Money Buys Freedom
The central thesis behind ChooseFI is that the path to Financial Independence moves you closer to freedom in every aspect of your life. I loved this quote from the modern-day philosopher Naval Ravikant, as it sums it up perfectly:
Money doesn’t buy happiness – it buys freedom. – Naval Ravikant
Choose to be in a Good Mood
One of my favorite recent podcast episodes was with Alex Hormozi on the ‘Modern Wisdom’ podcast. This was 4-hours long and jam packed with insight – so much that I’m going back and listening again.
One quote from Hormozi jumped out to me and I found a slightly longer version of it:
The single greatest skill you can develop is the ability to stay in a great mood in the absence of things to be in a great mood about. And if you can be in a bad mood for no reason, you might as well be in a good mood for no reason.
This speaks to a fundamental truth of life and a larger strategy:
Everything about how we view the world is nestled in our own minds.
If you’re looking for good things, you’re going to find them.
If you’re looking for bad things, you’re also going to find them.
So why not simply look for good things?
If nothing else, it’s a much better strategy for a great life.
4% Withdrawal Rate Too Low?
I read a recent Marketwatch article on Bill Bengen (the creator of the ‘4% rule’) changing his analysis – he now believes a 4% withdrawal rate is too low and many can safely withdraw more each year in retirement.
The section of the article that stuck out to me:
Under the original rule, he used a simple portfolio of two asset classes: U.S. large-company stocks and U.S. 5-year bonds. Over time, he built a more sophisticated and balanced portfolio by using U.S. large-cap stocks, U.S. midcap stocks, U.S. small-cap stocks, U.S. microcap stocks, international stocks, intermediate-term U.S. government bonds and U.S. Treasury bills. That diversification lifted the 4% rule to 4.7%. He fiddled some more and found that adding even more asset classes — such as gold, commodities, real estate, and emerging-markets equities — didn’t make a big difference. In addition to diversifying, Bengen urges investors to rebalance their portfolios each year. Bengen calls the 4.7% rule the worst-case scenario that would have allowed a retiree who stopped working in October 1968 — and faced a bear market and high inflation — to not outlive their money for 30 years. Out of almost 400 investors he studied, only that one investor had a safe withdrawal rate as low as 4.7%. For the rest of them? The average safe withdrawal rate was 7%, Bengen said. “Although you can call it a 4.7% rule for ultraconservative people — if they wanted to be the safest that’s ever been in history — but for most people they’ll end up with a lot of money and probably a lot of regrets at the end of retirement and wishing they’d spent more earlier,” Bengen said. “You have to look at the circumstances at when you retired,” Bengen said. Given today’s financial environment, Bengen said he sees inflation as fairly reasonable but stock-market valuations as very high. As a result, he would advise a retiree stopping work today to withdraw 5.25% to 5.5% and safely have enough funds throughout 30 years.
ChooseFI Community Taking Action This Week
My 1% better this week: I decided to pay to have my deck renovated. As a teacher, I have the summer off, but instead of spending two months on a massive DIY project, I chose to invest in having it professionally done. I've saved well and had the extra funds available, and now I get to spend my summer focused on what truly matters-quality time with my wife and three boys.
- Derek
My 1% better is something I've been doing for a few years. We have only one good gym in our town and a family membership is over $200/month. So I started teaching fitness classes once a week for a little extra cash and my employment comes with a free family membership! This includes access to an outdoor pool in the summer and we are all more active year-round. The best part is anyone can do this - our facility is always looking for childcare help, facilities help, etc. with varying hours to fit around most schedules.
- Megan
Our 1% better is a story of Surprise FI. Actually it is more like 100% better. My spouse and I were both on local government sector career paths assuming we'd retire when our pensions were maxed out at Age 66. Why retire at Age 66? Because 1) that's what everyone else around us did and 2) we didn't have the basic tools to think through how much we really needed to retire. Two years ago, at Age 53, I became interested in investing podcasts, which led to retirement podcasts and then FI podcasts, including ChooseFI. After hearing so many early retirement stories and learning about basic rules of thumb, like having 25 times annual spending saved up, I determined our annual spend rate going forward. Surprise! I was shocked to find that we were already FI, a product of natural frugality, decent investing, tax avoidance strategies, plus two solid incomes over 32 years. We had our 25X plus pensions on the horizon, so more work seemed like overkill. We were able to retire immediately rather than work another decade plus! At first, my spouse didn't believe me that we could retire early. How could that be true? I kept showing her the spreadsheet, but it was exposing her to various podcast episodes where other people told their stories that brought home that early retirement was feasible. Once convinced we could do it, we debated whether we should do it. We were both lucky as we had jobs that we loved where we were making a difference, although the hours were long and stress levels were high. We had hundreds of conversations and took vacation time to "practice" retirement. Ultimately the lure of extended travel and ultimate time flexibility caused us to pull the trigger. We figured we could try retirement out and always go back to work if we didn't like it. We're now six weeks in, spending a month in the South as a break from winter back home, and can't imagine going back to work full time.
- Andrew
My 1 % better is eating at home. And today eating oatmeal for breakfast and a salad with chicken for lunch. Each week I am taking 1% steps to better health. I also walk at least 40 minutes per day. Since I'm at my part time fun job today, I am taking walks 5 minutes at a time. So far I'm at 15 minutes. My goal now is to eat half of my plate vegetables for one meal every other day. And oatmeal for breakfast every other day. Gradually I will reduce my daily calories by 250 calories. And eat lean proteins , veggies, fruits, and healthier carbs. Aim is to make my diet first 30% Whole Foods and gradually to 80%.
- Sheila
My win for the week - my home and auto insurance was up for renewal and my new quotes were significantly higher than last year. I shopped them around and was able to find coverage for about half of what I was quoted initially.
- Nathan
My husband and I made our life 1% better by (FINALLY!!!) signing up for Camp FI in March 2026!
- Audra