Getting Personal with Personal Finance: Ginger & TJ | Episode 519

0:00Hi, everyone. It's Ginger again. I'm here today with TJ to have another personal conversation about personal finance. I've talked to TJ exactly one time, and in that short conversation, found him to be an extraordinary person. It's rare to meet someone so successful, so warm, so generous, who is also so very young. We're here today to learn his secrets. And with that little teaser, welcome to ChooseFI.

0:33Thanks, Ginger. I'm so excited to be here and happy to share my experience that might be helpful for others. Yeah, absolutely. So let's go ahead and give people a little bit of an image here. So give us some demographic information. How old are you? What does your family look like? So I am 37 years old. I am married. My wife and I had our first son recently. He's 20 months old and a joy to be around. And we've been saving for a few years. We found FI, realized that there was a purpose to the savings. And we've gotten to the point now where as far as essential expenses go, we've hit our FI number and are starting at least a mini retirement, which may turn into a permanent retirement and really excited about that.

1:19I love it. We're just jumping right in. So TJ is retired slash sort of retired slash maybe retired. So we definitely want to hear the details, but let's kind of start with, you said, suddenly we realized our savings had a purpose. Can you kind of talk us through what was that experience and when did that happen? Yeah. So my wife and I have both been natural savers. We grew up in families that could make ends meet, but not a lot beyond that. So when we followed what our interests were, we each ended up going to college for engineering. I mean, in particular, I got a bachelor's in mechanical engineering and a master's in nuclear engineering.

2:02So all excited about the opportunities for a challenging career. But the other thing that comes with that is also the opportunities to earn a lot more than I'd ever seen in my family's past. So once I had enough money to buy things, I realized that the life that I had been living that I had through my whole childhood was an enjoyable life to me. And I didn't feel a need to change much of that. And so I had a lot of extra money available. And that ended up being money that instead of spending on other things that I already knew I didn't need. I just wanted to save and have available for whatever the future might bring.

2:40And so we started saving the money. I was blessed by finding programs like what's currently called FaithFi, which is a Christian-based finance program. At the time, it was called Compass One. And so I knew a little bit about from that, a little bit about how to invest some money and make it grow, not just sit in a bank account or under a mattress. And And we lived a life that we really enjoyed and put the money away in a way that it was growing. And one of my good friends and prior coworker, Chris Cannon, introduced me to the Chooseify podcast when it was back in about episode 30. And there were a lot more actionable tips about, okay, what can we do with this?

3:24And we realized, hey, this is a method that we can be very intentional about making the money work for us and allow us to have experiences and a lifestyle that I honestly didn't even know was possible until I found Chooseify. Yeah. I want to slow you down a little. You were saying, OK, so you got out of college and got your first job and suddenly you were making more money than you had realized could kind of be a thing. or was so foreign to how you grew up. And for some people, for a lot of people, that can be tricky. Like obviously wonderful and yay. And now I can buy things that I wasn't able to buy before, but it can kind of be tricky in terms of how I think about my own family and, oh, I feel a little bit of guilt.

4:10Or did you have any emotions around that, that you kind of had to work through? Or Or were there ways in which it was actually counterintuitively difficult to earn more than your parents had earned? Yeah, there's probably much more than a podcast worth of information to share on how that journey goes. So what I'd say simply is that when we grew up, you know, there's always the necessities. So we always had food on the table, but it was also always important to volunteer. here. My mom is an incredibly selfless person. And so she demonstrated that for us and modeled it. And so even when we didn't have much money of our own, we were giving of our time and going on a lot of, you know, every summer would be a mission trip and something of that sort.

4:58So that's the loving, generous mindset that I grew up seeing and emulating in myself. And so what my parents wanted for me was always to have a, you know, what every parent wants, a successful, well-adjusted adult. So it was always, you know, a very supportive family environment throughout my entire family of, you know, going to college like neither of my parents had and being able to achieve and earn more than, you know, all the odds and ends jobs that I did from the time I was 14 on. And so it wasn't, I never felt really guilty about being successful. It was a celebration. Everyone was very supportive and it gave me options and abilities and removed some stresses that of course had been in my life up to that point.

5:48So it was actually just a very positive thing. Yeah, no guilt associated with it. Just an excitement. Yeah, I love that idea of it was a celebration. Okay, so you and your wife started listening to Choose Fi. and now we are up to today. How much time lapsed? How much time were you on this very intentional path to we are going to buy our freedom? I started listening to Chooseify early on, but my wife did not. She was not on board with all of this talking about early retirement. Honestly, she still doesn't like the idea of an early retirement or reaching financial independence. So her term for it is work optional.

6:34And that's her favorite way to think about it and say it. And once we started getting really intentional is probably around 2017, 2018 timeframe. And my wife, Jessica is amazing and supportive. So she was always on board with helping save money, but she was very hesitant to accept the FI lifestyle. We would listen to all the standard books. So she knew about Vicki Robin and she's like, I don't want to live on an island off the coast of Washington, that's not our life. And other books and things like she just couldn't see herself in any of the stories. And I understood that. So I did most of the research and listening and planning.

7:09And it was through a free financial advisor that my company offered where we could actually put our goals to paper. And they ran some numbers and gave us percent likelihood of success and what our net worth would look like if we continued working till we were 65. And the numbers were just in the millions. I was like, wait a second, we can live on millions. And so that was the moment that she'll say she got on board with, instead of trying to just earn millions that we knew we didn't need, how do we target what we really do want and what we do need and align on that. And so we got really intentional once those numbers were put to paper in 2018.

7:50And now it's 2024 and we've hit our essential FI number. So we don't have to work again. We are work optional, both of us. And we're also at a point where we can, I mean, it's just so exciting with my son at 20 months that I get the ability to see him each and every day. And so that's what we're choosing to do is to spend that time as a family and just loving that. Yeah. I wonder if it would be helpful for people if you could kind of walk us through logistically what you meant by, okay, my wife got on board and we started working towards this. And what I mean by that is I'm assuming that meant, oh, maybe we were opening a brokerage account that was after tax instead of focusing on our retirement accounts, right?

8:38But that might not be what you mean. So can you kind of walk us through like what that actually looked like to take this path that is not traditional, right? And so we don't hear about it unless we go looking for that information. But what did that look like for you? Yeah, that's true. So we were always savers. So we had a lot of money, both in our retirement accounts and our outsider retirement accounts. I was blessed to have recognized investing was important early on. So I had an after-tax brokerage account and I had learned enough from my own personal research to do some investing. It was around the time that I started listening to Choose Fi and read The Simple Path to wealth that I realized how powerful the simple index fund approach was.

9:25And so really, we started tracking our net worth is the big change that happened in 2018. And we'd just gotten married the year before. And so one of the things that we agreed to and instituted was a quarterly money date to sit down and go over, you know, where have we spent money? Where are we going to be spending money in the next couple of months, making sure we're aligned on all of that stuff. And then also, is there anything we want to change based on where we are? And is there anything that we're spending money on that we're not valuing? So it was having those discussions. And those are the specific questions that we had on a page in OneNote.

10:05And we would just go down them, answer them every time. And so we've got a history from the last seven years of every quarter, what all of our accounts were worth and what our thoughts were, what our expenses were going to be, making sure that we were aligned in that. And we were on the whole in really good shape as far as being well under our income, what we were spending. We actually found out then we started tracking and we're like, oh, we've got like a 40 to 70 % savings rate, depending on the year. But it was, okay, how do we want to invest it? Which places do we want to be thinking about putting money.

10:42I found out that my company has the after-tax option in the 401k. And so we started saving even more money there and converting it to Roth. So there's all these little things that we started intentionally doing. And that kicked off in 2018. And just little decision by little decision helped us get to the point where we are now. I love that you guys took notes on your meetings. That's awesome. I'm very much a note taker. The ability to take good notes and remember where those notes are and go back to them is something that has served me well, both in my career and also at home to help keep us aligned and help us go in the right direction.

11:21It's been great. Yeah. Do you remember anything, and you can look back at your notes if you don't, that you're willing to share under that category of what we want to change in terms of like, oh, we're spending on something that doesn't have value, or we need to make some changes around the budget, that kind of thing? Yeah. So a couple of examples early on that we identified, some where we wanted to save some money. So we realized the cell phone bill was expensive, and we made the switch. We couldn't do Mint Mobile because it was T-Mobile's towers, and those don't exist very much where we are.

11:56But we were able to switch to the low-cost provider, U.S. Mobile, and that saved us hundreds of dollars a year. I started carpooling to work, which saved on gas money and the commute. I've had an hour-plus commute to work as far as the drive every day for the last 13 years. So that's certainly a larger expense than if I were a little bit closer to work. We also found that we were eating out, having fast food or going to restaurants pretty regularly. And so we started buying more groceries and taking more packed lunches. We also found areas where we wanted to spend more. So for example, we have a yard that's a little bit difficult to mow.

12:38And given how much I was working in overtime and other things that Jessica was doing, we decided to hire a mowing company and also a company to take care of the pool. So those are things where it still aligned with our values and was within the budget. And so we decided to spend more on those things. And some of those we still continue today. All of the cost-cutting measures we continue today. And the combination of the things just made sure we were aligned all along the way. Was there anything difficult at first about spending more on some of those things? So there's a certain bit of tension when you have a goal that involves saving and then you have an action that involves spending.

13:21So in some ways, yes, but we had talked about it and we talked about the pros and cons and how it affects our lives and the time that it means that we get to have together in the sense of what we were spending on. So it was a conscious and intentional decision to spend and we were aligned in that. So it was a positive thing and we were definitely happy to do it, even though we knew that it wasn't the optimal path directly to the FI number. But our goal was never to shoot straight to the FI number. The goal was to be aligned in our finances and in our life and recognize the value that the saving money that we were doing everywhere else was bringing to us.

14:04Yeah, seems like you did really well with that balance. I think about how with some of my friends, we say things like, okay, well, let's go out to coffee and just retire four minutes later than we were going to. I wonder, do you feel good about drinking the coffee if that's how you're discussing it? Well, I love your focus on we're really enjoying that we get to spend more time together. And while the value is really evident now, that seems like a good, healthy way to approach that. And you really leaned into that word intentional. And so, so much of the spending we do that is mindless is the spending that ultimately we feel bad about, right?

14:47So I could see how saying like, okay, well, I'm not going to mow the lawn myself and thus it's going to be 18 more minutes until I can retire to instead say, okay, this is my life now also has value in our relationship in this moment has value. And so, boy, we're really going to enjoy that now. Yeah. One of the things that was important to make sure that we were aligned in this on board together and the financial independence plans is we both worked hard and come from a place where we didn't have financial means to do a lot of things. So talking about, okay, what do we want to do now that we have all these options.

15:28It gives us an opportunity to really think about and make decisions from a place of alignment and excitement about what we're choosing to do. Because early on, we didn't have options. I mean, I can still remember before I got my first paycheck after graduating college, I had went on a trip to Europe with Jessica. That was soon after our first date. I met her, and a month later we were in Europe together. So Jessica and I both as part of our college experiences spent time in Germany working and living there. I did it through an international co-op program which meant that I had a job over there and I was working and she had a semester abroad as well as a job for a time.

16:13So we met each other at a German club and only spoke German to each other for the first three months of knowing one another. So romantic. Then the first time I spoke English to her was when I asked her out on our first date because I was not confident enough in my German to be able to flirt. Yeah. So we went on that date and one of the things she brought up was how her work was sending her on a trip to Italy and she was lamenting a little bit the fact that she was getting a company-sponsored trip to Europe, and she really didn't have anyone to share it with or anywhere to go. And she has a different opinion on how the conversation went, but I'm confident that she asked me to go with her.

16:56Either way, a month later, we had planned and successfully executed a trip around Europe to different places we wanted to see. So I booked my own flights. It was a period of time between graduation with my master's and starting work and spent all the money that I had essentially to go over and meet her in Italy and go see Prague and visit some places in Germany together. And she did all that at the end of her work trip. So they paid for a round trip flight. It didn't matter that the return flight was a couple of weeks later. So we got back from that much closer as a couple, excited about how much we shared.

17:34And then my job hadn't started yet, right? So I had, I spent everything. And I actually went to a close friend of mine and said, Hey, I don't know if I'm going to have enough money at all to make it to my first paycheck. So he wrote me a$5 ,000 check. And he said, if you need to cash it, you can cash it. And so like, you know, I held on to that and, you know, was careful with my expenses during the month of time where I moved a couple of states away, got my apartment all set up, went to work. And then, you know, with well under$200 in my bank account, that first paycheck came in and I got to celebrate.

18:18Oh my God. Okay, hold up. 20 minutes ago, you were like, we're natural savers. So it's just natural for us to have stashed away all of this money. This is not the same person who spends down is like, I don't know if I'm going to be able to make it to my first paycheck. So what's up? Were you just so in love? I definitely was in love. Yes. And obviously, the decision was a good one. What I'd say is, I've never not enjoyed the life that I'm in and the moment that I'm in, even though I know it's important to save and I had money to be able to go to Europe, even though I also had, you know, student loan debt and, you know, just the expenses of living.

19:07But at the same time, it was really important that as I was working a lot and, you know, working through college, that part of the money that I was making didn't just go to, you know, whatever was needed that day, but that I also had some put away for other opportunities, other things that I wanted to spend on and going to Europe again and getting to spend time with a new girlfriend who ended up becoming my wife was, I mean, about the best investment I could possibly have imagined looking back on it. I see your point. Yes. And I can't help but think about Annie Duke. Have you read the Thinking in Beth's book that Brad talks about?

19:46I haven't. I've heard him talk about it all the time. But no, I've not read it myself. I think so many people who are listeners of Chooseify are also familiar with Annie Duke. So we're going to explore this for a minute. She talks about how we often will conflate the outcome of our decisions with like the decision making process. And so if you ask someone like, what's a good decision you've made, they always respond with something that turned out well. And the same thing with if you say like, what is a bad decision, always something that turned out poorly, right? When in fact the decision itself, right.

20:22Because of how probability works. So we always think of it in the opposite of what I'm going to say, but what I think is like, you made a bad decision and it had a great outcome. And I love that because I think also like, I look forward to reading your book, which is, you know, beautiful, bad decisions. because those are the things that also define our lives, you know, and bring so much beauty to our life. And I'm so glad that you were willing to really take a big risk and to think about what were your other resources if money wasn't going to be your resource and it was going to run out at the end of the day.

21:06Yeah. So for listeners, I am not writing a book. I don't have that skill set. But I would almost, I would turn that a little bit, though I see your point. Like, it sounds like it's a terrible idea. Spend everything you have and, you know, skate on through. But I had also accepted a job and knew that I had a$65 ,000 a year salary that was going to be coming my way. So it's a very short-term risk. And that's, you know, mitigated by my friend who's willing to help me make it that extra month or two till the paycheck comes in. The other thing is, I mentioned that I'd lived in Germany. So part of my college program at the University of Cincinnati was a mandatory co-op.

21:46So they founded cooperative education. You had to work to be able to graduate. So you had to have work experience in your field as part of the degree that you got. And so you would know what you were getting into, but also you'd kind of proven and you have a lot of background on the resume. And so I had co-opt. I'd worked for a couple of different nuclear power plants. So I had this experience and I was making, you know, at the time, what was really good money for a student. So 20,$25 an hour and knew that I would be able to make a lot more. And then I signed up for the program in Germany because I didn't know German and I wanted to learn the language.

22:20And so did a six week intensive German course. And I went over and I was making$5 and 45 cents us equivalent an hour. But I knew even though I was making less money. I was living in Europe. I was getting that experience. And I mean, I proved to myself that I could live over there with that lower income and still have a wonderful experience. I visited 17 countries. I really got so much of those memory dividends, as Die With Zero calls it. And the experience I had there proved that even if I'm spending the money and I'm not making much money, the life experience and the value that brings to me is so worth it that when I got to be able to make that decision again of, should I go to Europe again in this time before I start work and, you know, have a year round obligation in my very last summer?

23:09Like, yes, absolutely. So maybe my prior experience helped me understand that the probability was better than it might seem at first. Yeah, yeah. I love that. Oh, okay. I think everyone is curious about your six week intensive language program. Yeah. What? What? Tell us about that. Did it actually work? Absolutely. Yeah, just tell us about it. So yeah, as part of the international co-op program at the University of Cincinnati, in addition to helping place you in a job if you can't find one of your own in a country that they support, they'll also give you the opportunity to sign up for a course that's a six-week intensive language course.

23:55So at the time that I was going through it, there were the options to take Spanish, Japanese, or German. And I already knew some Spanish from high school taking Spanish and Latin. So that wasn't as interesting to me. I had no confidence that in six weeks I could learn Japanese. And I said, okay, German it is. And so it was part of the curriculum of sorts. I had a six-week period of time where, you know, from morning to night, all we did was go to class and speak German. Like, we got in there the first day, and up on the board were a couple of phrases. And, you know, one of them was, wie sagt man?

24:30And there was a blank. And then it said, auf Deutsch. And so that's the phrase of, how do you say blank in German? And they were very clear, you need to learn this, because this morning is the last time you're going to speak English in this class, you ask, if you don't know a word, how do you say that word in German? And then you start from there. And so really immersing myself in it, by the end of six weeks, I knew German well enough. And we had native German speakers who were teaching the course. So thankfully, that helps a lot with pronunciation. And by the end of it, we had to give a full presentation PowerPoint kind of thing in German to a couple of companies in the Cincinnati area, which has a large German cultural heritage.

25:10And I mean, at the end of my presentation, I actually had a vice president from one of the local companies come up to me and directly offer me a job from that. He's like, hey, if you can learn German, you know, and you can present this well, and you got the technical background, we'd love for you to work with us. So yeah, I mean, and the thing is, there were 18 of us in that class, and everybody learned German, and everybody went to Germany for six months. And And it's just the communal support and the experience was just wonderful. I'm so curious because I'm one of those people who I would really like to learn another language, but I'm too lazy.

25:45And so I do Duolingo for two days and then I stop. And so I'm always kind of like, okay, well, this is not the way for me. This isn't working. So I'm always curious. It's great. So you want to learn it. get in there. Yeah, I love it. Okay, so we are having a good time and laughing about how bad you are at making decisions. But I want to transition us a little bit to a little bit more of a serious topic. I know that when we were talking about, are you retired? Or do you consider yourself retired? You had said, kind of, and that there were a couple reasons where you weren't comfortable just saying, oh, yes, I'll never work again, or I won't work at all.

26:31And one of them was about medical expenses and how you didn't know what those were going to look like after you left your great company benefits. Can you talk us through that? Yeah. So this is one of the areas of massive financial uncertainty in our lives. So So less than two years after my wife and I got married, we had to make a very unexpected sudden trip to the hospital. My wife got some scans of her head and they came back and told us that she had a brain tumor that needed operated on within the next two weeks or she might not survive. Oh, my goodness. So, yeah, that was absolutely unexpected, shocking.

27:18So we had to make plans for, okay, what does this look like? How do we deal with it? So the brain surgery happened. We were lucky to have an excellent brain surgeon right in the area local to us. And a couple of weeks later, the results came back that it was cancerous. And it was a particularly rare brain tumor. And she was going to have to go through treatment. So we started looking at, okay, radiation oncology, and what does that look like? And what does chemotherapy for this type of a brain tumor look like? And all of those kinds of things. And it took a lot of time for us to eventually wrap our hands around and just mentally understand, okay, what is this?