Pod Insights Money Guy Show What FIRE Can Teach You No Matter When You Retire About this episode The FIRE movement is popular in the Personal Finance space. It has a lot of values and goals that people resonate with. However, not everyone wants to retire early.
So while FIRE may not be for everyone, the lessons that this movement can teach you about personal finance are incredibly valuable, no matter when you end up retiring.
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0:45 Speaker 03 What the FIRE movement can teach you about money, no matter when you want to retire.
0:55 Speaker 03 Brian, I am so excited to talk about this because FIRE movement gets a lot of press. Some of it's positive, some of it's negative. And rather than speaking to the merits of FIRE or whether you should do it or how you should do it, I think that there are lessons that everyone can learn from some very important things that FIRE movement participants and proponents have figured out thus far in their journey.
1:16 Brian Preston? I like to think, you know, we live here in Nashville, which is the music city. And one of the cool things when you hang out with professional musicians is that they can play any song in any key and just change a few variables and it changes the numbers, but it still works out. I like to think that we're going to be that tour guide today.
1:32 Speaker 03 We are the Nashville musicians of the financial world.
1:36 Brian Preston? We're going to tickle the keys of the financial independence retire early movement.
1:40 Speaker 03 That's exactly right. For those of you that are not familiar with what the FIRE movement is, that's exactly what it is, is financial independence retire early. It's this idea that there are things that I can do, there are ways I can influence my financial situation, that I can reach the end goal that most people want to reach, but I can do it more quickly than others. And what we want to do is we want to take some of those lessons and tactics that FIRE movement proponents have used and figure out how can we apply that to our financial lives or that we all So can do money better.
2:11 Brian Preston? I'll lean into the things I really love about this because that financial independence is a very valuable thing because the first thing I love the thought of you owning your time that much sooner. I mean, you think about when you get to be my age, you start getting more sentimental about things and you realize that component of time that many people, when they're young, they take for granted, it becomes so much more valuable. You get to be the control person of making sure you maximize that resource.
2:40 Speaker 03 And then when you own your time, it does allow you to create the financial freedom to be able to use your money as a tool to build ultimately the life that you want. And so even if you're not trying to do that at age 40, 45, 50, most folks want to be able to do that at some point along the path. I mean, Brian, you're a prime example. There was a time in your history where you thought you were part of the fire movement.
3:02 Brian Preston? 20 something year old Brian thought I was retiring at 50 and I'm so thankful that I actually saved and invested like I was going to retire at 50 because it gave a lot more options now that I'm post 50 and I actually love my job. I wake up every morning, super excited to come here and create content for you guys. I'm, I'm just thankful for the flexibility. I'm thankful for that it has provided the resources that we can invest in things that go beyond just will we get a return on this.
3:27 Speaker 03 I love it. So let's talk about some of these lessons that we can take away. The first lesson that you ought to take away right now is to subscribe to this channel because if you subscribe, you will know every time we put out brand new content fresh for you. That part was free. That's not from the fire movement. Here is the first lesson from the fire movement. When it comes to the way that we go about making our financial decisions, ultimately, margin matters.
3:51 Brian Preston? And I love a good echo of the three ingredients to wealth building. If you want to know, if you're not familiar with our three ingredients, the first ingredient is of course discipline because if you don't live on less than you make, you'll never be able to build financial independence and that ability is the margin that creates the money, which is the second ingredient. And then if you give that money enough time, you have the magical recipe. For creating wealth beyond your wildest imagination.
4:22 Speaker 03 But ultimately, what happens with the FIRE movement is they compress their timelines. They naturally decrease one of the ingredients. They back down the time they have to work. So they have to really focus on and flex those other two ingredients. Have to focus on discipline and really create the margin. And they understand how they can use it to their advantage. A lot of FIRE proponents will have savings rates of 30, 40, 50, even 60%. And so we wanted to show you, okay, if you can figure out how to master this, this is what the FIRE movement has figured out when it relates to timeline. We thought walking through a little case study would be interesting. So let's assume that you're seeking to replace your spend rate.
5:04 Speaker 03 Meaning if you have a 60% savings rate, then financial independence for you would be defined as being able to replace 40% of your income because that's what you spend. So we're just trying to replace your spend. And obviously taxes factor in and there are other variables, but we want to just stay sort of high level to show you how important this margin can be. Let's also assume that for these FIRE proponents, that they have a 3% annual wage increase. So every year their pay goes up by 3%. So when they get to financial independence, they're not replacing today's income. They're replacing some portion of their future income or their future spend rate. Let's also assume that they have a conservative rate of return, a 6% annual rate of return compounded monthly. Again, most FIRE proponents will likely have a higher rate of return
5:49 Speaker 03 because they're going to have more aggressive portfolios. But again, we're just illustrating the concept of how this can work. And let's say that you have a 3.5% withdrawal rate in retirement. We're going to define financial independence as being able to withstand and withhold a 3.5% withdrawal rate every year. What happens if you are a FIRE proponent based on different savings percentages, different savings rates? Well, you can see that if you have a 50% savings rate, starting from zero, using those assumptions, it would take you about 23 years to build a pot of money large enough that if you were to pull off 3.5% every year and sustain you for the rest of your life, it would take 23 years to reach that sum. Pretty impressive.
6:33 Brian Preston? I think it's interesting because I'm going to... Zoom out and think about the typical path towards financial independence. Most millionaires are actually minted in their late 40s. After 27 years of saving and investing, that doesn't mean that's what they have deemed is their financial independence, retire early number, but it is interesting that seven figures for most millionaires happens in their late 40s after that 27 years. And here we are seeing somebody who's that aggressive with their savings and investment rate can cut it down to 23 years. But that's still, think about somebody who graduates college, 22 years of age, that's 45.
7:12 Speaker 03 Sure, yep.
7:13 Brian Preston? I mean, that's, that's, that's something, but a lot of people don't even discover saving and investing in their early 20s. What if they, they figured this out in their late 20s? Maybe there's a way to even accelerate this more.
7:23 Speaker 03 Yeah, obviously, again, the FIRE proponents have recognized how valuable margin can be. So if you were to start at zero and you could increase your savings rate to 55%, which means that your spend rate would be 45%, you can do that in 19 years. If you have a 60% savings rate, so you're looking to replace a 40% spend rate, you can do that in 16 years. If you have a 65% savings rate, you can now do that in 14 years. And if you are able to have a 70% savings rate, so what you need to replace is a 30% spend rate, you could accomplish that inside of 11 years if you have that aggressive of a savings rate. So the more margin you have, the more you're able to influence your financial timeline.
8:07 Speaker 03 And the FIRE movement has figured this out.
8:09 Brian Preston? I do love the math component of this because this, and I can see how this can become addictive too, is because you think about, man, if I could just do this, I'm actually gaining years back of my life. I do want to caution our audience, remember, we love financial mutants. There's a fine line between mutants and miser. And when I see 70% savings and investment rate, wowzer, wowzer, that's a, that's a big savings rate.
8:34 Speaker 03 But what we know is that these savings rates, they don't happen without some level of like intentional effort, right? It may be that some people figure, okay, well, how do I just get my lifestyle as low as possible? How do I really get my expenses down? As much as I can, so it creates sort of an unconventional lifestyle, or some recognize, you know what I need to do? I need to get my income really, really high so that I can live off of 30%. Oftentimes, when it comes to FIRE, it's some combination of those two things. It's some combination of how do I get my expenses down and how do I get my income up? Well, even if you're not pursuing FIRE, just everyday, normal, regular people building towards financial independence, if you can figure out how to impact those two levers, you're going to also be able to accelerate your timeline.
9:19 Brian Preston? So Bo, let's hit them with, what are the key takeaways on why margin matters?
9:24 Speaker 03 So the very first thing you want to know when you're thinking about, how do I pursue this endeavor? How do I influence my financial life? Is you need to determine the savings rate that you can hit, not what someone else tells you, not some other savings rate. It may be wonderful to hear, okay, if I save 70% every single year, then I can be financially independent 11 years. Well, if that's not practical for you, then it doesn't matter. So you need to find for you, based on your lifestyle, based on your goals and your circumstances, what's the actual savings rate that you can hit?
9:57 Brian Preston? Yeah, and I love, because one of the things we always share is we want people to get to 25% of their gross income as fast as possible. And a lot of times, I know we pick up audience all the time that are in their twenties, and they're probably hearing this right after they graduate, and they're like, man, you guys, what a big distance we just jumped. Because here y'all are talking about 25% is the ideal, but you just showed me a slide that showed people who are saving 50% to 70% of their income. I want you to take a deep breath. If you're in your twenties watching this, and you think you have more of a traditional path of retirement, saving in your twenties is more aspirational anyway. It's okay if you just start somewhere. You know, take where you are in life right now,
10:38 Brian Preston? start at 5%, 10%, at least get to step number two, which is that employer match, and then get to step five with the Roth. Because what we know is, and this is what I love about, we eat our own cooking, but we also show you the numbers. If you think about how much you should save, we have a great resource. If you go to moneyguy.com/resources, we've actually Put the math to the numbers so you can see, hey, what does 25% do for me? If I can save and invest that by the age I am, what will be the replacement ratio at that point? It's pretty powerful stuff and you'll quickly see if you do anything in your twenties, it's 10%, 15%, you're gonna be way ahead of the curve. But somebody who gets into their thirties, you really need to be aiming to hit that 25% number
11:21 Brian Preston? and especially if you plan on retiring much sooner than traditional 65.
11:25 Speaker 03 So we've already laid out that there are sort of two levers you can pull. You can get your expenses down as low as possible or there are ways that you can increase your income because the higher income goes, the higher you're allowed to have your savings rate. So another key takeaway that we've learned from the FIRE movement is when it comes to the thing that we do every single day from nine to five, think about a career, not just a job. Are you in something that's going to create a level of earning potential to where you can scale up your income so that you can scale up your savings? Or might you be able to find some sort of supplemental income or some sort of side gig where you take all of that money, you begin to deploy it towards your future financial goals?
12:05 Speaker 03 If you can do that, what you're ultimately doing is creating more margin in your financial life. And the more margin you create, the more control you're going to be able to have over the other two wealth ingredients, time being the main one that you're going to be able to impact.
12:20 Brian Preston? We just, I love on this slide, it talks about gamify your savings. I think if you wanted to expand that even more, I love, this leads into lesson number two, which is optimizing to make a difference. Because I think people, once you're a financial mutant and you realize just how valuable your component of time is, but also how valuable the component of discipline is, you're gonna look at money a little bit differently and you're gonna really probably get hyper-focused on how do I pull every dollar out of every opportunity so I can maximize this, this life that I'm living to build and build and build?
12:54 Speaker 03 One of the ways that we even do that is how we consume. Okay, if I'm going to maximize every dollar, I even want to maximize how I'm using my dollars, how I'm spending, how I'm consuming them. So you might be someone who recognizes, you know what, I am disciplined and I'm Able to be responsible and I'm going to use a credit card anyway. So if I'm going to use a credit card, I might as well use one that aligns with my spending. So maybe I want to find one that maximizes rewards or maximizes the points that I can earn. So that it makes the things that I'm already going to do less expensive. Even just doing that and figuring that out early on can have a material impact in your financial life.
13:30 Brian Preston? I mean, I resemble this. I don't consider myself a FIRE person. I mean, even though I'm financially independent much earlier than than most. I do love the behavior of maximizing and finding steals like knowing when prom day is, knowing when the seasons are that you should buy certain major purchases. There's all kind of, I mean, how often I'm still, Black Friday is not as much of a thing. It is, but it's still one of those things you just know after Thanksgiving or right before Thanksgiving. If you're buying electronics, you're probably going to do okay. And I think that that is a special skill of optimization that can be helpful. Whether you're part of the FIRE movement or you just want to be a financial mutant that wants to save a little bit better and know you're getting a deal.
14:09 Speaker 03 But it's not just on the consumption side where you're able to optimize. You can also optimize when it comes to how you accumulate and how you build and how you actually structure your savings. That's why if you read any level of FIRE content, you'll hear all these different strategies. You might hear about like 72T distributions for early retirees. Or you might hear about Roth conversion ladders as a mean just means to create tax-free income and also give you access to those dollars. There are tons of strategies out there that will show you how can I optimize if I am building towards financial independence? And how can I control the different pots that I'm going to pull from? If you want to know more about that, if you want to know more about these strategies, we actually did a great show titled, "Three Ways to Retire Early That You Might Not Know About."
14:53 Speaker 03 So type that into YouTube or click on the link and you'll be able to go check that out and do a deep dive into some of these other optimization strategies that even you can implement, even if you're not part of the FIRE movement.
15:04 Brian Preston? Yeah, I mean, this is, and this is why it leads to why is optimization one of the big things that can create the key takeaways? So you can be on this journey that much faster. And I like the fact of being intentional. With every dollar that comes into your army of dollar bills.
15:20 Speaker 03 Yeah, Brian, I want to give you credit for this. You told me this early on. You said, Bo, you always got to ask yourself the 2% to 5% test. And I said, Brian, I don't, I don't know what that means. What is the 2 to 5% test? He said, hey, it's this idea. I'm a little bit like a superhero. I said, Brian, how on earth are you like a superhero? He said, what I can do is I can make my money stretch farther than my peers. I can do more with it than the guy sitting next to me because I understand how money works. I'm intentional with every single purpose. And that was true of you 20 years ago, and I'd argue it's probably still true of you today, right?
15:51 Brian Preston? Well, since you just gave me a compliment with the 2 to 5%, because I do like to think that I can make my money really stand up and dance for me whenever I need it to. I think I'll give you credit for doing the heavy lifting first. Don't skip leg day. You can make your money work that much harder.
16:07 Speaker 03 Yeah, there are some ways that you can do early on planning. If you do them early on, it can have material impacts in your financial life later on. One just might be how you tackle your debt. Maybe you heard that, okay, I'm going to do the snowball method, but you recognize, okay, snowball is great. But if I really understand the mathematics and I really want to maximize and optimize, maybe I should switch from the snowball method to the avalanche method. And doing that, I'm going to save more in interest. I'm going to have more dollars that can work for me. Or maybe it becomes when you spend money, Brian. This again, another lesson that I learned from you. You say, hey, it's not always about getting the cheapest deal. There is, I think it was a millionaire next door, he talked about people who really understand wealth, they don't just spend for the cheapest, they actually spend on value and quality as well.
16:52 Brian Preston? Yeah, well, it's also the hassle factor. It's just like, I like when I'm going to use my credit cards. I have key categories that I focus on. Then I have a general purpose credit card that just gives me 2% on everything else. And that way I don't have to waste too many, too much of my mental horsepower on getting this, but I still feel like I've given the nod, I've checked the box, I'm maximizing every dollar. This is what's needed. And this is why I love that we just talked about the debt arbitrage as well. Is because I think the reason so many people focus on the debt snowball is because most Americans struggle with key disciplines. Or basic discipline. So it's better just to give them some, some wins of starting small and then getting bigger.
17:33 Brian Preston? Anybody who's part of the FIRE, anybody who's a financial mutant, discipline has never been a struggle for you. That's why the math definitely comes into play and making sure you don't leave that on the table.
17:43 Speaker 03 And then the other way that you can do some heavy lifting first is a little counterintuitive because this sounds like heavy lifting, but it actually makes your life that much easier. Can you figure out ways to make the good habits as easy as possible? When it comes to saving, investing, can you automate your investments? Can you have your contributions go in automatically and invest automatically? Can you do things like take advantage of your employer match and get all of that free money sitting out there? Are there things you can do like maybe backdoor Roth conversion strategies where yeah, it's a little bit more complicated. It's a little bit heavy lifting, but if you can do it early on, then you really get to begin to build your tax-free buckets. Or even if you have like an after-tax account, are you doing things like
18:26 Speaker 03 tax loss harvesting or capital gain avoidance, which may seem like small insignificant moves in the moment, but if you can compound those small seemingly insignificant things over a lifetime and optimize, you'll recognize that you in fact will be 5, 10, 15, 20% further along than your peers who didn't do that heavy lifting early on.
18:47 Brian Preston? You, you mentioned automating. I believe that this is a twofer. And what I mean by that is it really does. If I, if I can get things that make the good habits that much easier and automation for sure. If your dollars are automatically going into your investments every month without you having to put any effort into it, that is going to put you on the path to building wealth that much sooner and easier. I also like that the other part of the twofer side is that it makes the bad habits that much harder. If every dollar already has a purpose, it's so much harder for you to go waste it on just frivolous consumption. So don't sleep on the fact of be very good at optimizing and also creating a plan for every dollar.
19:26 Speaker 03 And then another lesson that the FIRE movement has taught us, and I think this one is a wonderful one, is that the clearer our goals are. The better the goal is likely to be. I mean, most fire people, they have a firm end goal. They know what they want their money to do and they know what they want their lifestyle to look like. They have key targets and they know exactly when they want to hit them. They have discerned that if I can have a very clear and attainable goal, then there's a really good chance I'm going to actually stick to it and move towards that goal.
20:00 Brian Preston? I feel like this section was very complimentary because I do want to give credit. A lot of people who have decided they're part of this fire movement, they know their number. You know, they've heard the adage, "If I can just get 25 times my spending, that's a good key indicator, you know, something napkin math plan that I can lay out there." Also, they usually know their savings rate. You ask the typical American, "What is your savings or investment rate and how much is that in dollar terms?" I think a lot of people, they struggle because they don't know what their employer match is. They haven't really created these automated plans, so they don't really have it tied in. That is not what people are doing that are either financial mutants or part of the fire movement.
20:39 Speaker 03 They also know what their budget is. So, they know their number, that is a future goal. They know their savings rate, that's the strategy. But they also have the budget. This is the thing that's going to keep them in line to make sure that they don't steer off course. Every single dollar has a purpose. Well, when you're in the early stages of your financial journey, that too should be true of you. But, it's not just about setting goals. Because you can set a goal all day long, but with setting the goal, there also has to be a well-thought-out plan to get there. Something not saying, "Hey, I want to hit $100,000 by age 30." Will you say, "I want to hit $100,000 by age 30 and to do that, I will..."
21:23 Speaker 03 And then this is what fire proponents do. They say, "I will, I'm going to cut my budget, X dollars per month through meal prep and canceling memberships, etc. So, I want to achieve X by doing Y." And then in addition to that, "I want to maximize my employer match and I want to invest X number of dollars into my Roth IRA." In order to reach that X goal by certain age and I'm gonna increase my savings rate by X percent every year in order to do that. It's not just about dreaming and having this idea and having a concept of what you want to accomplish. But it's about tying and marrying that concept to actionable steps that you can take that will move you in that direction.
22:06 Brian Preston? Well, it's, we could have put the slide in there. We've used it on other shows where you talk about the SMART goals. Cause we want them definitely to be measurable, have timelines and all kind of other things that actually keeps you from falling into this next camp. Because so many people, the research has shown it is that if you will actually create a written plan and actually put the checkpoints in there. That effort is going to pay off because check this out. If you set clear goals, now what is clear goals according to this research project? Those clear goals is number one, write down the goals. Number two, define actionable steps. And then number three is, is actually having some accountability by checking in with friends.
22:46 Brian Preston? If you can do those three things, the success rate is around 76%. That's actually actionable, creating plan, that is successimized. Now, if you're just a dreamer, you're a person, you didn't, you didn't write down the goals. You just said, hey, it's kind of like you saying, hey, when I'm 30, I want to get to a hundred thousand dollars, but not putting any steps to it. You didn't write it down. You didn't have actionable steps, which is number two on this research project. And number three, you didn't have any accountability, you didn't create community so you could check in on this. All of a sudden you see, success is not insured anymore. Now you only have success rate around 43%. That's why you often hear me say, you have to create a written plan to actually know you're creating something.
23:30 Brian Preston? Versus if you're just saying it out loud or coming up with a mantra, that's more daydreaming or what you aspire to. But it's not really something that's going to create success.
23:40 Speaker 03 So when it comes to defining goals and define clear goals, what are some of the key takeaways? Well, one is you have to know where you're at. What are you doing today? Where is your current state of being? Because how on earth can you know? Where you're going, or if you're even on the right track, if you don't define where you are today. So you have to know where you're at today. And you can use the Financial Order of Operations.
24:07 Brian Preston? Oh, sitting on the ready.
24:08 Speaker 03 To define that.
24:09 Brian Preston? Yeah, I mean, this is one of the things. If you guys, if you're new to the show, because we're constantly picking up around 45% of you every month, new people, brand new to the channel, go to moneyguy.com/resources, download your free copy of this. Also, look at all the other free stuff. There's a reason we're trying to load you up, so you can get that head start. But the Financial Order of Operations, just like, please excuse my dear Aunt Sally with PEMDAS and math, you didn't know how to answer the question unless you knew parentheses, multiplication, addition, what comes next? There's an Order of Operations with money as well, and we've created that for you, so you don't have to waste any of your brain potential figuring it out, because we've already done it for you.
24:49 Speaker 03 So you have to know where you're at. You also have to know where you're going. Have you actually put together those actionable steps? That's the second part of the process. I'm here today, I want to be here tomorrow, and these are the steps that I'm going to do to achieve that. And then, are you doing anything to stay accountable? Do you have friends in your life that are checking in with you? Do you and your spouse sit down and have a State of the Union, talking about the goals that you're moving along? Are you part of the Money Guy subreddit? Are you a member of the Facebook group? Do you participate in the Discord? Are there things that you're a part of that will keep you accountable to the financial goals that you have? And if you can combine those three things, you're well on your way to beginning to define clearer
25:33 Speaker 03 and more attainable and sustainable goals.
25:35 Brian Preston? I was kind of shocked you didn't say, "Join us every Tuesday, 10 a.m. Central." Because our live streams, I mean, we have thousands of you every week, that I do feel like we are your accountability plan, we are your community. And I would encourage you, jump in, be a part of that, because we love being part of your success too, and then getting all the feedback. So don't be shy about that.
25:55 Speaker 03 And then, one of the things that you have to do, so those three are all great, but then the other thing that you have to do, you have to have milestones along the way that you're celebrating. What the end goal is, but in achieving that end goal, there are going to be a myriad of other goals in the short term that you're going to hit. So know what those milestones are and what milestones matter to you. We actually have a great show that we did that was, are you on track to becoming a multimillionaire? Don't miss these important milestones. So maybe you don't know what milestones to define for yourself. We've done that for you to say, hey, on your way to financial independence, here are some that you might hit that are worth celebrating, that are worth acknowledging, that are worth recognizing are part of your journey.
26:38 Brian Preston? This is one of those episodes I was really proud of. I knew it was good because I had former neighbors that have moved away to move to different states that texted me after they watched this show and told me how good it was. So if you've ever wanted to know unique milestones, it's not just the basic ones like reached a million dollars or say, this one is really cool because we talk about when your savings and investments start replacing your income for maybe a month of work. And then we move into other key milestones. This is a great episode. If you're looking for something to give you motivation to go to the next level, this is one I would definitely encourage you to go check out.
27:12 Speaker 03 And then one of the ways that you're going to be able to track, am I hitting these milestones? Am I doing this? Is to track your net worth annually. If you're not doing that, you're missing a huge opportunity to get a view in your financial life. We have a great tool that you can go check out at learn.moneyguy.com that will put a lot of those milestones right there, front and center on the dashboard. What does your journey to abundance look like? What is your wealth accumulator score? How are your three buckets structured? What's happening to your assets versus your liabilities versus your liquid assets? If you're not tracking these things through time, it's going to be very difficult to know when you hit a milestone that's worth celebrating and to make sure you're staying on track
27:54 Speaker 03 towards those clear, actionable future goals that you want to accomplish.
27:58 Brian Preston? Yeah, I love, this is a great communication tool for my non-financial spouse because you know, I'm trying to always bridge that communication gap. So definitely use the net worth tool. It's a great dashboard to also understand what is going on, what's changed in the last year. And speaking of Tools, the fourth lesson that I think that the FIRE can teach about anybody with money is that you can use your money as a tool and they lean into that heavily.
28:24 Speaker 03 Yeah, a lot of people in the FIRE community, they live unconventional lives in one way or the other. What they figured out is they don't want to live a life that someone else has built for them. They want to live the life that they want to live. So this might mean they have a different career path than a traditional nine to five, or maybe they have a more frugal retirement lifestyle, like doing the RV thing, or maybe they want to retire in a different country or different geography. They understand, okay, what is it that I ultimately want to achieve and how do I use my money as a tool to help me achieve that goal? The money is not a goal in and of itself, it's just the tool, the
29:06 Speaker 03 mechanism, the method, that I'm able to build and construct that life that ultimately I want to live.
29:11 Brian Preston? Yeah, I think it's important because you hear a lot of things like money can't buy happiness, but money is definitely a tool that can make life a little bit easier and even create happiness or be a tool that makes happiness, you know, that much easier. I mean, you buy, you get front row seats to a concert, that might buy you some happiness. You know, it's kind of like the buy me a boat, you know, that's why I love the songs like that where it puts it in focus. That's the same thing. So let's talk about money of what it can provide. It can provide security. It definitely can provide some additional time. That's probably the most noble thing that I tell people, don't take it for granted. It also can provide flexibility. It can provide those experiences. There's where the front
29:53 Brian Preston? row seat is, that's where the boat may be out with the friends and the cooler, you know the rest of the song. And then of course, if you put all this together, you put your best life, and this is the thing that I wanted to spend a section on, is that one thing I pick on FIRE people about is I don't want you to do such a good job with thinking about you're going to, if you just can put up with this horrible job that you don't like that pays you a ton of money, you're going to be able to go live your best life in either an RV or living overseas. I want to make sure that your abundant life also gives You to live in this moment as well because as a person in their 50s, I will tell you, you can do both. I want you to maximize, bedazzle your basic life. So you do enjoy your 20s, your 30s, your 40s,
30:37 Brian Preston? and you're not just living for that late 40s, early 50s. Make sure you're living in abundance.
30:42 Speaker 03 So what are some key takeaways around thinking about our money as a tool? The first is pour into your why. I love what you just said, Brian. It's not just about your why in the future. It's not the why when you're 70 years old. What's your why today in your 20s? What's your why in your 30s? What's your why in your 40s, 50s, 60s, and so on? Because if you can really define and develop what that is, you will find that the decisions that you make begin to align with that why, with the things that matter to you. Begin with the end in mind, not just for your whole journey, but even for segments. In my 20s, what do I want the end of my 20s to look like? In my 30s, what do I want the end of my?
31:24 Speaker 03 And am I constantly working towards those milestones that are ultimately moving me towards my ultimate end goal?
31:30 Brian Preston? Also, knowing what you value. If you think about this in terms of, a lot of our society pushes us towards consumption. And I remember, and I detailed it in Millionaire Mission, you know, I realized when my father lost his job, when I was, you know, in my middle school slash going into high school years, that even though it was the poorest time for my parents, it was some of the best memories because my father was around. So I think that I would encourage everybody, no matter where you are, if you're part of the FIRE movement, or if you're just a financial mutant that wants to be the best with money, kind of try to put some time into knowing what you value that's devoid of having to spend a lot of money on it. Because that's actually where I think happiness, and then you get extra money,
32:13 Brian Preston? you can really spend a little bit extra on leaning into those things that give you value, give you happiness, give you fulfillment. Don't sleep on that part of it.
32:22 Speaker 03 And then I already said this, begin with the end in mind. Having a clear direction for yourself and your life can not only define the path, but it can help keep you focused. Because what we know is this journey towards financial Independence for this journey of life that we're on is not always going to be the smoothest and easiest journey. We're going to need things that even when stuff happens that we did not expect, even when the unknown unknowns come our way, if we can constantly keep that end in mind, that goal that we're working towards, we're going to have a much higher probability of staying the course and sticking to the plan so that we can ultimately make it to that finish line.
33:00 Brian Preston? And that leads to kind of the closing lesson here is I want everybody to know, I don't care what your goal is, if it is to retire at 45, or if you're just a traditional person that's go retire at 65, I want you to know financial independence is possible. That's why we create this content is that it is something that I think you just have to put a little effort in and you too can have this if you just keep watching our content, keep growing. We'll help you know the tools and how to maximize this.
33:27 Speaker 03 Yeah, I think the one thing that stinks about our industry is that in this personal finance space, it's easy to just get inundated with tons of pessimism. There are always something negative going on. There's always something to be scared about. There's inflation or a bad economy or wages are low and home prices are high. There's all kinds of stuff out there that would suggest, oh, man, the system is rigged against you and financial independence is a pipe dream and it's not attainable to everyone. Well, one thing that I love about the FIRE movement and you can go do this. If you've not gone out to the subreddits, if you've not read up on this, if you've not looked in the communities, FIRE folks come from all walks. I mean, these are people that were low income earners. There are FIRE people who never made a six-figure salary.
34:12 Speaker 03 A lot of FIRE folks were late starters. I didn't figure this out until I was in my 30s or maybe I really caught caught caught fire on this when I was in my 40s. Or maybe it's people who came from from some negative thing. Hey, I went through bankruptcy or I had a family situation or I got myself in a bunch of debt. I had a problem that I was in. They have faced adversity and are still able to come out on the other side without having to sacrifice ultimately what those goals and those dreams were. So if you resonate with this, this sounds like you. Financial independence is possible. It's not something you have to get absolutely right from the first day that you step foot out of your
34:56 Speaker 03 college career, high school career into your first job. There are gonna be stops and starts along the way. That's okay. You can still do this. You still can move towards that ultimate end goal.
35:08 Brian Preston? Well, I want to tell everybody, there's always gonna be bad stuff going on. It's like right now, I know housing is a mess. And I think that, you know, we just came through this post inflation period where if you're a young person, you're trying to figure out, what does this mean for me? But don't let that pessimism. Yes, in this moment in time, that is going to be something that feels like a weight that's working against you, but there's always the weights that are working against you. I mean, think about the Great Recession where the market lost 50%. Fast forward even, you know, or back it up even a few more years, the dot com bubble where people who worked in tech or people who invested in tech, which by the way, was everybody who was investing in the in the 90s at that point.
35:49 Brian Preston? You know, those companies all went kaput or lost 50 to 60% of their market value. There's always been headwinds. I even talk about quality of life things. For this is, there's never been a better time to invest. When I first went out and started my working career. I mean, you had to go through a gatekeeper to get access to investments. Nobody was using index funds. You had to go commissioned or you had to go buy stocks directly. All of this has gotten easier. So there's always going to be some warts on whatever season of life you're in. It's just your choice. Am I going to embrace the opportunities of this moment in time? And then, you know, and maximize that and then see if you can build the life that when
36:34 Brian Preston? maybe housing gets more affordable or maybe, you know, you have so much success financially in other areas that you overcome the inflation and the other things. I want you to go with that glass, half full optimism to see if it can help you overcome and have the focus to create success.
36:51 Speaker 03 And I love that you're here right now, listening to this. You know, a lot of folks Been able to attain financial independence. They started out with no financial foundation, no knowledge. And then they started listening to a podcast or watching a YouTube channel and educating themselves. And they were still even able to gain the financial literacy to be able to move towards their ultimate financial goals. I love how you said it, Brian, that a lot of people, it's not a straight shot. They have some setbacks. They have some stuff that caused them to maybe not be moving in the direction they wanted to be. And they were able to rebound from that. We actually saw a prime and perfect example of this on an episode of Making a Millionaire. We sat down with Patrick and Megan.
37:35 Speaker 03 They kind of walked us through, hey, we had this horrible experience. We, we had this awful thing that happened. And yet, even though that thing happened, today, this many years in the future, we're still okay.
37:48 Brian Preston? Yeah, I mean, a wound can either take you out or it can create a scar that maybe you look back on and you, you tell the woeful tell or you tell the, the things that to be concerned or careful of. But you recovered and you came out of the other side. And that's why I would, yes, maybe there's a wound right now because of what inflation has done. But you can recover from this. You can, we'll look back 15, 20 years from now and the people who picked up the pieces, they picked up the opportunities will be the financial mutants. And that's what I loved when we did this episode with Patrick and Megan. I think that they came out on the other side of it with a completely different outlook. And they weren't having to define their success by something bad that happened before. And that's for everybody out there.
38:33 Brian Preston? And that's why I love, you know, for fire, financial independence, retire early. I love the fact that there really are trying to focus on using discipline to maximize their army of dollar bills. Now, dude, I agree with everything, not necessarily, but there's not many things in life that we all agree with everything. But what I love is everyone taking the time to try to figure out, what is your best financial life? And then taking steps to making that action.
39:00 Speaker 03 Whether you're part of the FIRE movement or not, I think these are all lessons that we Can take away around understanding how powerful margin can be around optimizing our financial life, having a clear goal and working towards that goal, and even getting creative and persevering, even when it doesn't seem like that's the opportunity that's available to us. If you can take these parts and these pieces from the FIRE movement, if you're on a traditional track, even if you don't plan on retiring early, reaching financial independence is still very much on the table for you. And we're excited we get to be a part of that financial journey with you.
39:34 Brian Preston? Take advantage of the free stuff. Moneyguy.com/resources. If you want to accelerate that journey that much more, I would encourage you to go to learn.moneyguy.com. And we have tools, we have courses, we have other things. By the way, if you're like, why do they have these courses and tools? What's going on? These are things we know you need on the go-between. Maybe you're a do-it-yourselfer and you just need a little bit more of a lifter up in the fact that you need that net worth tool so you have the dashboard of what's going on. Or maybe you need to know your number course so you can know where you're at the curve, behind the curve, or right where you need to be. And of course, if you look at the courses, and you look at the tools, and you go, I'm so beyond this, we want you to graduate and take the relationship to the next level and fulfill the abundance
40:16 Brian Preston? cycle. And we work with clients all across the country. We love creating this content. This was not supposed to be a marketing plan. This was supposed to just be a great place to get education, and it has grown beyond my wildest dreams. So I thank you, thank you, thank you for being a part of this. But I do want to remind you, and this episode is a great just reminder of this whole goal, of you've got to own your financial life. Take an active participation role in it, or it will own you. I'm your host, Brian Preston, Mr. Bo Hanson, Money Guy team, out.
40:48 Speaker 03 The Money Guy Show is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through the Money Guy Show. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.
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