Separating the FI from the RE in FI/RE.

The “FIRE” (Financial Independence – Retire Early) lifestyle has been receiving a whole lot of outside press lately, while this is obviously a good thing as it has the power to greatly improve the lives of those that choose to adopt it’s lifestyle and philosophies, it also has drawn the wrath of many that choose to focus on the Early Retirement aspect alone and point out how it may or may not be actually feasible as a long term plan. To be able to properly separate the two ideas we first need to define them.

silhouette photography of group of people jumping during golden time

Many people in the FIRE community may have first been introduced to personal finance by Dave Ramsey and his Financial Peace program, Dave preaches that debt creates bondage in the form of financial obligations from the lender to the borrower. Financial Independence is a very similar concept in that once someone reaches FI they have the peace of mind to know that they are in a financial situation to make choices that are not afforded to people who are living paycheck to paycheck. Financial Independence in a nutshell is the point where an individual has accumulated enough income producing assets to live off of without having to work any longer, this freedom allows them to choose to either continue what they are doing or pursue either another career or even stop working all together. For most in the FI community the game plan seems to be the accumulation off a large enough investment portfolio to withdraw 4% of the principle to cover living expenses, while allowing the interest earned over and above the 4% withdrawal to continue to accumulate, thus creating a perpetual money machine. There are of course many other routes such as rental income form real estate and passive income from ownership in private businesses. There are different stages of Financial Independence, from having enough saved to be able to take time off from work or to accept a lower paying position that offers a better quality of life, to having enough money saved to never have to work again. Financial Independence allows an individual to have many options not available to most people and one of those options is Early Retirement.

man and woman holding hand walking beside body of water during sunset

Early Retirement or the “RE” in FI/RE is as mentioned earlier when someone has accumulated enough assets to live off of the earnings and no longer depend on outside income derived from another person or entity. Everyone has a different path to Financial Independence and therefore will arrive at the crossroad of continuing work or Retiring Early at different times and stages in their lives.  Retiring Early is an option only afforded to someone that has already achieved Financial Independence. Many detractors of the Early Retirement movement point to the fact that there is not much data to back test to see whether the 4% rule will actually work over a 40-50 year retirement period, however they fail to see that the main point is that the individual has achieved financial independence at an early age, something that the majority of people may not ever actually achieve in their entire life, this is great evidence that Financially Independent people are extremely good at handling their personal finances and that if a problem does arise in the future they will most likely be able to resolve it with the same hard work, focus, and discipline that got them to financial independence at such an early age. Another thing to keep in mind is that the 4% withdrawal rate was not just picked out of thin air but actually derived from a study known as the trinity study that sought to find the highest withdrawal rate that would allow for complete certainty of never running out of income and in fact the majority of the time the scenarios in the study had someone using the 4% rule end up with much more money than they started with 30 years later, even after making yearly withdrawals of 4%. This is because the stock market on average returns much more than 4% and thus allows the principle to continue to grow over time.

man and woman holding hands walking on seashore during sunrise

Fortunately their are many young and extremely intelligent bloggers in the FIRE community that are there to help and not just offer generic advice but give highly specific and specialized advice to people of all walks of life, so regardless if you are a physician, a mechanic, a pharmacist, a chef, a military officer, or even a single parent, there is a blog out there just for you that offers specific advice that can not only save you money but time and frustration from trying to comb through what seems like never ending advertisements from investment firms wanting to charge you to invest your money.

As you can probably tell from the name Chef on FIRE, I mostly speak to the restaurant and service industry segment about how to maximize their incomes and investments. I have a personal love for those that choose to serve others and feel that they deserve to be able to retire in confidence and hopefully enjoy having someone serve them for a change. While this is the audience that I focus on, I am constantly learning from reading post from other bloggers and think that they offer a great insight into the lives that other professions offer. It is great to know that regardless of the type of career one chooses, they have to ability to become Financially Independent if they are willing to work hard, save money, and learn to invest it wisely.

Screw F.I.R.E – Don’t retire early, create a legacy.

People today have become so self centered and inwardly focused on themselves that their only concern is to create just enough Financial success to enjoy a modest life and  free them from the obligations of earning income from trading time for money. Now don’t get me wrong I have nothing against people choosing not to work or to stop earning income, I do think that to save just enough to afford a modest lifestyle for you and your family is slightly selfish, I mean for one thing if anything was to happen to either you, your spouse, or a child, that minimum income to support that modest lifestyle will create almost certain financial ruin, don’t believe me, spend time in a hospital or retirement home speaking to patients or residents and you’ll learn just how uncertain life is and how easily unplanned medical issues can derail a life.

adult doctors gloves health

If we look back in time men were not just providers but they were builders, warriors, conquerors, and empire builders. They didn’t plant just enough crop to barely make it through the winter, they planted as much as they could and if they had excess above their family’s needs they either sold it or gave it to a neighbor. What happened to our desire to grow wealth, create a family name, and create a fortune? Instead of saving the minimum amount to meet our minimum needs for contentment, why not use the excess money we have above our family’s needs to continue to further our family’s wealth and standing in society?

The playbook to wealth is very simple.

Find a source of income that exceeds your monthly expenses

Focus on creating more income while keeping expenses as low as possible

Invest excess finances in assets that increase in value and create more income.

Rinse and repeat.

Yes this is simple but it should be. In modern times this would include getting a job, gaining education or experience to make your time more valuable, when you begin earning more don’t allow your lifestyle or spending to increase but instead invest the difference in index funds, rental property, and start a side business that you can earn income from and hopefully grow as well. See our ancestors did this as well, they first had to make sure they could meet their basic needs of food and shelter, after that they would sell their excess goods or services, they would then invest those proceeds into buying more land and livestock which had a compounding effect for them, many would eventually invest in selling goods made from the land or animals such as wood, wool, hay, etc… The only difference is that those generations knew how hard life was and that nothing is promised so they didn’t barely meet their basic needs and stop, they continued to acquire land and livestock for not only them but for their kids and their grandchildren. They would teach their children to run the farm and insist on them having a better life than they had had.

man field rice colombia

Now the question is why don’t we do that? Why should we be so selfish to save just enough to cover our immediate needs and stop working towards furthering our families standing? If our incomes are the largest contributor to our net worth or our family’s security, why cease to use it? Personally I feel obligated to earn as much as I can in my life and to acquire as much as possible to leave to the next generations to come. I could easily stop working and downgrade my standard of living so that I wouldn’t have to work anymore but I’m not that selfish. I want to ensure that I not only meet my needs but that if something happens to me and I require long term medical care, that not only will I be able to receive excellent care but it will not leave my spouse broke, I want to not only meet my needs but create a long runway for my kids to take off from and to be able to help them get a financial head start in life. I want to be able to help care for the aging parents of my wife and I, I want to be able to bless multiple generations of my family, I want my grandchildren to have the option to attend private school, to take music lessons, to take vacations, and to enjoy a life that is full of options. This is called self sacrifice and it is the greatest form of love that one can express. Just as Jesus paid the ultimate sacrifice by giving his life so we could be saved, I choose to give my life, my time, my effort, and my attention to not just making my life as easy and enjoyable as possible but to sacrifice so that generations of my family can be Financially secure. Health is a gift and choosing to exit the workforce at the prime of your earning potential is pure selfishness, not only are you shortchanging yourself but also mankind as you are no longer contributing to the greater good of society. Just as past generations taught their kids to plow a field or milk a cow, I teach my children to budget, to invest, and how to make themselves more valuable to society, however not only do I teach them these essential skills I also give them a head start, this is my duty as a father. When you take a wife and have kids, you are no longer just responsible for yourself but you are responsible for their safety and well being and in today’s time it is less about defending them from physical starvation or the elements as it is about ensuring their financial futures.

battle black blur board game

So in closing, MEN……. Be MEN, be not only providers and protectors, be defenders of freedom, be conquerors, build an empire that your grandchildren can be proud of, don’t fall into the trap of becoming satisfied with barely getting by but strive for the best life possible. Do you want your legacy to be “Well grandpa saved some money and retired at 30, then just kinda hung out?” Yes it’s nice being around young kids but as they get older they probably won’t want to be around you so much and when you are dead and gone, I’m sure they would rather have large inheritances than memories of you laying around on the couch……………

Thanks for reading,



If you own stocks you are probably somewhat familiar with dividends, but what exactly are they? In simple terms a dividend is a portion of the excess revenue a company has available after paying all operating cost that they choose to distribute to  owners/shareholders. That sounds great but is it? Personally I love dividends and see them as a sign of both maturity and stability, this is because usually a new company will reserve most of if not all earnings to re-invest in the company for growth, this isn’t bad because that growth allows them to increase earnings which will hopefully result in an increase in the value per share of the company. In contrast a large and established company may not have much room for further growth except through acquisitions, since they don’t need to employee excess revenue they choose to pay it out in the form of dividends which is attractive to many investors, especially older investors looking for income and stability. The dividend investor may also benefit from share appreciation but nowhere near the same rate as the younger faster growing company, in fact the per share price will actually fall after the dividend payout due to the fact that the company just moved hundreds of thousands of dollars off of their books, of course that money went straight to you the shareholder so it’s not really a loss but a way to earn passive income. Currently income from dividend payouts is taxed at different rates depending on your gross income, see the chart below.

Qualified Dividend Tax Rate Single Filing Status Married Filing Jointly Head of Household Married Filing Separately
0% $0-$38,600 $0-$77,200 $0-$51,700 $0-$38,600
15% $38,601-$425,800 $77,201-$479,000 $51,701-$452,400 $38,601-$239,500
20% $425,801 or more $479,001 or more $452,401 or more $239,501 or more

close up photography of people holding coca cola bottles

Some of my favorite dividend paying stocks are listed below with their current dividend yield.

Coca-Cola – 3.37% – Dividend has grown each year for 55 years

Pepsi – 3.36% – Dividend has grown each year for 45 years

AT&T – 6.08% – Dividend has grown each year for 33 years

person holding pepsi can

Now we can’t talk about dividends without mentioning the Dividend Aristocrats, to meet the criteria to be called a Dividend Aristocrat, a company must be a member of the S&P 500 index and have a minimum of one dividend increase annually for at least the last 25 consecutive years. The first list of Dividend Aristocrats was published in 1989, with 26 companies on the list, this list is often times considered a list of some of the strongest and most dominant companies in the world since to have been able to earn excess profits from operations even through all the bear markets and recessions, the companies must have a great operating system and strong competitive advantages.

For the die hard index fund investor there are dividend funds that track high paying dividend stocks, two of my favorite are listed below with their dividend yields.

VYM – 3.26% – Expense ratio of 0.08%

VIG – 2.03 – Expense ratio of 0.08%

apartment architecture buildings business

Of Course a discussion of dividends wouldn’t be complete without mentioning REITs, better known as Real Estate Investment Trust. In simple terms a REIT is a fund that owns and operates income producing land and or real estate, this usually consist of a mix of commercial properties such as retail spaces, office buildings, storage facilities, and apartments. The REIT investor/shareholder benefits from the steady stream of rental payment made by the tenants and the best part is that by law a REIT must pay out at least 90% of it’s taxable income to shareholders. Below is a list of my favorite REITs along with their current dividend yields.

VNQ – 4.29% – Expense ration 0.12%

Personally I own both VNQ and VYM in my ROTH IRA as well as the three single stock companies listed earlier with about 3 other high yield dividend stocks, however I am not nor do I plan to increase my holdings in the single stock, only in the index and REIT funds. I like owning them in my ROTH because the dividend income is earned tax free and is a not only a long term holding for me but an inheritance vehicle for my children that I hope will benefit from a steady source of tax free income for someday. I must say that I also own both VOO and VTI as well as VEU, in both my ROTH and my Traditional IRA for long term capital appreciation but I have always loved dividend stocks since my first purchase of Coca Cola stock many years ago and I still remember seeing the first dividend payment in my account:)

I hope you enjoyed this article and appreciate you taking the time to read it.






The Power of Habits

As humans we are all creatures of habit and tend to continue to do what we are most comfortable with. This can be extremely detrimental to our success because becoming successful requires us to step out of our comfort zones and face unsure circumstances. Luckily we can retrain ourselves to see fearful or uncomfortable situations as positive experiences similar to the way we see the pain of a hard set of squats as a necessary evil for muscle growth. The way we choose to perceive things makes all the difference in how we live our lives. Some people see dieting as an awful experience and focus on their current state of discomfort from being hungry, however others choose to focus on the long term benefits of weight loss and improved health. The contrast between these two perceptions of the same experience is what causes some to never seem to be able to lose weight while others are able easily shed excess weight. The same is true for working out, some hate going to the gym because they are focused on the immediate discomfort while others love it due to the results they receive. The great thing is that we can all decide on how we choose to perceive every experience we have.

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Winning in life and at the game of FIRE isn’t only about accumulating a ton of money, it’s about building a life that you enjoy living and not waiting till you are to old to enjoy the benefits of financial independence. It takes 30 days of doing something continuously to embed and new habit in us as humans, However often times with so many external obligations and stresses from work to parenting it is hard to change our schedules unless we purposefully make time to create the new habit. This is where proper nutrition and supplementation play a key role in allowing us to create the life and mental state of mind to ensure that we are successful. We should all make sure that we are consuming enough calories through healthy foods such as lean meats, fruit, and vegetables.  If our incomes are our major path to savings and investing, then our ability to work is paramount, your health is your wealth. Without healthy bodies, we can’t earn the money we need to invest. Without a healthy body we can’t get out and enjoy the world God gave us. If you are looking forward to a nice long retirement, then it is important that you stay as healthy as possible for as long as possible, so that you have plenty of time to enjoy your hard earned money. Any exercise is better than no exercise, but the best type of exercise for health and time are HIIT and weight training. “High Intensity Interval Training” involves short but intense burst of running or some type of cardiovascular exercise, this type of exercising offers better cardio and pulmonary benefits than traditional slow paced running and burns more calories, however the best part is that it takes less than half the time. Weight training or resistance training involves lifting heavy weights to cause our muscles to grow in response to the added weight. Adding muscle to our frames not only burns and displaces fat but also having more muscle burns more fat during normal activities. The best thing about both HIIT and weight training is that you can accomplish both in under an hour per workout and get great results practicing them 4 times a week, that’s only 4 hours a week for better health!!!! In your pursuit of FIRE don’t neglect your body that you have to live in during early retirement and old age. Start now and build some healthy habits that will last a life time and change the way you feel and move during retirement.

Thanks for reading,


Stocks, Stocks, Stocks

In this article we will explore a brief history of the stock market, from it’s origins to it’s current place as America’s number one wealth creator. The East India Company is recognized as the world’s first publicly traded company. The East Indies were a major hub of riches and trade opportunities, merchants sailed there to trade and purchase exotic items that they could return home to sell. Unfortunately, few of these voyages ever made it home. What would usually happen is a merchant would have a great idea to travel to a far off land and purchase exotic items, however since he didn’t have enough money to do it alone, he would seek financing from wealthy individuals who sought to earn a return on their investment. If the ship sank or was taken by pirates the captain might lose his life and the financier would lose his total investment. The wealthy soon saw that it was better to spread their investments out over multiple ships to prevent losing everything, this however was extremely expensive and prevented everyone except the ultra wealthy from entering this business. As a result, a unique corporation was formed in 1600 called “Governor and Company of Merchants of London trading with the East Indies”. This was the famous East India Company and it was the first company to use a limited liability formula. Investors realized that putting all their “eggs into one basket” was not a smart way to approach investment in East Indies trading. This company sold shares in each of it’s ships to many people looking to spread out their risk and earn a profit. The formula proved to be very successful. Within a decade, similar charters had been granted to other businesses throughout England, France, Belgium, and the Netherlands. In 1602, the Dutch East India Company officially became the world’s first publicly traded company when it released shares of the company on the Amsterdam Stock Exchange. Stocks and bonds were issued to investors and each investor was entitled to a fixed percentage of the East India Company’s profits. Unfortunately an Indian uprising ended this company. London actually founded a stock exchange in 1801 but publicly traded companies weren’t legal until 1825 and by 1817 America founded what is still to this day the center of the world’s financial market.

sea landscape water ocean

The NYSE or the New York Stock Exchange founded in 1817 is today the biggest stock exchange in the world, however Contrary to what some people think, the NYSE wasn’t the first stock exchange in the United States. The Philadelphia Stock Exchange was actually the first in America but the NYSE soon became the most powerful stock exchange in the country due to the lack of any type of domestic competition and its positioning at the center of U.S. trade and economics in New York. The NYSE is presently located at 11 Wall Street in 1865.

architecture art clouds landmark

The NYSE was founded 17 May 1792 when 24 stockbrokers signed the Buttonwood Agreement on Wall Street in New York City. Famously, they met beneath a Buttonwood tree and formed a centralized exchange for the rapidly growing securities market in the United States. The agreement eliminated the need for auctioneers who were used frequently for wheat, tobacco and other commodities and set a commission rate. The organisation made the Tontine Coffee House its headquarters and focused on government bonds. Twenty-five years later, on  March 1817, the organisation officially became the New York Stock & Exchange Board, later simplified to the New York Stock Exchange. Throughout the early 1800s, the NYSE expanded beyond government bonds and bank stocks. Advances in telegraphic communication allowed buying and selling through the telegraph. Membership increased and became more exclusive. By the start of the Civil War, securities, commodities and gold, discovered in California, greatly increased participation in the exchange. When the stock market crashed on October 23 1929, causing an 89% drop in share prices, the federal government decided it was time to step in and regulate the stock market. The NYSE subsequently registered with the United States Securities and Exchange Commission. The Securities Act of 1933 required public corporations to register their stock sales and distribution and make regular financial disclosures. The Securities Exchange Act of 1934 created the SEC to regulate exchanges, brokers, and over-the-counter markets, as well as to monitor the required financial disclosures. In 1971, NASDAQ National Association of Securities Dealers, founded its own exchange, NASDAQ, which specialized in electronic trading and eventually became a U.S.-based rival to the NYSE. Today there are a little less than 4,000 publicly traded companies for investors to purchase share in. The stock market to this day still functions much the same way as the original East India company designed it’s business plan. The stock market allows companies to quickly raise money for investments and expansion, while at the same time allows the individual investor to participate in the profit of multiple companies to spread their risk across multiple ventures.

group of people in a meeting

What exactly is a stock? A stock is a small piece of a publicly traded company, so when you purchase a stock you own a small piece of the company and are entitled to a piece of the profit they earn. In the old days investors would try to buy stocks of individual companies and diversify by spreading their purchases across several different sectors of the economy such as, energy, consumer goods, manufacturing, commodities, etc… then came along the mutual fund, which was a single fund, managed by a professional who charged a fee for his management services, these mutual funds provided instant diversification through spreading out their investing across different sectors as well as different investment vehicles. With all investments the best way to track their returns are not just of actual returns but their returns compared to the average of the market, which is basically a function of the national or international economy. If your investment did worse than the average of the market or of the average return of a particular segment then it was considered a dud, if it did better it was considered a good fund and the manager would be able to attract more investors and most likely justify a larger fee, the problem is that few managers beat the average market return and the ones that do usually cancel out the higher returns with the higher fees . Enter the Index Fund……. If you are even slightly involved in the F.I.R.E community, you are probably very familiar with what an Index Fund is, if you are new to the F.I.R.E community, an Index Fund is a fund that tracks a particular index or sector of the market. Two of the more popular within our community are the total stock market index, which tracks all the publicly traded companies and a fortune 500 index fund, which tracks the 500 largest companies based on revenue and market share. The investor gets two great things, instant diversification and a guarantee to get the average return of the market. This is why index funds have become so popular, they offer a great way to invest without requiring a fund manager or constant portfolio maintenance. The great thing about index funds is that they allow the market to do what it is supposed to do. self-cleanse itself by allowing the stronger companies to take market share from the weaker companies, if you owned individual shares, you run the risk of losing everything if the company goes out of business, however in an index fund the losing company is simply replaced by another company. This is great because the economy doesn’t stop demanding goods and services just because a company goes out of business and the employees of the shuttered company will simply find jobs at companies that can afford to pay them. People are what run the economy, they create the demand for good and services and also earn wages to produce them. All over the country people meet in rooms together to devise ways to increase revenues, raise profits, and expand the business, all of this is to provide returns to you the share holder. With an index fund you own a small piece of every company in that index, so essentially you have thousands of very smart men and women working hard to increase your net worth.

Thanks for taking the time to read this and I you liked it.