Everything Is Negotiable
Episode 119
Episode Guide
Episode Summary:
Episode Timestamps
Episode Show Notes: ChooseFI Podcast - Mr. Refined's Journey to Financial Independence
Episode Summary
Mr. Refined shares his inspiring journey of overcoming significant debts, including six figures of student loans and medical expenses. Through strategic negotiation, financial hacks, and a frugal lifestyle, he transformed his financial outlook and is now focused on achieving financial independence with a goal to triple his net worth. His candid reflections emphasize the power of persistence, human connection, and the drive to reclaim time for family.
Key Takeaways
- Negotiate Everything: Emphasizing that "everything is negotiable" can lead to substantial savings on bills, including medical expenses.
- Frugal Living: Adopting a frugal lifestyle is crucial for managing and reducing debt effectively.
- Dependent Care FSA: Utilizing tax-advantaged accounts like a Dependent Care FSA can help reduce childcare costs.
- Persistence: Staying dedicated in the face of challenges can significantly impact one's financial journey.
Timestamps & Topics Discussed
- Podcast Intro
- Mr. Refined's Backstory: Introduction to Mr. Refined and his initial struggles with student loans and medical debt.
- Dealing with Student Loans: His journey with six figures of student debt and strategies for reduction.
- Medical Debt Negotiation: How he negotiated his $100,000 medical debt down to around $12,000.
- Key Insights on Financial Hacks: The importance of negotiation and lifestyle choices in achieving financial independence.
- Final Thoughts and Goals: Mr. Refined shares his commitment to reclaim time for family and his aspirations for the future.
Actionable Takeaways
- Negotiate Bills: Approach all bills with the mindset that they are negotiable; conduct research and be persistent in negotiations.
- Reclaim Your Time: Make a deliberate effort to prioritize family time over work obligations; reassess your commitments.
- Maximize Use of Dependent Care FSA: Look into using a Dependent Care FSA to help lessen childcare costs effectively.
Important Quotes
- "Everything is negotiable; don't settle for the price they give you."
- "Recognizing my impact on my son's well-being ignited my commitment to change."
- "Start today! It's never too late to invest in your future."
FAQs
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How did Mr. Refined reduce his medical debt?
- He negotiated with various providers to lower his nearly $100,000 medical debt to about $12,000.
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What strategies did he employ for his student loans?
- He engaged in debt forgiveness options, negotiation, and legal channels to manage repayment.
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What is a Dependent Care FSA?
- It’s a type of flexible spending account allowing pre-tax dollars to be set aside for childcare expenses, lowering taxable income.
Discussion Questions
- What steps can you take to immediately reduce debt?
- How can lifestyle changes improve your financial situation?
Related Resources
- RefinedByFire.co - Find Mr. Refined’s blog and insights.
Podcast Outro
"You've been listening to ChooseFI Podcast, where we help middle-class America build wealth one life hack at a time." Podcast Extro
Unlocking Financial Independence: Overcoming Debt and Reclaiming Your Time
Achieving financial independence is a journey many aspire to, yet face significant obstacles along the way. Mr. Refined’s inspiring story, as shared on the ChooseFI podcast, is a testimony to the power of strategic negotiation, community support, and frugal living in overcoming substantial debt. Here, we present actionable insights based on his journey which can serve as a guide for anyone embarking on their own path to financial freedom.
Understanding Your Debt: The Importance of Knowledge
To make headway against debt, it’s crucial to first understand the intricacies of your financial situation. Assess your current debts and identify which are negotiable. Begin consuming resources that demystify personal finance. Generating a thorough knowledge base about your obligations helps empower you to take actionable steps.
Action Items:
- Evaluate all debts: List out student loans, medical debts, and any other liabilities.
- Identify negotiable bills: From medical bills to credit payments, recognize that everything is negotiable.
Negotiation Strategies: Everything is Negotiable
One of Mr. Refined’s pivotal realizations was that all debts are negotiable. He successfully negotiated his medical debt down from nearly $100,000 to approximately $12,000—a staggering achievement. Here’s how you can adopt a similar approach:
1. Reach Out Proactively
When faced with bills, initiate contact with service providers, hospital administrators, or loan officers discussing your situation openly.
2. Present Your Case
Discuss your current financial standing candidly. Articulate that while you are committed to paying your debts, you seek reasonable terms.
3. Cultivate Empathy
Treating representatives as people rather than faceless entities often yields better responses. Share personal anecdotes that highlight your commitment and drive for financial restoration.
Action Items:
- Start the negotiation process by calling bill collectors or service providers.
- Use a calm and empathetic approach to build rapport.
Adopting a Frugal Lifestyle: Live to Save
Frugality is not merely about cutting expenses; it’s about reshaping your lifestyle to prioritize wealth accumulation. Living below your means provides room for savings and investment.
1. Simplify Your Life
Reduce unnecessary expenses by distinguishing between needs and wants. Trim subscriptions, choose budget-friendly groceries, and explore public transport when feasible.
2. Embrace Options like Dependent Care FSAs
If you have children, utilize tax-advantaged accounts like a Dependent Care FSA, which allows you to allocate pre-tax dollars towards childcare expenses. This not only reduces your taxable income but frees up vital cash flow.
Action Items:
- Conduct a monthly budget review to identify areas for cuts.
- Utilize pre-tax savings accounts for childcare if applicable.
Reclaim Your Time: Prioritize What Matters
Time is a resource that must be valued appropriately. As Mr. Refined realized through his personal journey, reclaiming time for family and personal well-being can enhance your quality of life significantly.
1. Set Boundaries
Establish work-life boundaries that allow you to focus on family and personal growth.
2. Maximize Efficiency
Engage in efficient time management practices. Use meal prep services or grocery delivery services to save hours during the week, thus allowing you more family time.
Action Items:
- Designate “family time” in your schedule and stick to it.
- Explore services like grocery delivery to cut down shopping time.
Embracing Side Hustles: Diversifying Income Sources
To break free from financial constraints, diversifying your income can create new opportunities for saving and investing. Mr. Refined emphasizes the importance of developing multiple revenue streams alongside traditional employment.
1. Identify Your Skills
Consider what hobbies or talents you possess that could transform into a side business.
2. Start Small
Begin with manageable side projects that won’t overwhelm you. As you gain more confidence, expand those efforts.
Action Items:
- Assess skills and interests for marketable side hustles.
- Dedicate a few hours weekly to explore entrepreneurship.
The Journey Toward Financial Independence
Establishing a clear ‘why’ can serve as powerful motivation on your path to financial independence. Mr. Refined's inspiration stemmed from his desire to foster a supportive environment for his children. This renewed focus propelled him towards his ambitious goal of tripling his net worth.
1. Set Clear Goals
Create specific, measurable financial milestones that resonate with your personal values and lifestyle aspirations.
2. Reflect and Reassess
Regularly evaluate your journey. Reflect on what is and isn’t working and don’t hesitate to make adjustments.
Action Items:
- Develop a five-year plan outlining financial goals.
- Regularly check in on these goals to assess progress.
Conclusion: Your Road to Recovery and Success
Mr. Refined’s journey illustrates that overcoming financial hurdles is not only possible but achievable with the right strategies and mindset. By adopting negotiation tactics, embracing frugality, reclaiming time for personal connections, and exploring additional income streams, you can forge your path toward financial independence.
Remember the key takeaway: Everything is negotiable. Start today, implement these strategies, and watch as your financial outlook transforms. It begins with the determination to take control and seek the support of a like-minded community. Join the ranks of those who are making it happen, including yourself!
Mr. Refined from Refined by Fire has overcome a staggering amount of debt that accumulated from student loans and medical bills. After finding the FI community, he was able to triple his net worth! Mr. Refined talks openly about his debt, how he negotiated his way out of debt, and why he is pursuing FI.
[elementor-template id="143609"]We All Face Challenges
Every single one of us has faced obstacles on the journey to FI. You may have started with debt, lost a job, or faced a personal crisis, the journey is different for each and every person. The hard part is overcoming those challenges and working towards your FI goals anyways.
Even if you aren't pursuing FI, debts have to be repaid and lifestyles have to be funded. Financial challenges are bound to present themselves but some of us are able to overcome them and build a better life.
Although all of us have challenges, Mr. Refined had a series of financial and physical obstacles that would stop anyone in their tracks. In fact, he even has a challenge on his website: If anyone has had it worse than he has, then he'll buy them a stiff glass of bourbon. So far, he's only paid for one glass.
However, he was able to overcome these challenges. No matter where you are in the journey, you can overcome your own challenges. Let's take a closer look at Mr. Refined's story and the concrete ways he was able to pay down debt and build his net worth.
Mr. Refined's Beginnings
Like many high school students, Mr. Refined had worked hard to get into the "right" college to pursue his chosen career path. Many students are drawn into the idea that pursuing a high-income career is the only way to build a financially successful life, Mr. Refined was no different. He chose to attend a prestigious out of state school to pursue a career in engineering that cost around $60,000 a year.
However, after working extremely hard to attend this school, he decided that he didn't like it because it was not offering him the total education experience. Instead of a well-rounded experience that involved schoolwork and social activities, the school did not offer the social experience and networking opportunities that Mr. Refined desired. Plus, the student debt he was racking up was starting to feel overwhelming.
After making this realization, he chose to enact some "geoscholastic arbitrage" by transferring to the University of Wisconsin with a scholarship offer. Although he thought this would be a stepping stone to another college, he liked the school and experience it offered. At the end of his six years in college, he was able to graduate with three majors and two degrees.
By transferring schools on a scholarship, he was able to save himself thousands of dollars. The scholarship was awarded based on merit but he did use the FASFA to apply for financial aid. He did not have to apply to the scholarship specifically but the award allowed him to drastically cut his college expenses from the original $30,000 per semester.
Although he was able to significantly cut down the amount he was spending on his education by transferring schools, he still had six figures of student loan debt at graduation.
After Graduation
Immediately after graduation, Mr. Refined experienced a series of unfortunate events.
At graduation in 2008, the job market was tough. Instead of taking a job he wasn't excited about, he decided to continue working as an intern until he found a good job. He did eventually find the job he was looking for.
A short time later, he was the victim of an assault that required thousands of dollars worth of medical attention. Even after he left the hospital, he was required to recuperate in bed for weeks.
Unfortunately, this assault happened exactly two weeks before Mr. Refined's health insurance at his new job kicked in. This left him with no insurance company to pick up the tab for the series of medical treatments that he needed.
As icing on the cake, while he was lying in bed recovering, he received a letter in the mail from one of his student loan providers that demanded full repayment of the debt immediately. The loan provider was going bankrupt, so every borrower was expected to find a way to repay their loans quickly.
Related Podcast: Student Loan Repayment With Travis Hornsby
How Did You Deal With The Legal Issues?
Luckily, he had purchased a LegalShield subscription several years ago for assistance with writing contracts for his small landscaping company. Legal Shield works similarly to car insurance for legal issues, so with his monthly fee, he had access to a lawyer with additional fees.
Mr. Refined's lawyer from LegalShield sent a letter to the lender that explained his life circumstances. It outlined his physical and financial situation which made it clear that it was impossible to pay back this money immediately.
The letter worked! He received a response that his loan had been absolved without ever needing to show up in court. Instead, the loan was wiped away because the lender is no longer in business. With that letter of proof, around $60,000 to $70,000 of student loan debt was simply erased.
Currently, the LegalShield plan is $24.95 a month. It may be worth the investment for any future legal issues you might encounter. Legal fees are known for getting expense quickly, so this could be a way to protect yourself from exorbitant fees.
How Did Mr. Refined Pay Off The Debt?
As some of his student loan debt was absolved, the medical bills started pouring in. It started with one bill for $10,000 then another for $5,000, and slowly the bills grew to an amount close to $100,000. At first, he thought that he had been double billed but after several calls, he learned that each department was billing him separately for his medical care.
Before the assault, he had around $100,000 in student loan debt. The total medical debt led to almost a quarter of a million dollars of debt for Mr. Refined. After a moment of considering the idea of running away from his debts, he decided to find a way out of this.
The first step was to understand the costs behind his hospital bills. After relentless pressing, he was able to secure an itemized bill of expenses for his hospital stay. The costs for basic essentials were astounding. For example, he was charged $17 for a roll of toilet paper!
Once he had this itemized breakdown of costs, he started negotiating with the hospital. He had learned from his student loan legal battle that debts were negotiable, so he just started asking for a reduction in the total amounts. It took countless hours on the phone with hospital representatives and continuous explanations of his current financial situation to six different providers. Each of the providers worked with Mr. Refined on both the term of payment and the total amount owed, so he was able to work down the debt from around $100,000 to $12,000.
With this reduced debt burden, Mr. Refined was able to tackle both his student loans and medical debt with sheer hard work and determination. While his peers bought homes and cars, he continued to live as if he was in college and put the extra money towards his debts. Amazingly, he was still able to pay off his loans within five years graduating college.
Related Podcast: How To Get Out Of Debt
Actionable Advice To Tackle Your Own Medical Debt
If you are in a similar situation, then the mountain of debt in front of you may seem hopeless. However, it is completely possible to tackle your debt with a positive mindset and Mr. Refined's methods. The first thing you need to remember is that everything is negotiable. Although it may not be easy, you should at least attempt to negotiate your debt down.
If you can put a dollar sign in front of anything, it's negotiable.
To get started, you need to make your calls with a friendly attitude. Treat the person at the other end of the line with respect or it will be difficult to get anywhere in a negotiation. Before you even pick up the phone, Mr. Refined recommends making an effort to smile. Once you are on the call, attempt to make a personal connection. Even if it something as small as asking how their day is, you will be surprised how helpful that can be.
While on the call, treat the other person like a human being. Remember that they likely have other people yelling at them all day, try to be the exception. When possible, repeat back information to let them know you are listening carefully and are taking the conversation seriously.
When they are ready, relay your personal story. After this, the human element may take over and the person may actually be willing to work with you.
As you are making these calls, take careful notes. It is likely that you will have to call back several times before you get your answers. Every time you call back, make sure to frame your conservation with the specifics from your previous calls. Make sure to keep as much specific information as possible handy while you are on a call.
If you were the victim of a violent crime, then look into programs that will help you pay the medical bills. Many states have victims of violent crimes program, plus there are several private organizations that are willing to help. If you have less than average income and no health insurance, then many hospitals are willing to offer financial aid.
Just keep calling and searching for the person that is willing to negotiate with you. Be the nice squeaky wheel that keeps calling until some kind of resolution is reached.
Taking Negotiations Beyond Medical Bills
Treat everything as negotiable. Whether that is your internet bill or your medical bills, continue to negotiate until you reach an agreement that you can live with. After you overcome debt, you still have financial goals to work towards.
Debt free is not the end of the journey, frankly, it's the beginning.
Mr. Refined continued to hustle and approach finances with the mindset that everything is negotiable.
For example, he started focusing on reducing his tax liabilities and was able to reduce these from 41% to 9% in just one year. Some of this was through a child care hack via a dependent care FSA offered through his employer. Through this DCFSA, he is able to receive a tax advantage if he uses the money on childcare. He plans to continue optimizing his life in pursuit of FI.
Challenge yourself to reduce costs through negotiations. The worst that can happen is that you are denied a discount of some kind. With each negotiation, remember that no one will help you if you are rude. As you continue on your own journey, approach everything with the mindset that it is negotiable. You might be surprised how much you are able to save!
Listen to Brad and Jonathan's thoughts about this episode here.
How to Connect with Mr. Refined
Reach out via his website at RefinedbyFIRE.co
The Hot Seat
Favorite blog: Joel from FI180 and 5 AM Joel
Favorite article: Mr. Money Mustache's Shockingly Simple Math Behind Early Retirement
Favorite life hack: One massive action hour every week. The goal is to get through as many tasks as possible even if they are imperfect and incomplete. He takes each task to around 80% completion or as far as he can in 10 minutes before moving on to the next task.
Biggest financial mistake: Not taking action. He had around $10,000 in an HSA account. If he had invested it, then it would be worth $54,000 today.
Advice you would give your younger self: Be more relationship focused because the relationship matters more than the message. You can relay any message through relationships. Do not concern yourself with being right, then you will not get your message out.
Bonus: What purchase have you made over the past 12 months that has brought the most value to your life? Instacart comes in second to Audible. He values bettering himself every single day.
Related Articles
- Podcast Episode: Demystify College Scholarships with Brian Eufinger from Edison Prep
- Hacking College with Zero Debt
- Practical Tips For Negotiating Medical Bills