00:00:09
[Music]
00:00:12
welcome to the best interest podcast
00:00:14
hosted by Jesse krammer where we discuss
00:00:17
today's best ideas in personal finance
00:00:19
and investing the best interest is a
00:00:22
personal podcast meant for entertainment
00:00:24
purposes only it should not be taken as
00:00:26
Financial advice and is not prescriptive
00:00:28
of your financial situation
00:00:30
here's your host Jesse Kramer quick
00:00:32
before I introduce Our Guest could you
00:00:34
please pause the show and then in your
00:00:36
podcast app give a rating and review to
00:00:39
the best interest podcast why because
00:00:42
the best interest it's a growing small
00:00:44
business and I want to keep making this
00:00:46
content for people just like you a
00:00:48
rating and a review it lets all those
00:00:51
fancy algorithms know that you care
00:00:53
about this podcast and I know I'm asking
00:00:56
for your time I'm asking for your effort
00:00:59
and I know that you don't owe me
00:01:00
anything so I really appreciate those of
00:01:02
you who decide to sacrifice that time
00:01:04
and effort to leave that rating and
00:01:07
review thank you guys so with that let's
00:01:10
go meet our
00:01:12
[Music]
00:01:20
guest my guest today is a lawyer from
00:01:23
greater Denver Colorado who lives with
00:01:26
his wife and two Elementary School aged
00:01:29
children and that makes him different
00:01:31
than some other fire disciples we've had
00:01:32
on the podcast who don't have kids so
00:01:35
that's something we will touch on today
00:01:37
he's quite verbose on Twitter very
00:01:39
entertaining all the time and very
00:01:41
educated on personal finance and
00:01:44
investing principles so I'm excited to
00:01:46
pick his brain today he is the land
00:01:49
shark land shark how you doing my man
00:01:52
I'm doing great except for the fact that
00:01:54
you think I'm verose that uh that hurts
00:01:57
I mean I think that's a good thing right
00:01:58
you're good with words maybe maybe maybe
00:02:00
it's got a negative connotation I don't
00:02:02
know I don't know verbos means you use a
00:02:04
lot of words man you're you're concise
00:02:07
how about that is that a better I don't
00:02:09
know I try to be intentional but then
00:02:10
again you know sometimes it's just
00:02:12
diarrhea of the mouth right you just
00:02:14
whatever comes out that's probably me
00:02:16
being verbose and using the wrong word
00:02:18
for you let's be honest that's some
00:02:20
irony right there that's some sad irony
00:02:22
um well L shark thank you for being here
00:02:24
and I think a great place to start at
00:02:26
least it's my Curious question is what
00:02:28
is a land shark where did the name come
00:02:30
from I mean how did you get this brand
00:02:33
so I'm going to answer with a joke if
00:02:35
that's okay yeah so why don't sharks eat
00:02:39
lawyers I don't know professional
00:02:43
courtesy so it's not a very good joke
00:02:45
but yeah lawyers are sometimes referred
00:02:47
to as sharks and when I was thinking
00:02:49
about possible names for a Twitter
00:02:52
handle I didn't want to just be some
00:02:54
non-descript generic Financial this or
00:02:56
fi that um you know so I was trying to
00:02:59
think of something
00:03:00
interesting and different uh I'm
00:03:02
landbased so uh so there you have it and
00:03:05
it is a classic Saturday Night Live skit
00:03:08
if you've if you've never seen it you
00:03:10
should uh look it up on YouTube the land
00:03:12
shark with h Dan akroy back from the 70s
00:03:15
so it was pretty good I will look that
00:03:17
up I I will make sure to look that up
00:03:19
I'll link it in the show notes even um
00:03:22
well one thing I I did want to pick your
00:03:23
brain on here is just a little bit about
00:03:25
your your personal finance and investing
00:03:27
story because as I alluded to in the
00:03:29
intro
00:03:30
you know you talk about financial
00:03:32
Independence and retiring early a lot
00:03:34
but unlike some other people we've had
00:03:36
on the podcast you have you have some
00:03:38
kids so maybe you know how does that
00:03:39
play into everything how'd you get
00:03:40
started really talking about personal
00:03:42
finance and investing to others what's
00:03:44
your what's your background yeah so
00:03:46
that's a good question um you know I'm
00:03:48
not exactly sure uh why or how I fit
00:03:51
into the financial Independence space
00:03:54
online um you know I've been lurking in
00:03:56
the f space for a long time now um and
00:03:59
as you said earlier I am a lawyer um and
00:04:01
I didn't see a lot of lawyers really
00:04:03
sharing their stories online certainly
00:04:05
saw a lot of doctors saw a lot of
00:04:06
Engineers a lot of other professions but
00:04:08
I just I I never really saw a lot of
00:04:10
lawyers not saying that there are none
00:04:12
but I just I didn't see many um I also
00:04:14
just wanted to add my voice to the space
00:04:16
and have some fun at the same time so
00:04:18
you know I'm in my early 40s uh as you
00:04:21
said in the intro I'm a husband and
00:04:22
father of two ele school age kids I've
00:04:25
been practicing law for about two
00:04:27
decades now almost and you know the law
00:04:29
is an interesting profession you know at
00:04:31
times it can be intellectually
00:04:34
stimulating you know I get to work on
00:04:35
some really interesting cases complex
00:04:37
cases with clients who are doing really
00:04:40
remarkable things but the flip side of
00:04:41
that is it's also extremely stressful so
00:04:44
you know I'm pretty much always on call
00:04:47
and you know the business model for
00:04:48
practicing law at a law firm is you know
00:04:50
we Bill our time so we're literally
00:04:52
trading our time for money and you know
00:04:54
I've known for some time now that you
00:04:56
know I wasn't going to be one of those
00:04:57
lawyers who practices well into my 60s
00:05:00
70s or 80s you know there's plenty of
00:05:02
lawyers that you know they're the gray
00:05:04
hairs walking around the office and
00:05:05
they've been doing this forever and
00:05:06
they're going to do it to the day they
00:05:07
they die so for me the law was always a
00:05:10
means to an end um you know it pays well
00:05:13
and I've always been pretty careful
00:05:15
about saving and investing and you know
00:05:18
so when I was in my 20s I was kind of
00:05:20
dabbling a little bit and stock picking
00:05:22
and um but about you know 10 years ago
00:05:24
that's when I started getting really
00:05:25
serious um and it really came with
00:05:28
becoming a father right so that's kind
00:05:30
of like the the light bul moment when I
00:05:32
was just like all right I got to start
00:05:33
getting real real and serious so I
00:05:35
started reading a lot of investment
00:05:36
books um I stumbled upon the bogleheads
00:05:38
Forum I don't know if you've ever
00:05:40
checked out the bogleheads Forum but um
00:05:42
you know those forums are just full of
00:05:44
really great information and that was a
00:05:46
real eye opener for me and you know at
00:05:48
that point in time I became convinced
00:05:50
that I shouldn't try to beat the market
00:05:52
because I wasn't smart enough to do so
00:05:54
uh but instead I should just try to keep
00:05:55
fees low invest in broad-based index
00:05:58
funds and capture the market markets
00:05:59
return and just invest regularly and
00:06:02
aggressively for the long term and you
00:06:05
know it was through that you know the
00:06:06
bogleheads Forum that you know that's
00:06:07
when I eventually stumbled upon the fire
00:06:09
Community because like before that you
00:06:11
know I wasn't sure what I was saving for
00:06:13
I was just saving because that's what we
00:06:15
were told to do right go save for
00:06:16
retirement sure um and that concept was
00:06:20
kind of ambiguous right like save for
00:06:22
retirement what exactly does that mean I
00:06:24
didn't really understand when I would be
00:06:26
retiring or how much I would need to
00:06:28
retire But ultimately I had a family and
00:06:31
I was becoming increasingly dissatisfied
00:06:33
with the grind that is you know working
00:06:36
as a lawyer and I wanted out and you
00:06:38
know once covid hit and we found
00:06:40
ourselves you know working from home I
00:06:42
get to spend so much more time with my
00:06:44
kids that I decided that you know that
00:06:46
was way more important to me than any
00:06:47
amount of money that I could earn from a
00:06:49
job so I I made the decision that I was
00:06:52
going to retire as soon as
00:06:53
possible excellent thank you for that
00:06:56
background a really cool background uh
00:06:58
bogleheads form you mentioned the
00:06:59
bogleheads Forum I've spent some time on
00:07:01
the bogleheads forum for listeners who
00:07:03
don't know that's John Bogle right the
00:07:06
founder of Vanguard and his followers
00:07:08
are called bogleheads or they call
00:07:10
themselves bogleheads so the bogleheads
00:07:13
Forum I mean could you just give us a
00:07:14
one minute description of what's on
00:07:16
there what the people are like what
00:07:17
they're talking about and you know what
00:07:19
you learned from the bogleheads yeah I
00:07:21
mean it's a a pretty diverse Forum but I
00:07:23
mean it's it's a lot of uh you know
00:07:25
frankly retirees who are uh their hobby
00:07:28
is finance and investing and so one of
00:07:31
the things that they'll do is uh you can
00:07:33
post your portfolio to them and then
00:07:35
they will give you their advice as to
00:07:38
how you can fix it so you know 10 years
00:07:40
ago I posted my you know this is what my
00:07:42
401k portfolio looks like and my wife's
00:07:44
401k and they said okay you should sell
00:07:46
these funds and and buy vtsax or or you
00:07:50
know and if you didn't have those
00:07:52
options they would give you kind of the
00:07:53
next best choice in in their opinion so
00:07:55
you know based on their advice uh they
00:07:57
really subscribe to like the three fund
00:07:58
portfolio which is you know a
00:08:00
combination of uh a broad-based US stock
00:08:04
index fund a broad-based international
00:08:06
stock index fund and then a broad-based
00:08:07
bond portfolio and basically by com
00:08:10
combining those three portfolios you can
00:08:12
have everything you really need uh going
00:08:14
forward to have a successful investment
00:08:17
um career right is that a is that a
00:08:19
three fund portfolio that you subscribe
00:08:21
to in your in your own investing life or
00:08:23
has it evolved over time you know I did
00:08:25
for a while um but right now I'm
00:08:28
actually um I've deviated from the three
00:08:31
fund portfolio most of my my asset
00:08:33
allocation is basically entirely
00:08:35
equities it's probably a little riskier
00:08:37
than I should but I don't own any bonds
00:08:39
I also sold out of my International
00:08:41
position so I'm 100% us uh equities
00:08:45
vtsax and you know we own our home
00:08:48
outright so I kind of view that as our
00:08:49
bond position um but you know it's it's
00:08:52
really simple I've got a little bit of
00:08:53
individual stocks here and there a
00:08:55
couple additional funds um that you know
00:08:59
are kind of inconsequential in the grand
00:09:01
scheme of things most of it is just
00:09:03
vtsax out of curiosity those individual
00:09:06
stocks that you own is that just kind of
00:09:07
play money on the side to kind of test
00:09:09
yourself or or do you have like a strong
00:09:12
conviction in those companies in
00:09:13
particular what what drw you to those
00:09:15
stocks uh you know honestly that is it's
00:09:18
more like entertainment than anything
00:09:20
else right it's like less than 1% of our
00:09:22
Port portfolio and a little dabbling you
00:09:24
know here and there to see like oh can I
00:09:26
actually do some stock picking but I'm
00:09:28
not putting real money on the line in
00:09:30
the grand scheme of things right I'm
00:09:31
just you know buying a couple of things
00:09:33
here and there and and it's nothing that
00:09:35
would be uh unusual or unheard of right
00:09:40
like there's the Amazon and Facebooks
00:09:41
and the the Googles and you know the
00:09:43
apples you know those types of tech
00:09:46
companies generally so gotcha gotcha so
00:09:49
it's it's like putting $10 on the
00:09:50
football game just makes things a little
00:09:52
more interesting put some some skin in
00:09:54
the game just kind of yeah add some fun
00:09:56
to the experience okay you mentioned you
00:09:58
mentioned some books earlier you
00:09:59
mentioned you know right around that
00:10:01
time maybe where you found the
00:10:02
bogleheads you had kids you the light
00:10:04
bulb went off started reading some books
00:10:06
what were some of the most influential
00:10:08
personal finance investing books that
00:10:10
you you still go back to yeah so the
00:10:12
bogleheads guide on investing is
00:10:14
fantastic um JL Collins's simple path to
00:10:17
wealth is is probably the best book that
00:10:20
you could you could read um but then
00:10:22
there's you know some other Classics you
00:10:23
know U Jack Bogle himself has a number
00:10:26
of uh investing books Bogle on mutual
00:10:29
funds you know Common Sense on mutual
00:10:30
funds um Burton malel uh a random walk
00:10:34
down Wall Street is a classic um William
00:10:37
Bernstein the four pillars of investing
00:10:39
is fantastic so um there's a another one
00:10:43
the coffee house investor was another
00:10:45
book it's by a guy named scus is I think
00:10:48
his last name y um yeah so there's
00:10:50
there's a number of them uh all of them
00:10:52
kind of share that kind of
00:10:55
uh uh appreciation for not trying to
00:10:58
beat the market and just just trying to
00:10:59
match the market and keeping your your
00:11:01
index uh your your fees low right and
00:11:03
investing in broad-based index funds
00:11:06
right right excellent yeah but the one I
00:11:08
recommend to everybody is the simple
00:11:10
path to wealth I mean that's it's so
00:11:11
easy to understand and straightforward
00:11:14
and you know D koll is such an amazing
00:11:17
author you know he's he's a great writer
00:11:20
um and you know for for somebody
00:11:22
starting out I mean you can't beat that
00:11:24
one you might convince me to finally go
00:11:27
get my copy that's that's probably the
00:11:29
number one book in terms of the ven
00:11:31
diagram of uh highly recommended but
00:11:34
that I have not
00:11:35
read that that simple path of ralth is
00:11:38
probably the the top book in there you
00:11:40
know it's kind of funny because when
00:11:41
when my kids were really young um you
00:11:44
know there was a point in time where uh
00:11:46
we couldn't get them to nap unless we
00:11:49
were with them right so we had to kind
00:11:51
of like be in bed with them and uh you
00:11:53
know so they would take naps and I would
00:11:55
just have my phone there and I would
00:11:57
just start kind of reading Jim Collins's
00:12:00
blog and so his stock series is
00:12:03
basically what turned into the simple
00:12:05
path to wealth so I read his stock
00:12:07
series on my phone while my kids were
00:12:09
napping next to me and you know that was
00:12:12
kind of like the Genesis of of
00:12:13
everything for me in terms of
00:12:15
understanding Index Fund investing and
00:12:18
and you know you just kind of how to
00:12:20
build my My overall philosophy of
00:12:22
investing and then once he came out with
00:12:24
the book I reread it um recognized a lot
00:12:26
of it from the stock series itself but
00:12:28
just kind of organized it a little and
00:12:31
uh you know cleaned it up and it's it's
00:12:33
fantastic but you know either way read
00:12:35
the stock series or read the book you
00:12:36
can't go wrong excellent I'll I'll link
00:12:39
to those in the show notes for the
00:12:40
readers and and a few of the other books
00:12:41
you recommended
00:12:43
too uh let's talk real quick in your
00:12:46
Twitter profile you you describe
00:12:48
yourself as a financially independent
00:12:50
land shark who hates debt so let's talk
00:12:52
about debt and and maybe we can start
00:12:54
with uh coming out of law school did you
00:12:57
face the proverbial kind of law School
00:12:59
med school grad school debt that that
00:13:01
other people write about you know I had
00:13:03
some but I was pretty fortunate that I
00:13:05
didn't have like the crushing debt that
00:13:08
others had I was I had a full
00:13:10
scholarship to undergrad uh so I
00:13:12
graduated college without any debt and
00:13:14
then when I went to law school I had
00:13:16
about two-thirds of it paid through
00:13:17
scholarships so I graduated with about
00:13:20
$40,000 in debt um which was manageable
00:13:23
um you know it was certainly not
00:13:25
insignificant but you know I was able to
00:13:27
take care of that relatively quickly
00:13:29
kind of before my kids were born and
00:13:31
that was kind of like the the motivator
00:13:32
for us was and I didn't like the idea
00:13:34
that I was going to be you know it was
00:13:36
it was on a 20-year term I didn't like
00:13:37
the idea that I would be saving for my
00:13:39
kids college or putting my kids through
00:13:40
college while I was still paying off my
00:13:42
own law school debt so uh I paid that
00:13:44
down um right around the time that they
00:13:47
were born and you know moved forward
00:13:49
from there and so to this I mean were
00:13:51
there other debt instruments that you
00:13:53
took on along the way whether it's you
00:13:54
know I don't know Car Loan mortgage
00:13:55
other stuff like that or have you always
00:13:57
been pretty against it you know we
00:14:00
um we had a car loan on our 2006 uh
00:14:04
Subaru which we still drive today um but
00:14:08
we had z% financing for two years and
00:14:10
paid it off in two years so that was
00:14:12
free money so um you know I'm not I
00:14:14
don't think I'm an idiot about that I'll
00:14:16
take free money if I can get it but um
00:14:18
you know just the past two three years
00:14:21
uh we paid down our house and so we own
00:14:24
our house out right now um we recognize
00:14:26
that that may not necessarily be the
00:14:28
optimal financial decision from just a
00:14:30
dollarss and cents perspective but from
00:14:33
a peace of mind perspective we love the
00:14:35
fact that we owner house outright and
00:14:37
that we're not paying you know three
00:14:39
four thousand bucks a month to the bank
00:14:41
every month right psychology versus math
00:14:45
is the the never- ending argument in
00:14:46
this space and right there's no right
00:14:48
answer because that's why they call it
00:14:50
personal finance personal finance it's
00:14:52
all up to individual's choices so what
00:14:55
you're saying there L shark if I I'm
00:14:57
understanding it right is
00:14:59
yeah you probably could have taken some
00:15:00
of that extra money put it in
00:15:03
btsx and made 15% a year in the last
00:15:07
five years on it instead you paid down
00:15:10
maybe a three or four or five per loan
00:15:12
so mathematically okay in in hindsight
00:15:15
2020 hindsight wasn't the optimal choice
00:15:18
but you feel great about the fact that
00:15:19
you own your house outright that's
00:15:21
amazing and so such a peace of mind fact
00:15:24
yeah absolutely I mean we've got no
00:15:26
regrets with with paying it down and you
00:15:28
know I mean the the flip side of it is
00:15:29
you know in hindsight yeah we know what
00:15:31
the returns of the market are um but
00:15:34
five 10 years ago we didn't right and
00:15:36
the market could have easily done
00:15:37
something different and paying on a
00:15:41
guaranteed rate of return to to reduce
00:15:43
that debt level would have been a really
00:15:45
smart decision so you know either way I
00:15:47
don't regret it uh at all there's no
00:15:49
chance that I would um you know take out
00:15:51
and cash out the equity in our house to
00:15:53
to do some investing like having having
00:15:55
that paid off and knowing that our cash
00:15:56
flow is that much better on a month-to
00:15:58
Monon basis you know that's enabling us
00:16:00
to retire early because we're not going
00:16:02
to have that eating away at our our
00:16:04
monthly expenses right and and just
00:16:07
knowing your story knowing where you
00:16:09
stand today you were probably also
00:16:12
investing quite a nice sum of money
00:16:15
every month in addition to paying down
00:16:17
your mortgage early right it's not it's
00:16:19
not like you weren't investing at all
00:16:21
yeah yeah absolutely I mean we were um I
00:16:23
don't think we were maxing out our 401ks
00:16:25
and and Roth IRAs um the entire time
00:16:29
that we could have you know in hindsight
00:16:31
we probably could have gone back and
00:16:32
invested more but you know we have been
00:16:34
saving aggressively uh for a very long
00:16:38
time now and you know one of the things
00:16:41
that paying down the mortgage allowed us
00:16:43
to do is it really instilled the
00:16:45
discipline of saving massively right so
00:16:49
what we what we did is we took out a
00:16:50
15-year loan and we paid it off in about
00:16:52
five years and you know on our house you
00:16:55
know we had a $400,000 mortgage so
00:16:57
paying that off in five years that's a l
00:16:58
a lot of money to pay back relatively
00:17:00
quickly now we were fortunate that we
00:17:02
were making good money so we had the
00:17:04
ability to do that but once we paid off
00:17:07
our mortgage you know we were paying
00:17:08
5,000 bucks a month towards our mortgage
00:17:11
and then when we would have some bonuses
00:17:12
come in throw some extra cash we'd throw
00:17:15
that at the principal when we paid off
00:17:17
that mortgage all of a sudden you know
00:17:19
we had $5,000 a month that we were not
00:17:22
spending that we just kept allocating
00:17:24
towards our investments so now like
00:17:26
$60,000 goes to our tax taxable
00:17:28
brokerage account every single year and
00:17:31
it doesn't bother us because we're used
00:17:33
to spending it you know and it so it it
00:17:35
allowed us to kind of avoid lifestyle
00:17:37
inflation because we were just used to
00:17:39
not having that money around for you
00:17:42
know buying toys and you know buying new
00:17:45
cars and clothes and whatever it is but
00:17:48
yeah I mean to your to your to your
00:17:49
question Jesse Yeah I mean we we it
00:17:52
wasn't a either or scenario we were we
00:17:54
were certainly saving um while we were
00:17:57
paying down the mortgage we uh the
00:18:00
paying down the mortgage kind of gave us
00:18:02
the discipline to save even more
00:18:04
aggressively than I think we we would
00:18:06
have because I was a little bit of a
00:18:08
spender actually before we kind of got
00:18:09
onto this you know fi uh Journey that we
00:18:12
were on you know I was definitely more
00:18:14
prone to go out and you know pick up a b
00:18:16
tab with my friends and and not really
00:18:18
think about it and you know go out and
00:18:20
you know buy some toys and not really
00:18:21
thinking about it you know go do do
00:18:23
whatever um and you know this instilled
00:18:26
discipline and you know for people who
00:18:29
are very disciplined in and of
00:18:30
themselves um maybe they don't need it
00:18:32
but for for me I kind of needed to have
00:18:35
that regular payment that I knew that I
00:18:37
was going to pay down the mortgage uh to
00:18:39
then kind of drive us forward if that
00:18:42
makes sense it does make sense that does
00:18:44
make sense and I'm sure that the the
00:18:46
fact that the payment the mortgage
00:18:48
payment was probably automatic or maybe
00:18:50
you had set it up automatically and then
00:18:52
now your investing if I had to guess
00:18:54
might be automatic withdrawals the fact
00:18:57
I mean it almost makes discipline easier
00:18:59
for you in that way absolutely yeah
00:19:02
absolutely well and that's why you know
00:19:04
listen to the Nobel Prize winners right
00:19:06
listen to the the Richard sailor and the
00:19:08
Danny conans of the world from the
00:19:10
behavioral economics field who say
00:19:12
automate your finances right reduce the
00:19:14
friction set yourself up for success by
00:19:17
putting money in your 401k automatically
00:19:19
investing that money automatically the
00:19:21
way to go well David box you know the
00:19:24
automatic millionaire I don't know if
00:19:25
you've ever read that one know David
00:19:26
boach he's also the he's of the latte
00:19:28
factor guys right or and and and so that
00:19:31
was the latte factor I believe uh first
00:19:34
appeared in the automatic millionaire
00:19:35
and I think automatic millionaire came
00:19:37
out sometime in the mid 2000s um he he
00:19:40
re U revised it couple years ago but
00:19:44
it's a great book and it's really simple
00:19:46
it's another one of those kind of
00:19:47
seminal personal finance books but
00:19:49
basically you know he always talks about
00:19:51
the idea of just automating your
00:19:53
finances um you know paying yourself
00:19:55
first and then just set forget it and
00:19:59
let it take care of itself and you know
00:20:01
for me um you know kind of learning to
00:20:06
automate our you know IRA and 401K
00:20:09
contributions and our mortgage payments
00:20:10
and then just learning to live on what
00:20:12
was left uh you know then we didn't
00:20:15
allow ourselves to succumb to Lifestyle
00:20:17
inflation because we had a smaller kind
00:20:19
of amount of money left over each month
00:20:21
because so much of it was already spoken
00:20:23
for and I think that that's the easiest
00:20:26
way to kind of guarantee your success
00:20:28
and and one of the things that that we
00:20:29
did is you know we were probably more
00:20:31
aggressive in terms of you know what the
00:20:34
Target that we set for you know paying
00:20:35
down the mortgage you know that $5,000 a
00:20:37
month that's probably a little more than
00:20:39
we could afford honestly at the time
00:20:40
that we did it but we just said we're
00:20:42
like you know what we'll make it work
00:20:44
and we made it work um and you know
00:20:46
there was a couple months when it was
00:20:47
like it was a little tight it was it was
00:20:48
difficult um but it's just it's
00:20:51
sometimes you can you can fool yourself
00:20:53
into uh instilling you know this
00:20:56
discipline to save more so than you
00:20:58
actually think you can right set the bar
00:21:01
high and you'll probably find a way to
00:21:03
adapt exactly that's actually that's
00:21:07
particularly um impressive coming from a
00:21:09
shark who really hasn't evolved in like
00:21:11
400 million years well we're the perfect
00:21:14
species right you're just you know we're
00:21:16
just all
00:21:18
cartilage um well let's talk about your
00:21:20
fire plans now I'm particularly
00:21:23
interested in in you know are you using
00:21:26
the 4% rule to plan out your retirement
00:21:28
or are you are you using like what what
00:21:30
kind of math is kind of going into your
00:21:33
long-term retirement
00:21:35
plans so we have uh you know we've put
00:21:38
together a a pretty uh comprehensive
00:21:42
withdrawal strategy timetable and I've
00:21:43
actually shared it on my Twitter feed
00:21:45
I'd be happy to share it with uh with
00:21:46
you you could put it in the show notes
00:21:48
absolutely um you know put together a a
00:21:50
Google doc it's actually something that
00:21:52
um I don't know if you know Robert from
00:21:53
stop ironing shirts but he uh put put
00:21:56
together a withdrawal simulation that
00:21:58
I've I've been you know tweaking and
00:22:00
making my own um he did it a couple
00:22:02
years ago and I learned so much from
00:22:04
that guy I mean he is super smart um and
00:22:08
so the the withdrawal simulation that we
00:22:10
have has a couple different assumptions
00:22:13
um and it has columns for a 4%
00:22:15
withdrawal rate a 3.5% withdrawal rate
00:22:17
and a 3% withdrawal rate and based on
00:22:20
kind of what we're projecting right now
00:22:22
so I'm I'm planning on firing in uh
00:22:25
early
00:22:26
2022 my wife is probably going to
00:22:28
continue working for another two years
00:22:31
so you know 2024 is when we'll probably
00:22:34
start actually drawing on our
00:22:36
investments and you know before then
00:22:37
we'll just live off of her uh income So
00:22:41
based on you know kind of what we're
00:22:43
projecting I think a 3% withdrawal rate
00:22:46
will actually cover our annual spending
00:22:48
in 2024 and so we're projecting $120,000
00:22:52
annual spending and you know 3% of our
00:22:57
uh nest egg at that point in time will
00:22:58
be about
00:23:00
$127,000 so we'll be spending less than
00:23:03
3% gotcha and for listeners who don't
00:23:07
know how does 3% compared to
00:23:10
conservative liberal I mean where does
00:23:12
it fall on the spectrum of with draw
00:23:14
rates yeah I mean 3% is really
00:23:16
conservative right so you know the the
00:23:19
Trinity study contemplated a 4%
00:23:21
withdrawal rate contemplated a a 30-year
00:23:25
timeline I'm 42 uh looking at a 50-year
00:23:29
retirement uh Horizon all all things go
00:23:33
well so uh you know a 3% withdraw rate I
00:23:36
don't think that um we will run out of
00:23:39
money we've we've run a lot of
00:23:41
simulations on on fire Cal and using
00:23:45
personal capital and you know all those
00:23:47
simulations kind of contemplate a 4%
00:23:49
withdrawal rate um so you know I'm a
00:23:52
pretty conservative guy when it comes to
00:23:54
to you know finances and saving in
00:23:56
general so feel pretty confident that a
00:23:59
3% withdrawal rate should work right
00:24:02
right I know one thing that I know about
00:24:04
the Trinity study or at least the the
00:24:05
famous 4% rule is that it was based on a
00:24:09
5050 stock Bond portfolio kind of
00:24:11
looking at historical data so I'm just
00:24:14
curious how are you going to potentially
00:24:17
adjust your asset allocations over time
00:24:20
I know the the future is foggy we don't
00:24:21
have crystal balls but if you had to
00:24:23
guess you know you're you're going to
00:24:25
retire soon 100% total Market Index Fund
00:24:28
you think you'll stay there for the
00:24:29
majority of your retirement or do you
00:24:31
foresee yourself slowly shifting into
00:24:33
something more conservative I think I'm
00:24:36
going to add some bonds and so we have
00:24:39
we have a decent amount of cash right
00:24:40
now um that probably could could start
00:24:44
to actually transfer into what our bond
00:24:47
position should be um
00:24:49
but you know right now uh given the fact
00:24:52
that the house is paid off um you know I
00:24:56
I I haven't been that convinced that
00:24:58
bonds really make sense right now
00:25:00
especially given the fact that interest
00:25:01
rates are so low they're probably only
00:25:03
going to go up and if they start going
00:25:05
up then bonds are going to really
00:25:06
underperform so uh you know I probably
00:25:09
should add some bonds but right now it
00:25:12
hasn't been something that you I've been
00:25:15
really uh chomping at the bit to do part
00:25:18
in the pun so but certainly something to
00:25:22
consider going forward yeah yeah well
00:25:25
that explanation totally makes sense and
00:25:26
if you have that 50-year time Horizon
00:25:29
ahead of you like you're saying probably
00:25:31
does make sense to stay more aggressive
00:25:33
early on and to start tapering into more
00:25:36
conservative assets as you get older um
00:25:39
now one interesting thing I know that's
00:25:41
another result of the Trinity study is
00:25:43
yes you know if you do the 4% rule with
00:25:46
a 50-50 stock Bond allocation a few
00:25:49
historical 30-year periods would have
00:25:52
failed uh but so many historical 30-year
00:25:55
periods you would have actually ended up
00:25:57
with more money at the end of those 30
00:26:00
years even after withdrawing money every
00:26:02
year for your cost of living you would
00:26:05
end up with more money than you started
00:26:07
so that's the other side of the coin is
00:26:09
you know if you go super conservative
00:26:11
that's great you're probably going to
00:26:13
drive your percent chance of failure
00:26:15
down to zero and you're also going to
00:26:17
find yourself with more money than you
00:26:18
expected later on right you know that's
00:26:21
what the probability say yeah and you
00:26:23
know the the withdrawal simulation that
00:26:24
that we have uh we don't account for
00:26:27
social security at all but we will
00:26:30
obviously be getting uh a significant
00:26:32
amount of Social Security and I don't
00:26:34
know if you've ever played around with
00:26:35
physician on fire Social Security
00:26:36
calculator but he's got a great Social
00:26:39
Security calculator and and he's got
00:26:40
this article about the various Bend
00:26:42
points and social security is pretty
00:26:44
complex um but after you've You' vested
00:26:47
for a certain period of time and you've
00:26:48
hit these Bend points you basically get
00:26:50
a diminishing amount of money you know
00:26:52
per dollar right like you start off
00:26:54
you're getting 90 cents on the dollar
00:26:55
and then you're getting 32 cents on the
00:26:56
dollar and then you're getting 10 cents
00:26:57
in the dollar um we're we're at that
00:27:00
second Bend point right now where you
00:27:02
know the amount of money that we're
00:27:03
actually putting in and that we'll get
00:27:05
back out really Cuts against continuing
00:27:08
to work but you know I know that you
00:27:10
know when we hit age 70 uh and we
00:27:13
actually start drawing on Social
00:27:15
Security um that's just going to be you
00:27:18
know additional padding for our our
00:27:21
finances and I feel like you know at a
00:27:22
3% withdrawal rate based on what we're
00:27:24
projecting right now and not taking into
00:27:26
account Social Security
00:27:28
if I feel comfortable with that that
00:27:30
once the Social Security comes in that
00:27:32
almost also Cuts against the need for a
00:27:34
bond position at this point it kind of
00:27:36
allows us to take additional risk right
00:27:39
right uh I haven't seen that calculator
00:27:42
specifically from physician on fire but
00:27:44
I I I I know the the Social Security the
00:27:46
tapers how how they taper off over time
00:27:49
um and yeah physician on fire great blog
00:27:52
I've written a couple articles for for
00:27:53
leaf seems like an awesome guy and uh
00:27:56
yeah I'll I'll I'll find that that
00:27:58
calculator and Link it in the show notes
00:27:59
for anybody who's
00:28:01
interested uh L shark I wanted to do a
00:28:04
little
00:28:05
transition now people when they hear
00:28:08
that someone's retiring at 30 last week
00:28:11
I had purple on the podcast of of a
00:28:13
purple life she's retiring at 30 you're
00:28:15
retiring she's she was phenomenal it's a
00:28:17
great episode episode 36 if anyone's
00:28:20
interested and uh you know a question
00:28:22
that came up for her it's probably a
00:28:24
similar question that you've had to
00:28:25
field from time to time which is
00:28:28
you're so much younger than the
00:28:29
traditional retiree what are you going
00:28:31
to do with your time or or why do you
00:28:34
want to retire why do you want to stop
00:28:35
now so when people come to you with
00:28:37
those kind of questions you can pretend
00:28:39
that I'm coming to you with that
00:28:40
question what do you say what what's
00:28:42
your thought process on on what you'll
00:28:44
be doing in
00:28:46
retirement I guess the question is what
00:28:47
am I not going to be doing you know the
00:28:50
I I'm I've never been bored like that's
00:28:52
not within my DNA like I am incapable of
00:28:56
being bored like I I find so many things
00:28:58
interesting and fascinating um but you
00:29:01
know for me um you I just I launched my
00:29:04
own blog just about a month ago and L
00:29:07
shark. org and my first post was about
00:29:10
time and you know the more and more I've
00:29:12
been thinking about in the older and
00:29:13
older I'm getting I'm just kind of
00:29:15
realizing the value of time and how it
00:29:17
is truly finite and regardless of how
00:29:20
much money we have you know we have a
00:29:21
finite amount of time and you know I
00:29:24
really want to make sure that I'm not
00:29:26
squandering that time and just trading
00:29:28
it for money right like right now I'm
00:29:29
selling my time to my clients for for
00:29:33
money and you know that's great it's
00:29:35
provided me with a really you know great
00:29:37
lifestyle live in a nice Community nice
00:29:38
house my kids go to Great Schools um but
00:29:41
my kids are growing up and I don't want
00:29:42
to I don't want to miss their childhood
00:29:44
and you know that's one of the things
00:29:45
like we mentioned earlier about about
00:29:47
covid and working from home I've spent
00:29:49
so much more time with my kids this year
00:29:52
that you know typically you know I was
00:29:54
out of the out the door at 7:30
00:29:56
commuting you know downtown and then
00:29:58
coming home by 6:00 and so maybe I'd see
00:30:01
my kids in the morning before i' go to
00:30:02
work and then I'd see them for maybe an
00:30:04
hour or so before they went to bed and
00:30:06
that was it and now I get to walk my
00:30:08
kids to school every single morning I
00:30:09
pick them up from school every single
00:30:11
afternoon I get to take them to you know
00:30:13
soccer practice and baseball and martial
00:30:15
arts and all all their activities we get
00:30:17
to go on Hikes and bike rides and go
00:30:19
swimming together and it's just
00:30:21
fantastic so you know what I what I plan
00:30:23
on doing with my retirement is you know
00:30:25
number one I'm prioritizing my family
00:30:27
time over everything else you know my
00:30:28
time with my kids while they're young my
00:30:30
time with my wife that to me is my
00:30:33
number one priority um second you know
00:30:35
I'm going to be focusing on my health
00:30:37
and well-being um I'm definitely feeling
00:30:39
the effects of of the grind of the
00:30:40
practice of law uh it's definitely a
00:30:42
stressful um career not saying that the
00:30:46
law is unique in that regard like
00:30:47
there's lots of stressful careers but
00:30:49
it's it's it's definitely a grind so I
00:30:52
want to focus on my health and
00:30:53
well-being and really focus on exercise
00:30:55
and spending time Outdoors running and
00:30:57
hiking and biking and you know doing all
00:30:59
the the great things that that Colorado
00:31:01
has to offer continuing to just read and
00:31:04
learn and then you know I I do a lot of
00:31:06
community service I also uh am
00:31:08
passionate about U creating and making
00:31:11
music and and writing so like I said I
00:31:14
just launched the blog I'm gonna I'm G
00:31:15
to be working on that um and you know
00:31:18
then we're just going to see but one of
00:31:20
the things that I'm really looking
00:31:21
forward to is decompressing like I've
00:31:23
been going
00:31:25
110% you know since since I started
00:31:27
started practicing law and it's it's
00:31:30
it's time to just take some time to
00:31:33
unwind and you know I wake up in the
00:31:35
morning and the first thing I think
00:31:36
about is work and I go to sleep and I'm
00:31:37
thinking about work as uh as I'm trying
00:31:39
to fall asleep and I'm waking up in the
00:31:41
middle of the night thinking about work
00:31:42
and that's not a healthy way to live you
00:31:44
know and I've had Partners who have had
00:31:46
heart attacks and strokes over the past
00:31:48
you know couple years and you know I
00:31:51
could see that as a something that
00:31:53
happens to me all right and I just you
00:31:55
know I'm not invincible so at a certain
00:31:57
point in t time when you when you've won
00:31:59
the game uh you got to stop playing and
00:32:02
I just I I have enough like I I believe
00:32:05
that I have enough to sustain the
00:32:07
lifestyle that we want to live and I
00:32:10
don't need to continue to add additional
00:32:12
money um you know just because I
00:32:17
can I really like that one one quote you
00:32:19
said there towards the end which is
00:32:21
sometimes you have to realize when
00:32:22
you've won the game you you need time to
00:32:24
stop playing and you mentioned William
00:32:26
Burn de or Bernstein earlier great
00:32:29
author in investing mind and he's got
00:32:32
this quote that I absolutely love which
00:32:34
is paraphrasing here that the point of
00:32:37
investing is not to maximize Returns the
00:32:40
point of investing is to not die poor
00:32:43
you know and it's it's a quote about
00:32:45
risk really and it's a quote about you
00:32:48
know you don't have to put pedal to the
00:32:49
metal going as fast as you can as far as
00:32:51
you can as long as you can because going
00:32:54
pedal to the metal is inherently risky
00:32:57
you might crash right the point of these
00:32:59
exercises we do the point of working as
00:33:02
a lawyer as hard and as long as you did
00:33:04
isn't necessarily to do it forever and
00:33:06
become as rich as possible there's more
00:33:09
to life than that right there's more to
00:33:11
life than just Absolut working your butt
00:33:13
off and uh yeah so it applies to
00:33:15
investing it applies to your job it
00:33:16
applies to everything we do it applies
00:33:18
to money it applies to time I really
00:33:20
like that how you're bringing it back to
00:33:23
that finite resource that we have time
00:33:25
it's one of those cliches right there's
00:33:27
a lot of cliches in the personal finance
00:33:29
and investing space there's a lot of
00:33:31
cliches out there on Twitter that we see
00:33:34
day after day time after time right but
00:33:36
some of them are just so universally
00:33:38
true that there's a reason why it's a
00:33:39
cliche and the fact that time is this
00:33:42
finite resource the most finite resource
00:33:44
that we have it's one of those cliches
00:33:47
that comes up every day but you know
00:33:49
what it's always
00:33:50
true absolutely yeah there's this uh
00:33:53
this song by uh Chris Staples and uh
00:33:57
it's called halfway over my life is
00:33:59
halfway over who knows maybe more I'm
00:34:02
finally getting good at this wish I
00:34:04
could live a hundred more nobody knows
00:34:07
what happens next I'm guessing this is
00:34:09
all we get and I just heard that and I
00:34:12
was like godamn that just hit a hit a
00:34:14
cord and you know my my kids they're you
00:34:17
know they're in elementary school but
00:34:19
they are growing up fast and like before
00:34:22
I know it they're going to be in middle
00:34:23
school they're going to be in high
00:34:24
school and they're not going to want to
00:34:25
hang out with their old man right now
00:34:27
they love hanging out with their old man
00:34:29
and I don't want to miss that you know I
00:34:32
don't want to I I don't want to spend so
00:34:33
much time trying to become a big shot at
00:34:35
work that I forget to spend quality time
00:34:37
with my kids right you familiar with uh
00:34:40
there's a Blog up there called wait but
00:34:42
why oh I love weight by by yeah so so
00:34:45
you're probably familiar with that it's
00:34:47
probably one of his most famous articles
00:34:49
that talks about you know how much time
00:34:51
we get in life and Illustrated really
00:34:53
well so you can see kind of like little
00:34:55
blocks that represent little chunks of
00:34:57
time year by year week by week and I
00:35:00
know one of the time stats that he looks
00:35:02
at in there is how much time parents get
00:35:05
to spend with their kids right and how
00:35:07
much of it I think it's something
00:35:09
something like by the time your kid
00:35:10
turns 18 and leaves the house the
00:35:13
average parent will have already spent
00:35:15
95% of all the time they will ever spend
00:35:18
with that child yeah so so it's tough
00:35:21
you know your your kids were how old did
00:35:22
you say l shark yeah they're in
00:35:24
elementary school scho yeah so so you
00:35:27
know halfway through their childhood is
00:35:29
means you're probably 45 to 50% of the
00:35:33
way of of time you'll spend with them
00:35:35
and that's a it can be sad but it can
00:35:38
also be a very motivating fact to to
00:35:40
really make the most of the rest of the
00:35:41
time that you have with them so yeah I
00:35:43
mean I don't I don't think it's sad at
00:35:45
all I mean it just is right and and and
00:35:48
the point of of saving and investing and
00:35:50
and kind of doing all these things is to
00:35:52
I think prioritize your values right and
00:35:54
you know the things that are really
00:35:55
valuable to you so you know obviously I
00:35:57
want to spend time with my kids and and
00:35:59
be present in their lives you know the
00:36:00
flip side of it and one of the things
00:36:01
that I'm looking forward to in in
00:36:03
retirement is you I'm fortunate that my
00:36:05
parents are still alive and you know but
00:36:07
the flip side of that weight but why
00:36:09
post is you know how much time do you
00:36:11
have with you know your grandparents
00:36:13
with with your your mom and dad when
00:36:14
they're you know entering you know their
00:36:17
senior years right and you know if I had
00:36:20
the opportunity right now to basically
00:36:23
recapture some time with them because
00:36:25
I'm retired because I'm not going to be
00:36:26
working like what a blessing that is and
00:36:29
you know as they move on to you know
00:36:31
when one of them passes and then they're
00:36:33
just you know there's just one of them
00:36:35
you know I can help them in that process
00:36:37
and you know I wouldn't necessarily have
00:36:39
that time if I was working a 9 to5
00:36:42
Monday through Friday right like so like
00:36:44
I'm really looking forward to actually
00:36:46
not only spending time with my kids but
00:36:47
you know spending time with my parents
00:36:49
while they're still around and you know
00:36:50
my extended family um just because I
00:36:53
have that good fortune of being able to
00:36:56
recapture some of that time love it love
00:36:59
it recapturing a resource that maybe you
00:37:01
thought would have slipped through your
00:37:02
fingers but hey early retirement opens a
00:37:04
lot of doors that most people assume are
00:37:07
are
00:37:08
closed we got a couple options I mean is
00:37:10
there anything that you wanted to talk
00:37:12
about specifically that we haven't yet
00:37:14
you know one of the things that I've
00:37:16
been doing with with my Twitter profile
00:37:18
that has actually kind of resonated with
00:37:20
people and and obviously we've we've
00:37:22
done very well we're very fortunate in
00:37:24
terms of you know how how our
00:37:26
investments have done um so one of the
00:37:28
things that I try to do is just kind of
00:37:29
illustrate like what exactly has
00:37:31
happened in our finances yeah and like
00:37:34
the power of compound interest and like
00:37:36
so some of these some of these tweets
00:37:38
have really um resonated with some you
00:37:40
know I'm sure other people think you
00:37:42
know oh I can't can't relate to you know
00:37:45
lanchar because you know my net worth is
00:37:47
significantly higher than than most
00:37:50
other people that are on Twitter or
00:37:52
whatever but you know the point is that
00:37:54
compound interest really works right and
00:37:56
if you
00:37:57
uh put it to the test like it it will
00:38:00
work for you so you know when we started
00:38:02
tracking our net worth and I think
00:38:03
tracking your net worth like if there's
00:38:05
one piece of advice that I could give to
00:38:06
anybody it's the importance of tracking
00:38:09
your net worth because once you actually
00:38:11
and you I know you always talk about
00:38:13
this you know what gets measured gets
00:38:14
managed when you start measuring your
00:38:17
your net worth you can actually start to
00:38:19
see the progress right and so you know
00:38:21
we started tracking our net worth off
00:38:23
and on in like 2008 but we started
00:38:26
getting really serious about it you know
00:38:28
probably like
00:38:30
2012 um so it's been been about 10 years
00:38:33
now so we you know in 2008 we were we
00:38:36
had a net worth of about
00:38:38
$300,000 and uh that then we had you
00:38:41
know the financial collapse and all that
00:38:43
all that fun stuff but we we became
00:38:45
millionaires my wife and I in March of
00:38:48
2013 right so we saved and we invested
00:38:51
we became we had a million dollar net
00:38:53
worth in March of
00:38:54
2013 it took us five years
00:38:57
to get to 2 million so January 2018 we
00:39:00
crossed that threshold but it took us
00:39:03
two and a half years to get the three
00:39:05
million so in September of 2020 we got
00:39:08
to three
00:39:09
million we got to 4 million in April of
00:39:12
20121 so we we we made a million dollars
00:39:16
in less than a year and that wasn't from
00:39:18
our income that was I mean it was
00:39:20
partially from our income but that was
00:39:22
also we no longer had a mortgage payment
00:39:24
we were throwing more money at our
00:39:25
investment and now we're at $4.4 million
00:39:28
you know and which is remarkable we're
00:39:30
up 25% for the year we've made $875,000
00:39:32
this year in our you know investment
00:39:35
accounts including our what we've
00:39:37
actually saved and and invested but you
00:39:39
know you you look at how that actually
00:39:41
charts out and it's the snowball it
00:39:44
starts rolling and it's taken care of
00:39:45
itself and now when we look at our our
00:39:49
finances you know I feel comfortable and
00:39:51
we're making really good money at work
00:39:52
you know my wife is making good money
00:39:54
and I'm I became a partner you know
00:39:57
several years ago but and that that
00:39:59
really kind of added fuel to the fire in
00:40:01
terms of just our earnings um but and
00:40:05
you know and this year we're gonna earn
00:40:07
I don't know $600,000 in W2 income which
00:40:10
is a lot of money yeah but we I'm gonna
00:40:12
walk away from that right um and I feel
00:40:14
comfortable walking away from that
00:40:16
because our investments are making more
00:40:18
than that which is crazy that you know
00:40:21
once that snowball just takes over so
00:40:23
like if there's you know one piece of
00:40:25
advice in addition to just the
00:40:27
importance of tracking your net worth so
00:40:28
you can actually see it and visualize it
00:40:30
and we track it on a monthly basis and
00:40:31
on an annual basis because monthly is
00:40:34
great to know where you are annuals
00:40:35
where you start really wow like look at
00:40:37
where I was five years ago um but once
00:40:40
that snowball starts rolling you know
00:40:41
get that investment account growing as
00:40:44
early as possible I wish I started
00:40:46
earlier um you know I still started
00:40:48
early enough but you know had I started
00:40:50
earlier it's it's you know you can only
00:40:54
imagine where it would be at this point
00:40:56
so you know start early invest regularly
00:40:59
invest often um you'll thank yourself
00:41:01
later yeah I mean you're you're right I
00:41:04
am a huge proponent of tracking net
00:41:07
worth I track my net worth every month
00:41:09
like you do and it is fun to zoom out
00:41:12
and look at month by month or year by
00:41:14
year and see the progress that you've
00:41:15
made over time you know I right now am
00:41:19
close to where you were in 2008 and it's
00:41:22
exciting to think of what the next
00:41:24
decade could bring and even though land
00:41:26
sharkk I mean you you made a good point
00:41:27
there where you're saying you know well
00:41:28
maybe the average listener the average
00:41:30
reader on Twitter can't quite relate
00:41:32
because their W2 income isn't five or
00:41:36
six hundred grand like like yours is
00:41:38
however I think the average listener or
00:41:41
reader should relate to the fact that
00:41:43
you know how you went from one to two to
00:41:45
three to four million in whatever was
00:41:48
you know five years three years two
00:41:49
years one year well they they might not
00:41:52
be making million doll jumps but they
00:41:54
would be making quarter million or half
00:41:56
million dollar jumps in those same kind
00:41:58
of time periods right sure maybe someone
00:42:02
they they'd go from a quarter million
00:42:03
they'd get their first quarter million
00:42:05
in five and their next quarter million
00:42:06
in three and the next one in two and the
00:42:08
next one in one it's the same exact idea
00:42:10
it's just you scale it based on your
00:42:12
income and how much you're investing
00:42:14
right right and you know I I wasn't
00:42:16
earning this this money the entire time
00:42:19
of my career right like you know I
00:42:20
started as a lawyer I was making you
00:42:23
know under $100,000 when I first started
00:42:25
out and and it started to grow um which
00:42:28
is still you know a sign significant
00:42:30
amount of money but you know my wife and
00:42:32
I were not uh earning you know over
00:42:35
$200,000 for a a decent chunk of our
00:42:38
marriage and then it started growing and
00:42:41
you know we just got more serious about
00:42:43
investing and throwing the money at the
00:42:45
mortgage and throwing the money at our
00:42:46
retirement accounts and throwing the
00:42:47
money at our brokerage account and it
00:42:49
just starts
00:42:51
snowballing out of
00:42:53
curiosity maybe you know this for sure
00:42:55
because me you know I know kept a lot of
00:42:56
data in your past or maybe you just have
00:42:58
an educated guess how much of your total
00:43:00
portfolio right now can you attribute to
00:43:03
actual investing principle versus how
00:43:06
much of it can you attribute to that
00:43:09
principal growing or you know interest
00:43:12
returns that's a great question I wish I
00:43:15
knew the answer to that but I guess what
00:43:17
I could tell you is how much money we
00:43:20
have earned in our careers sure versus
00:43:22
what our our our portfolio is worth now
00:43:26
that's a great stat yeah go for it yeah
00:43:28
and this is something that I'm probably
00:43:29
gonna turn into a blog post just based
00:43:31
on you know thinking about the the big
00:43:34
picture right like in your entire life
00:43:37
like how much are you gonna earn right
00:43:39
and in your entire life how much are you
00:43:41
g to spend how much do you need right
00:43:43
and so you know that was one of the
00:43:45
things that I was looking at when we
00:43:46
were putting together our withdrawal uh
00:43:49
simulation is you know we're we're
00:43:50
factoring in starting at $120,000 of
00:43:53
annual spending indexing that for infl
00:43:56
inflation figuring a 50 to 60 year
00:43:59
timeline like how much money do we
00:44:00
actually need um just with interest
00:44:05
compounding over time and you know that
00:44:08
that number assuming that we we live to
00:44:12
age uh 100 you know we need 12 million
00:44:18
bucks all right like that's that's
00:44:21
$120,000 a 2% interest starting in 20 uh
00:44:26
24 going until 2079 12 12 million bucks
00:44:31
right and like how much of your
00:44:32
investment is actually going to cover so
00:44:34
you know those are the kind of things
00:44:35
that I've been thinking about so you
00:44:36
know right now our net worth is about
00:44:38
$4.4
00:44:39
million what we have earned in our
00:44:43
careers between the two of us um
00:44:49
is $4.4 million oh wow so one to one one
00:44:55
to one ratio now that's not including uh
00:44:59
what we've what we've earned in 2021 so
00:45:01
that's through 2020 so that's a little
00:45:03
skewed you know if you factor in you
00:45:04
know what we've what we're going to earn
00:45:06
this year we're GNA earn about $600,000
00:45:08
so it's we'll we'll earn $5 million say
00:45:11
but right um that also doesn't doesn't
00:45:14
include you know what we're going to
00:45:16
earn for the balance of the year and
00:45:18
invest right but y you know right now um
00:45:21
we're you know basically one to one and
00:45:23
I mean that's a pretty remarkable thing
00:45:25
if you think about it because you know
00:45:27
you got to spend some money to pay for
00:45:28
your expenses sure you're not typically
00:45:31
saving 100% of of your money but you
00:45:33
know you invest that money over time you
00:45:36
know at some point that Delta becomes
00:45:39
smaller and smaller and you're not you
00:45:41
know and I never had like one of those
00:45:43
super high savings rates right like I I
00:45:46
am not Frugal I am not one of those like
00:45:49
people who were saving you know 50% of
00:45:51
our income 60% of our income until we
00:45:54
started making like significant money
00:45:56
where all of a sudden because we weren't
00:45:59
inflating our lifestyle then we got to a
00:46:01
big savings rate but in the beginning we
00:46:03
had a 10% savings rate 15% savings rate
00:46:05
20% savings rate which is still bigger
00:46:08
than you know what most the average
00:46:09
American is doing um but like in the in
00:46:12
the fire Community like that's nothing
00:46:14
right like oh you're only saving 20% of
00:46:16
your your income you're you're a spin
00:46:18
Thrift that you know the the Investments
00:46:20
at a certain point in time start doing
00:46:22
the work for you then that's why we
00:46:23
invest right that's why we want to put
00:46:25
our doll to work and we hope that
00:46:28
Investments behave like they have in the
00:46:30
past and our dollars start to start to
00:46:31
multiply onto themselves um you know
00:46:36
younger people listening to this I I can
00:46:38
tell you my there's a name for that that
00:46:40
stat that you actually gave us land
00:46:42
shark I think budgets are sexy they
00:46:43
wrote an article about it once upon a
00:46:45
time which is your you know all the
00:46:47
money you've ever earned uh or maybe
00:46:50
it's what your total net worth is today
00:46:52
divided by all the money you've ever
00:46:54
earned and if it's over one you know
00:46:56
yours is one right now the number is
00:46:59
over one you're in a pretty good spot
00:47:01
and if you're under one well most people
00:47:03
are there especially when they're young
00:47:05
I think mine right now is something
00:47:09
like6 it's getting better it's getting
00:47:11
better but that the idea there is that
00:47:13
when you're a young person there's
00:47:15
plenty of things to spend money on you
00:47:17
might go into debt because of college or
00:47:20
a car or a house and you're not earning
00:47:23
a ton of money which means you're not
00:47:24
saving a ton of money so your net worth
00:47:26
might only be
00:47:28
$50,000 even though over your career
00:47:31
you've earned
00:47:32
$200,000 well your ratio there is one
00:47:35
and
00:47:35
four5 not great but over time the
00:47:38
compounding interest in the numerator of
00:47:41
your net worth if you've been investing
00:47:42
your money that compounding interest
00:47:44
really starts to work for you especially
00:47:46
if you've been doing it for you know 15
00:47:48
20 years like you have or or 12 years
00:47:52
seriously yeah no that's a that's a
00:47:55
really interesting way of looking at
00:47:56
things and I hadn't really thought about
00:47:58
it too much until right now and I'm
00:48:00
definitely going to dive into that a
00:48:01
little deeper and and I am curious now
00:48:04
to to go back in time and and look at
00:48:06
everything that we've actually saved and
00:48:08
invested you know we've changed uh
00:48:11
brokerages uh periodically not
00:48:14
periodically but we've changed a couple
00:48:15
times um so I don't know if I have
00:48:18
records going back you I wasn't
00:48:20
necessarily A meticulous Record Keeper
00:48:23
early on now I'm a little more about it
00:48:26
out of curiosity who do you do your
00:48:28
investing through right now uh so you
00:48:31
know we've got um vangard accounts we've
00:48:34
got Fidelity accounts then we've got our
00:48:37
401K accounts with whoever our employers
00:48:40
decide to have them through but most of
00:48:43
our money is in Vanguard and and a
00:48:46
little bit it's infidelity okay gotcha
00:48:49
gotcha
00:48:51
um yeah oh I I happen to find it I did a
00:48:53
little Googling in the background here
00:48:55
might be rude of me to Google while
00:48:57
podcasting but uh how dare you J Money
00:49:00
over at budgets are sexy he calls it
00:49:02
your lifetime wealth ratio and I think
00:49:05
it was uh looks like it was something he
00:49:07
was throwing around the community in 20
00:49:10
mid 20 201 2015 or so your lifetime
00:49:14
wealth ratio is your net worth divided
00:49:17
by your lifetime income and if you can
00:49:20
get it above one you're probably in a
00:49:22
pretty good spot yeah interesting I'm
00:49:24
gonna have to look that up yeah yeah
00:49:26
it's a good one and and uh listeners out
00:49:28
there it's a good thing for you to
00:49:29
calculate too just to think about how
00:49:32
many dollars have I earned in my life
00:49:34
how much of my time have I traded for
00:49:36
dollars in my life versus what do I have
00:49:39
to show for it
00:49:40
today it'll open your eyes uh in some
00:49:43
ways and good in some ways bad but it
00:49:45
might light that fire underneath you to
00:49:47
to turn the ship around as it were it's
00:49:50
also important to to know like you know
00:49:51
how much money you actually need and you
00:49:53
know that's one of the things that um
00:49:55
you know your money or your life that
00:49:57
book is great about you know in terms of
00:49:58
you know trading your time your life
00:50:00
energy for money um and you know kind of
00:50:02
thinking about you know what exactly are
00:50:05
you working for and you know that's one
00:50:07
of the the big things about um I think
00:50:09
the fire community that has has got me
00:50:11
thinking about things recently about you
00:50:14
know why why continue to work when
00:50:16
you've won the game why continue to
00:50:17
trade my time you know which is the only
00:50:20
time that I've got uh for additional
00:50:23
money you know that that life energy is
00:50:25
Irreplaceable right and you know it
00:50:27
would just be so much better to do that
00:50:29
to spend that time and Life Energy on
00:50:32
things other
00:50:33
than work right work at my 9 to-5
00:50:38
so if you haven't read that book i' i'
00:50:40
highly recommend it it's a great one
00:50:42
yeah yeah that's another one that I
00:50:44
haven't read even though I have I've
00:50:46
read chapters and excerpts from it some
00:50:48
of which actually inspired some of my
00:50:50
blog articles there's one concept from
00:50:52
the book called the Fulfillment curve I
00:50:55
don't know if you remember that one and
00:50:57
it this fulfillment curve it essentially
00:51:01
says uh more stuff does equal more
00:51:05
happiness up until a point and then
00:51:08
after that point more stuff equals less
00:51:11
happiness right and then you know the
00:51:13
way to think about it is if you're
00:51:14
you're homeless on the streets well some
00:51:17
more money and some more stuff is going
00:51:19
to significantly make you happier and
00:51:21
increase your your quality of life but
00:51:24
if you have everything that you need and
00:51:26
you're comfortable and you're enjoying
00:51:28
yourself getting a second and third and
00:51:30
fourth car let's say right not going to
00:51:33
make you any happier if anything it's
00:51:35
just going to cause you headaches right
00:51:36
so that's the idea that many people
00:51:39
understand but many people also don't
00:51:41
understand many Americans especially
00:51:42
hate to say it we're kind of a
00:51:43
consumer-driven society we love our
00:51:46
stuff and sometimes we surround
00:51:48
ourselves with so much stuff that it
00:51:49
drives us that crazy even when we
00:51:52
don't realize it you know we don't
00:51:54
realize that our own property is is
00:51:56
driving us up the wall well yeah I mean
00:51:58
you've got the whole like hedonic
00:52:01
adaptation concept where you know oh
00:52:03
this thing that I'm going to be buying
00:52:04
is going to bring me so much happiness
00:52:06
you get it and then you're like well it
00:52:09
doesn't bring me that happiness that it
00:52:10
it did when I first bought it so I need
00:52:12
to go buy something else right and so in
00:52:14
your money or your life another thing
00:52:15
that they talk about in in that same uh
00:52:18
concept of the Fulfillment curve is you
00:52:20
know with each purchase that you're
00:52:22
making you know is it actually bringing
00:52:25
you
00:52:25
something of of value you know is it
00:52:27
actually enriching your life is it
00:52:29
actually bringing you Joy is it actually
00:52:32
giving you what it's worth you to
00:52:34
exchange your precious Life Energy for
00:52:37
right and you know when you think about
00:52:39
it that way and it's the same kind of
00:52:40
concept of like opportunity costs right
00:52:42
so like you know a dollar today is A1 37
00:52:45
actually because of taxes and then it's
00:52:47
$10 and know 20 30 years whatever it's
00:52:50
going to be you know like is it worth
00:52:52
the exchange and you know that that's
00:52:54
not you know Philosophy for for becoming
00:52:56
a miser or being you know uh a scrooge
00:53:00
about anything but you know you just
00:53:01
want to think about you know you want to
00:53:02
be mindful about the the way that you
00:53:05
spend your money and you know make sure
00:53:07
that you're spending it in a way that is
00:53:08
actually bringing you the proper amount
00:53:11
of value that it should and there's
00:53:13
nothing wrong with spending money I mean
00:53:15
if if you want to spend money I mean
00:53:16
we're like what we're doing right now in
00:53:18
terms of you know factoring in
00:53:21
$120,000 of 3% withdrawal rate from our
00:53:25
um from our investments you know that
00:53:27
would be a fat fire lifestyle I think by
00:53:29
by any stretch of the
00:53:31
imagination um you know that's a lot of
00:53:33
spending you know we certainly don't
00:53:36
consider ourselves Frugal you know we
00:53:37
live in a nice area our kids go to good
00:53:39
schools we like to go on nice vacations
00:53:40
but that's something that we really
00:53:41
value so I don't mind spending a lot of
00:53:44
money on a really nice vacation because
00:53:45
it's something that our family really
00:53:47
appreciates right so trade your time
00:53:51
trade your life energy for stuff that
00:53:54
really matters to you
00:53:56
and when you start thinking of trade in
00:53:58
those units you know everybody thinks of
00:53:59
Trades maybe in units of dollars this
00:54:02
very understandable well if you change
00:54:04
your units from dollars to hours or from
00:54:07
dollars to Life Energy however you want
00:54:10
to measure that all of a sudden these
00:54:12
trades might look a little bit different
00:54:14
to you and that's the idea that these
00:54:16
authors like Vicky Robin your money your
00:54:17
life that's what she's trying to tell us
00:54:19
and it's a great mindset to have it's
00:54:21
something that has helped me out a lot
00:54:23
over the last say five six seven years
00:54:26
for
00:54:26
sure absolutely I'm trying to instill
00:54:30
that a little bit in my kids although
00:54:32
right now you know they are uh you know
00:54:35
they are like Peak video game age right
00:54:37
where they're just like totally into it
00:54:39
and you know now there's all these inapp
00:54:41
purchases that you could do in Roblox
00:54:43
and Minecraft and all that stuff and uh
00:54:46
you know they just want it right and I I
00:54:47
Tred to tell them you really want to
00:54:49
spend your money on that like and and
00:54:50
I'm making them actually spend their own
00:54:52
money right like they've got a bank of
00:54:53
mom and dad and you know Mr Money
00:54:55
mustach has has done a blog post about
00:54:57
the bank of mom and dad and a kind of a
00:54:59
way of uh teaching your kids you know
00:55:02
the value of money and that you know
00:55:03
money doesn't grow on trees and that
00:55:04
it's not something that you should just
00:55:05
waste right like but you can spend it um
00:55:08
but you got to be spend spending it
00:55:09
mindfully right and and on things that
00:55:11
are actually gonna gon to bring you
00:55:12
value it's a little T hard to instill
00:55:15
that that lesson on Elementary School
00:55:17
age kids but I'm trying totally it
00:55:19
totally is and it's at least from my own
00:55:22
experience of having been a kid once and
00:55:25
it's a lesson that might not sink in at
00:55:27
12 but there will come a time later in
00:55:30
life when you're thinking back when when
00:55:32
they'll be thinking back on these
00:55:33
lessons that you've instilled in them
00:55:35
and it'll click so much easier for them
00:55:37
because they'd heard it before than it
00:55:39
might for someone who had never heard
00:55:41
that lesson before at least that's the
00:55:42
way a lot of that's the way a lot of
00:55:44
lessons have worked for me right I
00:55:45
didn't listen when I was 10 or 14 or but
00:55:48
then sometime in my 20s I said
00:55:50
Ah that's what was going on there now I
00:55:53
get it it makes a lot more sense
00:55:55
well let's go into the famous best
00:55:57
interest podcast rapid fire questions
00:55:59
how about that sounds good okay all
00:56:01
right so the first one is uh what's the
00:56:04
last material object or personal luxury
00:56:07
that you spent $100 or more on I'm GNA
00:56:10
cheat here I'm gonna do two perfect
00:56:12
bought a new mountain bike it's
00:56:14
fantastic my my family goes on a lot of
00:56:16
bike rides together so living here in
00:56:17
Colorado you got to have a nice mountain
00:56:19
bike so I love it it gets a lot of use
00:56:22
second thing is it's uh I bought a
00:56:24
vintage 1964 Rogers Tower drum set and
00:56:27
it's just this Kick-Ass drum set from
00:56:30
the 60s it sounds and looks beautiful
00:56:33
and I told my wife uh during covid I was
00:56:36
like I gotta buy this drum set and she's
00:56:38
like whatever man like it's your money
00:56:41
worked hard for it you mentioned earlier
00:56:43
actually that you enjoyed music and that
00:56:45
in retirement you'd be doing more more
00:56:47
music are you a drummer
00:56:49
primarily uh I play a little bit of
00:56:51
everything but yeah drums are my my main
00:56:54
instrument very cool are you playing any
00:56:56
bands or how do you how do you express
00:56:58
your
00:56:59
musicality I have uh you know as a
00:57:01
practicing lawyer I don't really have
00:57:03
the amount of time that I'd like to to
00:57:05
be in a band uh right now I've got I've
00:57:09
got a couple people that I like to play
00:57:10
with um and that's one of the things
00:57:12
that I'm G to be spending a lot more
00:57:14
time on in retirement for sure nice nice
00:57:18
uh next question what's one good habit
00:57:21
that you're trying to form or a bad
00:57:23
habit that you're trying
00:57:25
break as a lawyer I'm always on call I
00:57:29
work ridiculous hours and as I'm nearing
00:57:32
retirement I'm trying to say no more and
00:57:35
set boundaries I'm struggling with that
00:57:38
personally especially in this content
00:57:40
creation space where there's this like
00:57:42
little hidden hidden idea that saying
00:57:46
yes to everything is how you get ahead
00:57:49
that make sense oh yeah you know just
00:57:50
you got to do everything you got to meet
00:57:52
everybody you got to accept every offer
00:57:53
you got to go on every podcast you got
00:57:55
to accept every guest post at some point
00:57:58
it's like I am driving myself crazy you
00:58:00
got to start saying no you know I think
00:58:02
there's like the the yin and yang of
00:58:04
life right like I mean there there are
00:58:05
self-help books about write you know
00:58:07
saying yes to everything and then there
00:58:08
self-help books about saying no to
00:58:10
everything right and like what's the
00:58:11
right answer and I think it depends
00:58:13
right like it depends on kind of where
00:58:15
you are in your life and where you are
00:58:17
in whatever the phase is of your
00:58:18
business or your schooling or you know
00:58:21
your career uh you know maybe there's a
00:58:23
time to say yes to everything and then
00:58:24
maybe there's time to dial it back and
00:58:26
say no and I've been saying yes to
00:58:27
everything for a long period of time and
00:58:29
now it's time to Pivot and to say no and
00:58:31
to set those boundaries but for you
00:58:33
you're you're launching the best
00:58:34
interest you're growing this business
00:58:36
maybe it's appropriate to say yes and
00:58:38
then you know at a certain point in time
00:58:40
dial it back and then say yeah yeah
00:58:42
that's a good point it's a good thing to
00:58:43
think
00:58:44
about uh next one next question what's
00:58:47
your favorite Financial tool or app or
00:58:51
service that you use and why do you like
00:58:53
it so jrod uh mentioned this in a
00:58:57
previous episode of your of your podcast
00:58:59
but it's my net worth spreadsheet it's
00:59:01
simple it's elegant and it works you
00:59:04
know I love mint and uh personal Capital
00:59:06
but you know this spreadsheet easily
00:59:07
lets you see your monthly and annual net
00:59:09
worth performance um I use it regularly
00:59:13
and it's just worked for me excellent
00:59:15
and and one more time is is that
00:59:17
available to a listener if they wanted
00:59:18
to download their own blank copy of it
00:59:21
or where you yeah I've got a a sharable
00:59:24
version on Google Drive I I'll make sure
00:59:26
that you get a a link to it and you can
00:59:28
link it in the show notes wonderful
00:59:30
wonderful and then before we get to the
00:59:33
last question I I did Ping our our
00:59:35
Twitter friends before we hopped on live
00:59:37
here and I said hey everybody anybody
00:59:39
got a question for L shark we we got
00:59:41
some nice comments we got you know L
00:59:43
shark is on a tour from seafire SIM uh
00:59:46
we got the L shark from juston you know
00:59:49
people just giving you the the the fans
00:59:51
are coming out all right yeah the
00:59:53
groupies but we did have one interesting
00:59:56
uh question actually from uh the art of
00:59:59
purpose creation 247 all 65 followers
01:00:02
he's coming down to chat with us he was
01:00:04
on the podcast before he's a good guy so
01:00:07
his question for you l shark is how
01:00:09
would you invest $110,000 given to you
01:00:12
right now but hard mode no index funds
01:00:15
you're not allowed to say index funds
01:00:17
how would you invest $110,000 right now
01:00:21
uh vti ETF it's an ETF
01:00:25
is that is that cheating is that is that
01:00:26
an index ETF it's not an index fund man
01:00:29
it's an ETF it's an exchange traded fund
01:00:32
I'm a lawyer man I I I I I look for the
01:00:35
technicalities there and you know he
01:00:37
said no index funds I mean this is
01:00:39
objection I'm gonna throw this case
01:00:43
out okay no ETFs no index
01:00:47
funds uh how about this one one company
01:00:50
pick a pick a single Company stock or
01:00:52
pick a single uh crypto coin pick pick
01:00:57
something else something something else
01:01:00
I i' I'd have to go with
01:01:03
uh Tesla because they're they're just
01:01:06
the game changers out there and nice I
01:01:08
feel like apple and Amazon and Facebook
01:01:10
and Google they've already taken over
01:01:12
the world but Tesla is yet to take over
01:01:15
the world they're on on the March yep um
01:01:20
but you know with with the capabilities
01:01:24
of
01:01:26
you know just revolutionizing the Auto
01:01:28
industry and the solar interests and and
01:01:31
just you know what Elon Musk is doing I
01:01:33
think um they're going to be the game
01:01:35
changers going
01:01:36
forward it's great logic totally makes
01:01:39
sense to me but don't put $110,000 into
01:01:43
Tesla that's not investment advice
01:01:46
agreed that's a good caveat and agreed
01:01:48
with that it's a cool company I'm
01:01:50
excited to watch them grow I'm probably
01:01:51
I'm excited to get one myself I hope one
01:01:54
day
01:01:55
uh but yeah I don't have the coones as
01:01:57
it were to believe that they are
01:01:59
underpriced right now relative to where
01:02:01
they'll be right I mean they're they're
01:02:03
already priced as if they're a huge
01:02:05
company because they are but uh they
01:02:08
might be overpriced hate to hate to say
01:02:10
it we we'll see what the future bring
01:02:12
they might be underpriced they might be
01:02:13
exactly and I don't have the expertise
01:02:16
to to differentiate those two that's why
01:02:18
I just get my my return in you know
01:02:20
vtsax I get my chunk of them and let the
01:02:24
mark get decide because picking
01:02:26
individual stocks is a losers game you
01:02:29
know you're going to lose you just don't
01:02:31
know very true very true and that brings
01:02:34
us to the last rapid fire question L
01:02:38
shark if we gave you a billboard what
01:02:41
message would you put on that billboard
01:02:43
to share with the world if your kids
01:02:45
ever ask you to play with them say
01:02:49
yes that is a very nice
01:02:52
message Lance shark if any body wants to
01:02:55
reach out to you if they want to they
01:02:57
download your spreadsheet and want to
01:02:58
ask you a question about it or they just
01:03:00
want to connect with you and pick your
01:03:01
brain how can these people reach you
01:03:04
yeah so check out my new blog which is L
01:03:06
shark. org you can also reach me on
01:03:08
Twitter at I am Landshark um I'm also on
01:03:11
Facebook at I am Landshark
01:03:14
so very cool all of those links and all
01:03:17
the other links we talked about today
01:03:19
will be in the show notes and L shark
01:03:22
thank you very much for coming on to the
01:03:23
best interest podcast tonight it was
01:03:25
great talking with you thanks Jesse it
01:03:27
was a lot of fun keep up the good
01:03:29
[Music]
01:03:36
work all right a little more bad audio
01:03:38
for me apologies for that but I want to
01:03:41
give a huge thank you again to L shark
01:03:44
thank you for coming on the best
01:03:45
interest podcast today land shark
01:03:47
listeners if you want to reach out to
01:03:48
the land shark I've included all of his
01:03:50
links in the show notes if you want to
01:03:52
reach out to me my email is is Jesse
01:03:55
best bestin interest. blog or you can
01:03:56
follow me on Twitter where my username
01:03:58
is
01:03:59
bestest JC we can continue to invest in
01:04:03
one another because as Ben Franklin said
01:04:05
an investment in knowledge pays the best
01:04:07
interest sharing with others is
01:04:09
investing in their knowledge and thank
01:04:12
you all for listening to this episode
01:04:13
number 37 of the best interest
01:04:23
podcast
01:04:26
[Music]
