Always Come Back to the Why | Alan and Katie Donegan | Ep 569

26:54And I think a lot of, from my anecdotal experience of the fight community, many people in the fight community are quite open to new experiences, to travel, to alternative different areas of life. And I mean, even just counter-culturally, just what we're doing in general is counter-cultural, right? Like we're saving money. Ooh, that's so different, right? Like we don't want to work until we're 70. Ooh, that's so different. Like this should be the obvious path, but it is countercultural, right? But nevertheless, sometimes you get caught up in this is what I do. And I've never, I've never expanded my horizon.

27:29And I think I noticed we had such a lively conversation in our choose a local meetup yesterday. Like I mentioned, we had this case study and I think the couple who were presenting, I mean, they were marvelous and they were so far ahead of the game. They were doing great. But I think a lot of the suggestions that people offered from the community and from the audience, they maybe had never thought about before. They never heard about it. And I think it was a lot to take in. And I think that's normal. But what I hope for a lot of us, and I hope why people, why you're listening to this podcast and why you're spending time with me and friends, amazing friends like Alan and Katie every week is because there's a wealth of information here and you're internalizing it at your own pace.

28:13Okay. It doesn't have to be, this is flip a switch. Aha, I'm in the five community. Everything is different. You need to go at your own pace, but I would implore you to be open-minded, to understand that just your one way of living isn't the only way of living. I promise you that. And it doesn't even mean it's the best way. It probably most likely isn't. You fell backwards into the best way of living. That just defies logic, right? I think what we want to do is experiment. And I think what you guys have been doing, I've seen so beautifully from afar, is you've been experimenting with life for years now.

28:48And I think that kind of mindset leads to a successful life. Does it lead to absolute perfection every time? No, of course not. That's not the way the world works. It's experimenting. It's trying stuff out, and it's failing spectacularly in whatever way you define that. And it's, oh, a little kernel of, I really like this. or oh, maybe we could, if we double down on this, even probably Rebel Finance School is a perfect example. Like you guys, I know you had a few hundred people the first maybe year or two or thereabouts and now you have tens of thousands of people in the course. And like you stuck with it because you saw something there, right?

29:24And you also found your why, which I think is really important. Yeah, like there's so much I want to unpick from what you just said, Brad. And I feel like, first of all, it's not been a straight, easy path to get to where we are. And, you know, there's been bumps in the road, there's been bumps between ourselves and friction between us of figuring this stuff out. And we've been very good at this one area of life. And there's other areas of my life that when I'm trying to make changes, it makes me feel a lot more empathy for the people that come on our course and say, well, just tell me what to do.

30:01Just tell me exactly what to do. be very prescriptive and we say no you need to understand this so then when I was looking at health and you recommended Brad the podcast that Tim Ferriss did with Rhonda Patrick about all different supplements and how you do the hot and the cold exposure and I found myself going don't tell me all this detail and tell me why and how just be very prescriptive tell me what to do and it made me understand that I've been very good at wanting and learning and understanding finances in that area of my life but it doesn't mean I haven't necessarily applied it to other areas of my life and I'm like well give me the shortcut tell me exactly what to do and I've had exactly the same in my like personal development and figuring out a lot of my demons and things I'm like can someone just give me a recipe and I don't have to think just tell me what to do and you to a point you can but it's not as long lasting or deep or real change making so when you're talking about you know people find it hard to change I want to tell you and the listeners that's been me as well just in other areas of my life that are kind of on catch up with the finances I think I've learned to love change so so many people fear change because they're like what if it gets worse.

31:20I've learned to love change because I think change brings new things, exciting things, and it quite often makes things better. And if it doesn't make things better, you just go to the back to the way they were and you haven't lost anything. But if you never risk it, you'll never find something better. And I love your dad. And he had this thing of like, I found the best curry I could ever eat in like 1984. And I've never found a better curry. And don't experiment and like that's it we found perfection in 1984 never change anything it's almost as if like you can't experiment or find new things or you close off to the rest of the world and finding amazing things and you might have a great curry but that doesn't mean there's not another 47 great curries that will be equally good for different moods and different reasons and you'll love them in the same way.

32:14So experiment and try stuff. And change can be the most amazing thing in the world. Because if your life is okay, oh, to me, that's not good enough, change it. And you will find something that's spectacular or marvelous. And it'll be great for a while. And then you'll change again and find something else. And you change as you age. And what you want and desire changes as you age. So you have to change. Life changes. The only constant is change and it will either be forced on you or you can choose to do it quicker than the universe forces you to do it. Yeah, certainly a very fair way of putting it.

32:54Change is inevitable. It just is. I think it's a worse mindset when we dig our heels in and we try to hold on to what's there, to the past, to, hey, this worked. I'm never going to, to your point about the curry from 1984, for it. Like, okay, well, you know, things do move on and you can't hold that. I know I did this kitty. You talked about personal development. I was in a mastermind group and this was a couple of years ago. There were two groups and there was a change in, in how the structure of things were, were going and they were going to combine. And my initial thought was hold on, hold on tight to the past.

33:31I don't want to change. I love this group. And I was literally the last person to make a decision on whether to move forward and join the new combined group, or essentially I didn't have an option to stay. It was either not go in or join this combined group. And I thought long and hard about it. It's funny looking back with the benefit of hindsight, I don't know why I was so hesitant, but I think I just loved our old groups so very much that I just didn't want to see a change, but it was inevitable. To Alan's point, it was inevitable. There was no force of will that I could exert to keep that group together.

34:07It wasn't possible. That wasn't what was going to happen. So thankfully, I did make the decision to join the new group. And it was a wonderful experience for the however long year and a half or two years that it existed. And I'm so glad that I did. I would have missed out on friendships and relationships that are lifelong, that I just simply would have missed out on. But my initial thought was, hold on to the past, hold on to the past. And I consider myself at this point in my life, somebody who's open to change, and that still was there. So if you listening to this are saying like, yeah, that's, that's me.

34:40I mean, I think Katie, maybe you can give some advice because you know, you're coming from the point of, Hey, this is my natural tendency, but yet you've been living a life of change for the better part of probably almost a decade at this point. Like how it's not a matter of overcoming overcoming is not the word we would use, but like, what kind of strategies would you advise to that friend who's listening to us now who wants to know like hey katie struggled with this i struggle with it too like how can i how can i take steps to move forward the first idea that popped into my head was like get an alan and i don't think that's an effective strategy for most people and not really a reproducible one because i think alan's i think you can probably tell from our different reactions and when we talked about change and me saying like i've been the hold on to how things are and alan's like oh look what this changed let's go over here and do this thing and I have resisted and dug my heels in to use your words Brad and then eventually I was like oh the things that Alan suggests leads to really cool stuff so I'm not going to resist anymore maybe a little bit less Alan can tell you whether I still resist or not and I know not everyone has an Alan and I think I need to learn to do that for myself and perhaps you can do that for yourself so you know we all have these little ideas maybe that pop into your head and then you go oh well no I can't do that but there is that wisdom inside you that says oh I'd quite like to try this but then another voice will come in and say no we can't do that because xyz so I think it's it's listening to that voice and exploring it and just small steps at first of like oh how about I go to this new coffee shop that I've been meaning to try and that I haven't.

36:29That's a change. That's something different that you've never done. So I think maybe some, what's that thing called? Exposure therapy, a small change, like just get used to small changes. Anna laughs at me because when we go back to visit my parents, I will walk exactly down the road, across the road at exactly the same point because many years ago, I decided that that was the most efficient way to walk down the road. And of course, life is all about efficiency, Brad. There are no other possible reasons to live life. I was like, oh, why don't we go this way? I struggled so much. I was like, no, what do you mean?

37:04You don't walk on that side of the road until this point later on. So it's interesting how deep that desire to be the same is. So I think it's those small changes that you can make to start building that muscle. What do you think, Alan? cross the road at a different point get over it do something different go to a different cafe go to a different place explore and your life will be richer and also the space you create by doing something different allows the universe to create things and bring things into your world that wouldn't be there otherwise because you'll go to a different cafe and meet a different person you'll cross the road in a different place and see a different thing you will literally see the world in a different way, walking down one side of the road as opposed to another.

37:51You've just got to try it. You've just got to do it. The more you mix your life up, the more you'll be used to change and going, actually, this is quite fun. What else can I explore? Where else can I go? What else can I see? How else can I live a cool life and have nice experiences? And there might be times that you don't like the new coffee shop or you don't like that path. And there is a risk. there is a risk you go to your favorite restaurant you always have the same dish and you know you love it and then you're like i really should try this other dish you know i've got to get out of my lane i've got to try it and you're like well that was a bit rubbish that's not as good as the dish i always love and there is a risk but you might find something you love even more you might find some variety you might find something else and i think it is worth the risk of having an experience that is not quite optimal to maybe uncover a bunch of incredible things and you could always give yourself permission to go back like you said you try something different it didn't work and it's like maybe in that restaurant you say well I'm going to order this new dish and actually I'm going to put my money on this risk and say well if I don't like it I'm just going to buy the dish I normally get anyway but then you've like backed yourself up that you know risk you know I can live with this and if it doesn't work I'll just buy the breakfast burrito.

39:09I love that. I don't care. It always comes back to the breakfast burritos. I like it. And yeah, I mean, Katie, to your point, we don't all have an Alan, right? But can we try to internalize a little bit of what Alan just told us and take that into our lives, even if it's a little bit outside of our comfort zone, right? It's going to be outside of our comfort zone. But I think so many good things happen, again, on being on the other side of being vulnerable, taking risks, trying to do new things, like all of these things, they just matter. They really matter. And yeah, if it's uncomfortable, lean into it.

39:47I think we talked about this last time. Maybe one of my little rants was like so many of us, right? Like we've been saving for most of our adult lives. And at some point we are going to have to withdraw money because that is literally the entire definition of five. That's what we're doing. That's what you two are doing every single year. And I would imagine every single month, depending on the cadence of how you withdraw money, but you have to sell assets. It's just part of life. And is it going to be like a smiling and whistling all the way to clicking sell that very first time? No, it's probably going to be a little bit uncomfortable, but you have to lean into that.

40:26You're an adult, you do hard things and you just have to click sell. It's just part of life. And I think so many good things come from just that little bit of discomfort and leaning into it. And yeah, like if that means like as an adult, you know, I'm a 46 year old guy. If that means like asking somebody like, Hey, do you want to go on a hike with me? Like that feels a little weird. It would have felt weird when I was a 14 year old kid. And it would have felt weird as a 46 year old man. Like it just feels weird. but am I ever going to get anywhere if I don't ask? No, of course not. I'm going to be sitting home, not hiking at that point.

41:01Right. So what are we talking about here? So I think this is especially for the Brad and Katie's of the world who are listening. It's like, you got to sometimes go outside of your comfort zone. And I think you're going to be very pleasantly surprised with how the world responds to you. So here's the challenge to everyone listening. This is your challenge ask someone out that's your challenge for this week ask someone for a coffee ask someone for a hike ask someone to play board games ask someone out but you're not talking romantically are you you're talking well well it could be whatever you want also like the friendship wise yes just as friends was what i was thinking but whatever you want go outside your comfort zone and ask someone out i don't care who it is what it's for like you seem really interesting let's just hang out.

41:53And I always remember, I read a book many years ago, and it said you should ask a rich man for lunch. I was like, that's quite interesting. What does that mean? And it said, ask a rich human to lunch, not because of the lunch, but because of what you'll learn from them just by asking them questions. And I remember thinking to myself, how do I do this? Like, I don't even know a rich person. Like, how do I even do this? And I remember going to a Toastmasters Club, I saw one of the other speakers. I thought they gave a great speech. And then at the end, I said to him, like, I read this book, it told me to ask a rich person out.

42:29I don't know if you're rich, but you seem really interesting. Would you have lunch with me? And he looked very panicked. He's like, what is this person saying? And he's like, maybe not lunch, let's start with a coffee. And he said, yes, we're coffee. And we hung out for coffee. And he was super interesting. We had an amazing time. Then he's like, come around to my house for dinner. My wife and I would love to host you both for dinner. We made friends and it was incredible. But I was super nervous. You know, the kind of nervous of like sweaty under the armpits and slightly like uncomfortable. But I did it anyway.

43:04And I said the words. I would like to point out to the world and to remind myself that Alan actually is a human that has normal human feelings. You do get nervous and weird about approaching people, don't you? like just like a lot of us do and normally like 99 of the time it goes like fine or better right like you're all you're pretty much always rewarded for feeling that fear and doing it anyway and most often you go what was I so worried about and this was great and I'm so glad I did it so that's the challenge ask someone out who are you going to ask out Brad I like that who am I I can ask out?

43:44Yeah. Well, I mean, I guess I just kind of did that yesterday. So, uh, so my, my new hiking buddies, but, uh, yeah, I mean, I think it also doesn't have to be someone brand new either, right. That you've never met before. Like we're not talking about like approaching random strangers necessarily. I mean, that could work, but I have a whole bunch of friends who I probably haven't seen that my last year has been just really, really busy and, and hectic in the best way, but there are a lot of friends of mine I've lost touch with. And yeah, I mean, just reach out, ask for lunch, ask for coffee, whatever.

44:17I'm actually going the next couple of days. A friend of mine named Craig, he has a cabin in West Virginia and him and his wife, Katie, invited us out there. So we're going to just hang out with them for the next two or three days, which should be great. Like haven't spent that much time together, but it's going to be, that'll be a fun adventure. And I think that'll be, maybe, maybe that counts, but otherwise I'm going to reach out to, and I will follow back up on this, I'm going to reach out to one or two friends who I haven't seen in the last eight months and let's grab lunch. So I think that'll just be a fun exercise.

44:50So I love it. Thanks for listening to Chooseify and for all your support of our mission here. The absolute best way to support Chooseify is when you sign up for your next rewards credit card to use our cards page at chooseify.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. I wanted to ask because we were talking before about relationships and couples money and differences and such. I know you guys have a monthly finance meeting of some sort. I don't know what exactly you call it, but sometimes I get a text from you like, hey, we're at our monthly meeting, blah, blah, blah.

45:32I think getting on the same page as your significant other on the path to five is just so important. And I'd love to maybe just use that as a very generic launching point for like, how did you two get on the same page? Have you always been there? Is this like, I think we've talked about this in past episodes, but even I forget. And it's like, let's even talk about the Genesis point, but then maybe more so like the, what does life look like today? As far as your, after you've iterated and after you've figured this out, like, because I think ultimately, like we were talking before, we want to cut through learning curves.

46:04So there are a whole boatload of people listening who are like, I would love to do that with my significant other. Like, what's the best practice? Like, what does life look like now as far as your money and your communication? So maybe we'll scratch what I said before about going back to the Genesis. Maybe we can we can talk about that later. But let's talk about today. Like, what are the best practices? What are you doing? How do you communicate? Like, are there any stressors like in your life? Like, are there any money stressors? I think the biggest thing helps us is always come back to the mission, always come back to the why.

46:35So you can get locked on arguments of how do we track our spending and why are you spending too much here and why are you doing this? But I always try and bring us back to why are we actually doing this? What's the huge why? We're doing it to be able to live this life or experience this. And then suddenly the small details melt away because you're matched on the why. When we forget the why we have arguments yeah a couple of times recently we were kind of tracking out how much we're going to spend in the next few months and I was like oh that seems really high and that's obviously a very subjective thing to say like that seems like high spending and then kind of start having a little mini freak out which does cause friction because I was like I just want to do cool stuff and let's go and then he reminds me which again I could and should there's a should but do for myself of go, well, what's the why?

47:31The reason is we want to do cool stuff. Sometimes that costs money. It's okay to spend money. And it's just that reframe from always having wanted to save and somehow play this game to keep my expenses as low as possible. It's like, well, now is the time to spend the money. And the phrase that helps as well is we repeat to each other, I don't want to be the richest person in the graveyard. I'm not going to take this money with me. We have no dependents or anyone that we're planning on leaving it to. Let me enjoy it. And that was the purpose. So that has and is still a friction point of me having little mini freak outs of we're spending too much.

48:14And that's just a knee jerk reaction. I'm even like doing this move, like jerky movement with my arm that you can't see going too much, spending too much. and I get controlled uh which let's be honest controlling Alan doesn't always go well it doesn't mean I think what you meant was doesn't ever go well so we have to come back to the why why are we doing this why are we leading this life and I think that really really helps us to come up to the top level I think the monthly finance meeting is a huge thing for us. We are coming up to have done it for 10 years now. So every single month, last day of the month, we track our net worth.

48:56What happened? Did it go up? Did it go down? Should we be worried? We track our spending. What did we spend money on? How much did we spend? And then we have a few questions of what was a good spend? Like what gave us value? What was a bad spend or what was a waste of money? Where could we spend less? Where could we spend more? And we go through all the different elements to make sure we have a good chat about this stuff. And we make it fun. Our version of fun is breakfast burrito, nice coffee, doing it out, like having a wonderful time. Lots of people from Rebel Finance School have ended up like they do it in the evening with cheese and wine.

49:33I'm a little bit concerned about them doing accounting whilst drinking. But, you know, we'll forgive that one. But do this thing so it's fun because I think it becomes a chore for people. It's my favourite time of the month. I'm like, oh, monthly finance meetings coming up. Make it fun. Finances can be fun. You're literally talking about your future and your money and how you do things. This should be the most fun time ever. And that's tying it back to that why, isn't it? Rather than you get into the weeds and who spent what and where the money going. Well, why are you doing that? And coming back to the why is so important.

50:07Exactly. And we check, like, if we keep spending like this, are we spending more than 4 % of our portfolio? Are we spending 5 % of our portfolio? How close are we to it? And I think it's interesting to track it on the way as well and go like, we've saved and invested this, that means we could live off this per year. And it's growing and you have fun with the numbers. and gamification. Yeah, I like that. So, okay. I think a lot of people are looking for these in the weeds, like answers on like, how do these people actually do it? So what I just heard was that it's not like you have an exact amount that you spend every month.

50:46Like you don't take, Hey, here's our 4 % rule. Here's the amount we get allotted per month, one 12th of that annual amount. And we try to stick really closely to that. It sounds like you two are living your lives. And yeah, some months they're going to be extraordinary expenses. I know you've had that amazing Disney trips and things like that, but you're essentially living your life and then seeing how close that comes to that 4 % rule plus or minus, and then adjusting accordingly. But I guess confirm that for me, first off, most importantly. And then second, do you think about it on an annual basis?

51:21Do you look at your, okay, we have$2.6 million. We can spend a little bit more than what a hundred thousand whatever you're denominating that in pounds or usd like per year but we spent 130 this year or we spent 80 or whatever the number is like how are you adjusting i know this is seven questions all at once but like i think these are the really important things like i'm like how do you think about this and then how do you actually practically change if there is a change necessary i guess if you go to the the hard and fast four percent rule if there is a rule is like, well, you quit work, you live off 4 % of your portfolio, inflation adjusted forevermore from that original time when you retired.

52:02I think, I don't know anyone that does that. And most of the times you would end up so significantly wealthy, you've left a huge amount of money on the table and not had fun along the way. So the questions Brad asked about like our particular system and do we do it? We are more trackers than budgeters. So we tend to look back at what we've spent and then go, how did we do? And then that affects future decisions. But the tracking is the true element that really enables us to do it because we know exactly where the money went. We know exactly what we spent it on. We also look across countries because being nomadic, coming to LA is one of the most expensive places you could possibly live.

52:43And we were looking at the daily cost of living places. One of the cheapest places we've ever stayed was Vietnam. It cost us£84 a day, which is about$100 a day to live on the beach, eat in the best restaurants and have the most amazing life. And I know that$109 a day is 40 grand a year. So if I spend more than$109 a day, I'm spending over 40 grand a year. If I spend less, I'm spending that. And we look at the figures, we see where we're going. Then we go, maybe we shouldn't live in LA for a couple of months. Maybe we'll go to Columbia for a couple of months and save some money. I know this is probably not that relatable to people who have a house and live where they live.

53:23But geo arbitrage is a incredible tool for reducing expenses, because you can live like a king in Thailand. And we've always said if sequence of returns risk bites us, if the market crashes, well, we'll move to less cost of living countries. And that's one of our flexibility pieces. Yeah, we kind of do a cash flow projection for want of a better word. Oh, I feel like I've gone back to the corporate world there a little bit of vomit just came into my mouth we will look as our cash reserves go down as we're spending money each week each month we're like okay this is getting a little bit low what have we got coming up how much might we need to withdraw to pay for our spending that's coming up which is obviously very variable because you know as you said brad you have your extraordinary expenses but also because we are in different countries the cost of living is different so we're like okay two months in Colombia coming up we've been there before we know how much it costs to live there then it will be this and then you know a few months out it starts to get a bit more grey and woolly so like well I don't know where I'm going to be but at least we do that for the next few months and I feel like people can do that if they have a more conventional life of living in one place like okay what's coming up yeah you know how much you're going to spend every month because you've been spending it for however many times you've been living there.

54:42It's way easier to know and track that stuff. So the actual like specifics, like the real specifics, every single month, we log into a Google sheet that has our net worth, and we input our net worth numbers. And then we have a digital notebook where we have the same questions every month that we answer about our income and our spending. And we go through those exact questions. And it's kind of a formulaic thing. But I've become a searcher of questions, and I like good questions. And those questions actually help us to think every month. And we have like a little thing that like Katie's got it up in front of us in our digital notebook that says net worth, then it says, we've actually got 5 % of the figure, because we're feeling a bit braver, and we think 5 % spending is probably okay.

55:32And how much that breaks down to year, month and daily spend so that I have a rough idea of what it is. Then I've got my monthly spending. How much did I actually spend? Which we look at the 5 % figure of our current net worth, like strictly speaking, as I said, you would do what you retired on, but we are not spending what we retired on, not even inflation adjusted. We're spending way more than that. But our portfolio has grown so much that it supports it. And I think this is the flexibility bit. If you want to be 100 % certain your money will never run out and you are unwilling to ever change your spending, then you should stick to 4%.

56:11If you're willing to be even remotely flexible, then you could probably increase that amount. If you're willing to think, well, maybe I could earn 10 grand one year if the market goes down. Maybe I would move somewhere else or reduce my spending or I'll cut out the gym for the year and I'll do press-ups in the backyard. I don't know. Whatever it is, if you're even remotely flexible, then you should think about spending in a different way. And we readjust that figure to give us a more rounded view of what we actually could spend. And if we did start spending that, we would restart the sequence of returns risk period, i.e.

56:48it's sort of like roughly we think about it as a five years from when you start retirement. That's the sequence of returns risk period. And if you've written that out, your portfolio has probably grown by so much that sequence of returns risk has become irrelevant, which is exactly what happens to us. Our portfolio has grown so much, even if it crashed by 60%, we would be back to what we had at the start. And we're kind of like, it's irrelevant for us now. But if we restarted spending like 5 % of what we've got today, we restart the sequence of returns risk period. And then we go, okay, are we willing to do all these flexible things to survive that period if there is a big crash.

57:30Right. And that's, yeah, that's the beautiful granular detail that is going to be really helpful for people. Right. So using your example, just very specifically, since you've been open with your numbers, like 5 % of 2.6 million is 130 grand a year. And then you said you make a little bit of money from Rebel. So you can spend, I'm making this number up, but you could spend$150 ,000 a year or 150 ,000 pounds, whatever it is, a year or maybe a little bit more and be in that 5 % withdrawal rate. But yet you also said embedded in there, we know at any point we could live in Vietnam for a hundred dollars a day, which is $36 ,000 a year.

58:07Right. So like that is the beautiful thing about being open to flexibility. And also, because again, we've talked about people understandably are scared, right? Like there, There is always going to be some layer or level of fear and uncertainty. That's okay. That's part of being human. But I think anytime you build this flexibility in and you build options in, it helps your mind. It helps your mind for the future of, okay, in your cases, you are world travelers, but you're not changing every week. You're going to a place for two, three, four months, and you're doing that a couple times a year.

58:43but even still within the confines of that life, yeah, Palm Springs and LA are going to be dramatically more expensive than Vietnam or Bali. It just is, right? That's just the way it works. So maybe next year, if let's say something happened and the market took a notice, I have like, maybe part of that option is, all right, well, we're going to spend three months in Columbia next year, three months in Vietnam, three months in Bali, and three months in Mexico. And our life is going to be like that probably alone would be cheaper than three or four months in Palm Springs. So, and you two are nodding significantly here, like, and that's just, but an option.

59:21And it doesn't mean you have to, frankly, also, that's another thing we know about withdrawals and such is it takes an extended period of the proverbial, you know, what hitting the fan for it to go really wrong. So if you had Palm Springs or some other very, you know, Aspen or going back to London planned on your calendar for three or four months for 2026, and we have some downturn between now and then, you can still do it. You don't need to upend your plans. It's an extended period of things going bad. I would think for most of us that then and only then would our plans be totally changed to some degree.

59:59And of course, we're speaking generalities here, right? The real big iron, if he's listening to this, is probably shaking his fist at me right now. But nevertheless, less like this is how real people think you know and and i think it's important to know that flexibility is important you don't have to change wholesale on a dime just because the market went down five percent or even 10 or 15 but having those options i think makes your life easier mentally is a hundred percent the big crashes which if you think about how many there have been we're talking 2001 with the dot-com bubble we're talking oh eight and there's not really been a big ones since.

1:00:38We're not talking the little ones, we're talking the big ones. And actually the key is the dual forces of high inflation and a stock market crash are where you get in trouble. If you don't have those two things happen for an extended period of time, like the 4 % or 5 % works perfectly and you don't even need to consider it. So if you have a small 20 % correction, it's not going to cause you a big issue. But talking about fear, Brad, I really wanted to ask you this. We had a comment in one of our Facebook groups from the New Zealand group, actually. Shout out to the Kiwis. Yeah, they're great. They are fabulous.

1:01:14They said, I find myself really concerned about global instability and the likelihood of an impending collapse of the economic system. I've done volatility training, which was the new thing we did on Rebel Finance School to try and prepare people for the media panicking them, like the media will scare you. But still, some of the rhetoric is really compelling, especially when considering the stable peace we've had since World War II and some of the unprecedented factors signaling that something terrible is imminent. How are others responding to this? How do you think about this, Brad? What would you say to people?

1:01:51Is this a real fear? Is this something that keeps you up at night? Well, that's a tough one. It is not something that keeps me up at night at all. This is not to minimize that there are things going on in the world, right? Let's be entirely clear. There are, but frankly, there always are. And I think this is something that I know Morgan Housel has talked about, I've heard on his podcast, and it's look at the stock market returns over the last hundred years and it's just up and to the right. Now, does that mean when zoomed in that it's always up and to the right? No, of course not. Think about how many crazy things from the Great Depression to World War II to everything, more recent, the great financial crisis, the dot-com bust, the housing market, and this is just in the US or many of those things, right?

1:02:41And yet they are but a blip on that scale. Now, can I tell you definitively that there's not going to be a zombie apocalypse tomorrow or AI isn't going to take over? No, of course I can't. But I think looking at history, this is why people study history. You get a sense for the scale of these things have happened before. It might not be the exact thing, but these things have happened before. And humans in general are pretty robust. We find a way. There's an ingenuity that helps us overcome things. It's funny because I didn't always consider myself an eternal optimist. I think maybe I had that like Uber or pseudo intellectual pessimism maybe at some point in my life, but I'm pretty optimistic now.

1:03:25And I think it's just a better outlook on life. I don't think sitting around watching the news every day, and this comes from a former news junkie, let's be clear, but I don't think sitting around watching the news every day does anything positive for you. I think it only puts fear into you constantly. And when you look outside, this is my look outside test. I look outside and the world is pretty darn good and everyone's going about their business, enjoying their lives. And yeah, again, does that minimize? Am I, am I a total fool? And to say that there aren't crazy things going on in the world?

1:04:00No, of course not. Okay. But on a day-to-day basis, life is pretty darn good. And I think anytime you try to prognosticate on the, there's an imminent collapse, like the wording in here, right? Imminent, like who the heck are you to say it's imminent. I think there have been people who have been prognosticating an imminent collapse for the last, well, forever, frankly, but for the last 10 years, certainly that I've seen in my investing life. And most of those people have been wrong again and again and again and again and again. And if they sat on the sidelines, you two are the perfect example, right?

1:04:34If you thought in 2019, there was an imminent collapse coming, you would have taken your million and you would have squirreled it away somewhere. And it probably would be worth about a million right now, maybe less if you had pulled out of it. Yeah. If you had spent out of it, then for sure less, a hundred percent. But instead you've lived six really great years and you have 2.6 now. So I think anytime it's, it's like stock market timing. I think this is really akin to that. Anytime we try to get our brains involved in, I know better, because that's ultimately what you're saying. I know better.

1:05:08I know better both when I'm going to sell and when I'm going to buy. And the fact of the matter is the likelihood that you're going to know better than everybody else twice, not less once. The chance of you knowing better than the entire world once is almost zero. Twice is infinitesimal. So I just think just from a strategic standpoint, I think it's a bad bet. I just think it's a bad bet to look at this and say, I know better. It's imminent. I'm running for the hills. so well that's my reflexive four minute answer but i don't know where do you guys come down on this i think for me it comes to what's the alternative and i think often a lot of these posts are actually looking for reassurance they're like well i get it about index investing i get about investing for the long term but what about this like it is back to that fear again isn't it of can you just reassure me that that i'm doing the right thing and that's why i feel from this post.

1:06:07Yeah. And they ask, how are others responding to this? And I'm going, well, I'm not responding. I wouldn't respond. I have a globally diversified simple index fund portfolio. I invest in one simple global index fund. I'm invested in across the world. I'm diversified as you possibly can be. What am I going to do? I don't believe I can time the market, Brad. I know I am not smart enough to be able to time the market. I have realized as an investor, I am not good enough because I will make dumb decisions. Well, that's implying that there are people that can time the market. And there aren't. And there aren't.

1:06:45You're saying, well, I'm not clever enough, but there are. I think people have actually convinced themselves they are clever enough. There are people out there who have convinced themselves. and some of them are the TV celebrities you will see that have predicted it once right. And they got it right once, which law of averages says, if you keep predicting every six months, eventually after many years of doing it, you might get it right once. And then you can shout to the world, I was the one who foresaw this thing. And that's what every one of those people does. And then they convince themselves and everyone else that they are the oracle.

1:07:21They are the person who has the crystal ball that can see the future, and we should listen to them. And that, in a lot of ways, the guy who predicted the big short, not predicted the big short. Michael Burry, is that the guy? Yeah, Michael Burry, he was one of the characters in the big short, the movie. He kind of foresaw some of the stuff that was happening with the great crash, the economic crash, the 08 crash. And he's been predicting a crash ever since, and he's got it wrong so many times. but he predicted it once. And who knows? He'll probably predict it right again once in the future, but you just can't predict this stuff.

1:08:00So how am I responding to this? I am responding by having a nice life, enjoying my friends, because I can't do anything about that. I literally cannot do anything about an impending economic collapse if it happens. What can I prepare? I'm just going to enjoy my friends, enjoy my life, add value to the world and do everything I can to have an amazing life and enjoy it. So how am I responding? I'm responding by having more fun and more time with friends and enjoying life. Wow. That's a mic drop moment there, Alan. I think, uh, I love it. I love it. And I think that is the way to respond. And again, we're not sticking our heads in the sand.

1:08:38We understand that there are always bad things going on in the world and it's not to minimize things in the past. It's certainly not to minimize things that are going on now. But yeah, if you're living crippled with fear and anxiety over something you have no control over, and you frankly don't know what the future is going to bring, it's just a bad bet. I think that's how I look at life. It's just bad strategy. It doesn't make sense. It's not going to lead... If you ask me, is this going to lead me to a higher or lower likelihood of having a successful life? The answer is unquestionably a lower likelihood, smaller likelihood right like it just is that is a bad strategy like by its very definition i think optimism versus pessimism right like optimism is a better strategy than pessimism i think walking around the world with being nice to people or being not so nice or even blah at best like i think about this like in terms of like even just something simple like when i make phone calls to customer service representatives like i'm not being fake but i'm just trying to be the nicest person they talked to that day.

1:09:43And I find that over a hundred of those calls, I suspect very strongly, I'm going to get better results than virtually anybody else. And I'm not, I'm not being fake. There's no Machiavellian thing. I'm not trying to get extract anything from anybody. I'm just being a normal human because I understand their lives are hard and they're dealing with jerks all day. Like what's my best strategy to be the next jerk or to be the nice person. It's obvious. Like we know how to live. We just don't do it. And this is what it's maddening to me. It's like you understand the best strategy to live. Like even if you want to think Machiavellian, like just in terms of pure strategy, like there's a way to have a better life and there's a way to have a worse life.

1:10:21Why on earth would you not pick the better way? It makes no sense. I feel like we need to poke Brad and give him some more. I can say rant mode. Give him something else. Quick, quick. No, I love it. I love it. Seeing Brad getting passionate because it is true. It is so true. If you're just nice to people, they're nice to you. And even if you do it just so that people are nicer to you, the world is a better place. But you don't even do that. Just do it because you're nice to them and you will improve the world just by smiling at people being nice to people. Do you know how many people, if you just went and bought a coffee, do you know how many people slow down and gain eye contact with the person serving them coffee?

1:11:02Watch it. Next time you're in line, next time you're there, watch it. Guarantee people are reading the board. They're looking at their phones. they don't even slow down just to gain eye contact and say hi how are you and when you do it is amazing the impact it creates it freaks them out why is this person looking at me why have they stopped to look at me what's going on why are they talking to me i just thought i'd say hello good morning how are you and say hello and it is incredible but it just it happens less in a busy society nowadays. And I love your idea, Brad, of strategies that you can apply that make your life better.

1:11:40Why would you not do this? And if you looked at all the strategies for investing, like I could take my money out and leave it in cash, I could invest in gold, I could pick an actively managed fund, that one alone makes me want to vomit. I could get a wealth manager to manage my money and pay them 3 % of the thing because I'm scared to do it myself. Like I have all these strategies or I could just invest in one simple broad-based index fund and allow it to grow on average 10, 12 % a year over the long term. Like just pick the one simple strategy that makes your life better, makes you wealthier and helps you to sleep at night.

1:12:18Yeah, agreed. And then I think strategy is exactly how I look at that too. It's like, what is the strategy that's going to give me the highest likelihood of maximizing my net worth over 50 years. And I have yet to find essentially one human being who can beat the market net of fees over 50 years. I think it's almost impossible. I think it's essentially a 0 % chance. So therefore, why would I not just buy the market? Why would I not just buy a broad-based index fund? It doesn't make any sense because I'm thinking in terms of 50 years. So that has to be my strategy. It has to be because I can't beat the market over 50 years.

1:12:54The person at the Edward Jones or the Goldman Sachs, wherever in New York City or down the street, they can't beat the market and they charge you fees to do it, like to get suboptimal performance or even matching performance. And they charge you fees. So therefore net of fees, it's worse. And then compounded over 50 years, it's catastrophic, right? So like just purely strategy and not to mention, this is the easiest way. Just matching the market is the absolute easiest way. So it's like, again, layer upon layer upon layer, that's the best strategy that I can come up with. And that's why that helps me sleep really, really well at night is just buying broad-based index funds.

1:13:30I think it passes every single test I have of sleep well at night and the strategy perspective. So yeah, that's a beautiful example. Which someone sent us a video the other day with a link saying like, I'm worried about this. And the video was called Huge Problem, Looming Index Fund Bubble in 2025. And you know there's all these videos out there that sell the doom and gloom to get you to watch them. That's what they do. I'd be interested in your opinion, Brad, about this whole we're in an index fund bubble. Everyone's becoming passive. the money flowing into index funds is huge and it's warping the price discovery of stocks and shares.

1:14:15Should we actually be worried about an index fund bubble? I mean, I'm not worried about that. That's not something that I've even given two seconds of thought to. I think, should anybody be worried? Is there anything you can do about that? Is that even valid? I'm looking at this in our doc and it's funny, we've talked for almost an hour and a half and we've come on maybe two of the things in our document, which is awesome. That's what I love about these conversations. But I'm looking at this YouTube video and it's like this very scary looking man, it's huge problem. Like, it's just, it's fear mongering.

1:14:45It's all fear mongering. But that all said, right? Like I understand people who have, who have issues with the concentration amongst seven or 10 companies when you're buying index fund. I get that on some level, but is it something that I'm really worried about? I'm not because I've listened to JL Collins for the better part of a decade. And I understand how self-cleansing index funds are and the winners ride and the losers fall out, fall off, whatever, and new winners come and take their place. And we don't know what those winners are going to be one year from now, not less five, 10, 15, 50 years from now.

1:15:23So I like the mechanism of it, of an index fund. I love the mechanism of it. I think it's brilliant. And I wasn't well-versed enough on that until I listened to JL Collins. And I think everybody should listen. He's been on the podcast here on Choose a Vi a handful of times. You can just Google JL Collins, Choose a Vi going way back to 2017. And the amount of, of course, the simple path to wealth is a wonderful way to learn everything in a nice, concise way. But his voice is so amazing, guys. Like he should, you know, we know how great he is to listen to. So like that helped me understand better just the function of one of these index funds.

1:16:00So, again, I think we can be intellectually honest enough to say, like, do I love that 30 plus percent is in companies like NVIDIA and certainly Tesla and companies like that? Like, I mean, yeah, there's some little aspect of me as like, oh, that's a little much. But who the heck am I to say? Maybe that's a historical accuracy. Maybe it's under like we do these things in a vacuum without doing any research. Again, like it's how you think is what's important. Like, I know that my mind goes to fear. Even my mind goes to fear. And even what I just talked through in the last minute. But then it immediately goes to, oh, but I should actually look into this, right?

1:16:38Like, what if this is not a historical anomaly at all? What if this is underrepresentative? I don't think it is, but what if it is? Then, okay, all my fears were just allayed. It's gone. Like, that was ridiculous. So, yeah, I mean, I guess the real succinct answer is like, I'm not worried about this. One of you two said this before, like, but what's the other option? What's the other option to buy individual companies to get some brilliant, actively managed company or person to basically take 1 % or more of your of your assets every year? Like, that's not a good strategy. Like until somebody presents me with a better strategy, I'm 0 % concerned about this.

1:17:15I love that. And actually, I watched the video. So this kind of thing gets shared with us to say, Donagan, should I be worried about this? And they share this stuff with us. And I watched the entire video. I downloaded the transcript, I read through it, and exactly what it was, was 80 % fear and lies, and 20 % of a few moments of truth in there to keep it like sales. Then really interesting, right at the end, it's a 12 minute video, 10 minutes in, he goes, and obviously, dumb investors put all their money into index funds. And the smart people have learned how to evaluate stocks and shares and pick them.

1:17:55And then he has his pitch for his three-day course to teach you exactly how to invest. And it's all about this whole, you can pick, you can look at the price to earnings ratio, you can pick the good value companies, you can pick the winners. And that's what the smart people do. And let me teach you how to do it. And it's really interesting. If you actually just watch some of these fear-based videos and then get to the end without actually like getting caught up in the fear you will see they are just selling you stuff that's what they do what people do to us a lot with running rebel finance school is they'll see an article headline and they'll just send us the headline or send us the article and be like should we be worried about this because if you slowly just read through or slowly watch the video you're able to see through it but i think there's we're so fractured with our attention aren't we that you see this you're scared you're like oh let me let me ask for reassurance we see that time and again don't we and it's interesting like slowing down and watching it for the first in the first place do you believe that we could use the p ratio the shiller ratio the price to earnings ratio to be able to predict which stocks to buy and when to get in and out of the market such as the value investors tell us that we can, Brad?

1:19:17Do I believe I can? I don't think I can. Well, it's easy to give a flippant answer, right? I think there are people who are successful at picking individual stocks. So I don't want to be totally flippant and say it's impossible, right? We have friends and we'll never know how much of it is skill, how much of it is luck, survivorship bias, right? It's easy to look at even, and this is silly, but even Warren Buffett, right? Like if Warren Buffett played a hundred lifetimes, how many of them is he successful? It could be a hundred. It could be five. I have no idea. Like even the great Warren Buffett, like, I don't know how replicable it is.

1:19:55So like, I look at how can I replicate this? Or can I do this? Or can, we are happening to be talking to probably a couple of hundred thousand people, right? Like, can everybody listening to this somehow miraculously study stocks and pick the winners with any degree of certainty. I don't think so. I really don't. So I think it's a bad strategy. But again, we have friends who are successful, right? Brian Feraldi has been on the show many times. David Gardner, the founder of The Motley Fool is somebody who I've known over the years. These are people who have been really successful with individual stocks and they do this analysis.

1:20:29Again, do I think that's replicable for a regular person? Do I think it's replicable for me, I really don't. And I don't think it's a matter of smarts. I don't think it's a matter of time. I think just like in any aspect of life, there's some degree of luck. Anybody who doesn't say there's luck and success is a fool. I think that's just the fact of the matter is you can be prepared, you can be smart, you can be hardworking. Luck matters. And I think anybody who tells you otherwise is a complete idiot, frankly. So that is a universal truth of life. So do I look at the P ratios? Do I think like, because the ratios are significantly high, like, am I taking all my money off the table?

1:21:10I'm not, I'm really not. I'm not even thinking about it. Do I look at fundamentals of some companies? Like, would I personally, and I, you know, jokingly, we talked about Tesla last time, like, would I buy Tesla today based on the fundamentals? Like just my like rudimentary analysis of it? Not a snowball's chance in hell, 0 % chance, but that's me. And that's, and maybe there's other biases built in there, but I just wouldn't. But I'm also not making that decision. Like I wasn't going to buy Tesla or going to buy any other individual stock. I'm buying an index fund. That's what I do. And I understand, of course, for everybody yelling at me is, yes, I understand because of the way that Tesla is a very large company and makes up a couple of percentage points of every dollar that I put into an index fund.

1:21:51And I'm okay with that. It's been a massive success. It has this meme stock ability to keep on growing regardless of what, how many cars they sell or whatever other nonsense that goes on behind the scenes. And okay, that's fine. And if it does poorly at some point, then some other company is going to come take its place. And I'm going to own that too. And that's the beautiful part of an index fund. I absolutely love that. And we feel exactly the same. I just wanted to ask you, because sometimes when you're answering all these questions and you're helping people with their finances, you come to it and you go, can you really do this?

1:22:24Can we really do that? Have I missed something? Have I missed something? And I think that's one of the signs of someone who's thoughtful is, have I missed something? Let me get other opinions. Let me ask other people. Let me learn from this stuff. I do not believe that I have either the interest or the ability to pick stocks. And maybe if I spent the next 10 years reading company statements and studying the market, I could get into it. but am I willing to invest my time energy in doing that no I want to enjoy my life with my friends and I want to have my time to do cool stuff and I don't want to spend my time doing that I invest in index funds so I can have my time are you saying then that if people do want to and they spend 10-15 years studying this stuff and they should do you think they can beat overall index fund the stats would say no because even the professionals who are actively managers who are paid to do this, who've done it for 20, 30 years, can't do it.

1:23:25There are a few outliers out there, which everyone comes back to and goes, well, that person can do it, therefore it's possible. And there is a little bit of that that does exist. There are a few people that have done it, and they have this whole value investing system that they've talked about. But is it replicable? can people do it I don't think so like we've got 200 ,000 people on here listening to the podcast and would you go to them okay like go do it I think you could be successful I would say stay clear because I want to help as many people be successful as possible I would say like your chances of being successful at that are tiny if 200 ,000 people went out and tried it maybe 10 of them would be successful.

1:24:11Is that a replicable strategy? No. If 200 ,000 people listening to this put all their money in an index fund, 200 ,000 of them would be successful over the long term. That is a replicable strategy that everyone could do and I can do. I don't even need to know how it works. It's like the light switch. I don't really understand electricity, Brad, but I love it. I can press the light switch and every time the light comes on, I can do that. I can invest in an index fund in a tax advantaged account and I can become wealthy and I don't even really need to understand it. Yeah, I love it. And I think really to close out the episode, I'll come back to something you said before, which is always come back to the why.

1:24:51And I think that's what you just alluded to there is, yeah, you could do all this. You could study and there's a tiny little chance that you're going to outperform, but you want to go live your life and you two are doing that. And it's beautiful to see. So, all right. Well, I think we're going to do another one of these very, very soon since, like I said, we had this big, long Google Doc and we touched on but a few of them. So that's great. That's what's fun about these conversations is you never know where they're going to go. This was a blast. So if anybody's looking to get in touch with you, I know.

1:25:22So Rebel Finance School, you do, but I know you just ended in 2025. But can people always sign up and get the lessons? Yes, we leave it up and it becomes a self-paced thing so they can still sign up for the course and get access to all the videos and the materials. And we're actually turning it into a self-paced thing where you'll get a video a week. You'll get an email a week that guides you through the whole subject and you learn all about investing and index investing. And we're giving that all away. So it will be available for anyone to take and anyone to get on top of. and the listeners of ChooseFI, you've probably nailed this, but you might have a family member that doesn't know anything that you want to get on the journey to doing it.

1:26:03And it starts right at the beginning of tracking where your money's going, knowing how much you already have, how to get out of debt, how to get your mindset straight, what are the beliefs that might be holding you back, and then we get on to investing and building for the future. Yeah, so just type Rebel Finance School into your favourite search engine, whichever that might be, and you should be able to find us, the Donegan's. Beautiful. All right, Alan and Katie, my friends, thanks. This was fun. And like I said, we're going to do another one real soon. It lights me up chatting to you, Brad.

1:26:33And thank you for answering the questions, helping people and giving your time to make the community a stronger place. We really appreciate you. Thank you, my friend. I appreciate it. All right, to everybody listening, always come back to the why, right? That's what we're doing here. We're trying to make the best choices that we can make to live the best life we can. however you define that. And I think it takes intentionality. This is not something that just happens overnight. You have to think about it, you have to iterate, and you have to work on it, but go out there and have fun and come back to that why, whatever that means to you.

1:27:05All right. Thanks for being part of the Chooseify community and listening to podcasts. Until next time. Thank you for listening to today's show and for being part of the Chooseify community. If you haven't already, the best ways to get involved are first, subscribe to the podcast. So you're listening to this on a podcast player and just hit subscribe and then subscribe to my weekly newsletter. I actually sit down every Monday and write this by hand and I send it out Tuesday morning. So just head over to choosefi.com slash subscribe. And it's really, really easy to get on the newsletter list right there.

1:27:39And I would greatly appreciate it. It's the best way to get in touch with me. You can actually just hit reply to any of those emails and it comes directly to my inbox. So that's the way that I keep a pulse of the community. and how we keep this the ultimate crowdsourced personal finance show. And finally, if you're looking to join an in-real-life community, we have Chooseify local groups in 300-plus cities all around the world. So head to chooseify.com slash local, and you'll find a list of all of those cities in 20-plus countries all across the world. And if you're just getting started with FI, or you have a family member or a friend who you think would be interested, two easy ways.

1:28:16Choose a Vi episode 100 is kind of our welcome to the Phi community. And even though it's a couple years old at this point, it still stands up. And it's a really great just starting point to get an understanding of what is financial independence? What are we doing here? Why are we looking to live a more intentional life where we save money and use it as a springboard to live a better life? And then Choose a Vi created a financial independence 101 course that's entirely free. just head to choosefi.com slash fi101. And again, thanks for listening.