Optionality, 10 Google Maps Tips, Hamster Wheel Defined
Optionality
My family went to Busch Gardens, an amusement park here in Virginia, this past weekend and buying tickets was interesting because there were so many options for memberships and season-long passes.
We found that the season-long pass was only $10 more expensive per person than a one-day pass, so this seemed to be a clear winner since it provided options for a tiny price premium.
If we loved the park (which we did!), then we could go back as many times as we want this summer essentially for free.
I’m a big fan of paying small, nearly insignificant premiums for optionality down the road and another perfect example of this type of thinking is with our mortgage term.
I gladly paid the extra interest premium (1/8 of a point in our case) to get a 30-year mortgage term instead of a 15-year mortgage. Because it gave me options for a small price.
If I decide to pay it off in 15 years, which one can always do with extra monthly principal payments, then great. If not, I will have that interest rate locked in for 30 years and the much smaller required monthly payment that goes along with it.
I love these types of options and look for them often when making purchasing decisions.
10 Tips for Google Maps
As I talked about last August in the FI Weekly (with a tip on how to download maps before you go on any trip or to an area with poor internet connections), I think Google Maps is the most essential app I have on my phone.
I came across this great thread from Blake Burge entitled, "10 things Google Maps can tell you... (besides where you're going)" which included tons of tips I never knew about Google Maps. I’d highly suggest clicking through and reading all 10, but a few that jumped out to me:
- Street level view of any neighborhood with the "Peg Man," which is perfect for checking out an area before booking a hotel.
- You can check typical traffic conditions at any time during the day for a certain route. It isn’t just for live traffic! This can help when planning precisely when to drive to best avoid traffic.
The Hamster Wheel Defined
I saw a funny tweet from ‘CarDealershipGuy’ that seemed to perfectly describe the "hamster wheel" of buying expensive houses, cars, etc. that you can’t use because you have to work all the time to afford them:
"Car A: $65,000
Car B: $25,000
Both cars drive you to work
One keeps you stuck there."
ChooseFI Community Taking Action This Week
- Yetunde said, "My 1% is a credit and loan double win for me and my mom. My mom used to pretty much be allergic to any type of credit. After I started listening to ChooseFI after financing my first car in 2020. While it wasn't great that I needed her to cosign on my car, it eventually worked out. Not only have I just gotten my own Chase Sapphire Preferred, my credit score has increased to 720, my mom has a score of 700+, she has her own unsecured card, and I'm 2 years ahead on my car loan which equals to 50% of my loan paid off in 2 years!"
- Carolina said, "This July, I will be graduating with a Ph.D. in Microbiology. Just two more months to go...Last week, I got a job at a biotech company, which is the perfect fit for me, has great benefits, is within walking distance of our home, and allows me to start in September. So my household will aim to make August our red X month. I almost passed out when they told me the salary, but I had a deep breath and I still negotiated for a 5K signing bonus. AND THAT IS NOT THE BEST PART YET. My new salary equals our current household income. My husband and I are so excited about how this new job is going to accelerate our FI journey. As we have had a lower income for the last 5 years, my husband and I are in talks about planned lifestyle creep. But we have also pre-planned what percentages of our paychecks are required to max out both of our 401Ks."
- Bri said, "My 1% better is taking advice from ChooseFI to write a letter to the IRS. I've been helping my parents since my Dad got Alzheimer's. When he recently passed away, I found a notice from the IRS my mom thought was a scam. Due to his illness they either lost or didn't enter an important document into their 2019 tax return. They'd sold stocks and rightly owed over $5,000 that year. However, the notice included $1,200 in interest and about $700 in a penalty. I took the ChooseFI advice from one of your episodes and wrote a letter explaining his illness, and stating they'd never made these errors, always paid on time, and please forgive the penalty and interest. We would happily pay the rest. Mom just got a letter that the IRS forgave the ENTIRE bill! I am still in utter SHOCK and feeling immense gratitude for this and all I continue to learn from ChooseFI. Thank you!!!"
- Jerome said, "First and foremost, thank you for everything you have done to transform my family's life. Our story is about stacking many 1% improvements to completely transform our lives in less than 5 years. One example was finding a small, in-home daycare that charged only $10/hour for one child and $14/hour for two children. We had to drive 15 minutes each way, but we only had to pay when we used it, and the savings were well worth the drive (given we lived in a HCOL area). We also cut cable, drive old cars, and eat most meals at home (which makes it a real treat when we eat out a few times each month). On the income side, negotiating from a position of strength has allowed my wife and I to negotiate rather aggressively. For myself, the last year included a 30% increase in salary and 15% decrease in responsibilities. (Paradoxically, I now enjoy my job much more and could see myself doing this for a long time.) For my wife, an example would be a $10,000 raise and removing Sundays from her schedule. And she even started her own business! We dreamed of an early retirement in a part of the country with warmer weather and more things to do outside. Until we realized that because of our low monthly expenses, we could afford to make the move sooner than later. Which we did earlier this year! My wife is taking a pause in her career to spend this precious time with our two young sons (both under 4 years old) and will return to work whenever she chooses. Our savings rate has been "slashed" to 10%, but after a few years of not spending money on things other people expect us to, we are Coast FI anyway. I can't thank you enough for the education, motivation, and community you have provided to us."
- Allen said, "My 1% better this week is that I'm attending my first Camp FI in Virginia this weekend, and I'm excited to connect with some like-minded people. Also, I live in Lakeland, Florida which is an hour away from the nearest airports in Tampa or Orlando, so I decided to take the train up to Virginia. I really hate the entire airport process (I really don't like stress), so instead of driving 3 hours early to the airport, wading through security and sitting at the gate, my wife will just drop me off at our local train station and I'm off. I'm using the time on the train to catch up on some reading and to do some writing. I know 18 hours on a train is not many people's idea of a good time, but as someone who is generally a quiet, introspective personality, I believe this lines up better with my strengths. Slow travel is in FI plan, so this lines up with that goal as well."
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