Are You Over-Optimizing? | Jesse Cramer | Ep 555

24:15And let's say because of what's been going on in the world, I could go off and tax lost harvest today. Well, maybe I'm not aware, but on May 31st, the stock that I want to tax lost harvest today, I had dividend reinvestment going and it shut off a dividend 25 days ago that automatically got reinvested into that stock. If I try to tax lost harvest today, it's going to be a wash sale and I am not going to get the benefit of it that I intended. So in order to properly tax loss harvest, you need a lot of awareness of all your investing accounts, all your spouse's investing accounts, retirement accounts, everything.

24:50And so it's just one of those reasons again, where if the juice is worth the squeeze, if we're talking about situations when you're doing five and six figure or more types of sales to prevent thousands, if not tens of thousand dollars of taxes, by all means, it's probably worth doing all the monitoring and et cetera, et cetera, et cetera. But if we're talking about kind of de minimis amounts, I'm not sure it's worth it. I'm happy to get into a couple examples though, where I really think tax loss harvesting is good, is worthwhile. But when the typical person, all they use tax loss harvesting for is they say, here's my taxable brokerage account.

25:23I have some assets at a loss, other at a gain, and I'm just going to execute tax loss harvesting. What they've done there, especially if they're kind of repurchasing a substantially equivalent asset they haven't changed their asset allocation at all right part of the goal is you maintain the same asset allocation and what they've done by realizing some gains and offsetting with some losses they have not changed the cost basis of their portfolio they haven't changed the cost basis of the portfolio at all what they've done is that instead of realizing the tax instead of paying the tax now they've simply kicked the tax can down the road until a future year.

26:01Or maybe if they're close to death, maybe they permanently eliminate that capital gains tax through the step up in basis, which is fine. But what most people do is they kick the can down the road. And yes, from a time value of money point of view, I would rather pay$1 ,000 in taxes 10 years from now than$1 ,000 right now. But for the hassle and the risk that they incur through a wash sale or whatever it may be, the fact that they aren't fundamentally changing their portfolio construction at all. It's just that's a set of truths that I think the average DIYer should be aware of before they dive headfirst into tax loss harvesting.

26:38Yeah, that's an interesting one. And yeah, I don't think we'll go into all the positive examples because yeah, there undoubtedly are. But I mean, you've opened my eyes in the sense that really it's about having all of your money. I'm thinking about a company like Wealthfront, which I have a small test account there because I like to test these things, obviously. I'm a podcast host on a personal finance show. I've had accounts at M1 Finance and Wealthfront, and they do cool stuff. But one of the neat things about Wealthfront was they do automatic capital loss harvesting. Now, interestingly, as you are making me realize, okay, I have plenty of accounts in taxable brokerages.

27:17I have them spread across multiple brokerages, and you're talking also a spouse. So this doubly complicates And if anybody in that 61-day period had a dividend reinvested or made an automatic purchase that they might not have thought about, well, that renders the whole thing moot. And then your capital loss that you theoretically just harvested is a wash. You literally do not get to take that capital loss on your tax return. So then, right, if you've harvested cap gains to offset it, then you literally have just created a taxable event for yourself, which is less than ideal. So not saying not to tax loss harvest, but man, Jesse, that's an interesting one.

27:58And it's funny because I think what most people think of when they think of tax loss harvesting is, okay, I just have to make sure that I put it in a similar type of asset, but a little bit different. So most people think they can get by with, hey, I'm in a total stock market fund, and then I can sell that and buy an S &P 500 fund. And I think most people, the current thought, and I don't have any knowledge on whether the IRS has upheld this. I suspect that it has based on how prevalent this concept is, but that's okay. And that does not run afoul of the wash sale rules. But that really is the open and shut conversation on wash sale, not what you brought up, which is I think a lot of people just simply don't have all their money in one spot, don't have visibility into it.

28:42And I think, right, by over-optimizing one spot, they're actually hurting themselves, not helping themselves. Yeah, I agree with that. I agree with that. And if anyone wants just a quick litmus test, just to see if it's like a worthwhile pursuit. One of my personal tests is to ask myself or to ask people I'm working with or listeners, whoever, well, hey, will this act fundamentally change your overall asset allocation? Because if yes, then you might as well tax loss harvest while you're doing it. So what do I mean? You're selling your second home. You inherited a small cabin in the woods when your grandfather died, and now you want to sell it.

29:17You are going to realize some capital gains through the sale, let's say. So you're fundamentally changing your balance sheet in some way, and these capital gains are going to be imposed on you anyway. Well, you might as well try to realize some losses to offset those gains. Another common one, and this one probably applies to a good amount of listeners, is let's say you work in tech, you work at a startup, you are paid in equity, you are over concentrated in your company's stock and you've decided it's time to diversify. Well, you're fundamentally changing your portfolio. You are changing your investment side of the portfolio.

29:49You are going to be realizing gains to do so. Okay. You might as well also realize some losses there and try to balance that out. So there are some awesome ways, obviously, to execute tax loss harvesting. It's a great arrow in your quiver. It's just, again, it's something you don't want to over-optimize it in a way that ends up being detrimental. 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.

30:26Thanks for being part of our community and for your support. All right. What's the next area that you see a lot of people trying to over-optimize? A similar one is the asset location dilemma, which depending on how you use it, how you approach it, how you prioritize it, it can be a tax trap or it could be an amazing tax strategy. So again, the quick 30-second explanation here is that, as many of us know, some types of accounts, qualified accounts, retirement accounts, IRAs, 401ks, et cetera, Roths, et cetera, those accounts do not have – they're tax-free. They're tax-free on an annual basis. Capital gains, dividends inside those accounts, tax-free.

31:07They aren't taxed. Taxable brokerage account, though, on an annual basis, any sort of dividends, income, capital gains in that account gets taxed. So the thought process here is, well, and this is something I know you guys have done a great job talking about before. You say, well, listen, if I'm going to own different types of assets anyway, let's just use stocks and bonds as an example. I know that bonds tend to have a lot of annual income as a percentage of the overall bonds value, and that income will be taxed if it's in a taxable account. Therefore, I'd rather shelter my tax inefficient bonds inside of an account where there's no tax is actually charged to me like a qualified account.

31:46Therefore, I'd rather keep my stocks, which tend to be more tax efficient, especially if they're in like an ETF wrapper or something like that. I'd rather keep my stocks inside my taxable account. And listen, this is a good strategy and it can be done well. And a lot of the advice that I see online, it is done well, but we want to be careful not to always let the tax tail wag the investing dog as it were. So a big part of my personal thought process is that the first thing we want to do as DIYers, people in the FI community, is you want to make sure that your asset location in each account is properly matched up with the timeline and goals for that money.

32:26And then once you do that, then you can start to consider if asset location really is a valuable thing for you. And maybe the last thing I'll just say before kind of tossing it back over to you, Brad, and getting some of your thoughts is that there's this really good Vanguard study from 2022 where they wanted to dig into the actual nuts and bolts value that someone gets from proper asset location. And so the baseline for the study was they took someone who has assets in a taxable account, in traditional accounts and in a Roth account. So all three account types that many of us benefit from. And the baseline is that someone is 60-40 in all three of those accounts, 60 % stocks, index fund, 40 % bond index fund.

33:06And then they compared that to situations where this same hypothetical investor just totally optimized as far as they could for asset location. And on average, that investor benefits somewhere between 10 and 20 basis points per year of after-tax returns. So instead of receiving, say, an 8 % average annual return, they might receive 8.15%. So yeah, there's some benefit there. There's some juice to squeeze out there. But maybe what I'll get into after you share some thoughts is just, you know, we want to be cautious and careful not to over-optimize. Yeah. Okay. That's very interesting. So yes, some people are certainly listening to that saying, oh, I wouldn't mind the 8.15 % return.

33:48I know the value of, we always talk the other side is watching your fees, right? It's very important to not have significant expense ratios or asset center management because small differences in return can make a massive difference when compounded over 30, 40, 50 plus years. So there clearly is a benefit to doing this. But I guess my question to you, so what is the downside of over-optimizing here? So you talked about timelines and such. We definitely have had guests come on and talk about this. And it does sound very common sense, which is, hey, if you have something that you know is going to spit off a lot of income, current income, like bonds, for instance, maybe it is better to have that in a retirement vehicle as opposed to a taxable brokerage account.

34:35So that makes intuitive sense to me. And like you said, this Vanguard study says, okay, you are going to get a better return, but you are cautioning the entire point of the episode is, hey, we're cautioning maybe over optimizing. So give us the downside of this in essence. Yeah. I mean, the first few downsides that just come to mind, maybe they're a little simple in nature. They're also just kind of logistics in nature, but it's liquidity and accessibility and timeline issues. It's rebalancing issues. It's stuff like that. So what do I mean? Well, an optimized asset location strategy, if that's the one access that you're really pushing hard on, you're almost guaranteed that each account's kind of investment timeline is no longer going to match the timeline in your financial plan.

35:18So if we take a taxable brokerage account, for example, it is, as we know, it is the most flexible account. And yes, we have rule of 72T and rule of 55, and we have some good strategies to access qualified accounts early if we want, but everyone who's pursuing FI, their taxable account likely plays a pretty big role in the near term. right? When we're talking about those early years of retirement, when we're just talking about how they're going to maintain their lifestyle and cashflow for the early years, their taxable account plays a big role there. And if they are matching up assets with those future liabilities, that probably means that those near-term liabilities won't be funded from stocks.

35:56They'll be funded from bonds or cash or some other lower volatility, lower return asset from a taxable account because the taxable account is the one with flexibility. but wait a second, if we're optimizing for asset location, we're probably not going to have any bonds or any cash in our taxable account. We're only going to have stocks in our taxable account. Now this isn't the end of the world, Brad, I will say, because something that someone can do is they can say, well, I'll optimize for asset location. If I need money this year, I will sell some stocks from my taxable account. But then what I'm going to do is I'm going to go over to my qualified accounts where my bonds reside, and I'm going to trade an equivalent amount of bonds over there for stocks over there.

36:36So on net across my entire balance sheet, I haven't really sold any stocks. I sold some from my taxable account, but then I bought the same amount in my qualified account. And over in my qualified account, I ended up selling some bonds there. And that is technically it does work. It's just one of those things where, yeah, you're kind of by over-optimizing on asset location, you are now certainly under-optimizing in terms of just simplicity and logistics and accessibility and those kinds of things. So that's one example. Another good example that I'll dive into only because it's something I, it's, it's pretty corner case, but it's worth considering is thinking about long-term estate planning.

37:15So this is, again, this applies maybe more to older listeners, someone sick, something like that. But when asset location is the topic, I think to myself, well, how do assets get passed down. And taxable accounts get passed down with a step up in basis. Capital gains essentially get erased, for lack of a better term. IRA accounts get passed down. If it's not going to a spouse, if it's going to a child or a grandchild or something like that, IRA accounts get passed down in the form of an inherited IRA. And maybe this is actually something I should bring up in the next topic if we dive into Roth conversions.

37:48But the point is, there are some questions that we ought to ask at a certain point in life. We ought to ask ourselves, not necessarily how are are we investing for me and my lifetime, but how are we investing for the person or the entity who will receive my assets upon death? And again, if you over optimize, say an asset location, you might not be considering questions like that. Yeah, that's interesting. And it's funny because I think a lot of this is like you said at the outset, it's in the eye of the beholder, right? Because some people might be saying, oh, wow, that sounds like a huge stress to have to over optimize.

38:26Where do I have this money and how is it going to be passed down? I don't understand any of these rules. But again, I think your larger point is there are some things where the juice is worth the squeeze. Right. So that's something that could make a massive, especially if you're talking potentially millions of dollars, that could make a massive difference in terms of potential future tax liability to your heir. et cetera, like you said, step up in basis. There's a step up in basis on a lot and there's very little tax ramifications, but an inherited IRA, as I understand it, when you take distributions from that, that is taxable income, correct?

39:05Correct. Correct. So the current inherited IRA rules, if you were to die today, it might be a little different if someone died in the past five years. One of the annoying things over the last five or 10 years with Secure Act and stuff like that is that depending on the date of death, the inherited IRA rules were a little different or a little nuanced, but the IRS has tried to simplify them going forward. And so if I were to die today, well, first off spouses, the inherited IRA rules don't apply to spouses, which is kind of nice. Essentially, they just get to inherit the IRA as if it were their own.

39:35And there might be some nuance there that I'm missing. And this is where, you know, talk to your personal CPA to make sure that I get all this right. But if a child or a grandchild or a friend is going to inherit my IRA from me, they will have 10 years from my year of death. They will have 10 tax years to fully empty that account. They can basically take those 10 years in any way they want. They can wait until year 10 and do it all at once. They can chop it up into 10 equal slices and take it one at a time. And that person, when they withdraw whatever size slice that they want, it will be income.

40:08It will be realized income to them. Again, assuming this is a traditional IRA, right? I never paid a dollar of tax on that money during my life, but the IRS still wants its cut. And this is where I'll pivot quick, if it's okay with you, Brad, to the Roth conversion part of today's conversation, which we'll dive more into, but Roth conversions are a wonderful tool. I see them and recommend them frequently. And whether it's someone who's in early retirement, taking advantage of their low income years, someone in normal retirement, taking advantage of lower income years and trying to prevent large required minimum distributions later on RMDs, or whether it's people who are like you or I, our age, Brad, and all we're trying to do is execute backdoor Roths, which involves a Roth conversion.

40:48It's a wonderful strategy, but especially for an older person, they might be considering making a Roth conversion at 22 or 24 % in the federal bracket. Okay, fair enough. Let's say that's true. Well, if that person were to pass away, let's say, and they've decided that their grandchild, who's 20 years old, is going to receive part of that inherited IRA. Well, that 20-year-old probably isn't earning anything, very low income, and maybe for a few years will be very low income. And in theory, they could inherit that IRA upon death of their grandfather, let's say, and they could distribute a lot of that IRA in the zero or 10 or 12 % brackets.

41:32So it's like, why would grandpa do a Roth conversion to intentionally realize 22 or 24 % taxes when maybe in the next few years, he might pass away and the grandchild will pay a much lower tax rate. Now that is super corner case, super nuanced. And I will say some trusted estate attorneys and some CFPs who I know personally would say no offense, Jesse, but we don't really make planning decisions based on the inheritor. We much rather just make planning decisions based on the fact that the living person is in front of us and still breathing, which is fair. And maybe one other quick sidebar, because you made me think of something there, Brad.

42:08It's funny that if you talk to an asset manager or someone who's just trying to optimize your portfolio, they're going to just focus on investments. If you talk to your CPA tax repair, they're only going to focus on minimizing your taxes. If you talk to a trust and estate attorney, right, they're really going to be thinking through the lens of, you know, minimizing a state tax or a smooth transition of assets. And that's where it gets hard because I think the truth is you kind of need to balance all these different things all at once. Going back to our opening statement, this really is a balance.

42:36You're trying to find a balance between these different priorities. So depending on who you listen to, depending on where you're getting your advice or your information from, if all you do is listen to CPAs, you might be coming at this conversation today from a very different lens of just minimize tax, minimize tax, minimize tax. So I'll leave it at that. I can see your wheels spinning. Yeah, no, that's a really good one. And that'll take us to the next part of the conversation, which is, okay, how do we learn enough to figure out who to listen to? Or how do we trust our instincts if we don't have instincts on this?

43:09Or we don't have a sense of what is over-optimizing and under-optimizing because, oh, I heard dot, dot, dot, right? And it might just be, I heard on a podcast, I heard on a website, I heard from my CPA, I heard from my whoever. So that to me, I'm going to let you run with that. But I did want to just double back real quick, just lest we scare anybody. I think for most people on estate taxes, the estate tax is really one of these things in the public consciousness and politics that is so misconstrued. Almost nobody pays any estate tax at all. I mean, it's fleetingly, you could round to zero on the number of US households that pay estate tax each year, because the lifetime exclusion is so massive, so, so massive.

43:54So when you hear something like the death tax thrown around, it's mostly complete nonsense. And I mean, it's great marketing, but let's also be clear, it's incredible marketing and it's a wonderful scare tactic, but nobody pays that. So most assets like we talked about, Jesse, well, A, to my knowledge, again, if it's under that exclusion, the recipient of the estate, whoever gets the money, not the person who passed away, they do not pay tax upon that that death or getting that money i can think of no instance that i know of if they're under that exclusion but like we're saying there is a step up in basis in a lot of senses which is wonderful that means hey my father bought these stocks bought berkshire hathaway 50 years ago for a thousand dollars and now it's worth seven hundred thousand dollars a share for the a shares and never sold it right so in my bizarre example there's a six $699 ,000 unrealized capital gain that my father would have had if he ever sold that, he would have had to pay capital gains tax on that.

44:58But because he passed while still owning that share, and it was then given to me in the estate, it steps up in basis to the fair market value on the date of death. So in that case, my basis, which is a lot of people call cost basis, would be$700 ,000 on that Berkshire Hathaway A share in that case. So if I happen to sell it the next day for$701 ,000, I would just have a$1 ,000 capital gain. In that case, I guess it would be short term. My example broke down a little bit, but nevertheless, only a$1 ,000 capital gain as opposed to, in that case, a$700 ,000 capital gain because I got that stuff up to Visa.

45:38So a lot of people are worried about an estate tax. They really shouldn't be. They really, really shouldn't be. Totally agree with that. I mean, the estate taxes only applies to a, especially at the federal level applies to a fleetingly small minority of people at the state level. Some states, I will say to have a state taxes that are worth considering, or at least will apply to more people. I can tell you one. And here in New York, for example, our estate tax is a cliff. Meaning, right. If you are a dollar over the limit, the estate tax now applies to your entire estate, right? If you're a dollar under the limit, nothing, nothing.

46:14You aren't taxed on anything. If you're a dollar over, everything gets taxed. So, okay, here in New York, it can be pretty important to just get your ducks in a row. And even if you're vastly under the federal estate limit, it can still just be worthwhile to consider, okay, upon my passing, you know, where are my taxable assets going? And is someone going to really benefit from the step-up in basis that they receive? Where will my qualified, especially traditional assets be going? and will those people who receive them, say via an inherited IRA, will they really get the benefit that they want?

46:47I mean, let's say you have two adult kids you're leaving your money to. One of them is very successful and a high earner. The other one took a different route and is maybe earning much less money. Well, all of us being equal, you'd rather pass, and let's say just trying to be a fair parent, you wanna share your assets with them 50-50. Okay, totally fair, totally reasonable scenario. Well, you would probably rather, and they would probably rather, have the higher earning child receive your taxable assets with a step up in basis. And your lower earning child can receive a larger share of your qualified assets because they will end up paying less tax on it anyway.

47:20It's just little stuff like that. Again, it's worth being aware of these things. And maybe one of the challenges as you were kind of segueing there, Brad, is you're saying, well, how do we make sure we're not over-optimizing or under-optimizing? How do we keep all these things and balance. And my first gut response is, it goes back to the idea that perfection isn't the goal, right? I think we have to admit to ourselves that our plan will never be perfect. And even if we were to make every perfect decision right now, the fact of the matter is that a year's worth of market changes or a year's worth of tax law changes might take today's version of perfection and just render it obsolete.

48:01So my personal take is like, of course, continue learning, especially, you know, the DIYers, the FI community, keep on learning, listen to good sources, try to just expand your knowledge base piece by piece, piece by piece. And then with the knowledge that you know, say, I'm not going to be perfect, but I'm going to try to create a plan that I can live with that gets me to my goals that I believe takes a few different things into account, many different things into account, and then revisit it. However often you need to revisit it to make yourself feel good, revisit that plan. A financial plan shouldn't be static, right?

48:32I think it needs to be dynamic because the world is dynamic and you need to be able to roll with the punches. But at the end of the day, admitting to ourselves that like, yeah, I'm not going to be perfect, but I'm going to be pretty good. And I'm going to be good enough to live the FI lifestyle I want. I'm going to be good enough to do these things in life that I want. I think that's an important admission that we need to make to ourselves to find success. Yeah, that definitely resonates with me, right? Because, well, a couple of things, I guess most importantly, we need to keep learning. And I think this has been one of maybe the keys to my kind of life success, as it may be, is I just learn.

49:11I just try to take in information, even Jesse, when it doesn't seem like it's especially pertinent right now. And I think that's kind of what you're saying is, and I'll find this with people who listen to podcasts sometimes, friend of mine, I'm not talking about choose-o-i necessarily, but just podcasts in general. It's like, oh, I didn't like the title of that episode or, oh, I didn't think it was going to apply to me. And it's like, okay, well, that's all well and good. But A, you know, podcasters can only put like six words in a title and it's an hour long podcast and they can't possibly cover everything for first.

49:43That's kind of my public service announcement. But second, you never know when you're just going to seed your brain with something that can really help you. And frankly, if you listen to an hour podcast, most of us are listening to it in 1.25x or 1.5x or something like that, and you're spending 40 minutes on it, and you learn one or two things, that's actually a pretty good use of your entertainment time. So maybe, maybe, maybe create a simple Google spreadsheet or something, which is, hey, I learned something today. I know this sounds like a little extra work and it is a little extra work, but I'm thinking about, I don't know, like randomly starting new businesses.

50:21I love the podcast, My First Million, and they introduced me to another one called the Corner Office. And it's not C-O-R-N-E-R. It's this guy's last name, which is K-O-E-N-E-R, I believe. And it's just fantastic. It's just, it gives me like a ton of business ideas. and frankly, Jesse, am I going to take action on any of these in the next week, month, year? I don't know. I doubt it. But you never know. And you never know when that little piece of information might help you in your life somehow. And I think this to me is really the cornerstone of learning things is like, you simply can't know when it's going to help you, but there's no argument that having more information is worse than having less.

51:04And I think personal finance is a perfect example. There are just thousands of little pieces of information that you ideally could know. Do you need to know all thousand or multiple thousands? No, of course not. But the more that are just rummaging around in your head somehow and you can make a cohesive picture, well, then you have a little more information than you did the day before. And I think that, again, it's not over-optimizing. It's not saying to succeed in your personal finances, you have to spend thousands of hours learning all this stuff because that's antithetical to what I believe.

51:37And I know you too. I optimize for simplicity in most cases. And I think personal finance is actually really easy, but that's easy to say for me because I do have a lot of these pieces of information in my head. Totally. Totally. Shameless plug, but right. An investment in knowledge pays the best interest, right? That's how I got the name for my blog. It's this Benjamin Franklin quote, an investment in knowledge pays the best interest. And there's so much truth in putting together these puzzle pieces in your knowledge set, right? Whether it's about financial planning, personal finances, it could be about cooking, it could be about fitness, it could be about whatever the thing is that you want.

52:12And just like you kind of alluded to something there that I really liked, Brad, which is you kind of get these factoids, they start rummaging around and floating around in your head. And one important thing is just to like, if you can develop this little sixth sense or just this little awareness that it's like, ooh, this particular choice might have unintended consequences that are externalities that I'm not aware of. Or like, I think I heard something one time that like, if you do this, there are some side effects. I better go look it up. Like that's the instinct that I think is important to develop.

52:42Again, it's not that you need to know everything, but you just kind of have to develop an instinct for when you ought to dig a little deeper, when you ought to do a little more research. I mean, listen, Google or ChatGPT, like the internet is this amazing resource, you know? And it's so cool when it's like you Google something and you're like, oh, that was on episode 233 of Choose FI. I'm going to go back and listen to it now, right? And then you listen to you guys for 45 minutes and boom, there's your answer. But you're right. We don't need to make this complex per se, but what we need to just be aware of is that, yeah, it's back to the spider web.

53:13If you tug on it over here, you might be jingling the web over there. And it's just, it's good to know that upfront. Wow. Jesse, that sounds like the perfect kind of energetic close to the episode that feels like the exact point we want people to take away. And yeah, I think an episode like this, sure, we gave a lot of examples, right? And you dove into a bunch of things, but it's really the larger point of, okay, you can't over optimize in every area. It's just simply, it's not going to work. There's always some give and take in life and you need to be aware of that. You also need to figure out what works for your life, what helps where you want to optimize.

53:55And that might simply be, hey, I don't want to optimize. I want to just optimize for the sleep well at night test, which I've repeatedly said here on the podcast. And that's just something that's important to me. Now, does that mean, Jesse, that I'm throwing my hands up and I'm not doing anything savvy with my finances? No, of course not. But it means, okay, I need to really think about this. And maybe while I don't spend a lot of time thinking about my personal finances now, because mostly they're on autopilot, maybe every six months or a year, I do step back and say, hey, do I still want to be doing this?

54:28For instance, I actually just sold both of my rental properties that I had down in Georgia. Actually, this is really cool because this was originally envisioned by Stephen Boyer of Camp Fi creation fame as a future FI co-housing community. Interestingly, it is coming to fruition. The first people are moving down there. I kind of call them settlers, but the first people have moved down there. It's real. This is happening. So I own two rental properties in that community and they've been wonderful rentals, but it just was time. I actually sold one to someone who's moving down there and I sold one to somebody else who's just going to continue using it as investment until someone wants to move into it and then they'll sell it to them.

55:14But for me, it was a sleep well at night test because while these properties have been really pretty easy for me in the grand scheme of things, I realized like I just simply don't want to have rental real estate. and that was an optimization for me. And I think that's fine. I think I'm very happy with that as a decision. And I think that's what we need to do is what I would counsel as my last word here, Jesse, is everybody should just take a periodic look at their assumptions. Take a periodic look at what does my financial life look like? What am I spending time and energy on? And just say, okay, look, that served me when I set this up.

55:52Is that still serving me today? And the answer might be an absolute yes. And that's wonderful. And the answer might be, oh, you know, maybe, maybe not so much anymore. Maybe I want to pivot in some way. Might be, hey, I want to double down and buy 20 rental properties. That's great, too. I'm not arguing against rental properties in any way. But I'm optimizing for simplicity now. So, yeah, that was a massive win for me. And I think it's just kind of a cool illustration as we end the episode on just how you can look at your financial life and say, OK, is there time? Is there a time and a place to rethink this?

56:24I think that is what I personally would love for people to get out of this. I totally agree. You know, is the juice worth the squeeze? And your answer is allowed to change, right? Life is dynamic. The future is unknown. We don't know what will come. This whole process is not a static process. It's a dynamic process. We're always allowed to revisit our assumptions, revisit our answers or our plan based on those assumptions. And yeah, can't thank you enough for having me on, Brad. This was a really fun conversation. Yeah, I always love having you on. And we mentioned this earlier. So where to contact you?

56:58Because I'm fanatical about making sure people know exactly. So it's bestinterest.blog. So there's no the there. It's just bestinterest.blog is your website. It's phenomenal. And people can find your podcast there, but they can also just search for the new name of the podcast, which is personal finance for long-term investors. You do have a hyphen between long-term. Hopefully, hopefully, hopefully the podcast apps are smart enough to find it without that. And I suspect they are, but maybe not put a hyphen in there. So I know it's a great show and I hope people check it out. I know a lot of people checked it out the last time you're on, on episode 492.

57:35Anywhere else people can find you or reach out to you? Those are the big two. And the third small thing that I do, but it's the way that I think a lot of people just keep in the loop is if you go to bestinterest.blog, I send out a very quick weekly newsletter with my new articles, my new podcasts, and good stuff I find from all over the internet. So that's the way a lot of my audience kind of keep a pulse. But those are the three things, the blog, the podcast, and the newsletter. I love that. And people can find the signup link just on your homepage of bestinterest.blog. Exactly. Awesome. Jesse, this has been great.

58:06I really appreciate your time. Thank you, Brad. Likewise. Thanks so much for having me on again. 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 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 subscribe and it's really really easy to get on the the newsletter list right there and i would greatly appreciate 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.

58:46So 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 choose a buy local groups in 300 plus cities all around the world. So head to choose a buy.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 friend who you think would be interested, two easy ways. Choose a Vi episode 100 is kind of our welcome to the Fi community. And even though it's a couple years old at this point, it still stands up.

59:25And 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 Chooseify created a Financial Independence 101 course that's entirely free. Just head to chooseify.com slash fi101. And again, thanks for listening.