Ep. 585 — Unpacking The Path to the Boring Middle

I was thinking about what @bradBarrett said around the 26 minute mark about the interest free loan to the government, and the idea that this tends to happen to people who don’t have the wherewithal to save money.

Sometimes I feel like we need a “PovertyFI” genre to bridge different life experiences, lol.

In my experience, the savers are often the ones who used those tax refunds to pay down debt or start filling financial buckets they wouldn’t otherwise be able to tackle at the beginning of their journey. Meanwhile, the people who are crippled by debt and whose lifestyles are out of control tend to want every possible dollar in their paychecks.

It really comes down to where you start and whether you’re able to adapt as you go.

For some people, over withholding isn’t just a math decision, it serves as a behavioral tool. It creates forced savings and a lump sum that can be directed with intention. Early in a financial turnaround, that structure can matter more than optimizing for a few percentage points of return. Behavior often drives outcomes more than pure efficiency.

For example, if someone receives a $3,000 tax refund, that means roughly $250 per month was over withheld throughout the year. If that $250 were invested monthly at an 11 percent annual return, the total interest earned over the year would be around $165 to $180. That is the true opportunity cost.

But for someone who would otherwise spend that $250 each month, the comparison is not 11 percent versus zero percent. It is 11 percent versus nothing saved at all. In that case, giving up $165 in theoretical gains may be well worth it if the structure forces $3,000 of actual savings. That refund can then be deployed intentionally, toward debt payoff, emergency funds, or investing.

I view it similarly to the discussion about financial advisors from a few episodes ago. Is a financial advisor a wasted expense? If hiring one gets someone who otherwise would not save to start investing for retirement, then it is not a wasted expense. It is a behavioral bridge.

I just finished listening to this episode (I'm a week behind at the moment).

Something that @bradBarrett said when mentioning taxable brokerage accounts clicked for me, and I wanted to toss out here in case others find it useful. Specifically, he mentioned how he dislikes the term "taxable brokerage account" (though certainly there have been other occasions where it went into a full-blown rant :-). It occurs to me that it might make sense to think about it or call it something like a "brokerage savings account". I think that most people intuitively understand that savings accounts generated income (and in the FI community we generally get exposed to the idea of a HYSA), and so it seems logical to equate the brokerage account more with the "savings account" label rather than "taxable" label.

Naturally, there are still some differences, but the similarities seem more significant: same conceptual tax treatment of savings interest and brokerage dividends/cap gains; everything exists outside of the "retirement" umbrella; you can access it whenever you want, etc. It's a small difference in the way of thinking about it, but I think it has the potential to be meaningfully less confusing for those who might otherwise be confused by the "taxable brokerage" label.

I wanted to take a minute to reply to FishGuy and share our experience: my partner and I were similar to your situation (~$530k NW, $380k invested, DINK) when we decided to take a 'year off' work. We started planning around a year before the quit date by dreaming about things we wanted to do or places to go during the year (hard to limit it once you start!), both quit our jobs and had an awesome year traveling, spending time with family, having time for house projects and just living life at a slower pace.

We also did not have a rigid plan on going back (we completely cut ties with our companies, although left on good terms) and during the year we were so busy with the activities we planned we didn't want to think about going back to work (applying to jobs, interviewing, also wrapped up in this was deciding if/where we wanted to move, what to do with our house, all those life questions) so the year off bled into a second year.

All in, I ended up almost two years off of work, my partner a year and a half. Crazily, our net worth did still go up during this time (obligatory past performance doesn't guarantee future returns). I have lots to say about it, but overall I would highly recommend taking the time if you are able to (and I think most people are able to if they really put their mind to it), and the fact that you are even considering it means that I think you would get a lot out of even just 6mo off.

This episode was a great reminder that the “boring middle” is anything but boring. It is a space where positive incremental progress takes root and where the freedom to experiment becomes most exciting. I really enjoyed the discussion about how the path to FI is built through Discovery, Awareness, and Control, one intentional step at a time. A future episode could dive deeper into each stage, including success stories, tips, and hacks from listeners. Thank you!

Thank you for a great content filled episode! I'm currently in the boring middle and have been feeling restless lately like I should be doing something more, or different. I'm glad you reminded me of the "simple path to wealth." It really doesn't need to be complicated, I just have to keep plugging along towards my goal!

Listening to this episode I feel your pain Jonathan! I feel like I was somewhat sold snake oil when it came to the push for going to college and accruing a ton of student loan debt. I’m a PT and I really do love the field I work in, but the ROI isn’t the greatest.

I do want to say I’m happy to be officially student debt free as of September 2025! Thanks to PSLF (yes folks it’s still in existence despite changes in Dept of Ed and different Supreme Court decisions) I had all of my loans forgiven this year with no tax implications just for working at nonprofit hospitals and colleges for 10 years! We haven’t talked about this on the podcast for years and wanted to remind those who may want to see 5 figures of loans disappear overnight!

I celebrate the glorious return of the word "unpacked" to its former glory! NOW we are really putting the band back together!

Can't wait for some more hard core unpacking!

I was thinking about the idea of sharing FI 101 resources across local groups, and I was wondering if anybody has tried doing something for other organizations or communities. What comes to mind are the various churches I have been a member of, and Financial Peace University is often offered for financial literacy. While FPU has certainly provided value to many people, I think it would be cool to offer another level of financial literacy to my church. @jonathanMendonsa, I have heard it mentioned on the podcast a few times that you attend church. Is this something you have come across or considered doing?