End Of Year Wins | Part 2
Episode 282
Episode Guide
Episode Timestamps
ChooseFI Episode Show Notes
Episode Title: 2020 Wins from the ChooseFI Community - Part 2
Episode Summary:
2020 was a transformative year for many in the ChooseFI community. This episode features inspiring personal victories from community members overcoming the challenges posed by the pandemic. Listeners will hear success stories of debt elimination, financial independence, and the pursuit of personal growth, all while navigating an unprecedented year. The emphasis is placed on community support and actionable strategies that contribute to financial independence.
Key Topics Discussed:
- Personal stories of success shared by community members
- The importance of community engagement and feedback in achieving financial goals
- Embracing health alongside wealth for a more fulfilling life
- Financial strategies for debt elimination and investment
Timestamps and Highlights:
- Podcast Intro: You're listening to ChooseFI. The blueprint for financial independence lives here...
- Community Engagement: Discussing how listeners shared their 2020 wins, highlighting the power of community.
- Key Insight: "Surrounding yourself with the right people can transform your life."
- Embracing Failure: "Embrace failure as a stepping stone to growth."
- Guest Highlights: Introduction of Eric and Jason sharing their paths to financial independence.
- Debt Payoff: Eric discusses paying off a $40,000 mortgage, illustrating the decision-making process.
- Actionable Takeaway: Create a six-month emergency fund to bolster financial security.
- FAQ: Strategies for paying off student loans, focusing on high-interest loans first and refinancing options.
- Health and Wealth Discussion: Exploring the intersection of personal health and financial wellness.
- Key Insight: "Integrating health into financial discussions is crucial for long-term planning."
- Podcast Extro: You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time.
Key Quotes:
- “Out of any strife and change comes opportunity.”
- “Making personal financial decisions can lead to significant positive outcomes.”
Actionable Takeaways:
- Evaluate your current debts and prioritize high-interest loans for repayment.
- Create a six-month emergency fund to bolster financial security.
- Participate in community support systems for motivation and inspiration.
FAQs:
- What are some effective strategies for paying off student loans? Focus on high-interest loans first and consider refinancing options.
- How can community support enhance financial journeys? Sharing stories and experiences within a supportive community can motivate and inspire action.
Related Resources:
Discussion Questions:
- How can you leverage community support in your financial journey?
- What are your strategies for maintaining health during a financial journey?
This episode provides valuable insights and encourages listeners to reflect on their own financial journeys and the power of community in achieving financial independence.
Transform Your Financial Journey: Inspiring Wins from the ChooseFI Community
Introduction
In a year marked by unprecedented challenges, the ChooseFI community showcased resilience, creativity, and an unwavering commitment to achieving financial independence. The inspiring stories of individuals who transformed their financial landscapes in 2020 provide not only encouragement but also actionable insights. These community-driven narratives illustrate the power of strategic decision-making and the importance of social support in pursuing financial goals.
Harnessing the Power of Community
One of the most effective strategies for achieving financial independence is leveraging the strength of community support. Engaging with like-minded individuals enables you to share experiences, gather insights, and stay motivated. This collective journey significantly enhances your financial literacy, as highlighted by listener stories that emerged from the ChooseFI platform.
- Action Item: Seek out local or online forums, social media groups, or meetups focused on financial independence to share your journey and learn from others.
Financial Wins from Our Guests
Eric's Debt-Free Journey
Eric, a passionate member of the architects' field, shared how he was able to pay off his mortgage entirely, demonstrating the value of proactive financial planning. By prioritizing their financial goals, he and his wife created a six-month emergency fund, which provided stability during uncertain times.
- Key Takeaway: Paying off your mortgage may seem daunting, but it can alleviate stress and allow you to take greater financial risks in the future.
Jason's Transition to Financial Independence
Jason achieved his financial independence (FI) in May 2019 and embraced life post-FIRE amidst the pandemic's challenges. He focused on refining his budget and implementing a structured withdrawal strategy, which provided him with a steady income while ensuring he could manage expenses effectively.
- Action Item: Identify your minimum monthly expenses to determine your baseline spending and adjust your budget accordingly.
Embracing Failure as a Growth Tool
Both Eric and Jason emphasized the importance of embracing failure as a vital part of the growth process. Often, the most significant breakthroughs occur after setbacks.
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Key Insights:
- Surrounding yourself with positive influences and regularly evaluating your emotional responses to failure can transform setbacks into valuable learning experiences.
- Failure teaches resilience, adaptability, and opens doors to new opportunities, reminding you to assess risks wisely.
Strategies for Managing Debt
With many community members sharing their experiences on tackling student loans and other debts, effective strategies emerged:
- Prioritize High-Interest Debt: Focus on paying off loans with the highest interest rates first, while still making minimum payments on others.
- Explore Refinancing Options: Research refinancing opportunities to lower current interest payments and save money over time.
- Maintain an Emergency Fund: Having savings set aside reduces reliance on credit when unexpected situations arise.
Integrating Health and Wealth
Recognizing that financial health is closely intertwined with physical health, community members discussed the necessity of integrating both aspects into their lives.
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Key Strategies:
- Commit to a fitness plan that aligns with your financial goals. For instance, preparing meals at home can significantly reduce food costs while promoting better health choices.
- Engage in activities that encourage physical well-being, as some guests illustrated through their participation in fitness challenges.
Cultivating a Wealth Mindset
Adopting a wealth mindset is crucial for long-term success:
- Visualize Your Goals: Envision your ideal financial future regularly. This practice can help clarify your objectives and drive determination.
- Celebrate Small Wins: Acknowledge each step you take in your financial journey. Celebrating achievements—big or small—creates momentum and reinforces commitment to your goals.
- Invest in Yourself: By continuously learning about personal finance and investing strategies, you strengthen your financial acumen, positioning yourself for future success.
Preparing for Future Opportunities
Challenging times, such as those presented by the pandemic, have the potential to reveal new opportunities. Community members embraced innovation, pivoting their careers, and launching businesses that aligned with their newfound goals.
- Action Item: Reflect on your skills and interests to discover how you can adapt in changing landscapes. Consider freelance work, consulting, or entrepreneurship as viable pathways to explore.
Conclusion
As we reflect on the lessons learned from the ChooseFI community, we see a network of empowered individuals taking decisive steps towards financial independence. Leveraging community support, embracing failure, integrating health and wealth, and maintaining a forward-thinking mindset are all critical components of a successful financial journey.
Take these actionable insights and start applying them to your life today! Together, we can navigate the path to financial independence and enjoy the many successes that lie ahead.
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What You'll Get Out Of Today's Show
It's Part 2 of ChooseFI's end-of-year wins where we hear directly from our community members. During this live event, listeners shared the actions they've taken during the past year that have helped them to spend less, earn more, and enjoy the journey.
This year, the year-end-win episode took place in a three hour live Facebook and YouTube event featuring around 20 members of the community.
After listening to the podcast for months or years, how did individual members of the community take in information and take action leading to success in a very challenging year? Success isn't just the nuts and bolts of money. Ultimately, it's a life optimization strategy.
In response to Brad sharing in an earlier episode that he was joining Alan Donegan in his burpee challenge, Christine wrote in to share that she was inspired to step up her run by throwing in burpees along the way even if she couldn't complete the pushups.
Being perfect isn't realistic. Challenge and struggling are important, as is trying to get to the point of mastery. You grow during times of discomfort and failure.
The first end-of-year win comes from Eric. Introduced to FI by his best friends over a year ago, Eric binged listened to the podcast. In January of 2020, Eric and his wife re-scripted their financial life.
Eric is an architect and started creating YouTube content as a side hustle on his channel 30X40 Design Workshop.
Re-scripting their financial life started with paying down all their debt, including mortgage, with the cash they had saved that wasn't doing very much for them and built a six-month emergency fund.
Having that headspace allowed them to take more risks during the year. They don't have a specific monthly budget, but as long as his wife keeps her job as a research scientist, they are good. Everything he makes is going toward FI, including a post-tax brokerage account and 529s.
The FI literacy they've picked up from the podcast has shown they are a lot closer to their FI number than they thought.
The friend who introduced Eric to FI was Jason, who also had end-of-year wins to share. Jason figured out early in his career that he didn't want to persist working for other people until retirement age.
Five years ago, Jason learned about the FIRE community and began to buckle down, working toward a strategy.
Jason says they've always been good savers and put salary increases and bonuses toward retirement savings. In 2019, he realized 2020 was the year they could hit FI. He actually achieved it in May 2019 and stayed at his job until June 2020 because he had some things he wanted to see through.
In June, they moved from a high-cost-of-living area to a more moderately priced location. He began blogging on his website, The Next Phase is Now, to help work through the tornado of feelings he was experiencing.
Before retiring, they lived on their FI budget for a full year to give them confidence. Currently, Jason is drawing from his cash reserves, which he moves from a Fidelity account to his checking account once a month like a paycheck.
Next up is a question from Rebecca, who wants to know how to calculate her FI number when both she and her husband have pensions. Jonathan says the difference between your monthly expenses and your pension is what your FI number will need to cover.
The book by Grumpus Maximus, The Golden Albatross: How to Determine if Your Pension is Worth It, as well as episodes 057 and 227 with Grumpus are good to check out if you have a pension.
The next listener sharing her wins is Sara. Sara sold her care and began investing in VTSAX this year after graduating in 2019.
As a new investor, the market fluctuations this year were intimidating, but after reading The Simple Path to Wealth, she felt like she was getting in during a low period.
Sara's only debt is $78,000 in student loans which she hopes to pay off by age 30. During this 0% interest period, she has deferred making payments and has saved $20,000. It's a safety net that she's trying to decide what to do with.
Her employer offers a .5% match up to 6% in her retirement plan. Sara has increased her contribution since deferring her student loan payments and is looking to roll over an account from a previous employer.
Sara is trying to keep her expenses low and estimates her savings rate to be 30-40%.
Listener Jake has made a lot of big moves this year, which means undoing all of the American dream ideas that had been drilled into him, like the fancy apartment, car, and clothes. They weren't making him happy.
After listening to the podcast, Jake took action and moved into a place that cost him half as much, traded in the fancy car for a used Prius he paid cash for, and slashed his spending.
Another big move Jake made was to refinance his private student loans with a 10% interest rate to 4%. He's putting every extra dollar toward student loans and will 100% debt-free by the end of January.
The Talent Stacker podcast has lit a fire under him and Jake's goal for the end of 2021 is to hit $100,000 net worth.
Being able to work remotely, Jake has moved back in with his parents and reduced his rent to zero. Brad says he credits living with his parents after graduation as the springboard for everything that came after.
Zach says it's been a great year figuring out his why of FI and taking actionable steps. He thinks whether we realize it or not, we're all chasing time and health.
He wants to travel the world in business class and loves his 2006 Hyundai Sonata. For Zach, finding happiness wherever he is at is the FI goal. It's all about what you personally value.
His investments are set up to meet his passive income goal. At the beginning of COVID, Zach started two businesses. While a pandemic doesn't sound like a good time to start a business, Zach says any time of strife and change creates opportunity.
Next up is Kosta who says despite the tough year, his path to FI has accelerated and COVID hammered home the need to do it.
Three years ago, Kosta and his fiance thought they had made it with their lucrative careers. But when he learned about FI in 2018, he was hooked. They worked together as a team to pay down student loan debt and put a 20% downpayment on the house they bought at the beginning of this year.
Health issues that may take both of them out of work motivated them to ensure their later years were easier. And a by-product of FI, Kosta has lost 84 funds this year!
