How to be Financially Independent Without a Six Figure Salary with Brad Barrett
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a show about upgrading your life, money, and travel, all while spending less and saving more. I'm your host, Chris Hutchins, and I'm on my own quest to find every hack there is. So in each episode, I'll sit down with a new expert and learn everything I can. So today, I'm talking to Brad Barrett about financial independence, or FI as he calls it.

FI money is a lot like FU money. It's about how to get to that point in life where you have the financial freedom to do whatever you want. And Brad is the expert here. He achieved financial independence and quit his job at 35 years old without ever earning a six-figure salary. He then went on to co-found Choose FI, the top podcast on financial independence, with an audience of over a million listeners every month.

In our chat, we'll talk about his path to financial independence, how you can achieve it yourself, and some of our favorite money-saving hacks to help along the way. And since this is a new show, I'd really appreciate it if you can leave us a rating and a review in your podcast app. Thanks so much and enjoy.

Chris Hutchins works at Wealthfront. All opinions expressed by Chris and his guests are solely their own opinions and do not reflect the opinion of Wealthfront. This podcast is for informational purposes only and should not be relied upon for investment decisions.

Brad, thanks for coming on the show. Yeah, Chris, this should be a lot of fun. Thanks for having me. I appreciate it. Yeah, I'm excited to be early in the days of podcasting. You are much farther along than me. Yeah, it's hard to believe we've been doing Choose a Five for a little over four years now, which is still absolutely shocking to me that I'm a podcaster. But yeah, it's coming up on four and a half years, which is wild.

Brad, for all of those who aren't familiar with it, what is FI? So FI is financial independence that at its essence, obviously the show is all the hacks. For me, FI is like the one hack to rule them all. It's that umbrella. It's when you have financial independence, you have choice, you have options, you have autonomy. You can spend your precious decades

how you want to spend on this planet, but as opposed to being beholden to someone else. So ultimately, financial independence is being at a point where working is optional. You know, you hear the acronym FIRE. I'm sure a lot of people have heard that the FIRE movement, etc. That's financial independence, retire early. And I feel like for most people, the retire early aspect just doesn't resonate.

I don't know about you. I do know about you, Chris. I have a full-time job. You are financially independent and you have no interest in retiring early, just like I have no interest, just like most of us who have the drive and the wherewithal to get to a point

of being financially independent, we want to do things. We want to give back to the world. We want to add value, but we want to do it on our terms. And I think it really just starts from day one of your FI journey, which is start saving money no matter where you are. And this is not for perfect people who at 22 got their first job and started saving 80% of their income and just did everything right.

This is for everybody. And I think that's one of the things that's resonated so much about ChooseFI generally is that

It's not about being perfect. All of us have made mistakes. I've made catastrophic mistakes with real estate, quote unquote, investing slash really speculating that I paid for basically my entire adult life. But yet, I still reach five. And it's not about where you've been. It's about starting today and taking action to make your life better. It's about

long-term thinking and planning. And a lot of the hacks, frankly, that you and I love so much are based around

long-term thinking. We'll talk, I'm sure, about travel rewards, travel hacking, whatever you want to call it. That's not, hey, I want to travel tomorrow. Where are all my points? I mean, where we've been the last 18 months in this country, I'm ready to travel tomorrow. But in general, I understand what you're saying. But today, I am in need of a vacation. Yeah, I definitely hear that. The cool thing is you have millions of points because you've been planning for a while and you could take a vacation tomorrow. That's the cool part. So

Yeah, I guess ultimately, you know, we could get into the boring technical definition of FI and such, but it's basically just when your net worth can spit off enough income, however you want to define that to cover your expenses. So that's really the heart of it. But again, this is not a binary zero or one. It's not.

you're not fi or you're fi. And that's the only point along the journey. I think for most people, that first time that they have a positive net worth, that they have $5,000 in the bank, like their life is so dramatically less stressed than when they were living paycheck to paycheck or

or when they were in credit card debt, just having those first couple thousand dollars so that when you have a little emergency, which is just frankly life, right? Like life is lumpy. Things happen all the time. We call them emergencies. They're really not. It's just life.

When you have a $400 thing, whatever it is, a flat tire, a broken fridge, whatever it may be, that's not a catastrophe. The benefits of FI start accruing almost from day one. And then it gets on up from there to getting to the point where you have what we affectionately call FU money, right? Where the ball is in your court. You're not beholden to that job. You're not beholden to some jerk boss. You're not beholden to whatever whim that they, the elusive they, want to place on you.

It's your autonomy. How freaking powerful is that? I live and work out in Silicon Valley, and I think there's this kind of common perception that you can't get to that point without having a massive windfall or exit or start a company and make $100 million. I've gotten to know you. That's not your case. You didn't have this moment in time where you showed up into your bank account and there was an extra $10 million. That didn't happen overnight.

Is this something that kind of anyone can do? Yeah. For me, I think anybody can do this. Truly. And to your point, I never earned a six-figure salary in my working career. Never. And just a pause for everyone listening. You are financially independent now. Yes. You don't have to work.

No, I do not have to work at all. That's the beautiful thing. It's yeah, I reached that point, probably mid to late 30s, we'll say. So I'm just I'm 41 now. Yeah, probably 35, 36 ish. So yeah, I mean, it's a fairly abbreviated working career. And you know, I did well in school, I got a job with a big public accounting firm. But like I said, I never, it wasn't like I was a partner. Yeah, I left that firm after a couple years I worked for me, it was about making intentional choices. And I think that's

Another one of those bedrock principles of FI is being intentional and trying to figure out what do you want out of life? Do you want to spend 90 hours a week at a job? Okay, you can make that choice. And again, I'm not trying to set that up as like I'm making a value judgment. Like there are people who legitimately get a ton of value out of that, right? There are people who are building companies to your point. There are people who just love what they do.

We'll do that. That's great. Again, we can all make choices from a place of intentionality as opposed to that's what society tells me or I need to keep up with the Joneses, whether you think about it like that or not. Like it's there. And I think a lot of us on the Path to Five kind of stepped off of that treadmill and figured out, OK, maybe I can take a step back and say, what do I want out of life?

And for me, it was, I want to spend time, as cliche as it sounds, I want to spend time with my family. My daughters are nine and 12 now, so they're not super young. You know, at that point, I wanted to spend time with them. I wanted to be there when they got off the bus. I wanted to see them grow up. I didn't want to work all the time. And so for me, that was the guiding light. Again, that's me and that's very personal for me. Everybody has a different decision, but do it from a place of intentionality as opposed to just subconsciously

sleepwalking through life. Yeah, I mean, that's my philosophical side, but yeah, to your actual question, anybody can do this. It's a mathematical equation at the end of the day, right? It's what you earn minus what you spend equals...

some gap and that gap is your savings and you ultimately can calculate your savings rate. And if you can put that money away and invest it in, you know, for us, it's just sensible, long-term investments. It's not get rich quick or I got a stock tip from my uncle or some nonsense. If you can do that over an intermediate period, which for most people is 10 to 15 years, I think people can somehow get a little

almost like nervous because it is such an immediate gratification society that we live in. When you hear 10 to 15 years, it sounds like a lot, but I can attest it goes quick and that money starts accumulating quickly and it starts growing and it starts working for you. And that's a really beautiful point when you have enough money saved up. Even like I said, for me on a non six figure salary where my investments were earning more than what I was making

at my job. That's like, talk about an amazing day. And it doesn't take that long to get there. And just to be clear, this wasn't I had a trust fund and a less than six figure job. This all came from you thoughtfully and intentionally deciding how you want to spend your money. Yeah, I certainly do not come from money. My parents are not wealthy, probably similar to you. I'm hardwired to look for hacks, maybe be a little bit frugal, think a little long term. This started for me before I knew anything about FI and even my college choices. I

got into some Ivy League schools and places like that. But I made the decision then that that type of student loan debt was just something that it just would not serve me. So I have to say, I get pretty fortunate that I even started thinking about this from the time I was 18. And I came out of college with, I think,

It sounds almost quaint at this point. It was like $5,000 of student loan debt. And yeah, just from the very first, just started saving money. My first year associates at the big accounting firm, many of them were buying BMWs and renting apartments to show how adult they were. I lived at home for two and a half years and

saved 90% of my income because what the hell does a 22-year-old kid need to spend money on at that point? So I lived in Long Island, New York and purchased an apartment, which I guess is called a co-op there. And it just set the stage for my entire financial future. It started just from that bedrock of saving, saving, saving. Now-

I've spent some time in this financial independence community. And I think some people go way off the deep end, right? There's a world where you can get extreme and be the most frugal person. And that might be for some people. But I just want to be clear, despite that you saved a ton of your income, I don't think you necessarily lived a whole life as a hermit in your house, never went outside, never had a meal, never enjoyed life. So...

This isn't something where you have to give up everything. No, you're spot on. For me, it's not only do you not have to give up everything, but it's like the exact opposite. How do you live the same middle or even upper middle class lifestyle as everybody else and yet still save 30, 50, 70 plus percent of your income, right? Like how do you live a life where you're winning and nobody else knows it? That's the coolest part, right? It's like my neighbors have no idea

that in our working career saved 50 to 70% of our income. They have no idea because to the outward appearance, we look like everybody else. It's funny, I think, you know, I started this show, All the Hacks, and I certainly think, and we'll get to some of them, there are a number of quick little fun things you can do to save more or get a better experience for less.

But in the case of financial independence, I think the ultimate hack is a mindset shift. The question is, what do you want your money to go towards? Because it can go towards your future or it can go towards right now. And there are things in my life that a lot of people that know me often call me cheap because I might not want to go out to dinner and get the nicest bottle of wine and order all the food. But it's not because I don't like food. I happen to love food.

It's because I know that the difference between the $20 and the $100 bottle of wine every time you go out to dinner is the difference between saving that $80 and over time that adds up. And the independence and freedom and flexibility you get in your life when you have financial independence is worth more to me than the nicer bottle of wine. Yeah.

Yeah, you're right. You're spot on. I mean, that psychological shift is everything. You have to really just look like, what do you value? To your question a minute ago, it is not about deprivation at all. Sure, there are some people, and of course, you'll see articles in the Wall Street Journal or whatever about the fire movement. And they, of course, harp on the people who are eating the brown bananas and other nonsense like that. And

that's sensational and I get why it's in an article, but it's so beside the point. This is a community of people in America and all throughout the world who are just living intentionally based on what they value. I'm the same as you. Bottle of wine sounds fantastic, but the marginal value of the $100 bottle of wine over the 20 is to me, it's zero, right? The value is in the experience and that kind of stuff I'll pay for all day long. We are not cheap in anything.

any way, or at least size. Give me some examples. I feel like someone listening to this here is, wow, here's a person who is financially independent, can do whatever they want, doesn't have to work, hit that point before they're 40, and never made a six-figure salary, didn't have a trust fund,

I think the assumption is that's a one-room apartment and it has bunk beds for your whole family. And you guys walk everywhere. And if you need to clean the leaves up in your yard, you make a rake out of sticks. Can you give me some examples so people understand this isn't about sacrifice in your own life? Yeah. For me, it's not about being cheap at the margins just to be cheap. It's about setting up a framework of a life

that just didn't cost that much based around value. And then it gives you, it's like the, the Jocko Welling quote, the discipline equals freedom, right? Like for us, it was setting up this framework of a life that didn't cost so much to allow us the freedom to spend on things that we want. So just to talk about the framework for us, it was cars. Okay. We don't value cars at all. We

We, for the longest time, had 2003 Honda Civic and Toyota cars. We just upgraded to 2013. So we're still eight-year-old. For us, a car gets you from point A to point B. So I didn't have a car payment on my 03 Civic for 13 years. That sounds like a little thing because, oh, it's only a couple hundred bucks a month. But Chris, you've seen a compound interest calculator. Yeah.

That alone can be hundreds of thousands when invested and compounded over decades. So we love craft beer, but we don't necessarily get value out of going out or spending $7 on a beer plus tax and tip. We want to spend time together. So that was the intentionality behind it, which is, okay, what are we getting out of this experience? We're getting spending time together. So every day at five o'clock,

we have a happy hour with a different craft beer. Okay, so 440 rolls around, I grab the beers, put them in the freezer, and for $1.50 a beer,

We're sitting there and having happy hour in our house. So like that to me is just it's like a little rethink as opposed to going out for 20, 40, 50 dollars, whatever, for happy hour a couple of times a week. We're doing it in the house and we're just applying that intentionality. We meal plan. Again, it's not about deprivation. My wife is a fantastic cook. She loves cooking. It's one of her passions.

So for her, it's how do I explore and cook new things? And we have this kind of top 50 list of recipes that we keep adding to and culling the list. And again, that's where we're looking to get out of this. And we're eating delicious home-cooked meals for a couple dollars a person.

It's this line, Chris. So how do I get this amazing experience? But again, win in the process. And how do I cut to the essence of what am I looking to get out of this? Whereas contrasted with, we love hanging out with friends, right? And if our friends want to go out to eat, like there's never a time where we say no because of money. Of course we go out, right? Of course we do. Because

that's what we value. We value spending the time with them. Or you ask the question, what do we do? We travel significantly. So we pre-COVID times, we take August as our kind of red X month, we call it. So you look at the calendar, you take a big red marker and put an X through August. I'm not planning anything other than this trip. So we went to Scotland,

One year, we went to Hawaii. The next, we were supposed to go to Alaska last summer. Unfortunately, that got next. We never think about scrimping and saving when we're there. You know, if we want to do...

some type of catamaran tour or a helicopter ride. Of course, we're going to do that. Because again, we set up the framework of a life that doesn't cost that much. So yeah, so you decided, and I think a lot of people don't do this, you decided, okay, I could order in DoorDash or Uber Eats every night, or I could buy groceries. And I could go to Hawaii and stay at a nice hotel and go on a helicopter tour, or I could stay at a hostel. And you just said, look, if

If I do all of the expensive things, I'm going to work for my entire career and I'm never going to have time to think about it. And for you, having someone bring your meal to your house every night is just not worth not being able to have the experiences of traveling with your family. And you just made the decision of what's important. Sometimes I have this problem when I'm going out with friends or just discussing life. They're like, why would you do that? Why would you make that crazy decision? And...

Oftentimes, it's not about the fact that I don't love certain things. It's about the fact that I just love other things more. I really value trips and going all over the world, eating food, meeting interesting people, staying in interesting places. And to me...

Finding a way to do that is worth a whole lot more than having someone make my dinner every night. And I still like to go out to eat. I don't get as much value out of the high-end restaurant as I do the local ethnic restaurant. We still go out, but we try to do it less. And we... Same as you. We have an app where on Saturdays and Sundays, we plan out the meals for the week and...

We go buy all the groceries. I'm a little crazy where I'm like, let's go to Costco and Whole Foods and balance it off to get the best deals. But yeah, for me, it's just about picking what you want to spend money on. You can spend money on anything, but if you make it intentionally, you can kind of ramp up that savings rate.

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So a question I have is, do you have to save 90% of your income? Like for some people, you have two kids. We live in the Bay Area. Could someone who lives in the Bay Area and has two kids still save money? And how do you get started? And how much do you have to save to make it work? Like what's the... You said it's just math, but how does that math work? Yeah, it's a good question, Chris. And obviously I am...

certainly aware that everybody has a different life situation. It is obviously a lot easier for me in Richmond, Virginia than it is in the Bay Area. There's no value judgment. That's one of the other nice things I think about the community tone that we've established is, again, it's about your life and your decisions. And I obviously understand that there are different situations. So there is an article and we should link it up in the show notes. So it's the Shockingly Simple Math

behind early retirement. That's on Mr. Money Mustache's website. It just goes through basically the number of years to retirement or to financial independence is really how I look at it, depending on your savings rate. Do I think that it's going to be easier for, they're just practical realities of life, right? Is it easier for someone making a couple hundred grand living in a low cost of living area to get to financial independence?

than somebody making 60K living in the Bay Area? Yes, obviously it's easier for the first person. Everything is about that choice. The psychology is 95% of this. Like the nuts and bolts of the actual money stuff I find to be the easiest part by far. It's just the psychology of,

of why do I want to do this? What am I saving money for? I feel like there's a perception that people like you and I who've chosen that financial independence is important, we must spend 30 hours a month on our finances.

We're constantly tinkering and doing everything. Is that anywhere close to reality for you? I spend well less than an hour a month on my finances, like less. I say in my podcast, I spend 10 minutes a month. That might be a slight exaggeration, but it's not all that far off. And if I spend more than 10 minutes, it's because I'm still doing like archaic things, like balancing my checkbook, things that are utterly absurd in this day and age. But yeah, my financial life

is completely on autopilot. It's about taking my brain out of the investing. It's taking my brain out of my financial life because frankly, we let our emotions cloud everything. So for me, it's everything is on autopilot. I sweep money in automatically to my investment accounts. It happens. I don't have to think about it because I know if I have to think about it, I'm going to screw it up. That's just the

the way our tiny little human brains work. Yeah. I spent the last 18 months building an automated savings product at Wealthfront because I truly think one of the greatest financial hacks is automation. We get in the way of ourselves and data shows time and time again that people left to their own accord will buy when the market's up and sell when the market's down, which is statistically not the thing you should do the opposite. And

That is just an unfortunate thing. I take it one step further than you, which is I do want to optimize to the one more degree. So I go and change all my bill dates. So I know my income comes in on the 1st and the 15th. So all of my credit card bills get paid on the 2nd. And all of my wife's credit card bills get paid on the 16th. And the product I built...

monitors our account. And anytime it sees excess, it sweeps extra cash. So I know that because we're paying those bills right after we get paid, we can afford to have a lower threshold for how much we leave because we can time it.

And in fact, when we first launched the product, one of the most requested features was, let me choose which day you check for excess cash because other people were doing similar things. They said, I want to check every month on the 4th because I pay all my bills on the 2nd.

And then I know if you look on the fourth, I can basically go down to a few hundred dollars because I've paid all my bills for the month. Now, you don't have to go that far, right? Like the difference, by the way, of leaving a few extra thousand dollars in your checking account over the grand scheme of your life is insignificant compared to how much extra you could save by making bigger, more intentional decisions. So I want to loop back and just understand. Let's say I'm a new person. I'm listening to this and I said, wow, I've never been intentional about this. I want to get started now.

How do I go about figuring out this thing? You said the math is easy. It's 5% of it, but could we jump in and just kind of understand what's step one if I want to get serious about more aggressively pursuing financial independence? Yeah, I think step one for really anybody is you have to figure out where you are today. Okay. And again, this for most of us, like we have never, ever sat down and looked at our finances.

For most people, finances are the most stressful aspect of life. And what do you do when something's stressful? You try to, I don't know, throw it under the covers or never look at it, never think about it ever again, right? That is really the strategy that so many people take when it comes to their personal finances. So you've got to be really honest with yourself. So that means, all right, you got to sit down and as much fun as this sounds like, you got to sit down for an hour or maybe a couple hours and figure out,

where the heck are you today? What does your life cost? Do you have any idea? What percentage of people in general population have any idea what their life actually costs? Very few people have any sense. How much income do you have coming in? Most people know that one. Most people know how much income. They might not know the after-tax amount, but that one, fortunately, is pretty straightforward. I would imagine so. But just seeing that on paper that first time, and numbers don't lie, right? Like you're going to have some sense real quick. All right.

where am I? Right. And also as part of that exercise is putting it on paper of your net worth, which is, you know, a fancy accountant speak of just, hey, what do I own and what do I owe? And you take what you own, you subtract out what you owe and that's your net worth. And hopefully it's positive. But even

Even if it's not, again, this is not about having been perfect leading up to this. It's just about where you are today and making some changes going forward. I think personally that five is not in any way about deprivation, but that said, you have to make choices. And clearly, if you're in the red every month, if things are not going well,

you're gonna have to make some decisions. And for most people, it's about low hanging fruit. Like where do you get started? In all likelihood, that's gonna mean cutting something because most of us, if we could earn more income this month, we probably would already. I know that's somewhat trite, but I think again, if you're looking to how do you get started is, all right, I've already done the exercise of what does my life cost?

Again, you see some things on paper, like even I fall prey to this. I'm sure maybe you don't, Chris, because you're pretty damn locked in. I just looked at my credit card bills a couple months ago and just said, you backslide sometimes. And that's not, oh, beat yourself up or anything. Things happen. Also, you make choices, right?

Our family show is MasterChef with Gordon Ramsay. So we're going through that. It's on Hulu. And we hadn't watched Netflix in six months, but it was still getting hit to the credit card every single month. So I didn't even realize that, frankly, which is stupid. And again, this is it's 12 bucks. It doesn't sound like much, but it's the exercise, right? It's the exercise of, hey, not only did we see that, but we saw that we were still paying a rental fee for my daughter's saxophone. And

And she just made the jazz band. She's doing great. She's in her like advanced band and she wants to play the saxophone going forward. So we just purchased it. We called the company up and it was like a 10 month break even point. So it costs us 500 bucks extra to buy the sax and we would have paid 50 bucks a month. So that was a no brainer to us. And again, that's from a position of financial strength, right? Like we're not worried about cashflow. We're not worried about, do I have the money? We have the money.

It's just then it comes down to value decisions, which is such a fun place to be. Then it's not for most people. It's, hey, I can't afford that 500. So I'm just going to keep on paying this 50 a month indefinitely. You can make a decision from a position of strength there. So again, just from that one tiny little exercise, even somebody like me who theoretically should be locked in on this stuff, we made two decisions that

that's not nothing, right? That's 60 bucks a month for most people, $720 a year. If they're at a point of breakeven at the end of the year, you've got 720 bucks just from making those decisions that impact your life negatively. Zero percent. Like how cool is that? That's great. Yeah. Similar thing happened to me where I was paying for my cable modem for gosh, almost five years when the breakeven point was 10 months. So I think one of the things that's

more stressful but necessary is figuring out how much you're saving, which is for most people, how much you make minus how much you spend. So it's doing the inventory to figure out how much you spend. Is there an easy way to do that? Or is this kind of the one aspect of this where you got to go look at your bills, look at your accounts and really figure it out?

Yeah, actually, I'd love to ask you that same question. Is there an easy way? You know, I'm a tech dinosaur, so I suspect there is a way. I know an app like Personal Capital is able to use that to some degree. I don't know if you guys at Wealthfront have anything cool either currently or in the works. I like doing it. And again, this might make me a dinosaur here, but I find there's some value in doing it like on a sheet of paper on Excel. It just feels more real to me.

In that sense, like I'm going through and I'm just saying, hey, what does my life cost? I think there is value in, you know, if you have a significant other sitting down with them and just doing that exercise together and just seeing it tangibly in front of you. It just it feels more real. But Chris, what do you think on that? So it's interesting because I think the amount you spend in a given category is

is something you have control over. So there are a lot of tools that'll tell you, here's how you're doing, which I think is something interesting after you've decided what you want to do. There are plenty of places online where you can sync all of your accounts and get all of your transactions, or you can look at your statements.

But for me, I think it's helpful to say, because it's about decisions, going through and saying, here's how much I spend on my car, on my home, on my kids, on food, on groceries. But then I want to go and see what impact it would have by making those trade-offs. What if I saved this?

How would that affect me? What if I saved more? How would that affect me? We at Wealthfront haven't built a tool that will help you itemize your budget. But we did build a tool that lets you say, here's where I am today. What if I saved this much? And if I want to retire at this date, what does it look like? It's a tool called Path. And we're not the tool that's going to help you figure out how much money you spent on coffee last month.

but it's helpful in the next step, which I think is really important is understanding what the sacrifice means. Let's say you go to a fancy gym and that fancy gym costs you $100 a month. And you realize you don't really go that often and you could do it at a gym that's $50 a month. What does the extra $50 a month cost? And if you sum up all of those decisions, you might say, wow, all of those decisions mean that I could save an extra 10% of my income for

which now means that I could retire five years early. And I say retire, but I really think it means I now five years sooner can do whatever I want. Yeah.

And for most people, that's still working. And if you know that you want to work forever, your forecast doesn't have to assume that you need to cover all of your spending. You find after doing all of this that you spend $120,000 a year. And I use a much higher number than I know you spend because I'm in the Bay Area and spending what you do here is hard. But

If you know that you always want to do something and you're pretty confident that at the bottom end, that something could make, let's call it $60,000 a year after taxes, then you don't need to save enough to cover $120,000 forever. Maybe you only need enough to cover $60,000. Or if you know that once you're financially independent, you don't have to live in the Bay Area. You don't need to cover what you spend today. You could cover what you spend in the future.

But I know there's a simple rule that I'll let you explain briefly, but how do you figure out what that number is that you need to get financial independence? There's an easy calc.

But I think just like everything, there's nuance to every aspect of life. So there's the 4% rule. And a lot of people may have heard of this. We at Chooseify call it the 4% rule of thumb because we definitely do not want to imply that this is some hard and fast rule and that you're guaranteed. But in essence, how it works is you look at your annual expenses and you multiply by 25. So just really simply,

Let's say you spend 80 grand a year and that's what your life costs or use your number when you said 120. So 120,000 times 25 is $3 million. Super simple math. That is your FI number because I guess there's a whole bunch of academic research. Again, this is not my area of expertise, but

It's you can basically withdraw, again, the rule of thumb, roughly 4% from your investable assets, from your net worth. And it even indexes for inflation. So you're not stuck at that number forever. But you can very reliably expect your money to last if you pull out 4% a year. And now you're investing. All of that money is being invested. So the hope is that on average, you're earning...

seven, eight, 9%. Again, life is lumpy, right? So as you well know, in the market, there are many years where it's up there, some years where it's down, and that's all accounted for in this, right? So again,

The math is almost beside the point here. It's more that directional accuracy is how I look at it. I'm a CPA. Theoretically, I should be a numbers guy, but I understand how important the psychology is. And I think that's what gets people started is like, why am I doing this? To your point, what's the goal, right? Like when you can see, oh, when I'm saving an extra thousand bucks, it means I can retire or get to five, 10 years earlier, 12 years earlier, like that matters. Or instead of

throwing up my hands and listening to the media. And, you know, I'm not one of these vilify the media people necessarily, but, you know, you hear Susie Orman saying, oh, you need $10 million to retire. Who knows what healthcare is going to be? You know, like, I don't know about you, but I hear 10 million and my brain shuts down because that would not have been realistic for somebody like me on my salary. But when I hear that I control it, that it's based on my expenses and

That is an entirely different game. I have control over my life, not some elusive they, right? Not some what's going to happen in the future. Things can happen. We can have the zombie apocalypse. You can't account for that kind of stuff. You know, like the black swan events happen, but we're all screwed if we have the zombie apocalypse, right? For me, it's just...

What are my yearly expenses? I multiply by 25 to get my net worth that I need to be at FI. And I feel reasonably comfortable within a degree of accuracy that that's going to cover me for many decades. And final point, sorry for talking so much here, but final point is, like you said,

you're going to earn money. You're not going to sit on your butt doing nothing, but you're going to do it on your terms as opposed to somebody else's. And again, we talk about what are the game changing things like doing it on your terms. That pretty much changes everything. And you can do what you want.

with these precious decades you have. And yeah, that's pretty inspiring to me. Yeah. And I think you gave two examples. One of the $120,000 to live, which I live in the Bay Area. We have a child. Until we had a child, our annual expenses were under $100,000, which for Bay Area incomes is relatively low in terms. So we were able to save

aggressively. With kids and starting to think about childcare, we creep right over that number, but I still think we're in the boat of aggressive saving. And if we live somewhere else, it could be much lower. And I think one thing that is interesting is...

I have my gripes with the 4% rule or multiplying by 25 because if you say, okay, we spend $100,000 a year. And so that means we need $2.5 million. That somewhat sounds almost impossible. The question I ask people is, okay, do you really think that when you have financial independence, you'll make nothing? Is that the future? And are you going to continue to live in a really expensive place if you're earning no income?

So our calculus has been, look, if we truly decide that the thing we want in the world is to not work and to not make a cent of income, we don't need to commute. We don't need to go to the office. We're probably not going to live where we live. And so even though I might spend over $100,000 today, when I think about calculating my financial independence number, which is something that I've done, I'm not using that same spending number. And I'm assuming that maybe I could cut it in half.

And maybe that number comes down closer to $1 million. And $1 million still seems like a lot of money. And it certainly is for almost everyone. If you are able to put aside $20,000, $30,000 a year of your family's income over 20 years, that's almost a million dollars right there. And so it's something that I think, and 20% of your income or 30% of your income, it goes higher. Some people are aggressively driving that number up.

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I'll diverge a moment to say this show wouldn't be all the hacks if we just talked about one. And we spent a lot of time talking about the big psychological kind of intentional shift of looking at financial independence. But I think one of the biggest things you can do to increase the time in which you achieve that is...

to lower your spending. And it's both lowering your spending to increase your savings. So there are certainly ways to increase your earnings that will help here. I guess my question is, if someone's trying to aggressively get to financial independence faster, there have to be some kind of money, earnings, savings, spending hacks that make it easier. And

I remember going on your podcast a year or two ago and you had a section where you said, what's your favorite life hack? So I'm curious in all the people you've talked to, what are some of the best hacks to help you do this more aggressively, make it feel less like a sacrifice? Yeah.

Yeah, that is a good question. I actually have a list here of the first 150 episodes and you're on there, which is cool. And yeah, I think for a lot of people, there are there's always a range of this stuff. So there's extreme stuff like geo arbitrage, which is moving to a lower cost of living area. I don't think many people when they're first getting started with FI are exactly going to do that. But maybe something along the lines and this is near and dear to your heart, but like house hacking.

which in layman's or normal person's term is just

mostly having a roommate. It's rethinking what are my biggest expenses? And for most people, the cost of housing is the absolute number one. In essence, that's, hey, you're buying a place. So in theory, you're the owner in a perfect world, though it doesn't by any means have to be that. And then you are either renting an apartment as part of that or just renting single rooms out. And for many people, they can pretty much cover their entire mortgage

and live for free. So they are... We did this. This is what we did in San Francisco. Yeah, yeah. When we were looking for a place in San Francisco almost a decade ago, the requirement was let's find a place

that has a way to rent out a room that doesn't require us to have a roommate. So for us, that made it harder. We were looking for places that had a small in-law unit in the back, or what we ended up finding was a standard three-bedroom apartment, but one of those bedrooms had an external door.

And so we were like, it's not a full apartment. It doesn't have a kitchen. But we basically took the door to the inside of the house and put a lock on it and rented it out like a studio. It had a bedroom and a bathroom. And our tenants didn't have a kitchen, but most of them had a toaster oven or a rice cooker or different things to get by. And the Bay Area is somewhat notorious for having employers that offer lunch or even dinner sometimes. So that makes it a little easy. And we...

we rented that apartment out for five or six years and we covered the cost of the mortgage almost every year. And we spent nothing to live, which in the Bay Area is an expensive place to live. We paid nothing. And that I think was like one of the

best things that allowed us to save was taking that approach. So big fan. That's incredible. Yeah. So that is definitely a massive one and was the number one most popular. I think a bunch of people said the library. And again, this might sound trite, but we probably take out thousands of dollars worth of books every single year from the library. Is that the greatest life hack of all time?

in theory, the library probably isn't when you first hear about it, but that can add up dramatically. And I don't know about you, Chris, but reading is probably my number one hobby. I absolutely love reading. It's the best way to learn everything you possibly can about the world. And the library is there. It's part of your tax dollars. And especially nowadays, there are so many ways to get Kindle books. So it's not even like,

I've got to delay gratification. I can think about a book and 30 seconds later have it on my Kindle and it's free as opposed to paying for it. I do this all the time. So I'm not as voracious a reader as many, but I think that's changed a little bit. I'm more of a books are a way to consume content of information. So if I'm going on a trip and I want to understand the place I'm going, my instinct is let's go get the Lonely Planet guide for this country. Or

Or when we had a child, there were some books that I was like, I just want to go read a book about dream feeding. I want to read a book about all these different aspects. And my first search is always the library's digital archive. And I would say...

Maybe eight or nine out of the 10 books I ever want to read are on the library in digital format for free. And so one in 10 books I'll buy and then nine in 10 books I just check out for the library. You get it for 30 or 45 days. And the San Francisco Public Library has three different websites linked to it for digital books.

So I have them all bookmarked and I'm like, let's search Overdrive. Let's search Axis. And it's not that $10 on a book is going to make or break the year. It's an expense I don't need to spend. And

And that's what it's... If you make it about the $10, it's hard to think about. But if you make it about what are the things on my list that I don't need to spend money on and I don't have to lose anything, I don't have to give up anything. Yep. That is the mindset. That's the exact mindset. And that goes into the very next one, which is cell phones. There's always a way to get, in my estimation, almost the exact benefit from something at a fraction of the price in so many cases. And that's what's fun about these hacks, right? But...

hundred plus dollars a month for unlimited data and whatever on yourself. And like, that's not that out of the ordinary, right? Like I know plenty of people who are still paying that, but yet there are so many services that like Republic Wireless or Mint Mobile are the two that come to mind really quickly that for me, I get a couple gigabytes of data

Every month, I get free phone, whatever, on Wi-Fi, which is where I am 99% of my life. And this is even pre-COVID. So it always, it requires some tiny little bit of intentionality, which is just, for me, and I kid you not, this is just, I don't download podcasts or stream YouTube videos when I'm not on Wi-Fi. That's it. That's the list, right? That is all that I don't do. That's your sacrifice. And my...

That's my horrible sacrifice. And my cell phone costs about $15 a month as opposed to $100. So $85 a month, month after month, year after year. I think I've been with Republic Wireless for five plus years now. That's real money. That adds up. It's remarkable.

Again, where can you find that tiny little sacrifice that works for you? Like we said with the library, is it a horrible sacrifice to have to drive to the library to pick up a tangible book every now and again? No, it's not. Of course not. Is it a sacrifice at all to get the digital copy? No, zero. That's wonderful. So it's just, it's that little bit of thinking.

Right. It's like we talked about before. Another massive one is travel rewards. And I know you're going to do episode or episodes on this. So, you know, we're not going to go too far into it, but it's about the intentional use of credit cards to earn massive signup bonuses and ultimately massive rewards.

accumulations of points that can help you travel for pennies, if not pretty darn close to free. And now again, is that instant gratification? Is it, hey, I want to go to Paris tomorrow. Where are all the points? You know, no, it doesn't mean in some cases, I capital on venture, we could go. Yeah, there are credit cards, even right now.

that have a 100,000 point signup bonus that you can immediately redeem for $1,500 of travel. And that could be two people going to Europe. And I wouldn't even say it always has to be plan ahead. Now, if you're like me and you want to go way off the deep end and find a way to fly halfway across the world and stay in a bungalow over the water and fly in first class, yeah, you have to plan because there's no signup bonus that's giving you that many points. But

But I'm not paying for it. I always like to say I'm at the point where I don't want to fly over an ocean in coach. I'd rather play the game to get the points. I would never pay for it. I don't think I've ever paid for a first class lie flat seat in my whole life. That would be crazy. I both think that it would be crazy to cross an ocean in coach and crazy to pay for business class. Both of those things seem for many people to be impossible to think at the same time.

But yeah, I play the same game. I sign up for cards when there's a really big bonus. I track what's going on and it's paid off a lot. I mean, you have a course, right? Didn't you make a course for this? Yeah, this was actually what kind of bridged me

from leaving my full-time job. Yeah, I started a site called TravelMiles101, so 101.com about five years ago. And yeah, we created a step-by-step course for regular people. That's kind of how I always approach everything. It's like, how can regular people

win the live flat first class travel around the world that's wonderful and that's aspirational but for a lot of people it's like how can i take one close to free family vacation next year and if you could do that that's a massive savings three four five thousand plus dollars that's humongous for people so yeah that was you've done this more than once

Oh, yeah. Our first and most famous one is going to Disney World in Florida. We took my family of four plus my parents and my in-laws and all of us went on points. We stayed at the Disney Swan Hotel, which is a nice luxury hotel. We got Disney tickets for free, all using rewards points. And

I think for our family, it was $150 instead of about $5,000. And it just required a little bit of planning. It wasn't hard. There was no aspect of it that was hard. That's that kind of travel up to luxury travel. Like my wife and I went to Bermuda and we stayed at like the Fairmont Hotel, which is just this incredible hotel. We actually got this suite upgrade because she would love this. It was, they had just...

just upgraded the suites at the Fairmont. And literally the room we were in was the one that was on the hotel homepage as like the be all end all. It was so amazing. It was like, it would have been a thousand dollars a night. And at that point, I don't think this offer is still, or I'm 99% sure this offer doesn't exist. But at that point it was like two free nights with the Fairmont hotel, uh,

hotel card and my wife and I each got one. And we got this free suite upgrade. So it was a four night hotel stay in this suite that would have been easily $4,000 for $0, literally nothing. And we use the again, you'll go into these hacks later, certainly in another episode, but we wound up using British Airways miles to fly on American Airlines from JFK to Bermuda. And

it was far fewer points than we would have used because we had this little like sweet spot that we found using British Airways than if we had American Airlines miles. So not only did we get the entire vacation for zero dollars, but we actually spent far fewer miles than we would have if we didn't know that extra little hack. So there's always a layer upon layer of these hacks, which is fun. Yeah. I know there's a lot of people that think

Gosh, using miles and points is hard. You've got to figure it all out. And I think you can go take a class. Look, and Brad didn't mention this, but his course is free. And so you could take that. You could try to go learn all this. I'll throw one. I have no relationship to this company, but there's this company I found called FlightFox.com.

And I think now they're mostly focused on corporate, but there's a big button that says book a personal trip. And I just pulled it up. If you want to take a trip with Miles and you want to go to one place for two adults and two kids in economy, they charge you $100.

And they guarantee that if they don't find a flight with your miles that beats whatever you can find on your own, they don't charge anything. You could go down the rabbit hole of, okay, do I transfer my points to Avios to go book them through British Airways' website to go get this deal? What's the path? And by all means, I've gone down that rabbit hole, you've gone down that rabbit hole, and you might enjoy it.

But I don't want people to think, if you don't want to go down that rabbit hole, there are other ways that you can still get incredible deals. So that trip that might have been $5,000 that you did for $150, someone else might not want to do all the research, but maybe they could use a service that would help them do it for $250, which is still a gigantic savings. So there's more than one site out there that helps with award booking. I've been a fan of FlightFox.com.

And a lot of times people call me and say, hey, I want to book this crazy trip. I've got these Amex points or these Chase points, and I just don't know what to do with them. And I say, look, do you want to go spend a few hours and figure it out? Or do you want to just pay $100 and someone will figure it all out for you? And if you're taking a trip that otherwise would be thousands of dollars, especially with a guarantee that they'll find something better than you can, it can be a great way to both not have to spend all the time in the world learning it and get a huge deal.

Yeah, that's massive. I'm actually going to go check out Flight Facts after this and maybe put it into the course. So by the time this goes live, you might see that in there. That's really cool. Any other final hacks? Yeah. I mean, you know, there are a ton of little ones like waking up early and maxing out your 401k and things like that. I think one that I love, Camel, Camel, Camel, which is a site that is like

It looks like it was built in 1997, but it is such a great website. Basically, anything that exists on Amazon.com, which is pretty much anything in the entire world, you can see the price history for. And more importantly, you can set price alerts so that

You'd be shocked at what a difference the price can possibly be on one particular item. So like, for instance, we built a home gym at our house here and I went to buying a squat rack. And the one that I found is pretty mid-priced item. It was like, most of the time it was like 300 bucks. And I was like,

And which is really not that much in the grand scheme of things. But I noticed that it went down under $200 a couple times a year if you look at the price history. So I just set a price alert for whatever it was, $197 or some such. And when it hit that, Camel, Camel, Camel just sent me a email. I went and I bought the thing.

But that's one example. Obviously, if you need something right away, this is not going to help all that much. But like we are a big board game family, like we absolutely love board games. So there's at all times a list of probably 50 board games that my wife wants to buy for the family because she's the one who does all the research.

And we just plug them into Camel, Camel, Camel and say, hey, look, we can wait for that price to drop. We can wait for that best all-time price because almost invariably it's going to happen a couple times a year. And again, like I was saying, almost every item on Amazon, 10, 20, even 50% sometimes. It's crazy. Because like the first time you look at that, your mind is just blown. So-

I just realized that Camel, Camel, Camel now has a browser extension. You go to any site and you don't even have to go to Camel, Camel, Camel. You can say, oh, okay, what does the history look like? And you can see a real-time chart of what that has done over time and where it's at. And that's awesome. Sometimes I'm like, this is the lowest it's ever been. Now is the time to buy. Or almost every day, this thing is $40. Today, it's $50. And Camel, Camel, Camel is like, send me an alert when it drops back to 40 and I'll buy it then. And so we...

do similar things like that. To me, it's a fun game. It's like, how do you win at life? It's just, right? Because like, at its essence, like we find this fun. And I think most people that get into it do as well.

Yeah, it's really leveled up the quality of life you can have for the cost. And I think my big takeaway is that the more I spend time with Brad, the more I understand you don't spend a lot of money each year. I don't know if you share how much money you spend, but it's not a lot.

And you live what to me seems like an incredible life where you get to do the things you want and you drink the beers you want and you visit the places you want to go and you play the games you want with your wife. And that sounds wonderful. And you've done it because you chose what you cared to spend your money on. And you chose that having the independence to do whatever you want was worth the savings. And you use the time you have to find a way to optimize it so that you didn't have to sacrifice. And I think that's

just like a shining example of what you can do. Thank you, man. That's yeah, it's we feel like we are just rolling in abundance, just absolutely rolling. Like I could never have imagined a life this good. And it's amazing that it came just from just being intentional. So yeah, it's been quite a journey. And yeah, it's just it really is pretty amazing.

Yeah. So you've got a podcast. Where can people find it? Where can they read about what you're building, everything you're doing with Chooseify? Yeah, Chris, thanks. We built this entire kind of ecosystem. It's amazing how the Chooseify community has grown. I mean, obviously it started as a podcast and the podcast has grown really beyond our wildest dreams, but it's more than that. It's about the community. We always say it's not about me and Jonathan, my co-host. It's about all of us on this path together. And we have a whole bunch. We actually have Chooseify local groups that

in 300 cities throughout the world, which is amazing. Like you said, you were asking questions about the Bay Area. I can't answer those questions from- Yeah, I'm in that group. And it's great because the questions in the group are like, childcare is really expensive. What are you doing? And frankly, people who don't live in the Bay Area or maybe New York or a few other cities, those answers-

aren't as helpful. You can give a very apropos hack that you've come up with. Yeah, chooseabout.com slash local. You can see all those lists. And yeah, we have a bunch of, so those are Facebook groups. We have a main Facebook group with about 80,000 people in it. And it's just a really active,

positive place where people are sharing their wins. They're asking questions. They're looking for support. We've built something I'm really proud of. Yeah. And I guess final thing I would be remiss if I didn't mention, since I mentioned the travel course before, TravelMiles101.com, we do have a more advanced one at Chooseify. So at Chooseify.com slash travel, if anybody's interested. Brad, thank you so much for being here. I really appreciate your time. This has been great. Yeah. Thanks again, Chris. This is a blast.

All right, that's it for this episode of All the Hacks. Thank you so much for listening. I'm just getting started with this show. So if you like what you heard, I'd really appreciate a rating in your podcast app. Or if you'll simply tell a friend about the show, that would be amazing. And finally, if you want to find links to anything we discussed today, or if you want to share a suggestion for what we can talk about in the future, you can do both at allthehacks.com.