494 | Money is Your Best Form of Protest | Tori Dunlap

25:30I don't own property. I don't have any children right now. For now, I'm good. So I will continue to invest a little bit of money. I'll continue to pay myself a salary. But a lot of the money now that is profit for the business just goes back into the business. It goes into business reserves. It goes into making sure that if we have a bad quarter or even about like half a year, we're going to be okay because my job now, right? And this is the power again of financial independence is once you're good, you get to make sure everything else is good too around you. You get to start, you know, your cup is full.

26:05You get to start pouring from that cup. So now a lot of the money that I have is going into making sure that the business continues to be successful, continues to have a little bit of a nest egg and that we can do some of the bigger things maybe that I've wanted to do, but haven't had the business budget to do. And regardless of whether you're an entrepreneur or not, right? If you're thinking about investing, yes, we mean it in the literal personal finance definition, which is like putting money in the stock market. But we also mean it in investing in yourself, investing in your business. Maybe it's, okay, I have a little extra money and I've always wanted to go back to school.

26:39Or I've always wanted to start that business, but I haven't had enough capital to do it. Or I've just wanted to do this really expensive hobby, right? And it's like, it's an investment in my own joy. So also think about money in terms of investing beyond the Roth IRA or the 401k, which is like, how can I invest in my skillset, invest in myself, invest in my happiness, invest in the growth of something long-term? And that's what I've really been focused on the last year or two. Yeah. It's so important. And yeah, I'm right there with you. I think 2023 was definitely the most that we've ever spent just generally in life.

27:15Yeah. And it's okay. And I I think so many people on their five journey have to get to that inflection point where they understand, okay, look, it's okay to let up on the purse strings a little bit. And it's important to, like you said, spend on yourself. I know I've spent more on my health in the last basically 24 months than I have in my entire life. Oh, I'm about to send a thousand dollars to a personal trainer literally after, right after you and I talk like, yeah, because I sacrifice, this is something we can talk about. I sacrifice my physical health over the last three years, building a business.

27:45This is the other thing that I wish people talked about more is it's like, this laser focus pursuit of a goal is great, but it comes with consequences. Whether that's FI, whether that's... For me, it was New York Times bestseller status. I wanted that sticker on our book. And I pushed myself. And I don't regret it because even I knew as I was doing it, this was a sprint. And the sprint was going to be difficult, but I had to sacrifice a lot to be able to do that. And so that's, again, a conversation about balance. It's a conversation about you can't sprint forever. It's called a sprint on purpose.

28:21And so I even remember listening to the show back before I was a personal finance expert and thinking in my one-bedroom apartment, should I move into a place with roommates so that I can reach FI faster? I remember even thinking about that because I was obsessed with it. I was obsessed with... I was on net worth of five, probably three times a week figuring out, oh, if I saved 50 more dollars a month, how soon could I reach financial independence? How many years could I shave off of this? And so I was obsessed with it. And it's also really important for people to understand that 99 % of diets don't work, right?

28:5799 % of diets don't work because the more you tell me I can't have fried chicken, the more I want fried chicken. And that is not a willpower thing. That's literal psychology. You can be laser focused towards a goal and you can also find balance to be able to spend money thoughtfully on yourself, to be able to take care of yourself through it. And to also understand that if our mutual friend over at Marriage, Kids & Money, Andy Hill talks about this, and I think his story was great where he was pursuing financial independence so hard that with two young kids, with his wife, it got to the point where he realized, I'm sacrificing things that I want to do as a family just because I'm so obsessed with getting to this goal.

29:38And that's not sustainable. That's not fun. And frankly, it doesn't work. It does not work. Yeah, agreed. I think of it as short-term thinking. It's short-term versus long-term. So anything that is akin to a diet, whether it's food or finances in this case, when by its very nature, it is finite. It's I'm trying to get to X and then the dot, dot, dot is, and then all hell breaks loose because you're not going to just keep on. Like you said, you can't sprint forever. Or you think then I'll be happy. I just want to pause this there. Women, it's largely your physical health. It's often when I get to this weight and I'm sure it's the same for men, but like there's so much pressure on women to look a certain way.

30:23it's when I don't have a stomach, then I'll be happy. When I don't weigh this much, then I'll be happy. When I have that job, when I have this amount of money in my bank account, when I am a New York Times bestseller, then I'll be happy. And let me tell you, as someone who has millions in her bank account, is a New York Times bestseller, that is such an accomplishment and I do feel so proud. And yes, it brought me a little bit of happiness, but again, it's not about the stack of government issued paper. That doesn't get me anything. It's what money can buy me or the influence I can have to change other people's lives or to change my own life or to change and impact my community with that money.

31:03If you are pursuing a goal, just thinking, again, I will do this and then I'll be happy. To your point, all hell breaks loose. And you're not going to be happy with this. It's how can we use money as a tool to better our own lives? How can we use money as a tool in our toolkit with all of our other tools to find that stability and also to make the world a better place for ourselves and our kids and our communities? Yeah. Happiness is certainly quite elusive. I think you and I both know that from our lived experience and it is a constant work in progress. And it's a choice. That's the thing I've realized too.

31:43You choose to be happy. Happiness is not something you arrive at. I didn't realize that we were having, I was going to take this into TJ Maxx embroidered on a throw pillow. But happiness is a choice. You have to decide, yes, I'm going to show up as the best version of myself and I'm going to be happy today or at least content today. Yeah. I wholeheartedly agree. And like you said, impact. That just, that matters. It matters so much. And it doesn't have to be world-changing impact, right? You don't have to be Tori Dunlop. You can make impact in your family, in your community, right? In your town, in your city, whatever it may be.

32:20And I think looking for that, looking outside of ourselves, I've found has had a significant impact on happiness. And it's very easy to be myopic and just think about yourself, but like, that is not, again, short-term versus long-term. That is not a long-term recipe for success. It just isn't. Yeah. And back to what we were talking about before, in terms of making an impact, right, there's concrete things you can do. Having conversations about money, voting with your dollars, donating to causes you believe in. Again, talking about money is something that costs nothing, right? It's just that level of bravery to be open and transparent and vulnerable with other people in your life.

32:59Yeah. Agreed. thanks for listening to choose a fi and for all your support of our mission here the absolute best way to support choose a fi is when you sign up for your next rewards credit card to use our cards page at choose a buy.com slash cards i keep this page constantly updated so it should always be the top resource for you thanks for being part of our community and for your support so i want to kind of switch gears a little bit and maybe get into some nuts and bolts kind of stuff. So how does financial advice differ for men and women? This is another one where I'm like, how much time do you have?

33:38Okay. I'm going to set up my soapbox here and I'm going to climb up on top of it. Okay. It differs in every possible way. If you want more, I will shamelessly plug my book because this is the entire thesis of it. Beautiful. My book, Financial Feminist, covers this in more detail. Okay. I'm going to take us all the way back to childhood. I'm going to use the gender binary here because it's just easier for this example. But stereotypically, what toys are boys given? They are given Legos, trucks, things to build. They are told that their quote unquote value to society is their own ingenuity, is their own critical thinking, is their ability to fail and get back up again.

34:19right? Resilience. Stereotypically, what are girls given? Dolls, easy bake ovens, bridal veils. They are told that their quote unquote value to society is in how giving they are to others. It's not about their own identity. It's not about their own intrinsic value. It's not about their own critical thinking or their own ingenuity. It's about how altruistic can you be? How much can you sacrifice yourself for somebody else, right? We give a two-year-old child a literal another child to take care of. That's bonkers crazy to me, right? So what I was talking about before of this pursuit of money and wealth, right?

34:55When boys turn into men and they start pursuing money, that is socially acceptable because we have told boys that again, their value is in, yeah, their own ingenuity, starting businesses, bringing in bonuses at work. But the moment again, a woman has money, the conversation is you need to give it away. We tax women. Now, I am not disparaging donating, right? Big fan of donating. We should donate money. I don't think billionaires should exist. Whole conversation for another time. But the thing about women is that, again, when society patriarchy realizes they're no longer controllable, they start taxing women.

35:31They start demanding that they play small, and they weaponize that altruism that is in women since day one, which is you need to donate more. Why are you charging for your services if you really care to just be free, et cetera? So when we look at something like that, well, what is the advice even now in 2024, when you Google personal finance advice for men, that advice for men is to expand. It's to be bigger. It's invest crypto, real estate, negotiate your salary, start a business, right? It's all good advice, maybe with the crypto, with the asterisks, but like it's all good advice, right? It's like get more money, make more money, learn how to expand, right?

36:10What is the advice for women? Yes, even in 2024, stop spending money. That's the advice for women. The advice for women is the reason you're not rich is the latte, the manicure, the designer purse. You have a shopping addiction and that's the reason you're not rich. And so if you just stop spending, you'll become a millionaire. Let's just talk about the personal finance. Like, again, you talked about the nuts and bolts. Let's just talk about the math of that. At the end of the day, there's only so much you can cut, right? Right? Like, let's say I do take that advice personally and I never spend on anything discretionary ever again.

36:44Well, I still have my rent. I still have groceries I have to buy. I still have to buy my insurance. Right? At the end of the day, there's only so much that you can cut. You're also, you can believe this if you want, miserable. You're miserable because there's nothing. Life is not worth living. Right? You're not traveling. You're not going down to eat. You're not buying anything that might even be a little nice for yourself. Because again, you've been told that the pursuit of wealth for women, the pursuit of wealth is about shrinking. It's about spending less. It's about not expanding, not making more money, but about spending less.

37:22The other thing, and again, there's an entire chapter in my book about this, is that spending, we only use the word frivolous when it comes to spending for stereotypically feminine purchases. Frivolous spending is the manicures, the lattes, the getting your hair blown out, whatever. It's not NFL season tickets. It's not golf clubs. It's not video games. So even the purchases that you're telling me are bad. Men can have hobbies. Women can't. Men are allowed to have hobbies and to invest money in those hobbies, women are not allowed to. And those hobbies are the reason they're not rich. If we want to go even a level further, again, this is like, you've peeled back the onion here, Brad.

38:04Keep going. The very things that women are shamed for are also the things that I have to do as a woman in order to seem quote unquote professional. So you're telling me that makeup is the reason that I can't afford a house, right? Or that I can't save money. What if I show up to a job interview without makeup. But even more severely for women of color, right? Black women over and over and over again have been told that their natural hair is less quote unquote professional. And we actually have data that shows that they are more likely to not get promotions, to not get a position, to not get opportunities if they wear their hair in a natural way.

38:41So the very things that you're telling me are the reason I can't pursue wealth or the reasons that I am not able to save or able to pay off my debt are also the things you require in order for me to get that job, to get the promotion, or else you tell me I look tired at work. I give the example in my book of everything I had to do to even shoot my book cover. I was in a salon chair just to do my hair for five hours. Let's talk about not just the cost of that, which by the way was$500. And yes, I could have gone to a cheaper salon, but come on, it wouldn't have looked as good. Let's be real. So five hours.

39:21So not only am I spending my money, but also my time, my energy, right? I had to get my nails done. I had to put on makeup. I had to get my eyebrows waxed, right? And yes, you could make the argument that none of this is necessary. However, if you are a woman, you know that in order to, again, progress in a society, you have to perform femininity in a certain way. So to your original question, how does the personal finance advice differ. That is just like three high level examples. I have many, many more, but at the core of it is really men are allowed to pursue wealth and they're told to expand.

39:59Again, they're told to make more money and women are not allowed to pursue wealth in the same way. And they're told that the answer to the personal finance equation is to actually spend less to shrink themselves basically to hate your life. Yeah. Wow. That is quite an answer, Tori. And, but no, I love it because I think, again, you eat, live, breathe, sleep, this, right? You talk about this all the time. And this is not to excuse people in our community who are unaware of it. But frankly, some people are just unaware of the pervasiveness of this. And I think what's beautiful and challenging about this in the best possible way is it just opens our aperture for, okay, look, whether you knew it or not.

40:44this is going on. It exists and you have to be aware. And I want to highlight too, because I know that especially in more of the traditional personal finance community, a lot of this stuff is deemed quote unquote radical. It's one, not really that radical. And two, it's really important for me to define what I mean when I say patriarchy. When I say patriarchy, I do not mean men. I want to be very clear about that. I love men. I date men. Men are great. The shares quote, men are the coolest, but I don't really need them to live. The patriarchy hurts you, Brad, and all other men just as much as it hurts women.

41:22And I would sometimes argue it hurts you all more because there are certain expectations for what a man should be providing, right? All powerful, never showing emotion, right? And so when I say patriarchy, really what I mean is a system that continues to aid and abet inequality. And also, nobody succeeds under patriarchy. Like no one, including men, are allowed to be the most authentic version of themselves. So that's something for me that I really want to highlight, especially if you are a male identifying listener. When I say patriarchy, I do not mean men, because all of this impacts you all as well.

42:03It's more the systems, again, that exist that keep us from progressing and from viewing each other as equals and as partners in crime rather than enemies. Yeah. The phrase that keeps coming to my mind is like the underlying societal scripts. Yes. Right. And I think obviously, yeah, since you did describe patriarchy, in your case, you're not describing as male, but that's why like, yeah, my brain would immediately go to that. It's these scripts that are holding all of us down to your point. Right. And that's a really interesting and important way of looking at it. I love that, Tori. I really do.

42:41So Tori, again, another just kind of random question. You see a lot of newer investors. Yeah. And I'm curious, what are the couple of big mistakes that you see new investors making? Love this question. For those of us in the personal finance investing community for a while, these might sound so obvious, but I need to highlight that this happens to literally millions of people because I talk to them on a day-to-day basis. And if you are new to this community, hello, we're going to prevent you from making these mistakes. Okay. First one, the Roth IRA, the 401k is not the investment. It is the account that holds the investments.

43:23I like to describe it as a two-step process. You put money in the account and then you have to go choose your investments. I tell the story in my book about this cute lady who was a teacher. We called her Rose, who put aside a portion of her paycheck and her 401k literally for her entire life, her entire teaching career. She was so good and such a good saver and such a good investor. And she put money aside literally every single paycheck. She is late 60s, early 70s, ready to retire. She goes and she looks at her 401k and realizes it was never actually invested. This is a true story. and we literally hear from dozens of community members who have joined our community who follow us who hear me talk about this and they go, I just went and looked and my Roth IRA has just been sitting there for five years because no one told me I have to do step two.

44:17Now, you and I know better than anybody else what those five years or 30 or 40 years could have been if it was actually invested. So the Roth IRA, the 401k is the thing that holds the investments. It is not the investment. It's not like a bank where you walk in, you put a thousand dollars in a bank account, you're done. You've got to take your money and then go choose your investments. So that is the first thing. The second thing is that to the general public, the word investing is so loaded because of, again, those narratives you might've been believing from friends or family, or even just like TikTok, right?

44:50We have over 2 million followers on TikTok. I see some crazy shit on TikTok where investing for many people equals gambling. Investing equals going and putting it all on black or betting on a racehorse. Because this lack of education, people don't understand the difference between day trading, picking the hot stock and smart diversified index fund type investing. So when I start talking about investing, a lot of people, again, who are new to the community will do the like, yeah, but isn't that gambling? To some people, it is. If you're out here trying to short AMC, like, yeah, it's gambling. But if we're looking at investing as it should be, which is the definition of the word invest, right, which is to put energy, money into something for a long period of time, that is smart investing.

45:40So a lot of people either don't get started, or they feel too intimidated because they're just like, my uncle lost all of his money on this investing scheme, right? Or I saw 2008 and I saw how scary it was, but they don't see the numbers from this year, right? Or they don't see that diversified investing is about a little bit riding a roller coaster and patience. So that's the second thing is investing is not gambling, or at least doesn't have to be. And actually the investing that is the smartest type of investing doesn't require all of that much time and effort. It requires kind of a set it and forget its strategy with something like an index fund.

46:18And then the third one, oh, would love to talk about this with you. So many people think, okay, if I'm going to invest, I've been told it's way too complicated and it's way too scary. So I'm going to give it to somebody else. I'm going to give it to a stockbroker. I'm going to give it to a financial advisor. The stat that I found when I was writing my book blew my mind. Over the past decade, So over the last 10 years, only 25 % of professional stock pickers outperformed a general civilian, individual investors making smart, diversified investing choices. I'm going to say that again. Only a quarter of professionals, people we give our hard-earned money to, to go out there and invest and ideally outperform the market are actually outperforming you listening.

47:09you as an individual investor making those smart, diversified investment choices. So what does that tell me? That tells me that we have a multi-billion dollar, probably trillion dollar industry, the finance industry, that is built on making you feel like you're too stupid to understand. We have this massive conspiracy, basically, but we have this massive industry that makes investing seem complicated and uses all of this jargony language and all these graphs and these charts. And if you've logged into any sorts of investing platform in the last 10 years, even if you are a confident investor and know your way around it, it is still so confusing.

47:50I'm a finance expert. And anytime I log into Charles Schwab or Fidelity, I want to die. It's so confusing and so unnecessarily confusing so that you call up one of their advisors or so that you get your funds managed for you and they make money off of you, but they're bad at their jobs. So if you're out there thinking, this is way too complicated for me to understand, it's really not. It's about finding advice that makes sense for you and also thinking about, okay, how can I learn enough about investing to get started as opposed to being an investing expert? With women, I especially see this because again, back to my original example with how we We teach boys and girls.

48:31We teach boys to be resilient. We teach girls to be perfect. We teach them it's perfect or nothing. So a lot of women, when they get started investing, they log into one of these platforms because their dad told them to get on Vanguard and they log into Vanguard and then it's way too confusing and they hit the bail button because they're like, I'm so afraid of making a mistake. But really, we just got to get you started. And this is why I actually built an investing platform. I literally co-created, since I've been here, a platform to invest because all of the platforms I saw out there were way too confusing to navigate.

49:04And all of the robo-advising platforms were way too passive. They're not teaching you anything of why they're picking the things they're picking. They're not telling you what an index fund is or how to invest properly. So I literally built a platform that now has$70 million invested, most of which is by first-time investors. It's called Stock Market School. You can find it anywhere. But it's literally this idea of like, okay, I want to teach you to invest in a way that isn't going to make you terrified of making the wrong choice, but also allows you to invest for yourself. So yeah, those are three of, I think, the biggest narratives or common mistakes, which is, again, thinking the Roth IRA is the investment, thinking that investing is gambling, so I'm just not going to do it, or thinking it's way too complicated.

49:50So I'm just going to hand my money over to someone who frankly is bad at their job. Yeah, I love that. And the 25%, I mean, I'd be curious to see the stats over a 30-year period, right? What is vanishingly small, the percentage of supposed professionals who can outperform the market? And certainly net of fees, Tori, it's got to be almost zero. Well, and I think there's so many financial professionals out there that, of course, are really smart. If you are going to work with somebody, please make sure they're a fiduciary, meaning they're legally obligated to act in your own business interest, right?

50:24And I just think that there's a gap in education. People think, I need help with my finances. And they think, well, the only thing that's out there is a financial advisor. And it's like, there's a huge gap between I'm just getting started on my financial journey, or even I want to start investing, and I need somebody to manage it for me. That's a huge gap. But people don't understand that because they're desperate, which I totally understand. They're feeling anxious about their money. And they're like, this is too confusing. So I'm going to hand it over to somebody else. So I would really not recommend doing that.

50:56It's not as complicated as people make it out to be. And for most people, it ends up costing a lot more money. If you are going to work with somebody, you want somebody who's a fiduciary and who's fee-based, who's not going to take a percentage, who's not going to... I'm sure you've talked about this on the show, but isn't going to take a percentage, isn't going to charge a management fee on top of all of that, but instead is doing an hourly rate for a conversation with them. Yeah. And we certainly have talked about it, but we can't reiterate it enough, honestly, because it's so important. And just to put some numbers to this.

51:28So one of the things that I wrote or created that I'm proudest of was actually on my way back, my little personal finance website called Richmond Savers. So this one is Vanguard funds and the impact of fees on your investment. So Tori, I don't know if you've ever seen this or not, but basically, so my gross return was a little exaggerated. So back then I was assuming a 9 % gross return. And then I was saying, okay, you have$100 ,000 invested and you put in$1 ,000 monthly. Okay. That's probably pretty reasonable for somebody in the FI community, assuming a 9 % gross market return. And basically the balance at year 40 would be about$7.2 million.

52:06Now, if you put it in a Vanguard fund with 0.05 or any index fund with 0.05 expense ratio, you have about$7.1 million. You've lost$100 ,000 to expenses, which sounds like a lot, but just wait, it's coming, right? And that's about as good as you can possibly do. Now, contrast that with, okay, you went to a financial advisor who, like you said, charges and assets under management fee, and let's say it's 1%, so you have an 8 % net return, you've lost almost$2 million to fees,$2 million. And of course, Tori, as you know, it doesn't stop there, right? Because if you're going to a financial advisor, they are not going to put you in a Vanguard fund, right?

52:48They're going to put you in an expensive mutual fund. So I assume that that fund then had a 1 % fee. So it sounds fairly innocuous, right? Oh, it's just 1%. So your gross 9 % return gets down to a 7 % net return to where you've lost almost half of your money. You've lost$3.3 million out of 7.2. That is crazy town. That's what it amounts to. And maybe if we paid that fee, people would be good at their jobs, right? So maybe, okay, we can spend a little bit more, right? We were talking about investing in ourselves earlier, right? Maybe we spend a little bit more for these financial professionals to outperform the market.

53:24But back to my original stat, they don't. They can't. So that's so much in fees. And I just want to highlight, this is the other thing is all of this jargon gets thrown around and I like to break it down. For your community, they probably know already, but an expense ratio is just the fancy jargony term for fees. What is the cost of the fund? So my favorite is VTI, 0.03 % in fees. You can't find lower than that. But to Brad's point, if we're at half a percent, 1 % more than that. Again, it doesn't seem like a lot, but 1 % over a million dollars, that's a lot of money. Or with this example of 100K invest for the long term.

54:04And this is, again, I just want to highlight what you just said because it's so important. There's that fee, and then there's a fee that a potential financial professional, and I put professionals in the most air quotes ever, is also going to charge you. I see so many people, because they don't know any better, because they don't know what's out there, go to some place, and I'm going to name drop them, Edward Jones. If you look up the fee structure for Edward Jones, it's a three and a half percent fee. Three and a half percent. Before you've invested anything, they're taking three and a half percent.

54:36Now, again, that doesn't sound like a lot, but that's a huge chunk of your money. So a lot of people will then ask me, well, how do I make sure the person I'm working with doesn't charge those fees, ask. Just ask, are you a fiduciary? They will either tell you yes, or they will tell you no. Well, they won't really tell you no. They'll go, oh, well, but I give you the best recommendation. Just watch that. The second, what fees are you charging me? Show me every fee that you're charging me, both for your services, as well as the actual cost of these investments. And the biggest thing that I just want anybody to take away with, and it sounds so like woo woo fluff fluff, but like if your gut does not feel good, it knows.

55:21Like if you're talking to somebody and they're promising you things that sound too good to be true, it's probably too good to be true. If you're just getting like weird snake oil vibes, or if you just like something in your gut is saying, no, no, no, please listen to it. Because again, back to my point about our, you know, my original example of this cute little lady named Rose, right? Like one, she didn't know any better because nobody taught her. But two, if she did go to somebody, right, like I need you to understand that this doesn't just have an impact on your money now. It has an impact on your money for years, if not decades to come.

55:56And it's not okay, 3%, whatever. It's actually a huge chunk of your hard earned money. Yeah. So important. I'm glad you spent so much time talking about it because these lessons are critical. And I mean, people can learn by obviously listening to this podcast, reading your book, reading The Simple Path to Wealth by JL Collins would really cover the investing, not gambling, and the understanding that, hey, investing can be pretty simple. Like you said, I love how you focus on VTI. That's my updated advice now of, not that we give financial advice, yada, yada, yada, but VTSAX has kind of become this meme in the financial independence community.

56:36And frankly, it's just not the best advice anymore because I think a lot of people go to Fidelity or Schwab and try to buy VTSAX and they get hit with these massive fees, you can get VTI. It is the same exact thing. It's just the ETF version, right? And you don't get hit with fees. I've been choo-chooing on this VTI train. It's like 2015. I love it. It's my favorite. So yeah, I mean, to your point, it's just like VTSAX, I think it's actually lower in fees. The expense ratio is lower. So yeah, just thinking about investing as a long-term strategy. I wish I could tell you the strategies to get rich quick tomorrow.

57:09Like it just, it doesn't exist. If it did, I think we would both tell you we wouldn't gatekeep it. We'd both tell you, but it doesn't exist at least not without a ton of risk. So yeah, you see all these stories of people who did, you know, short sell and who, you know, got the crypto boom and all of that. But like, you're not seeing the people who took their life savings and actually lost it all. You're not seeing the people who, you know, got in too late. And then, again, there's a massive amount of risk when you view investing or really money in general as a day-to-day thing. We are paying off our debt with the expectation that it's going to take a while.

57:45We are investing with the expectation it's going to take a while. You don't go into the gym once and walk out looking like Dwayne The Rock Johnson. Like, I wish. Give me that magic G. Yeah, seriously. I'd take that. I would love that. But that doesn't exist. So, you know, we're, of course, as human beings, we want immediate gratification. We want immediate change. It's not the way this works. And instead, we want to think about this for the long term. Yeah. Tori, it feels like that is the perfect energetic place to leave this episode. I hate my biggest pet peeve as a podcaster is not closing the loop on things.

58:19We didn't close the loop on the buy versus rent. You want to? Yeah, let's talk really quick. Okay, let's do it. And do you have a podcast episode on buy versus rent? Yeah, I have a couple. So if you want more information about why I choose to rent versus buy, I actually, there's literally a podcast episode I did and I can give the quick, the TLDR version of it. Yeah, let's hear it. I almost bought property at 22 and it was the best decision I ever made to back out. And again, I talk more about why. I am very similar. Ramit Sethi and I are colleagues and friends. He is a renter, not a buyer. He's come on my show to talk about it.

58:51It's very much that like, this is just not the season of my life to own a home. It requires, like we were talking about before, a lot of maintenance, a lot of costs. People just think, okay, owning property is immediately going to be the better financial decision. However, I have friends who've lost money in their homes. I have friends who just don't have the time or the energy or the skill set to be homeowners. I am not the most handy person. If something breaks, I'm hiring somebody to come out and do it. It's just who I am. And so with renting, there's just something so flexible about that. My energy is in other places.

59:26My energy is on growing a business. I travel a lot for work and for fun. I'm really not home all of that frequently. And so just renting is more flexible in that way. It's also, again, if we're just looking at the numbers, actually smarter to rent in a lot of US cities than it is to buy right now. I live in Seattle where the average home cost, starter home is about$900 ,000. Like that's bonkers wild crazy to me. That's insane. And you're going to get in a bidding war with 12 other people and you're going to have to make a decision in 48 hours. like between when you see the home to when you need to put an offer on, you're going to lose that house if it's not in 48 to 72 hours.

1:00:00I'm not willing to make that big of a life decision that quickly. I don't know about anybody else. Like that feels, again, that feels crazy to me. So a lot of the financial, like the math actually is in favor of renting right now, in addition to all of the costs, right? So when you're a homeowner, you got mortgage insurance, you've got potentially PMI if you can't afford that 20 % down payment, you've got all of the costs of upkeep. You've got property taxes. You've got just so many things to think about with renting. Yes, I'm not building my net worth in that way or that's not an asset that I own, but it's not an asset that depreciates either because I am paying for a place to live.

1:00:39So yeah, I think that there's just, again, this is back to the shame in the personal finance community. The reason I almost bought when I was 22 is because my well-meaning parents were telling me it's throwing away money if you rent. It's like throwing money down the toilet, throwing money down the drain. The only way I would have been able to buy property when I was 22 was buying a condo that was an hour outside of the city. I would have had to commute an hour and a half one way to get to my job. I wouldn't have made friends because I couldn't go out after work. I couldn't see people on weekends.

1:01:07And frankly, I probably wouldn't have the business I had either because I was going to networking events. I was meeting people. I was learning about entrepreneurship and an hour outside the city. I love my parents, but I would have been hanging with them every weekend. And that's not the life I wanted in my early 20s. So I just think that there's so many factors that go into homeownership just besides the throwing away money thing. If you want to be a homeowner, if you understand all of the costs, if it fits the season of your life and the math checks out, great. But it's also a huge privilege right now.

1:01:35Homeownership is a massive privilege. If you can afford a house right now, especially in major US markets, that is a million dollar decision plus a million plus. And most people don't even have the flexibility to consider rent versus buying. So just, yeah, I have a lot of thoughts about it. It's ultimately, does the math work and does it fit with what you actually want and the life you want? Yeah, this is a really important one. I'd love to have like a dedicated episode on this because I am very much on the, man, in an alternate universe, I would love to be renting right now because it It feels like one of those underlying societal scripts, right?

1:02:14Like we talked about before that, oh, homeownership, it's the best way to - Right. It's your largest financial asset. Well, I mean, not for nothing, but if you're in the financial independence community and 30 years from now, your home is your largest financial asset, something has gone horribly awry, right? And that is not to say that homeownership is bad. We're not painting that picture, but be open-minded and look at the numbers. Look at your timeline. Look at the flexibility it affords you. All of these other factors have to go into the decision and it's not throwing your money away for rent.

1:02:48Because frankly, we can make the same argument of you're throwing your money away on interest on the mortgage. It's literally, if you've ever looked at an amortization table of a mortgage, it's ridiculous. No, no. And especially, we're recording this in April, 6%, 7%. I think they're in 7s. Yeah, I think 7%. It's not great. Right. So, you know, this entire time, even when the mortgage rates were more reasonable, I just thought, well, I can be putting my money in the stock market and making more money there anyway. And it's also it's less time, it's less effort in terms of wealth building. Now, I have gotten to a point where I am starting to get the feeling of I think I want to buy a house just because I like have the nesting instinct at this point.

1:03:31Like I want to start putting wallpaper up like that's where I'm at. But it's not a financial choice for me. And this is, again, to round out this conversation, when you get to a certain level of financial independence, you don't make decisions anymore based on the money. You actually don't. You don't make decisions anymore based on like, is this the smart investment? Or like, how much is this thing going to cost? You start making decisions on what do you actually want. Like I was talking to Tiffany Bajanista the other day, and she bought a condo all in cash. She did this a couple of years ago.

1:03:57And she was like, it wasn't the smart financial thing to do. Like I should have taken out a mortgage. But she's like, I didn't want to deal with it. I didn't want to worry. I didn't want to be in debt to somebody. I just put the whole thing out. And she's like, yes, I could have made more money in the stock market. But she's like, at this point in my life, I didn't want debt. And when you get to a certain level of financial independence, you start making decisions like that. You start making decisions based on what fits me, what feels good, what do I actually want? Even if you maybe lose money, even if it's maybe not the smart financial decision, but because it feels good for you and it's what you want.

1:04:30And that is where I want everybody to be in their lives and in their finances, where the decisions are based not on the math, but on your wants and your needs. Yeah. That is the ultimate position of financial strength and ultimately financial independence. Tori, this has been amazing. So energizing to talk to you. I can't believe it's been five years. Let's not make it that long until the next time. And thanks so much for being on. Obviously, we've mentioned a ton of places that people can find you. We'll put them all in the show notes. If any other that I didn't mention jump out to you, tell me about it now.

1:05:05But otherwise, I think people can pretty much find you essentially anywhere. Yeah. Book and podcast are called Financial Feminist, HerFirst100k.com. And if you're wondering where to get started, HerFirst100k.com slash quiz. We have a six-step quiz that gives us some information about you. And then we offer you a free personalized money plan. So if you're too overwhelmed and you don't know where to start, that's a great place to start. Beautiful. Love it. All right. Until next time, thank you for being here. and thanks for listening to ChooseFI. Thank you for listening to today's show and for being part of the ChooseFI community.

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