End Of Year Wins | Part 3
Episode 283
Episode Guide
Episode Summary:
Episode Timestamps
ChooseFI Episode Show Notes
Episode Summary: The third installment of the ChooseFI 2020 Win series showcases the transformative experiences of community members on their path to financial independence. Each guest shares wins that emphasize personal growth and community support, encouraging listeners to take actionable steps towards their goals.
Key Topics Discussed:
- Personal stories of community members achieving financial wins
- The importance of community support in the financial independence journey
- Strategies for smaller, incremental changes leading to significant improvements
- Various approaches to budgeting, investing, and expense management
Timestamps and Highlights
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Introduction to Financial Wins: Brad and Jonathan introduce the episode and set the tone for shared victories and lessons.
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Sarah's Teaching Journey:
- Share her experiences and challenges during the pandemic.
- Successes in maxing out retirement accounts and paying off her mortgage, achieving a debt-free status.
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MK's Business Growth:
- MK discusses growing her writing business and maximizing income through multiple streams.
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Whitney's Financial Planning Transition:
- Transitioning to managing her own finances after letting go of her financial planner.
- Discusses tax-loss harvesting and non-financial wins such as improved health and hobbies.
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Carlos's Photography Business:
- Carlos shares how his wife built a photography business from her passion and skills.
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Sitlali and Jose's Budgeting Success:
- Discuss how they implemented meal prepping and found creative solutions to reduce expenses while navigating life changes.
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Robin and Joni's RV Life:
- The couple discusses their transition to RV living and how the FI community impacted their financial journey.
Key Quotes & Insights
- "What are we truly working towards in life?"
- "To escape feeling stuck, take different actions for different outcomes."
- "The more you take action, the easier your journey becomes."
- "Financial Independence allows you to allocate funds based on personal values."
Actionable Takeaways
- Start looking at your financial vehicles and maximize contributions.
- Get off the couch and take action to improve your life.
- Eliminate unnecessary expenses to create more flexibility in your budget.
Related Resources
FAQs
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How can small changes lead to significant wins?
- Small actions can snowball into major life improvements over time, as demonstrated by the episode's guests.
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What are effective ways to budget?
- Employ strategies like meal prepping to save time and resources.
Discussion Questions
- What steps can you take today to start your journey to financial independence?
- What budgeting strategies have worked best for you?
Action Items
- Consider reevaluating your financial priorities and budgets this week.
- Engage with your community about shared financial goals.
Podcast Extro: "You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time."
Embracing Financial Wins: A Path to Independence
The journey towards financial independence is often paved with small, strategic decisions that lead to transformative changes in one’s life. In this article, we will delve into actionable steps and insights inspired by the ChooseFI podcast community, shedding light on the essence of financial growth and the power of community support.
Understanding Financial Independence
Financial Independence (FI) is the ability to live without being dependent on a paycheck. The foundation of FI rests on the ability to manage money effectively and make informed financial choices. It's about understanding various savings vehicles, reducing debt, and making deliberate lifestyle changes to reclaim time and resources.
Small Changes, Big Wins
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Incremental Improvements
One of the core philosophies of the financial independence movement is the idea of making small, consistent changes. Recognizing that these incremental improvements can lead to major wins over time is crucial. People often feel overwhelmed by the vastness of their financial goals. However, start by identifying one key area where you can improve—be it budgeting, saving, or investing. -
Utilize Multiple Savings Vehicles
To maximize financial growth, consider utilizing a variety of savings accounts and investment vehicles. Accounts such as Roth IRAs, 403Bs, and 457 plans can be instrumental in building wealth. Assess your financial situation and start contributing to these vehicles regularly. -
Address Feelings of Being Stuck
If you’re feeling stuck in your financial journey, remember that taking different actions can yield different results. Whether it’s reevaluating your budget, changing your spending habits, or seeking new income opportunities, change starts with action.
Community Support: A Vital Element
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Engage with Like-Minded Individuals
Community can significantly enhance your journey to financial independence. Engaging with platforms like ChooseFI enables you to connect with individuals who share similar goals. Sharing experiences and strategies can provide motivation and accountability. -
Celebrate Financial Wins
Each step towards financial independence is worthy of celebration, no matter how small. Acknowledging wins—like paying off debt, saving a certain amount, or even changing a habit—reinforces positive behavior and builds momentum for future successes.
Practical Strategies for Saving and Budgeting
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Meal Prepping for Budgeting
One of the most effective budgeting strategies is meal prepping. By dedicating time once a week to prepare meals, you can save both money and time throughout the week. This not only reduces the temptation to eat out but also promotes healthier eating habits. -
Library Resources
Utilize your local library for free resources. Libraries often provide access to books, films, classes, and even community programs. This is a fantastic way to enjoy entertainment and learn new skills without incurring additional costs. -
Eliminate Unnecessary Expenses
To create more flexibility in your budget, examine your spending habits and identify non-essential expenses. By minimizing these costs, you free up cash flow to invest in savings and prioritize your financial goals.
Using Talent Stacking for Increased Income
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Develop Your Skills
Reflect on your skills and how they can add value in different areas. Whether through side hustles, fulfillment of passion projects, or enhancing existing skills, talent stacking allows you to create additional income streams. -
Realize the Power of Online Platforms
The digital landscape offers numerous avenues for monetizing skills or hobbies. Starting a blog, YouTube channel, or a service-based business can provide both fulfillment and financial rewards.
Reevaluating Goals and Mindset
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Define What Financial Independence Means to You
Each individual has a unique definition of financial independence. Take time to reflect on what FI looks like for you. Understand your values and align your financial goals accordingly. -
Adopt a Positive Money Mindset
Developing a positive relationship with money is essential. Focus on celebrating regular progress, however small, and surround yourself with supportive communities that reinforce this mindset. -
Long-Term Vision
Maintain a long-term vision while taking short-term actionable steps. The journey towards financial independence is gradual, and having a clear purpose will guide your decisions and motivate you to stay the course.
Conclusion: Your Journey Begins Now
The path to financial independence is unique for everyone, yet the principles of taking mindful actions, leveraging community support, and fostering a positive mindset remain universal. Begin with small steps today that can transform your financial future. As you work towards your goals, remember that each victory—no matter how small—is a significant part of your journey towards achieving financial independence.
Share your journey with friends, engage with communities that inspire you, and embrace the transformative power of small, consistent changes. The journey is indeed long, but with determination and support, financial independence is within reach.
What You'll Get Out Of Today's Show
It's Part 3 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.
Are you building an amazing life or are you a cog stuck in a very depressing wheel? It could be either or it could be both. The community members featured in this end-of-year wins episode have had the wake-up call.
We can't control everything, but there probably are some things we can control that we haven't yet considered. Hopefully, these wins from the community will provide inspiration and imagination to find improvement with at least one thing.
Our first win comes from Sara, who teaches high school science. She began listening to the podcast in December of 2018 and after binge listening to half of the available episodes, she opened a Vanguard account with all of the money she had saved. This year, she put money into 457s, maxed out Roth accounts, and put some money in a 403b.
And finally, Sara also just made her last mortgage payment, paying it off in just 11 years. With the mortgage paid off, Sara is now debt-free.
A special shout out to MK who recently gave birth to a brand new tax-deduction, otherwise known as a baby girl. MK and her husband, Jason, hit FI in their late twenties, and in addition to working for ChooseFI, MK has written a handful of science fiction books and teaches others how to self-publish with her YouTube channel, Author Your Ambition.
The next end-of-year win comes from Whitney who fired her financial planner this year. While her financial planner had set Whitney and her husband up fairly well, they were finally ready to fly on their own. Now that she understood what she was doing, she was able to get out of some of the actively-managed funds and do some tax-loss harvesting.
After an unfortunate incident with a supervisor, Whitney was motivated to figure out how she could not work if she didn't want to. Previously, she had no extra time to figure things out, but being at home due to COVID allowed her to explore hobbies, take care of health issues, and do more activities with her son.
Although making even the 1% better changes aren't always easy, it is a positive feedback loop where it becomes easier and easier.
Whitney plans is to retire in the next couple of years.
Next is Carlos, who welcomed a new baby this year. His wife took some photography classes and after seeing that her photos were pretty good, set up a new business as a photographer.
Jonathan says he's noticed a pattern when trying to learn a new skill. The first is that it's something that interests you. Next is finding a community, getting some training, and finally doing it.
Although Carlos' wife had to hit pause with the business a few times during the pandemic, she's still managed to have success even in this challenging year.
Carlos started a blog this year. As an immigrant from Brazil, he had issues with the IRS and decided to share his experiences so that he could help prevent others from making some of the same mistakes. He's is writing the first article and will soon be launching Alien Moolah.
Citlali and Jose have spent the last year adapting and keeping good habits. They moved to California three years ago and needed to get a budget together and manage cash flow after encountering high rent prices.
They found ChooseFI early when just six episodes had been released. Living on a single income, they were open to the messages presented.
Since then, they have tried house hacking, Citlali earned a degree through Udacity, got a job working on autonomous vehicles, and they moved to Texas, which decreased their cost of living.
Jose says the aggregation of marginal gains has helped them to save. Meal prepping has cut their meal costs and allowed them more free time during the week for other things.
Because the pandemic has them driving less and they've built up a good emergency fund, they've reduced their auto insurance coverage and cut the cost in half.
They also frequently use the library for ebooks and more unusual things like museum passes.
Citlali's big win this year for a 50% salary increase following her performance review which is helping to increase their gap.
But Jose and Citlali are reaping the benefits of FI before reaching it. With family in Mexico that has been hit hard by the pandemic, they have been able to provide financial assistance to buy food and pay off medical debt.
Shannon's year has been one of adaptation. She works at a college where her responsibilities have increased and transitioned. As a result, her boss was able to negotiate approval for her position to be full-time. The increase in Shannon's gap allowed her to pay off her car loan.
Shannon also started a unique side hustle creating videos combining World of Warcraft and making cocktails, under the title TipsiGaming, which can be found on YouTube and Twitch.
With no debt and this year's salary increase, Shannon hopes to buy a home and house hack the payment.
Finding ChooseFI a little over a year ago, Shannon has one month in emergency savings and now she has seven months saved up.
Wrapping up the series are Rob and Joni who are preparing to hit the road for RV life. They discovered the FI community about two and a half years ago. Starting from essentially zero, their net worth is up to $250,000 and their investments are at $150,000.
They quickly got used to living in 200 square feet, enjoyed get rid of stuff, decluttering their life, and being able to quickly clean up their home.
They both work from home, making them location independent.
When they married in 2016, they followed a more traditional contribution of 10% into a 401K. Though they were debt-free when they found the FI community, they didn't start to crush the income side until about two years ago when Joni combined her skillsets, switched careers, and doubled her income.
Rob and Joni's expenses are fairly low. The RV is paid off but they bought some land to put it on. when on the road, their base expenses should be roughly $2,000 a month.
For more information on the free Five Day Challenge or to sign up for the newsletter, go to ChooseFI.com/start.
Next week JL Collins joins the podcast again to revisit the Stock Series concepts and share his perspective on some of the nuances discussed with other guests of the show.