April 23, 2020

Episode 95: Scott Rieckens (Playing with FIRE): Finding Financial Education, Perspective, and Freedom

April 23, 2020

The recent film, Playing with FIRE details the particulars of the FIRE Movement in a way that is accessible, informative and impactful. Both Cameron and Ben were hugely impressed with the film and the argument it makes for the framework of FIRE. Today we are joined by the producer and star of the film, Scott Rieckens, to discuss the movie and his own journey to reach financial independence. In much the same way that the film does, Scott makes a compelling and inspiring argument for the central philosophy of the movement, emphasizing what many of us will agree are the most important part of our lives and the way we can think about these to maximize our health and happiness. We discuss values and decision making, and how the FIRE perspective accounts for psychological and emotional changes to what is meaningful in your life. Scott explains the reframing that occurs with the system and the important aspects of it, especially those that matter in an introductory setting. We talk about communication and upkeep, the 4% rule and the individual nature of your own financial strategy. Ultimately the ideas of FIRE are just ways to think about what is really important to you and your family and they provide a way to focus and enhance these. For this truly inspiring and potentially life-changing discussion, be sure to listen in with on the Rational Reminder!

Key Points From This Episode:

Scott's own understanding of FIRE and what it comes to mean in his life. [0:04:25.4]
The initial connection that Scott had with the FIRE movement before making the film. [0:05:23.2]
Shared values and finding common financial ground in a life-partnership. [0:08:50.8]
Mental changes that Scott and his wife, Taylor, made in response to the ideas of FIRE. [0:11:57.5]
Reframing your decisions and the necessary information to do this. [0:18:01.9]
Social changes and the impacts of the philosophical alterations Scott made. [0:22:48.1]
How Scott has communicated these ideas to his daughter as she has grown older. [0:29:51.4]
Scott's complete gratefulness for his new relationship with money. [0:33:23.8]
First steps to take in the process toward financial independence. [0:37:27.4]
Getting a grip on the '4% Rule and how it can guide your decisions. [0:41:39.6]
Increasing income versus decreasing spending and adjusting accordingly. [0:46:41.2]
Applying these ideas to something beyond our selfish needs. [0:51:05.4]
The multitude of things we can all do with more time in retirement! [0:56:05.4]
Comparing the changing definition of success for Scott. [0:58:11.4]
The information that is now available for a framework for happiness. [1:01:55.4]

Read the Transcript:

I am personally very excited to have you because your movie, Playing with Fire, I thought was fabulous. It had an impact on me and I forced my kids to watch it. And it had a big impact on them and they are very good savers and even more so now. So off the top, Scott, can you describe what FIRE means to you?

Yeah, first of all, thank you for that. That's really nice to hear. Yeah, FIRE, it means freedom to me. It was an education for me, it was perspective for me and ultimately became freedom for me. And I think that goes for my wife as well. I think that's how we see FIRE and how we use it and implement it in our lives.

Cameron mentioned the impact that the film had on him. But I think for both of us, it was more than just an impact. It was almost transformational, maybe not for my life because I haven't adopted FIRE. But just from my understanding of the FIRE movement, we went from on the podcast on occasion kind of rubbishing it and we took a little bit of flack from some of our listeners. But after the message from the film, it clicked for both of us where it just make sense and it's the freedom like you're talking about. It's not about wanting to sit on your butt and do nothing. Anyway, so our initial connection with the movement or at least understanding the movement came from your film, how did you initially get connected with it? What spoke to you?

Yeah, I'm glad it could shift your perspective. I appreciate that. And I think that was definitely one of the objectives of the film. So again, wonderful to hear and very validating. I initially got connected with the FIRE movement through listening to the Tim Ferriss Podcast actually. And the reason I was listening to his podcast was, well, one, obviously it's fantastic, great content, amazing interviews and whatnot. But the reason why I was there specifically was I was trying to come up with a million dollar idea, let's say. I was trying to find a way where our lifestyle could continue because I felt like that was my duty as a husband.

And we were living in this high cost of living area and things were getting more and more expensive and our needs were increasing. We just had a child and it just felt like the weight of the world is on my shoulders. And so my initial instinct was let's go increase our income. We're tight, we're always sort of month to month. We're not falling, but we're not standing up tall. So got to figure this out. And so I was listening to Side Hustle Podcasts and Tim Ferriss and trying to unpack experts and how am I going to do this?

And I was stressing myself out and thank goodness, my good friend, Mr. Money Mustache comes on to that podcast and talks about the exact opposite, taking care of the money that you are earning now and being more intentional about your lifestyle choices in general and how you might be doing it wrong. And it was the proverbial face punch that I needed at that time, which was wake up, you're stressing yourself out trying to increase your income. By the way, I had a full-time job working my tail off, traveling the country, doing video production, which is hard, physical labor and a lot of mental labor and then having a child and all the other life stuff, I felt pretty busy already.

And so it was just such a wonderful idea to think, oh, we can spend that same amount of energy and time on what we have now and potentially by doing so increase our net worth, possibly retire early. This all sounded pretty marvelous to me. So that's how I initially connected with it and then that took me down the rabbit hole. I mean, I started reading his blog. He's an incredible writer. So that was enjoyable just from an entertainment standpoint. And I was just getting hit with life lessons, left and right and perspectives that I needed to hear.

And then from there, he sort of introduced me to what I now know as the FIRE experts within the movement, people that came well before me and well before him who were writing and creating content to try to give that perspective to people. And that's when I started thinking, oh man, this is a whole world and I feel taken care of. I feel like my questions are being answered wherever I look. And boy, this is an interesting group of people and they're doing an interesting thing. And so then my video production brain started going.

The part of the movie that really struck me was has to do with the values discussion. So I remember a coach that I had a long time ago used to say, when your values are clear, your decisions are easy. So this is how I've talked about the movie with my kids to get them to watch it and how to link their decisions in their spending and link it back to well, is this really impactful in your life? Is this what you want to spend your money on? So I'm curious were you and your wife, Taylor on the same page with respect to values from the get-go?

Yeah, great question and that's a great way to frame it for your kids and I think for yourself. And unequivocally, the answer is no. I think we had been going through life under the assumption that we knew what each other's values were and what brought us happiness because we married each other, we were best friends, we were together and so we had these baseline assumptions. But upon reflection, we had never actually talked about it specifically. And I thought that was really interesting. This is such a key component to our happiness and the way we live and it ends up informing so many decisions, whether we know it or not. And yet we hadn't even sat down and had a discussion about that really intentionally, maybe subliminally.

And so yeah, becoming a little more aware of that was critical. And what we found was that by sitting down and writing top 10 things that made us happy on a weekly basis, we discovered that the things that make us happy are actually quite simple, they're quite cheap and thankfully, they were very similar. And so we discovered that yes, we are compatible. Yes, there's a reason why we're together. And a lot of our assumptions were right. But I think the way we saw our values and the way we were actually acting on our values were two different things.

And so all of a sudden you looked around after checking out our happiness list, which was basically a list of spending time with each other and then looking around and being like, oh, all of the choices that we're making with our spending are preventing us from spending more time together because we have to spend so much time working to afford these things that we've surrounded ourselves with that don't even really matter to us. And that's really the crux of this whole thing for me is that-

It's really profound.

It's profound. It was absolutely profound because it's so obvious and so simple. And yet it's something we had not spent a minute thinking about and yet it drives so much of our life. It's everything. It's all the decisions we're making, all the ways that we're spending money boils down to this and yet we haven't spent the time on it. So yeah, it was profound. And profound, not only from an individual standpoint, but it was a recognition that this is actually a fundamental issue across the board. I see this across the board with my friends, my family, my coworkers, everyone's getting this wrong. Not everyone, I shouldn't say that, but a vast majority of people are getting this wrong. And it's stressing them out needlessly and it's making our experience here on earth a little bit more friction oriented. And so yeah, it just felt like an epiphany to find FIRE.

It really does. And even the way that you describe it, it's so profound is definitely one way to say it, but it's just so simple, which is maybe why it's profound. Yeah, so once you had this, the happiness discussion and figured out where, and it's great that you were aligned on that with Taylor, once you'd had that discussion, what were the most impactful lifestyle changes that you made?

Yeah, so I mean, the thing about having that discussion, it doesn't immediately change your relationship with money or things, materialism, the way you see the world, things you think you need, all that stuff. That's the work that takes effort. And so we knew fiscally what the most impactful changes could be. We didn't know how they would affect us emotionally. And that's what we tried to cover with the film because we recognized pretty early on, we had an opportunity to share the most important part of the journey, which is the initial phase where you're basically shifting your relationship with money, which ultimately starts to deal with, down the road, it starts to deal with your own self-worth and the way you perceive yourself and the things that you need.

And so all of a sudden, you kind of need a personal philosophy or you're just going to, I think you'd spin yourself up into crazyville because you'd be looking around making these drastic changes and kind of going why and you're feeling all this pain and you don't know why you're doing this thing. So for us, it was about the ideas of FIRE and personal finance were quite simple. It was the personal philosophies and that education that actually took some time to take hold and to become the new norm. So with that said, the most impactful changes we knew we could make were housing, cars and food, the big three. But really the most impactful change to our lifestyle was really the mental shift to a more stoic stance, becoming more grateful for the things that we have and not just the materialistic side of gratefulness, but also sort of taking a look at something like a simple cup of coffee and being more grateful and aware of how that cup of coffee is delivered to your lips.

The fact that somebody is farming this bean and then it's being shipped across the world and then it's being roasted by a professional and it's like somebody has to take the time to invest in all of this and take a chance so that you can walk in and have somebody make you the most amazing pour over in the world and it's all for six bucks. I think that's incredible. But when you're doing that without that thoughtful loop, you're just like, oh, this wasn't as good as yesterday. That's a really bad place to be. So I think the most impactful change that we made was really the mental shift into understanding how lucky we were, not only just in life, but to be able to pursue this at all. That is an incredible privilege. So we felt we had to go through that because that was not where our head space was.

So it's obvious that the impactful changes on a fiscal level are the top three and we made those changes. We moved from our expensive little island that we were living on. We got rid of both of our expensive leased vehicles. We stopped eating out, a hard stop. We started cooking in bulk. We bought a Honda for 6,500 bucks cash because we had saved it up over a couple of months. That was the first time I ever bought a car with cash. We moved to a lower cost of living area, but certainly not the lowest cost of living area that we could have. And there was a lot of different decisions around that that influenced that decision. For instance, we were looking at tax advantaged states as places to live. We were kind of trying to stay on the West Coast because the majority of Taylor's work is on the West Coast.

And so we had picked these spots that seem like they were relative to where we were much lower cost of living. But what we were making our decision on was through this filter of FIRE. And that's what I think is a really powerful piece of this is it is simple, but it's also really powerful in that you can use the equation of essentially your early retirement calculator to say, okay, how is this decision going to affect us in the future? And so instead of just saying because our old selves would have said, okay, where do we want to move? Well, I like the beach and I liked this and I like that. And instead we could look at it and say, well, here are some of the parameters that we hope are in this new place that we live like the mountains or outdoor stuff or the beach or whatever it is, the weather. But moreover, how is that going to affect our FI date?

And we've learned not to care so much about that date and focus on it really, really strongly. But it is a wonderful parameter to use to say, are you willing to work an extra X amount of years to make this decision? And sometimes the answer is yes and that's okay. But now we have that filter to use to make those decisions. So our decision-making is so much more powerful for us and that's what's so wonderful about it. So for instance, we ended up moving to Bend, Oregon, which is arguably the most expensive place to move on our list of five different places that we had chosen. But we had this idea that if we ended up choosing Bend that both sets of our parents would actually end up moving here as well at least part-time. And that was really important to us from a family perspective.

The place that was the most cost advantageous, we went and visited there. We were very serious about it so much so that we ended up getting our parents to fly out there and check it out with us. We were thinking like, this is pretty... We're probably going to move here. And you could just tell the look on their face, they weren't coming along with us. They weren't coming along for the ride. So that factored in heavily into our decision of where we ended up moving. And so you can use the financial filters, but I think you also have to use the happiness filters to make these decisions. But without one or the other, the likelihood of you making the right decision decreases exponentially.

100% agree. We spend so much of our time providing the financial piece of that decision making product for our clients. How do you frame this decision? What is the trade-off that you're making? And like you're describing, most people don't know what trade-off they're making when they make one decision versus another. But having that framing and the way you described it is beyond powerful. You cannot make a good decision without having good information.

Yeah, right. Yeah, and here's another piece. I didn't know where to get that information. That was the other huge piece to FIRE for me was, where do I even go? I don't have financial mentorship in my life. A lot of people don't. And our education system isn't set up to help us out in that front at all. And if there are classes, are you really ready for that when you're in middle school or high school or even college? If you are, you're probably in the minority and you're super lucky. But a lot of people aren't. And so for us, we found it probably when we needed to find it. We found it when it was going to hit the right way. And I think you can look at... I've spent a lot of time thinking about the sunk cost fallacy because you look back and you go, oh man, if we'd been doing this for the last 10 years, can you imagine. Because we came out into our working careers and then shortly after the recession hit.

If we had been aggressively saving and investing at that time because we had just a few years ahead of the poor millennials after us who were struggling to even get a job in the recession, we had the jobs, we could have been saving and investing and oh my goodness, I'd be retired today. No issues. And so I've spent a lot of time ruminating about that, but it's a waste of time. And time is a fleeting resource. So I've got to be careful with that. And so yeah, I look back and I think, man, if I had that information, great. Yeah, my life would've been different. But I have it now so what am I going to do with it now? But thank goodness, I have that information now. And so that's all I was going to say is that the FIRE framework is such a wonderful and powerful thing because it's simple to understand for the layman and I don't have to be a math whizz or a financial whizz to understand the power behind the information. And then I can make these great decisions around that power and live a better life.

And what your movie did a great job of was that meter above your heads as you made decisions or we make this change in our life and you'd see the retirement date advance? And then I think at one point Taylor kind of scale it the other way a little bit and you agreed and it showed while retirement's now backed up, I forget the amount of time, but a few years and you guys made an informed decision around that. So I thought it was a great visual that people can take away from the movie.

Thank you. I get really bummed out when I see... There's... I try not to read the reviews. But every once in a while, they come across my desk and it's always a bummer when you see somebody focusing on the numbers in that way. Oh, there's no way that could have happened or oh, that number seems off or whatever. It's like you're missing the point entirely.

It's not the point.

Yeah. Yeah, so I'm glad you noticed that. I agree with you I think. When we figured that out in the edit, I could feel the power of that. I was like, oh, that's a good idea. This is going to be the way to basically show the math without getting into the math too much because it was interesting. The movie, you can look at a fire documentary and say, are we making this for the FIRE movement or are we making this for the people that need the FIRE movement? And I think the obvious answer is we need to make this for the people that need the FIRE movement. And yet we still wanted to make a film that people in the FIRE movement would enjoy and appreciate because we needed their buy-in on this film for it to be able to hit the mainstream. I felt like we needed to make something for both.

So we kind of towed that line a little bit, but we erred towards the layman, the people that have not heard about this yet. The people like me before I found FIRE. We wanted to make that for those people. And so yeah, I'm glad you guys liked it so much. And I really enjoyed listening to the episode that you discussed after you had seen the film. I was actually... I remember I was dropping Taylor off at the therapist and I was sitting in the parking lot and thinking like, man, our lives have changed so much. I'm sitting here in this small town, my wife's in there getting some mental help and we're focusing on self-care and I'm sitting here listening to two people who clearly know quite a bit more than I do about personal finance and investing and they were inspired by this film in the right ways. And I was very, very encouraged to hear that.

That is really cool. You mentioned two of the impactful changes that you made when I asked that question, the mental shift and the housing decision and those I want to focus on specifically because they jump out to me as changes that would potentially impact your circle of friends. If you move physically obviously, that's a challenge. But likewise, if you shift your mental state on how you're thinking about money and that ends up conflicting. If you have a bunch of friends that like to go out deep every week for example. So did you have to change your social circles which seems like a big deal? If you're making a life change, maybe you get your spouse on board first, but changing your friends, that can be impactful, maybe a challenge. So how did that play out when you started making these big decisions?

Yeah, that's fantastic question. There's a lot of answers to it. I mean, on one hand, the first thing that'll get out of the way is we moved from the place that we were in. So we sort of got to... We took the easy road on that front. We didn't have to do the hard work on that front. And that was one of the appeals of moving to be honest. That geo arbitrage strategy was like that was part of it was like we get to go clean slate wherever we end up. We get to redefine our identity with people. And that was a really fun and interesting thing that we got to do by the way. When we landed in Bend meeting new people, we were able to own this new identity and see how people reacted to it and adjust accordingly.

So that was fascinating. I still though have a perspective because we didn't leave Coronado, leaves San Diego and then never talked to our friends again. And so I feel like I'm pretty qualified answers to that kind of have both perspectives. So starting with the existing friend circle, existing community and when we adopted this FIRE lifestyle, we got sort of a wide spectrum of reactions. So interestingly, we had friends that came out of the woodwork who were like, "Oh yeah, I've been reading Mr. Money Mustache for a decade." And all of a sudden, my eyes were open, I said, "Oh wait, you do drive a Honda Fit. You only have one car. You rarely go on vacations and you seem really happy. Why haven't you been telling me about this?" That was my initial reaction to it.

And so yeah, there were people that were just like, "Yeah, duh, of course I'm going to save a lot of my money and be smart about all this." So that was fascinating and eye-opening. Then you have this sort of middle of the road people that are sort of like us, heard about this and had varying levels of interest and excitement some of which are rare few that were like, tell me everything, get me on these podcasts, I want to do this along with you guys. Quite a few people, very skeptical that you'd start to see the excuses come in or sort of the walls go up. Well, I don't know if that's going to... Well, why would you want to retire early or all these questions that are sort of steeped in skepticism.

And then you had this other smaller cohort of people that were, that's nice. That's nice. It's not for me. It's nice. Okay, whatever. Does this mean we're not going to dinner next week and kind of getting snarky with it and stuff. Overall I would say, none of these things were as drastic as you might think they would be. We probably put more emphasis on the fear of what it could be to change your identity and let's say become more frugal than actually needs to exist because if you have good friends, they're going to support you in your endeavors. And if they're not supporting you in these endeavors that are meant to improve your life, then you might want to take a hard look at that friendship and that might be a good thing for you. It is not the worst thing in the world to move on from certain friendships, especially as you grow.

We all grow as people and so that's not necessarily a negative. It may not be comfortable, it may not be fun or easy, but it might be necessary. But what I was saying with the perspective of... Because we stuck around in San Diego for about six months after we found FIRE. So we had that perspective. And then the other perspective of redefining our identity in a new community really interesting because I think it was really exciting to redefine our identity in the new community because by being introduced as people who are frugal, who were following this weird FIRE thing that nobody had heard of yet, they started watching our decisions because we're all new friends and so it's a little more heightened in that way.

It's completely different signaling. In your past life, a lot of the signaling came from the things you own like your SUV's and stuff. Now it's the opposite.

Yes, absolutely. Yeah, there's a lot of signaling. Yeah, and you're shifting that signaling. And exactly, it was a fascinating experiment where in the old life, we're shedding all that old stuff with the old friends and they're all going, what are you doing? And oh, okay, that make sense. And all right, well, how's that going to affect us and oh, okay. And that was interesting. And luckily, like I said, we didn't see a lot of judgment. We didn't see a lot of shift. And with old friends, it's actually even easier because you're going, "Hey guys, just come over to the house, just come over and let's hang out here. I'll make dinner." That's not a big deal. "Oh, hey guys, I can't make it to that expensive concert, sorry." And you can decide. You can say, "Sorry, I'm saving my money and you should feel bad."

Or you can say, "Yeah, we're busy. Sorry, we can't make it that day." And I would air on the ladder. But with the new community, you've got these signals that you can put out. And like I said, we kind of experimented with it where it's like, okay, we're going to be really intentional about the decisions that we make around this new community and signal that we are available as friends, we are excited to go out and do things, but we're looking for things that are not mindlessly spending money for no reason. So we're not going to go spend a bunch of money out on a dinner when we can do that at home. If the dinner is some kind of monumentous celebration that can't be missed, then you'll probably see Scott and Taylor there. We're not making these decisions so stringently that we can't go have fun and go out to an occasional meal.

But we're not going to be doing it every weekend. We're not going to be doing a couple of times a month probably. It might be a couple of times a year. But ultimately, if you're going to be friends with us, you're going to see us at our house, we're going to see you at your house, we're going to go do things that don't cost a lot of money and we're okay with that. So from a social standpoint, that's kind of what we did. And we found that we didn't have any trouble building a new community. We found that leading by example actually ended up peaking a lot of people's interest, not necessarily initially or maybe it did initially, but they weren't willing to come out and talk about it and come over and hey, can we talk about this thing, whatever?

It made it a lot easier because we've got a film and a book and so people can just watch an hour and a half of a film with their new friend in it and be like, of course I want to watch that. And then they see it and they're like, "Oh, I get it. This is easy to understand. I see what you guys are doing." So we have that advantage. But we hope that people can use the film in that way who are in the FIRE movement now who might be struggling with this in any way. Just suggest watching the film with your friends or share it with them and hey, this is kind of what we're doing.

And that's what we tried to model. Some people may not feel like it represents their journey as much as others. But our story is one story. There's a million of them out there. But we tried our best to sort of be honest with it and try to hit the high points, which is this is about a shift in mentality and a shift in identity and that it's okay to do this and that it make sense. And then ultimately, this is probably more intentional, more optimized way to live than mindlessly consuming and spending and following the Joneses.

How do you communicate all this with your daughter?

Yeah, so in the beginning she was quite young. So it wasn't really something we were talking about. But now she's four, almost four and a half and she's starting to, let's say ask for toys or notice that maybe a friend of hers has more toys than she has. And, "I want more toys." "Well, what's wrong with the toys that you have?" "Well, I'm bored." "Okay. Well, we don't use the word bored first of all because that's the lack of imagination. That's not a disease that you're inflicted with and two, if you want a different toy, we're going to start talking about that. You have a piggy bank and if you want something, then you're going to have to earn the money necessary to buy that thing. And if you want something new, then you're going to have to replace it with something old."

So these are the little things that we're starting to teach her instead of having a piggy bank that you can't see into, a lot of piggy banks are actual ceramic pigs that are not see-through, we have two jars. And since she was able to talk, we've always said, "What do you do with your money?" And then she would repeat, "Just save half." And so we've got that sort of indoctrination going. But what we're going to do to manifest it is we've got these two jars and one is her saving jar and one is her spending jar. And so she's going to know that the saving part is important and the spending part is what she can do to make her own decisions. So we'll start to do that.

Eventually, we're going to start showing her, when she has a little more wherewithal in this, we're going to start to show her how the saving part will continue to grow faster than her spending jar because we're going to put a certain amount of interest into the savings jar and act as the bank or the investment so that she can see that the more she saves, the more that savings grows. So these are lessons that we've learned from our new FIRE friends who have thought a lot about this and I think are raising amazing kids. And one example is JL Collins, are you familiar with JL? He wrote a book called The Simple Path to Wealth, which is a wonderful book. It was one of my favorite books. I've read gifted it a million times. It really explains stock market, how the stock market works, why index investing is his favorite strategy and has now become my favorite strategy. And I love that book and I love JL.

And we've been lucky enough to meet his daughter who grew up with all this information and is now in her 20s and into her working career. And we've gone to some retreats where she's been there and she's actually shared how growing up with a stock obsessed father and essentially someone who is following this FIRE framework, how that's affected her both negatively and positively. So we're learning from our friends and our people within the FIRE movement about how to best serve Jovie, our daughter to not make her go down this path, but to show her these things and to teach her these things so that she doesn't have to struggle with the things that we struggled with so that she has that solid foundation. So yeah, it's front of mind, second-generation FI is critical and probably the number one reason why we wanted to do this. And again, going back to... I was ready for this message because for me, I had a daughter and suddenly everything was more important than me. And so we had to get this right. That was my incentive.

Is there anything about your... Because you're in this now. You've been doing this for a while. You're deep into it. Is there anything that you miss now looking back about your pre-FIRE life?

I'm kind of speaking for Taylor here as well. I think if you look at... I love the movie, The Matrix and I feel like there's so many parallels where which pill you take, you can't unlearn this stuff. So to reflect back and think what do I miss about that pre-FIRE lifestyle, knowing what I know now it's impossible to miss any of it because the new relationship that I have with money and the way I see the world is something I would never want to give up and it's something that I'm very, very fortunate to have that perspective. I love having that perspective. I feel empowered by that perspective. So honestly the real answer is no, I don't miss anything from my pre-FIRE lifestyle because those were decisions that I don't reflect positively on. That said, if you didn't take the blue pill or whichever pill shows you the matrix, I think if you're in that perspective, that sort of ignorance is bliss sort of perspective.

Yeah, I really liked my little boat club thing. I loved taking the boat out on the San Diego Bay with the family and friends. And yeah, those things were really wonderful and enjoyable. However, we have 100 Alpine lakes within 30 minutes driving of where we live now, which was by design and we're not on a vessel, but I've got a little stand up paddle board that gets the job done. We go up with some friends, our daughters are playing together. Life is good and it costs us whatever the stand up paddle board that I got used on Facebook marketplace cost me worth it and that's not depreciating as fast as the money I was sticking into a book club membership, which was as bad as it gets.

It speaks to the transformation though, the mental transformation where if you can look back and even though you can say, you have fun memories about the boat. If you can look back and genuinely say you don't miss anything because you've become a different person, the person that you are now wouldn't miss the things that you used to enjoy. I mean, that's powerful and it's also fascinating.

Yeah and it's honest. I mean, I thought a lot about that and I think Taylor has a slightly different perspective on it. She sort of misses some of the trappings. For some reason, her and cars, I don't get it. She's not a race car driver. She doesn't even care to drive that much. But she's still hung up on the car thing. I think it's a social thing. I think we're coming up with our little scratched up dinged up Honda with 108,000 miles. And I understand because she's got some friends that have very nice cars and I'm sure it's sending a signal that she's not comfortable with. And so I think she'd have a slightly different answer and I think that's totally fine too. I'm not saying that having this FIRE perspective and all the things that I've learned and the relationship shift that I've made is the only way and that you're not allowed to feel feelings of, oh, I wish I had a nice car or I wish I didn't have to save all this money all the time and be frugal. I wish I could not think about or care about those things.

Yeah, I will say even for myself, I definitely have moments where I feel that way. There's times where I'm like, man, I really want this cold brew in this specific brand in this specific grocery store and I'd like to go buy that thing. And then there's a part of me that's like, you don't need that. You made a whole batch at home. It's sitting in the fridge. It's cheaper. It's perfectly fine. It might not be as good as that one, but you'll get by. And after you have that cold brew at home, you're not going to be thinking about the one that you didn't buy at the grocery store. So I go through that stuff. Even as something as small as a cold brew and all the way up to, should I be looking at a vehicle that suits Taylor's tastes a little bit more instead of stubbornly sticking to this Honda CRV that I personally love because of what it says and what it stands for? So it's not all roses. But ultimately, yeah, I don't even spend time thinking about what I'm missing.

So I'm pretty sure to Scott that we have listeners right now that are having a similar experience to what you had listening to Tim Ferriss interview, Mr. Money Mustache or having a bit of an epiphany right now, what would you suggest to them is the first step they're now motivated to do something?

Yeah, they're having the epiphany as we speak. What do I do now?

Yeah.

Oh man. I think there's a couple of different ways you can go with it. So the top resources that really impacted Taylor and I were the ChooseFI Podcasts, Mr. Money Mustache's blog, the Mad Fientist Podcast, JL's book, The Simple Path to Wealth, really the cast of characters in the documentary. And if you're a listener, if you're a podcast person, listen to the first 100 episodes of ChooseFI, you'll enjoy them and start them from the first one. You'll go through the journey with them and you'll learn a lot. And it's fun to learn that stuff because it really is impacting your life forever. The Mad Fientist Podcast was wonderful because it really introduced me to the cast of the FIRE characters. He has everyone on who has grown this movement.

And so you learn their fresh perspectives, their unique perspectives on FIRE and on the world and their journey and how they feel about it and their tactics. And again, remember choose your own adventure. You can take things and apply them to your life. There's no hard and fast rules. And if anybody tells you there are, immediately run the other way because they're absolutely incorrect and no one's given them the authority to make a rule about this FIRE thing. It's really just a collective framework built around the 4% rule as a way to understand personal finance and investing to improve your life for the better. And our brand of that is really, and that's not unique, there's other people that do this as well, most of them do, really start thinking about what makes you happy, how you can put a lot of work into that because that's ultimately what this is all about.

And we know from studies, from it's empirical evidence that stress around money is prominent, it's prevalent, it's incredibly impactful and it's hurting people. So if you can get the finance part right, you can build the foundation for a happier life without that added stress. And I think then you can start thinking about self-care, you can start thinking about how to improve your life and be a happier person and be better for yourself and for the people around you when you don't have the stress of the finance. So keeping that in mind, I would go to those resources, the ChooseFI guys have just come out with a course. If you're a course person and you want to go step-by-step, we're going to come out with a real beginner level course as well that kind of just takes you through very simple way to start on all this stuff.

Yeah, that's where I would start. I mean, other than honestly, watch the movie. I mean, that's probably the easiest way to get started with motivation today is watch that film. I think it gives a good fresh perspective on what this is about, what you'll be doing and why you'd be doing it. My book kind of goes through the details a little bit more as far as the money and the strategies and the investment, all that stuff. And it really gives a little more detail of these different characters in the FIRE movement and that might give you a little more perspective on which direction you want to head to go listen or read.

So one of the foundations, at least from my somewhat outside perspective, although maybe a little bit more insight after talking to you, but still outside. One of the foundations of the FIRE movement is the 4% rule, which is this super simple idea and powerful idea that you can spend 4% of a portfolio of assets and you won't run out of money. But there are caveats and a lot of them. You mentioned on your website that the Trinity study, which is based on 30 years of historical US data and we've talked about this on the podcast. We've done a YouTube video on it as well.

When you take a different dataset, so keep 30 years, but go international data, choose different countries. The only countries where 4% works historically is Canada in the US. Doesn't work anywhere else. And then you extend the time period past 30 years. And it's like it doesn't work anywhere, 4%. So when we're talking about, I read on your blogger and in another interview you did that your FI date, even if you're not fixated on, it is around age 44 for you and Taylor. Obviously, if you get there, 30 years isn't enough runway. So that being such an important piece of the FIRE discussion, how do you think about that?

Yeah, so if you're a listener and you're a beginner and you're having your epiphany, stop listening to this, fast forward three minutes, how long it takes for us to talk about this because it doesn't matter. It really doesn't matter. That's my number one answer. If you are aware of all this and really excited to hear what I have to say, then you're delusional. And no, I think there's a lot of validity to being incredibly skeptical of all hard and fast rules, especially when they come with caveats and I think it's something that everyone should be thinking about. And I think the 4% rule is really more of a 4% guideline, rule is probably the wrong word. I think it's an amazing way to frame how to plan for something like retirement, in this case, retirement I should say. And Big Ern... Have you heard of Big Ern?

Yep.

Yeah, I mean, I think he's doing savant level work on these things and he's incredible and he's also a wonderful human being. And I think right now he's got it pegged around 3.25 or 3.5, somewhere in that range.

Right.

That's probably the safest way to go at this point where you don't have to work so long to, let's say, get to a 2% or something that the early retirement part of this just goes by the wayside. But 3.25, 3.5% somewhere in that range is going to be so safe that you just don't really have to worry. For me, look, it goes like this. One, we're not just going to invest in stocks. We're going to diversify that a bit. We're going to look at some real estate. So we have some passive income or fairly passive income coming in that can help sort of buffer in times of need. We're investing in businesses so that even though we're, quote and quote, "retired from mandatory labor", we can still enjoy. I'm still going to want to tinker and play with ideas and build things and stuff.

So making that in the form of a business that can create side income, it's going to be important to us. And it is a safety precautionary measure kind of thing mixed with the reality of knowing ourselves and knowing that that's going to be okay with us. So what I'm really saying is early retirement is not really the goal for us, financial independence is the goal for us. And in some cases, we already sort of feel financially independent in some ways. It's not independent of mandatory labor yet, but our decisions are independent of finances quite often and that's kind of a wonderful thing.

We feel more freedom because we have such a buffer now with a bit of an emergency fund and our net worth growing and an understanding of how all this works, we feel so much more empowered. I'm so sorry. To get back to your question about the 4% rule, I think it's not a hard and fast rule, I think it's a guideline. I think none of us know how long we have on this planet and there's really no perfect plan with any of this as you guys would contest. Any time you invest your money, there is inherent risk in that even with the stock market, even over 30 years because something could happen that's a black swan event of a magnitude we've never seen before that is possible, but it's going to happen to everyone.

So that's something to consider is that if something that apocalyptic happens, everyone's going to be feeling that because we are a global world now. And so we'll assess at a later date and understand what it's going to take the best life we possibly can if something like that were to happen. In the meantime, people who are really excited about math and geeking out about percentage points and how all that works can go right ahead and do all that work for me and I'll take a peak at it, I'll adjust my decision-making around those assessments.

That means totally reasonable way to answer the question, I agree. The 4% rule is not useless, it's a tool that you can help you start making decisions and get on the right path. But like you say, it's a guideline.

Yeah, and I would say too, I watched your YouTube video on the 4% rule. I thought it was wonderful. It was great analysis. And it raised some questions for me and made me think about it a little bit more. And I would say to anyone having an epiphany today listening to this right now, who didn't fast forward too fast, go check it out. You're doing some great work on there. I'm really impressed by it. And yeah, and it's being validated by the views and the comments and the likes and all that. So nice work.

Oh, thank you. So on the spending rule, it's talking about spending from a portfolio of assets. We're talking about stocks and other investments or whatever. But you've mentioned a couple of things that are really important considerations when you're thinking through that type of spending role. One of those is other sources of income, whether that's real estate or investing in businesses. Now you mentioned, early on in our discussion today, you mentioned how you used to be trying to increase your income before you discovered the FIRE movement and then you realized you could reduce expenses. But it also seems like people who are involved in FIRE are doing stuff like writing books or having blogs or making films like you've done to increase their income. So it's kind of they're increasing their savings on one side, but when people start getting into this idea of FIRE, do you think they should also be thinking about finding alternate sources of income like you've done?

Yeah, I mean, my situation's a little better because I am a video producer by trade. And so it might seem like I'm a FIRE blogger or a FIRE content creator now and I guess, that's true. But it's really the trade that I knew. And so I'm just doing my job right now. But yes, you're right. A lot of people are finding ways to do side hustles. And look, it's never been easier to start a side hustle in the history of the world with the advancements of technology, the way you can run your books now online and all the way down to the tax planning, all the way to setting up a business online, on a website and hitting go on the first day and you've got a business. I mean, you can set up an LC on your computer. All of these things are now at our fingertips with a couple of bucks and that's incredible.

So I think that's correlated. I think that's one of the reasons why you see a lot of people doing side hustles and things like that and not... But people who have a career right now, I'd say the first thing you'd want to think about is if you're looking at FIRE is you're decreasing your spending. You're getting that ship course corrected. Once that's done, it's sort of a hurry up and wait kind of thing. The systems are in place, you do a little maintenance here and there and you get back to living your life. I don't spend as much time listening to the FIRE blogs and listening to FIRE podcasts, reading the FIRE blogs, things like that because I've learned a lot about it. I've set the systems in place. I check them periodically to make sure they're still working, they are.

Great, and I'm going to go focus on these other things that I want to focus on. And when you get to that point I think, there's definitely some stuff you want to think about. I would say you have to be careful now though. If you start getting into increasing your income and kind of getting all spun up in that, you may be getting back into that mode of trying to race towards that FI date and hyper-focusing on that. And everyone I've talked to who have hit that FI date have said that that was the driving force, that was what ruled their world for a lot of their decisions for a lot of years. And when they hit that FI date, they thought everything would change and almost nothing changed, nothing of interest.

Yeah, their life changed, their lifestyle, the things that they were able to do change. But all the things they thought they were going to do that were going to bring them happiness then, none of it worked. Oh, now I'm going to go walk down to the market, choose my produce on a daily basis, become a professional chef in my kitchen and travel internationally whenever I want. And people would do that and then after six months of being on the road, they'd be like, "Gosh, I just want to go home." And man, there are nights where I do not want to walk down to the market, pick all this produce, come up with a new thing to cook. I'm just going to make something easy. And then you sit there and if that starts to happen to you and you've got your entire life ahead of you with nothing to get up four in the morning, you've got a problem.

So this is something where... This is a slippery slope. If you're going to start looking at increasing your income, do so carefully and know that it can be a slippery slope and that you have to be careful with it. And where I would start is if you have a full-time job right now, if you have a career, if you've got a job, start there. Are you providing enough value to just find increase, a raise? Start there. Start looking at negotiating that raise. I think Ramit Sethi talks a lot about this as some great information out there and he's not the only one. And you can find out. It's kind of a scary prospect and it's something that might be very valuable to learn, negotiating skills, how to understand your value. I mean, those things are going to serve you forever, knowing your value. So look at that and start there because then don't have to stress yourself out about starting side hustle because that's a whole another bag of worms.

If you feel like you're getting paid well and you don't need to go in and negotiate a raise or you've already done that, then, yeah. I mean, if you want to consider starting side hustle or starting a new business, tread lightly, learn as much as you can, make sure it's the right thing for you. I've been an entrepreneur for over a decade and seen a number of businesses succeed and fail and I enjoy it. I think it's a lot of fun. So I encourage it. But do so with caution and know that it's not the end of it all. But yeah. Yeah, increase your income if you can. I mean, of course. The other thing I will say about that is I want people to, in my ideal world, I want people to be thinking about this a little bit less selfishly and a little bit more selflessly in that these are all wonderful things because I think the happier we can all become, the more we can serve others.

And oftentimes, too often I think I see too much energy and discussion around the semantics of let's say, the 4% rule or increasing your income or how fast you can do this thing or how you can hack this other thing and not enough time being spent on if you get the freedom to not have to spend your time on mandatory labor just to live for the next 40, 50 years, how are you going to spend that time? And if it's cooking really nice meals and traveling internationally, then that's what it is and that's okay.

That's absolutely okay. But there is a lot of us that have the energy, the time, the education, all this amazing privilege and we should be sharing that and we should be trying to lift each other up and improving our communities. And that's where I want the discussion to go next and I'm seeing it happen and it's really, really exciting to see happen. But I hope that that's the evolution of the FIRE movement is that we're looking at how do we gain that freedom so that we can use it to better others around us to have a similar experience.

I love your advice or at least the advice that you relayed about increasing your income at your job. If you have a career now, you don't need to go and start a side hustle. You could dedicate that energy to your job. And that probably increases engagement, which maybe makes you enjoy your work more. Personally, I enjoy my job. I don't feel like I need to have a side hustle. I guess, you could call the YouTube channel or something like that a side hustle, but it's just part of my job. So anyway, the way that you described people getting to their FI date and then nothing changes I thought was interesting. For you as an individual or maybe you and Taylor together going through this now, what do you expect to change if anything once you hit that FI date? What do you want to do with your time once you don't have to work?

Yeah, so first of all, we're looking really hard at essentially homeschooling Jovie. A homeschooling has changed drastically over the last couple of decades and it's no longer this social pariah situation with not a lot of planning. There's a lot of people doing it now and it seems like it could be a better way for her to be set up for her future. So we're looking at that. What a wonderful way to spend time with her and grow together and maybe learn some things we've forgotten. And we're thinking about doing that with a core group of our friends here. We've talked about maybe doing sit-ups, sitting up kind of go up kind of situation. So something like that it's really interesting.

Heading into the future, again, I think community investment looking at how can we serve our local community here as best we can, whether that's me investing some time in helping other entrepreneurs get started, sharing my knowledge, possibly looking at the colleges and seeing if there's classes that I could teach or something like that, I think it would be really interesting. Taylor's looked at things like that. She has a soft spot in her heart for the elderly. And so she might spend her time at homes and hospice level kind of things. She would look at that. So I think for us it's really exciting because now that we're finally sort of grounded and have our feet on the ground here in Bend and new community and stuff, we are starting to find ourselves with a little more times. We've been pretty busy on the road with the film and moving this whole thing.

But we're finally seeing a little bit more time. And so our intention is to spend some of our free time while we're still in our working careers heading towards our FI date, experimenting and exploring the potential knowing that we're going to need something when we hit that FI date. And yeah, that's our focus right now. It's like head down, let these numbers do the work, make sure these systems stay in place and trying to enjoy the present, trying to enjoy the things that we have now and the things that we do now with an eye on the future and what we might want to spend our time with in the future. And I think that involves giving community and sure, serving ourselves a bit too, self-care huge. So spending more time outdoors, spending more time active, these things will help us live longer and be able to stick around to see Jovie grow old too. So yeah, that's our current plan.

The idea of finding work just not the type of work that you might be doing for money now, post FI, I think that's one of the biggest eye-openers for me. In thinking about the FIRE movement, that's been one of my biggest criticisms in the past. It's like, what do you want to just sit around? There's a clip on your YouTube channel from the film where you're talking to Mr. Money Mustache, to Pete and he talks about exactly this. He's like, "No one's going to just not do anything." And he gives the example of watching five TV episodes and then having a big dinner and going to bed. He's like, "You don't want to do that. Humans are made to work." But he's just talking about doing maybe physical labor like building homes and stuff that maybe wouldn't make the type of income that he was earning in his career, but he's able to do that because he doesn't need the financial income. I thought that was... Just that shift in thinking people don't actually want to sit on their butts and do nothing, they just want to do some other stuff.

I don't know anyone who sits on their butt and does nothing in the FIRE movement. I haven't met one person, especially those who have reached FI. Maybe people that haven't reached FI yet, maybe they tend to err on the side of lazy and hey, look, I mean, we all have our lazy bouts, it's fine. So no worries. But yeah, a life of TV and monotony and nothing, that's like, who the heck is going to do that?

Yeah, but I can understand your misconception because I think just hearing early retirement, it's obviously a trigger and I think what it really is is a misconception of the word retirement or at least we need to redefine the word retirement in today's age because the old version of retirement is exactly what you have in mind. It's like you stop working, you're probably older, your body is probably a bit broken at that point and you don't have a lot of ability to do a lot of things.

But now if you're retiring in your 30s or your 40s or your 50s and with the advancements of modern medicine. I mean, we're all living higher quality lives longer. And so there's more time to spend, there's more things to do. And yeah, I totally agree with Pete. I mean, hard physical labor is important or at least being physical is incredibly important to our wellbeing, we know this and work matters. Having some esteem, having some function, all these things are on Maslow's hierarchy of needs and ultimately self-actualization.

I mean, unfortunately, we are complex human beings that we need a lot of coddling, we need a lot of things happening to be happy and to be... Don't want to wake up in the morning. So yeah, FIRE is not about sitting around, sipping Mai Tais and doing a whole lot of nothing. It's not. And all of that would get boring after a while. So feel free to go do it for awhile. Yeah, go hit that beach, have a couple of Mai Tais, enjoy yourself. But eventually, you better have a plan or that beach is just going get real boring and those Mai Tais are going to make it fat and unhappy.

So last question for you, Scott, and I'm really curious for your perspective on this and we always ask the same question, but it's a little bit different for you. I'm curious how you and Taylor used to define success in your lives and can you compare and contrast to how you define it now?

Yeah, I think I defined success... First of all, I wasn't aware of how I felt about success back then. But if I have to look back and think what was success, I'm kind of guesstimating, it was something along the lines of succeed in business. And it was unfortunately a shallow as that. It was like maybe be a good friend, be a good husband. I had some of those parameters as well. But ultimately what I was really working for on a daily basis was having a successful business, but I had not defined what success was. I didn't define it by let's say a number or an event or a result. It was just success. And I guess, that was probably defined by outside social cues and signals. You've got the Gary V's of the world, starting out their brands with hustle, hustle, hustle and every day is a grind and do as much as you can and be everywhere and yada yada.

And you see him now backtracking on that. Oh, sorry guys, I was a little bit off on that. Don't hustle too bad or you'll stress yourself out to, yeah, to crazyville and that's not the way to go. But still work really, really hard and do all these things, be everywhere like me. I got those signals. It was seeing peers, people who I looked up to, people who I aspired to maybe become or to achieve similar levels of success. Those were things that defined success for me then. And there's nothing wrong with wanting to achieve, wanting to progress, wanting to make things, wanting to own things. I don't think there's anything inherently wrong with that.

I cherish my, I've got these Red Wing boots. I think they're called the Iron Rangers. These things are amazing. I cherish them. I'm glad somebody spent the time and energy to make these things. And I spent a pretty penny on them. I think it was like, they were 250 bucks. But I bought them for life. These things will literally last me my entire life. They're wonderful. It's like that's still okay and that is me being materialistic to some extent. But ultimately, that identity shift, my relationship with money shifting, everything shifting when I found all of this and started considering the philosophies of stoicism and understanding the hedonistic treadmill and all of these things that now I have a better perspective on life. Success is completely different.

When you think about... When you're on your death bed, you hear this all the time. This is nothing new. But I heard this and this made a ton of impact on me. It's like people that work in hospice care and hospitals and things like that, they say, when people are on their death that they're not sitting there going like, oh man, so glad I made all that money. Oh man, I'm so glad I achieved that level of success in my business. They're all sitting there and going like, my happiest moments are those moments with my family, with my friends and all these experiences that I've had, yada yada. That is obviously what's most important I think. And so success for me is ensuring that I am taking care of myself the best that I can so that I can serve others and be present and be there and enjoy the time I have with the people that I love.

Really good way to answer the question. It's fascinating to think about FIRE movement as much as it's based on stuff, you talked about this earlier, the difference between the financial side and the non-financial side. But the 4% rule lets you frame the financial side. The non-financial side is important, but kind of the 4% rule. We didn't necessarily have the data or the framework to know what actually makes people happy. Now we have the empirical data to know, like you mentioned the hedonistic treadmill, we actually know what makes people happy. There's even the model, the five factor model of happiness, the PERMA Model that shows engagement and positive emotion. But a lot of the stuff that you've been talking about, we didn't have that before. But now as humans, we can say like, there's actually a formula for what makes you happy and a lot of it requires the stuff that's key to that FIRE movement as a whole.

Yeah. Yeah, I mean, it seems like the more we learn about these key factors, they do make us happy. It sounds like. I mean, a lot of established religions, we're on the right track. And what it really boils down to is having a framework of gratitude, of mindfulness, things like that. When I hear that, I think first of all, yes, we are, I said this earlier in regards to side hustles, but we are living in the best time ever to live. We may not feel like because if you read the news too often, then you feel like everything's coming to an end. But in reality, we are living the best human life any human has ever lived hands down.

And yet if you don't do it right, it's very possible not to feel that way and not to live the best life because of all of the external factors that we also have to deal with that we have not evolved to prepare for. So looking at the PERMA Model and these five things, the one that stood out to me the most because I think positive emotion. We all know about the secret. We all know that when you smile and decide to take something on positively, it affects things positively and you can't argue with that. Engagement basically being present, being engaged in the thing that's important, it's difficult at times for some people like me and something I'm aware of and I try to work on. And when you find engagement by the way, I think that probably speaks to the flow state-

Absolutely, yeah.

When you're working, you don't even notice time is going by. So by the way, there's work right there baked into happiness. It's very important to work and to find enjoyment from that work. Relationships obvious meaning, fairly obvious though, probably one of the hardest ones, accomplishments though. Again, work. You have to work for accomplishments. Accomplishments don't show up at your doorstep and say, "Hey, I'm here. Congratulations, you have an accomplishment." So these are... Like you said, it's empirically proven that work is important. Mandatory labor to pay for the things that you don't need is not important and that's what I learned through FIRE.

Oh man. Powerful, really powerful. Scott, this was awesome. I mean, the way this came about was we mentioned your film, somebody maybe Cameron tweeted at you're Playing with Fire Twitter handle and then there was a little Twitter conversation and then I just messaged you and I was like, "Hey man, do you want to come on the podcast?" And you're like, "Sure." And here we are. So it's kind of cool how it transpired. And this conversation was, I mean, as good as or better than I could have imagined it to be. So we really appreciate you coming on. You're awesome.

Thank you so much for having me. I enjoyed. Like I said, I loved how you had seen the movie, the takeaways, that particular episode, I felt like you guys really understood what we were trying to do, which is really wonderful to see. And so, yeah. So thank you so much for the opportunity. I really enjoyed this.

Yeah, thanks Scott. And for all our listeners, the movie is Playing with Fire and it's a real compelling movie to watch. So thanks for making it, Scott. Thanks for joining us.

Thank you, Cameron.