< DadBodfi >
Crack a Beer. Crack a Joke. Crack the code to Financial Independence.
Beer (Wine) Selection: The Naked Grape - California Chardonnay
Awful. Terrible. The last thing I want in my wine is "baked apple and caramel". It tasted like the apple cider you would get during hey rides at pumpkin patches as a kid - but spiked with gin by an old creepy guy. I don't mind dabbling in the boxed wine area, but this was a miss.
Last week my wife and I began the onerous task of potty-training with our 2-year-old son. We are following along with "Oh Crap! Potty Training" by Jamie Clowacki. We have multiple friends who have walked this path, but like most everything else with young children, every path is different. Throughout this process I learned that potty training is a little like the path to FI. Here's how they stack up:
Round 1 - Accidents
As my son learns this process, he will inevitably have some accidents. His accidents occur when he can't make it to the mini potty in time. This results in a stained carpet or wet Iron-Man underwear. We clean and retry the process.
My accidents are a little different. As I previously wrote, I barely dodged the bullet of leasing a brand new car and buying a home at the top of my budget. However I did have the accident of taking out way too much debt as a student. My result is having a nasty monthly payment and dollars of interest accumulated every day.
Advantage - Potty Training
Round 2 - Long-Term Benefits
As my son completes his path to being potty trained, his body will develop muscle memory that tells him when it's time to use the bathroom. As he gets older he will discover the wonderful 5-10 minutes every man spends in the morning browsing his fantasy football team or checking the stock market.
However my long term benefits on the path to financial independence will be stronger. I will be able to retire much earlier than expected, spend more time with my amazing family, and do the things that I love - maybe even co-managing that fantasy football team with my son.
Advantage - Financial Independence
Round 3 - Gratification
Some may disagree here, but when my son finally made his first deposit into the mini potty, he was rewarded with a piece of chocolate. We also cheered his name throughout the entire house and carried him around on our shoulders like he was Big Papi after Game 2 of the 2013 ALCS (https://www.youtube.com/watch?v=HJyxzaLNlNw - I remember watching this game with my father-in-law live on TV. He got up to use the bathroom and missed this moment).
I definitely get a rush when I buy some shares of SWPPX instead of paying the recently retired cable bill, but that doesn't last long. My gratification after paying off one of my student loans is short lived - I politely tell the lender to pound sand, walk downstairs to have a beer, and realize I still have a long way to go.
Advantage - Potty Training
Official Decision - Potty Training 2-1 in a Split Decision from the Judges.
Written by DadBodFI
Beer Selection: Li'l Napoleon IPA - Pensacola Bay Brewery (Pensacola, FL)
Another business trip requires another local brew test. Pensacola Bay Brewery calls it "strong and hoppy" with "smooth caramel and honey finish". They say that it's so good it "can sneak up on you if you let it". At 6.7% ABV, it certainly did just that, and so did the 2nd and 3rd pour. However there was not quite enough citrus bite for me, and the finish was a too sweet. Score: 6/10
A few weeks ago I received an email from Amazon saying I could sign up for a free 30 day trial with Audible - their audio book service. The trial would include 30 days of ad-free listening, 2 free books of my choice, and a $10 credit to Amazon. There was no long-term committeemen and I could cancel at anytime.
Usually, I would say to myself "trials are for suckers" and delete the email. However since I've discovered FI, I cannot turn down free money. So, I signed up for the service and promptly set a reminder on my Google calendar to cancel the subscription in 29 days. I then immediately downloaded "The Simple Path the Wealth" by JL Collins. Because I'm smart, I asked my wife what book she wanted. It was a World War 2 novel. Done. Finally I took the ten bucks and put it towards our monthly dog food.
Within a couple minutes I was already in the green - 2 books and $10 off a normal monthly expense.
Much like travel hacking, trial hacking requires attention to detail and the ability to not give the offering business what they want. You must have the discipline to cancel on time and read any fine print. Over the next few months I will dive into the trials that are worth your time.
Written by DadBodFI
Beer Selection: COORS Light
The perfect beer for moving. It's light and refreshing, and you don't get a weird look from your wife when you crack one at 9:30 AM. Score: 5/10
The FI Move:
I recently closed on a new home. My family has been growing and we simply need more space. When we found the perfect home that was 5.5 miles away from our current neighborhood, I took a look around our house and started to ask myself "what's the cheapest way to get all this stuff over there?"
The first thing I did was ask a couple moving companies to walk through my home, look at my stuff, and give me a quote on what it would cost to move it down the road. I shopped the quote around - here's where the pre-DadBodFi me would stop and just go with the cheapest quote. Instead, I decided to brainstorm a little further. What if I went to Home Depot and bought a bunch of boxes and packed them myself? This would take a line item out of the quote. Sure, it would be more work, but I would be saving some money.
Then a few days later, JCool sent me a text asking if I wanted a bunch of leftover boxes he had just used for his move. He also had some wrapping paper for dishes and packing tape. I loaded up my truck and began packing boxes. I was already "in the green".
What about getting the boxes from A to B? I drive a company truck that comes with a fuel card that pays for all mileage - personal and business. If I could pack all those boxes myself, throw them in the bed of my truck, I could get them to the new house for free. But why stop there? Why not load everything in there - tables, couches, appliances.
After 5 days of packing/unpacking, an 18 pack of Coors Light, and 17 back and forth trips, we had successfully moved 95% of our stuff. All that was left were washer/dryer, piano, fridge, and bed. We rented a Uhaul for a half day to complete our move for $66.00 (this includes their flat service fee, mileage, and gas). It came with an appliance dolly and ramp that made this last haul quite simple.
There were a few more positives that came from moving ourselves:
1. The Workout - no need to hit the gym last week. I tracked around 15,000 steps per day and lifted plenty of weight.
2. Decluttering - Instead of having someone box every item I own, I was able to sort through it all and throw away or donate a TON of stuff. Man that felt good.
3. Valuable lessons - Along with many other household tasks, I now know how to install a washer/dryer and replace a toilet.
Whether you have a company truck or not, this is the way to go for shorter moves. Oh and the remainder of the $84.00 expense came from buying beer for my friends to help me load and unload the Uhaul on either side. It pays to have good friends.
So we are on the path to financial independence and we’re stoked about it. We’re socking away money in our investments while reading and listening to tons of great content in books and on the interwebs. But there’s one burning question in the back of our minds.. Can we spend money while on our journey to FI? Absolutely yes we can. One of the great things about your own journey is that it’s not identical to mine. When it comes to your journey, you make the rules. You decide on what’s important enough to spend your hard earned dollars and what’s not. Let’s fire up an example and see where we land on the topic.
Say you’re sitting on your front porch sipping on a cold beer and you see a shiny red sports car drive by. You think nothing of it at the time, but then coincidentally, you see an identical one drive by five minutes later. Let’s look a little bit deeper into the driver of car one and the driver of car two and see if we can spot any differences, shall we? So it turns out that the driver of car one paid $35,000 financed over five years at 2% interest from a local car dealer. He took a look at his budget and realized he could afford to pay the note on his car, he just wouldn’t deposit as much money in his savings account each month as he normally does. He enjoys driving a newer car and because he goes through the buying and selling process every couple of years, he has paid what he believes is a fair price. That’s his thought process, done and done. Now let’s examine the driver of car two. He took a different path to obtain his ride. After researching the make and model of the car he wanted on ebay and craigslist, he found a car that fit what he was looking for. He contacted the seller of the car directly and asked if he would take $25,000 for it (the seller also had a sticker price of $35,000, just like driver one’s car). The seller didn’t take kindly to this offer and responded with “no way.” This is when being on the path to FI really pays off. Driver two wasn’t in any rush to buy the vehicle and he planned on paying for the car in cash, as he is a very diligent saver. So he waited patiently as the opportunity to buy the car he wanted at the price he felt comfortable with hadn’t arisen yet. Well, interestingly enough after two weeks the seller of car two got antsy. He reached out to driver two with an email that got right to the point. “If you’re still interested, I’ll take $30,000 for it.” Still not in any rush, the buyer of car two responded and said “I can come up to $28,000 but that’s the end of it.” They struck a deal at $28K. Driver two paid cash, just like he had planned, no financing needed. He will keep the car for the next 10 years and will maintain it himself because he enjoys it.
Some members of the FI community wouldn’t have purchased the car because it brings no value to them. That makes perfect sense. Driver two bought the car because he values it and the joy that comes along with being behind the wheel. Which also, makes perfect sense. Spending money on what makes you happy while on the path to financial independence is far from forbidden. What’s important is the practice of mindful spending. Have you researched the purchase and thought about how much value it brings to you? The two drivers in our example are completely different. However to the outsider’s eye, they both look the same. Mindful spending is a concept we talk a lot about here at DadBodFI because where we choose to spend our money matters to us. Don’t be afraid to invest in your passion be it cars or otherwise, just think it through.
Beer Selection: Sweetwater IPA - Atlanta, GA
This "hopheads beery dream" is on my Mount Rushmore of IPAs. I first discovered it a few years back when I subscribed to a Beer of the Month Club. Since then it has been my go-to IPA. It's a beautiful 6.3% ABV unfiltered brew with a fantastic finish. If you're ever in Atlanta, check out their brewery tour. You can taste all their beers for around $10. Score: 8/10
Sports: Boston Red Sox vs. Baltimore Orioles
Bet*: 50 Units on Red Sox Moneyline (-160) Results: Win 79.41
Blog Total: +155.41
About 45 days ago I was sitting in a Toyota dealership. I am lucky enough to have a company truck that comes with zero out-of-pocket expenses. However I was interested in getting something for my family situation. We have two beautiful children and I thought we needed a bigger car. I had just received a sweet raise, my bonus check had come through, and I was contributing 10% of my paycheck towards my 401K. Man, that 59.5 age will be here in no time. Life was good.
Now that I have more money, I can afford more, right? The 2018 Highlanders are sweet cars. They have every feature you can imagine - 3rd row seating, automatic closing trunk gates, navigation systems. There's even a button that will turn your sound system into movie theater quality. EVERYONE NEEDS THAT, DUH. And get this - I could drive away from that dealership in that car, no money down, with a sweet monthly lease payment of $485.00 (12,000 miles a year, for 3 years). This was the deal of a lifetime..so I thought.
Now - since we are apparently so rich, we could also afford a bigger house. After having 2 kids in 2 years, it was time to up-size. I called my mortgage broker and asked the dumbest question of all time: "YO! How much house can I afford?" He told me I would have "no problem getting a mortgage for $500,000". Yessssss - that's a half a million dollars. I promptly called my realtor and told him to start sending us some links to homes at 500K and below.
These houses were awesome: 5-6 bedrooms, wine cellars, 3 car garages. One even had a Koi pond. A fucking Koi pond! I had to have it - because the bank told me I could afford it. We put an offer on the house, but it fell through after we got outbid by some bum.
The next night JCool and I were sharing a 12 pack of spiked seltzer (if you haven't tried it, please do - review coming soon). We had just discovered the wonderful world of FI. We talked about the value of things and what you actually need. Just because those blood sucking bankers say you can afford something, that doesn't mean you have to buy it. I listed my needs to JCool as follows: a space for my children to play, an extra bedroom for when the in-laws come in town, and some type of area that I could watch football, build stuff, and start our home brew. Low and behold - I found a house that had all those things and was way under the "budget". We closed today and I couldn't be happier. I also called the Toyota dealership and politely told them to pound sand. I am going to run our 2013 CRV into the ground.
So here's the final outcome, and I hope this helps our audience at least in the slightest. Just because banks and dealerships say you can afford to take out these massive loans, it doesn't mean it's the right thing to do. Think about what you need, and take it from there. What brings value to you and your family? For me, it's a home where my kids can play and where my best friends can come over to enjoy a home-brew by my fire pit.
Share what you know, ask what you are missing.
I love sharing with others and thankfully that is what this community is about. This concept of shared information towards a goal is one of the foundational pillars of FI. I’ve spent about 8 years in the “real world” and taking that approach isn’t easy because we live in a world where your key differentiators, the special tips and tricks you use to succeed, make you better than the next guy.
We all want to be wildly successful but it seems that success comes at the expense of those around us. We are trained not to share what makes us unique for fear of losing our edge. The beautiful difference in the FI community - you give to get. I come away with much more as a result. So in a way it is still about doing a little better than the next guy, but the big difference - tell the next guy about it so he can do better too.
The most exciting part of this won’t be realized for 20 years and I’m not just talking about the earnings from the VTSAX. We get to be different, not just for ourselves but for our kids. I get to convey what I learn to my son, after all being the custodian of sage advice and fatherly wisdom is one of my duties as a Dad.
We can only hope that ten years from now the idea of FI and the way of thinking that accompanies it will have a massive following. It takes effort and intentional action at every turn and I believe most people aren’t searching or will simply disengage when presented with the choice - something JCool pointed out in a post last week. Hindsight is 20/20 and for us that means we have the opportunity to give our kids the greatest advantage of all: Time.
A few months ago the three of us were sitting in a garage having “normal” Dad conversations: talking about how to use mind tricks to get our kids to do what we were asking, the best place to position your fan so that the garage stays cool for football games, and the age-old tradition of the perfect burger. Now our conversations are changing - we are sharing ideas and resources and relentlessly pursuing the knowledge that will take us to the next level. Needless to say we are excited for this new “normal.”
Maybe you discovered the concept of financial independence a year ago. Maybe you discovered it a month ago. Maybe, this is your day one. Either way, we believe the concepts of FI will ring true to you. Here at DadBodFI, we are going to do the best we can to arm you with the knowledge and tools you need to achieve financial independence but first, we think it’s important to get to the heart of the matter...The Why of FI.
Opportunities are a funny thing. They’re unpredictable and come into our lives unannounced but man are they powerful. Sometimes they surprise us and sometimes we work tirelessly in the hope that they might present themselves to us but one thing is for sure. If we aren’t prepared for them, opportunities smile at us as they walk quietly out the door. Opportunities of all shapes and sizes are on a hunt for the prepared and the prepared get rewarded.
We’ve grown up in a society that focuses on numbers. The problem is, they are the wrong numbers. We are taught at a young age we must aim high to secure a well paying job. We are taught the symbols of success have four wheels or a large number of square feet. We are educated to believe income, above all else, is king. This way of thinking is flawed. It mutes the other side of the equation, the most important side; the savings rate. How much of the money we earn is being invested or saved so that it goes to work for us? Let’s be prepared when opportunities enter our lives.
No doubt at some point in the future you are going to want to invest in something. You may want to invest your time, your money, or both. Maybe one of your kids will ask you to take on a big role in something which they are involved - coaching a sports team, being a scout leader, or maybe it’s a real estate venture with someone in your circle. Slow travel through Europe with friends anyone? If your hooked to your nine-to-five with no end in sight, you won’t even be holding seven-deuce offsuit at the hold'em table, you won’t be dealt in the hand at all (we love us some no limit Texas hold em so get used to those type of references). The path to FI has an overarching goal and it’s pretty simple: to hold all the cards. If you make some tweaks to your financial life now, you can open yourself up to all types of opportunities in the future. The tough part is, you don’t have any idea what those opportunities are sitting here today, but we have great news for you.. That’s completely okay. As you walk the path to FI you’re going to learn a lot, and we are here to walk with you. But there will always be some degree of unknown that you will have to come to grips with. The path to FI is so much than a race to a number. It is preparation for an amazing chapter of your life in which you and only you are the architect. You allocate your time. You allocate your resources. You decide who you want to be and what type of life you want to live.
We are going to cover a lot throughout this blog and we invite you to be a part of it. Let’s learn from each other. Tell us what you want us to focus on and we will dedicate time and effort to support you. The journey toward financial independence is going to take many twists and turns and we are excited for each and every one of them. After all, we only get one turn on this spinning ball of chaos, so let’s make it count.
Beer Selection: Bearded Iris Brewing Homestyle IPA
I am traveling on business this week and as always, I'm looking for a local brew to have with my meals. This 6.0% ABV IPA from Nashville, TN did not disappoint. Bearded Iris Brewing calls it an "Oated IPA brewed intensely and singularly with Mosaic". It went down easy with my burger and had the citrus kick I enjoy. The mosaic hops combined with the refreshing finish made it a home run. Score: 9/10
Sports: International Champions Cup Soccer - Real Madrid vs. Roma
Bet: 50 Units - Real Madrid Moneyline (+152) Results: WIN (126 Units)
Blog Total+/-: +76 Units
I am a huge soccer fan. I began watching English Premier League a few years back because it was the only sports on at 7 AM on the weekends when I would wake up with my kids. To anyone who says "Soccer is boring, they only score once or twice per game", I would suggest watching the game a little closer. The passes and touches are so crisp and the shear endurance of these guys to sprint for 90 minutes is down right impressive. And the fans? I once saw a video on YouTube of a guy getting caught smuggling beers into the game. He had no less than 30 beers on him.
Anyways - great win to get back in the positive.
It is my honor to welcome my partners in this journey towards Financial Independence - JCool and KingTutt. Both these guys are hard-working Dads. They refuse to accept the traditional strategies of retirement and will help push us all towards our goals. We could not ask for a better group of gentlemen to contribute to this setting. Standby for their introductions.
We all look forward to your first posts boys - no pressure.
Beer Selection: Ballast Point ALOHA SCULPIN IPA
We are all big craft brew guys, especially IPAs, so we were excited for this one. Their website calls it a “Hazy India Pale Ale” with “Brux Trois Yeast” that “adds mango, pineapple, and juicy guava notes”. Whatever all that means, I thought it was pretty good. It had a bitter, citrus taste which I like in IPAs. However the draft wasn’t as cold as I would have liked. Taco Mac needs to work on that. Score: 7/10
Sports: NFL Preseason Hall of Fame Game – Chicago Bears at Baltimore Ravens
Bet*: 50 Units on Bears Moneyline (+150) Results: LOSS Total +/-: -50 Units
I always get way too excited for this game. It’s a teaser because the off-season felt like forever and it’s nice to see football is just around the corner. Anyway, these games are hard to predict so I just took the underdog. The Bears were down 7 late in the 4th Quarter and driving. They scored a touchdown with a few seconds left on the clock. Being a preseason game, they went for 2 and the win. Pass attempt sails out of the back of the end zone – game over. Interested to see what happens with Lamar Jackson though, he looked decent.
*Obviously I do not use my own money to bet on sports, I have found over the years that it is impossible to win at this game. You simply cannot outsmart a professional Vegas Oddsmaker. Sure it makes the Akron vs. Middle Tennessee women’s volleyball game more interesting to watch on TV, but in the long-term it will slowly drain your accounts – and at DBF we want to minimize expenses and maximize savings. Instead, I found a website called “SportsPlays.com” where you can watch a couple of ads, and they will deposit $1.00 into your account. If you reach $200.00, they will send you PayPal. I’ve reached this once but it took quite a while. If you lose, you can watch another ad and they will replenish you (free money).
FI (Financial Independence) Topics – Goals for the Group, Books, What to do with our money
With this being our first meeting, we wanted to set clear goals for each of us. We decided that our main goal is to learn from each other’s financial experiences and figure out how we can stay on track to early retirement. We also want to be able to share these experience with the readers, to help them gain some knowledge before making these life changing decisions with their money. We started our journey by listening to a podcast entitled “ChooseFI” and became hooked very fast. We all have very similar family situations and live in the same area, but our financial situations vary quite a bit, which is a good thing.
Another topic we discussed was the value of libraries. I know – sounds boring right? But hear me out. One of us had just recently signed up for a library card (free of charge). The advantages of these are ten fold. This library has children’s story time, adult Yoga classes, and a large bin when you enter entitled “Free Books”. Here we found a copy of “Friday Night Lights” by H.G. Bissinger – one of the all time classics. As an example, this book is $15.95 on Amazon, or $2.99 at GoodWill. That’s a 100% savings wherever you look. Not to mention – libraries can order any book for you to borrow. I am currently waiting on “The Simple Path to Wealth” by JL Collins. Did I mention this all is FREE? That will be one of our key themes – Free or Near Free entertainment.
Home purchasing and mortgages, debt repayment, emergency funds, and investing in pre-tax and post-tax accounts were all topics we discussed. We wanted to come up with an ordered list of where our income should go that will shorten our path to retirement. Here was the verdict:
Our Action Items:
So there it is, Chapter 1 of DadBodFI. We will have monthly recaps of our meetings with other member postings in between. Let us know how you like it and where you may disagree. We also welcome beer reccomendations.
**Yes – this includes the beer we bought for this meeting and I’ll tell you why. One of the main points we discussed was the value of our spending. Does renting a movie on Demand ($5), ordering a pizza ($25), while you play games ($2) on your cell phone ($80/month), bring $112 worth of value to your life? It does not, but paying $15 dollars with my closest friends once a month to discuss how I can shave 15-20 years off of my working life makes a lot of sense. This will be a “fixed expense” from now on.
Welcome to the first installment of DadBodFI. This will be the story of 3 Dads with an average age of 30 who are beginning their journey to financial independence. We meet once a month to review our status while sharing a cocktail or two and watching sports. With a common goal to retire in 10-15 years, we are breaking every traditional rule that says you must climb the corporate ladder, stash 10% of your paycheck, and retire in your 60's to max out your social security and retirement savings.
By slashing our monthly expenses (student loans, car loans, groceries), taking advantage of "the system" (tax optimization, travel hacking), and investing our money where it will work for us (401K company matching, Index Funds), we will be be able to achieve our goal of an early retirement. We will detail our findings, successes, and failures so that you can join us in beating the system.