Habits for Wealth Building | Rich and Regular
Episode 298
Episode Guide
Episode Timestamps
ChooseFI Episode Show Notes
Episode Title: Habits for Wealth Building with Rich and Regular
Hosts: Jonathan Mendonsa, Brad Barrett
Guests: Martin, Asha, Julian, Kirsten
Episode Summary:
Achieving financial independence involves cultivating behaviors and habits that foster wealth building. In this episode, Martin and Asha share their journey toward financial independence alongside Julian and Kirsten from Rich and Regular. The conversation covers practical habits such as managing spending, budget reviews, and the power of community support. The importance of investing in oneself is emphasized, along with actionable tips for simplifying life and optimizing spending.
Key Topics Discussed
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Introduction and Overview
- Recap of the previous episodes featuring Martin and Asha.
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Habits for Wealth Building
- Increased awareness of spending habits post-COVID.
- Key Insight: "Since COVID, we've increased our savings rate by being more aware of our spending habits."
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Investing in Yourself
- Importance of personal development.
- Key Insight: "Investing in yourself yields the best returns."
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The Role of Community
- Support and encouragement from like-minded individuals.
- How community can influence financial decisions.
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Challenges and Insights
- The balance between spending and saving, and the experiences of feeling judgmental towards different financial habits.
Actionable Takeaways
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Practice conscious spending by being aware of where your money goes each month.
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Engage with community meetups to connect with like-minded individuals pursuing financial independence.
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Invest in yourself through courses or workshops that can enhance your skills and career opportunities.
Notable Quotes
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"Tracking our savings adds excitement and optimizes our financial decisions."
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"Approach financial discussions without judgment, as everyone is at their own stage of understanding."
FAQs
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What are some effective habits for wealth building?
Effective habits include regular budget reviews, being mindful of spending, and simplifying life to reduce clutter.
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How important is community in financial independence?
Community is crucial for support, sharing ideas, and finding encouragement among like-minded individuals on similar financial journeys.
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What does investing in yourself mean?
Investing in yourself means taking courses, attending workshops, or buying resources that enhance skills and knowledge, ultimately leading to better financial decisions.
Related Resources
Discussion Questions
- What habits can you implement today to begin your journey towards financial independence?
- How does your community influence your financial decisions?
- What are your thoughts on investing in yourself?
Social Media Snippets
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"Investing in yourself is always worth it! #InvestInYourself"
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"Set standards for your life; discipline leads to freedom! #FinancialIndependence"
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"Money talks should be part of your daily life! #MoneyManagement"
This episode emphasizes the social aspect of financial independence and how building wealth goes beyond numbers to involve meaningful connections and personal growth. For additional insights and resources, be sure to check out the Rich and Regular blog and their web series, Money on the Table.
Unlocking Financial Independence: Habits and Community Insights from ChooseFI
Introduction to Financial Independence
Achieving financial independence (FI) is not solely about money management; it encompasses cultivating specific habits and behaviors that facilitate wealth-building. Insights from real-life journeys provide us with practical strategies tailored for effective money management and lifestyle optimization.
Habits for Wealth Building
Practice Conscious Spending To embark on your journey towards financial independence, start by being aware of your spending habits. Tracking your expenses can illuminate frivolous expenditures. As one participant noted, since the onset of COVID, they mastered their spending by eliminating unnecessary purchases. Moreover, referring to the classic approach of reviewing your budget regularly can significantly optimize your financial decisions.
Embrace a Capsule Wardrobe A proponent of minimizing clutter, consider adopting a capsule wardrobe. This system involves selecting a limited number of versatile clothing pieces that can be mixed and matched. By streamlining your wardrobe, you not only save money but also reduce daily decision fatigue.
Optimize Spending through Daily Practices Integrate small yet effective habits into your routine. For instance, ensuring that the sink is consistently free of dirty dishes can encourage more mindful purchasing decisions regarding kitchen items. The idea is to create a non-negotiable standard in your home that alleviates mental clutter.
Celebrate Small Wins Tracking savings brings excitement and motivation. Celebrate milestones to maintain momentum on your journey. Whether it’s noteworthy savings or impactful purchases, acknowledging these moments reinforces the positive feelings associated with financial discipline.
Investing in Yourself
Investing in yourself is one of the most rewarding expenditures you can make. The returns from personal development, whether through courses, books, or health-related expenses, greatly surpass traditional investments. Focus on enhancing skills, knowledge, and experiences that add value to your life and career path.
The Role of Community
Build a Supportive Network Having a community can significantly impact your financial journey. Seek out local financial independence groups to connect with individuals who share your values and aspirations. These groups provide a platform for sharing ideas, encouragement, and accountability.
Engage in Meaningful Discussions Regular conversations about money can diminish financial anxiety and foster support. Approach discussions with compassion, recognizing that everyone is at a different stage of their journey. Providing a non-judgmental environment encourages open dialogue, which can lead to shared solutions and insights.
Find Your Routines in Group Settings Engaging with like-minded people offers fresh perspectives and can help with accountability. Whether through potlucks or local meet-ups, share strategies, successes, and obstacles in a collaborative environment. Generating excitement through community events can reinforce your commitment to achieving financial goals.
Challenges and Insights
Embrace Flexibility with Financial Goals A significant part of striving for financial independence is understanding that financial goals evolve over time. Whether transitioning from a traditional job to a more entrepreneurial path, cultivating a flexible mindset is essential. Your financial health should align with your life goals, leading to a balanced decision-making process.
Avoid Judgment in Personal Finance Conversations Being judgment-free in discussions around finances allows individuals to express concerns without fear. This supportive tone builds trust and fosters willingness to share successes and struggles, which can ultimately help in developing a strong community.
Actionable Takeaways
- Review Your Budget Regularly: Set a specific time each month to examine expenses and optimize spending.
- Engage with Community Groups: Join local meetups focused on financial education and support to build lasting relationships.
- Invest in Yourself: Make a commitment to pursue personal development opportunities that resonate with your passions and goals.
Conclusion
Financial independence is a multi-faceted journey that intertwines practical habits, self-investment, and community support. By implementing conscious spending strategies, building a robust support network, and maintaining flexibility within your financial goals, you pave the way for a more liberated and fulfilling life. Remember, every small step counts toward creating a secured financial future, allowing you to live life on your terms.
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Martin and Ayesha with Julien and Kiersten
Website: rich and REGULAR
YouTube: Money on the Table
What You'll Get Out Of Today's Show
We are checking back in with our Households of FI family, Martin and Ayesha, who have been paired with mentors, Julien and Kiersten of Rich and Regular.
Kiersten and Julien live in Atlanta and started working toward FIRE before they married five to six years ago and have paid off $200,o00 in debt, including their mortgage. They now share their journey on their blog rich & REGULAR.
Ayesha and Martin live in Chicago and found ChooseFI in January 2020 and jumped in with both feet. Martin is a natural saver and had been a positive financial influence on Ayesha before finding FI so they had done a decent job managing their money.
Martin was researching dividend investing after it was recommended by Ayesha's uncle who retired at 55. Ayesha felt like her aunt and uncle had the most fabulous retirement life she'd ever seen. Thanks to his example over the last 25 years, their goal is to get to where he is.
Julien had a similar retirement role model in his life. A close family friend was a Registered Nurse who retried early and showed him that there is a lot of life left after 40.
Since finding FI, and partly thanks to Covid, Martin and Ayesha's savings rate has increased. It has made them aware of all the frivolous, non-essential ways they spent money before.
Ayesha hates budgets and doesn't want to track every penny of her spending. She was out of work for four months during Covid and they found that they didn't miss her income and it showed them that they could save a good amount of money without feeling constrained or deprived.
Having a quantifiable goal and a clear target has helped provide clarity in what they are trying to accomplish.
Martin enjoys trying to optimize their spending and counting the dollars they save. When they decided to get a new television, he used Offer Up to do his research and purchased a flat-screen plasma HDTV for $40.
Julien used to track every single expense and look for new savings opportunities each quarter. But now, optimizing their spending has become such a deeply ingrained habit that he no longer feels the need to look at their budget. He says it becomes like muscle memory once you sort out your own system.
Ayesha feels like when you can simplify your life and have good habits, your life can smoothly and asked what Julien and Kiersten's top habits are.
Kiersten says doing laundry regularly keeps them from having a ton of extra clothes. She and their son have a capsule wardrobe with 20-30 pieces of matching items. She also keeps the kitchen sink clear of dishes to cut down on kitchen accessories.
Julien says they have just the right amount of things they need and notes that there is stress associated with the quantity and clutter in our lives.
Having too many things adds to decision anxiety and analysis paralysis. Instead, whether it is life or a financial strategy, find a handful of things you can nail every single time and ignore everything else.
Julien also says that he has never made an investment in himself that hasn't paid off handsomely, no matter if it is exercise equipment, a book, or a course. Don't allow frugality to prevent you from paying to learn new learning opportunities. New skills can improve your ability to earn more income or make you more marketable.
Kiersten likes to save receipts. if the item she purchased sits for several days, she didn't need it and will return it. She also purges the house of items regularly.
As far as community goes, Ayesha and Martin are doing okay. In addition to family, they have a group of friends who meet to share ideas on investing and becoming financially free. However, they aren't as familiar with the concept of FI so Ayesha feels like they don't have a like-minded community
Julien notes that, especially for black people, the pursuit of financial independence can be a very lonely experience. Telling people about FI doesn't work. You have to show them, like when you get to the point where you can take a two-week vacation or a month off from work.
Kiersten and Julien suggest focusing on influencing the next generation. They use their freedom to step up and help out and pick up the slack with their friends' children.
When it comes to building community, stay open-minded. It takes time to find your best friends and others whose values closely align with yours, but you don't need to divorce yourself from your social circle.
Like their budget, Julien doesn't check his investment portfolio very often because they won't be touching that money for 10-20 years. His attention is better spent on building the business and maintaining a healthy lifestyle. They make decisions on where to invest income every quarter.
You can see the crash coming on other people's lives despite the advice you may have given. Still, Julien says to leave the gate open and don't be judgemental. You may not have been the right messenger for that message.
Before starting rich and REGULAR, Julien was working for a company he loved but was underpaid. When his company paid an influencer $10,000 for posting a photo on Instagram, it motivated him to start earning income in other ways.
Since they already had rental real estate, he was confident he could earn more outside of work. He was eventual led into the world of digital entrepreneurship.
When Kiersten was finally comfortable enough to leave her job, they were not yet at FI, but a year's worth of runway that enabled her to quit and devote that time to building the blog.
The FI community often talks about what number is needed to hit FI, but that number is arbitrary. A single dip in the stock market can impact the number. Julien and Kiersten ask if you were counting on drawing down that money, what would you do for money now?
Most people only earn income one way, through earned income. They don't know enjoy the quality of that income over any other.
Kiersten and Julien attend FI meetups in Atlanta and other places and encourage Martin and Ayesha to do the same when they are able.
Julien had challenges at the beginning of his journey. He grew up poor and was judgemental about his beliefs on spending. He found virtue in saving and said hurtful things to Kiersten because he felt she was spoiled. He's since learned leading with shame creates barriers.
Whether a natural saver or a natural spender, everybody is spending. Spending today can be rewarding and motivating.
Kiersten was also judgemental in a different way. She thought she knew how her life was going to be and was closed-minded. She struggled with seeing a different version of herself. She had to be open and let go of her ideas of what certain aspects of her life would look like.
If they came into a windfall of money and weren't allowed to invest in themselves or their business, they would invest the money in low-cost index funds and then let it grow and forget about it.
Discipline equals freedom. When you set up a framework for life by setting up non-negotiable things, it allows you the freedom to spend time doing the things you'd rather be doing.
Brad agreed with Julien's sentiment about investing in yourself and that the spirit of frugality can get in the way of that. Watch out for it.
The local groups are the heartbeat of the FI community. They aren't made up of podcasters and bloggers. They are regular people who are getting together and trying to live better lives.
