Invest Retirement

HerMoney Podcast Episode 186: Lighting The Path To Savings and Security With The FIRE Movement 

Kathryn Tuggle  |  November 6, 2019

We’re Playing With FIRE this week, with guest Scott Rieckens. 

Are you ready to cozy up by the warm glow of the FIRE movement? The acronym stands for Financial Independence, Retire Early, and it’s a topic we love covering here at HerMoney. Over the years we’ve broken it down with some incredible guests including Jamila Souffrant, Grant Sabatier, Jonathan Mendonsa, Brad Barrett, and Vicki Robin

This week, we sit down for some one-on-one time with Scott Rieckens, author of Playing With Fire, and producer of the recent documentary by the same name. Scott walks us through his journey into the FIRE movement, and how he learned to prioritize his spending and saving goals. As an Emmy-nominated film and television producer and entrepreneur, Scott was inspired to explore the FIRE movement on the big screen when he discovered there was a lack of educational videos on the topic. 

Retiring early was a goal for Scott (as it is for many of us) but the FIRE movement goes well beyond that — it’s about taking control of your finances once and for all, and reducing the stress that can arise when we feel like we aren’t in control of our money.

The concepts around FIRE are simple, Scott tells Jean — and you don’t have to be an investing expert (or even the biggest fan of the FIRE movement) to get something out of the basic lessons. “Whether it’s the absolute best way to go or not isn’t really the point,” he says. “To me, it was just a matter of, ‘Okay, now I have the framework on how to get started.’” Scott cites Mr. Money Mustache, and Vicki Robin as major influences on his journey, along with the book, The Simple Path to Wealth by JL Collins

Scott tells Jean that he was led to explore the FIRE movement when he began to feel like he was squandering the money he was earning. “We were working so hard for our money, but we weren’t letting our money work hard for us,” he says. “We have a responsibility to our money, and I didn’t feel like I was doing my part with my daily Starbucks, or buying the latest ‘new shiny object.’ I knew these things weren’t the path to happiness, but I didn’t know any other way.” 

When they first joined the FIRE movement, Scott says he and his wife were out to see how far they could push their savings rate. Then, they decided to see what was “uncomfortable,” and that took them to the next level. “All of a sudden we realized we could live off one income, we could invest, and we had an emergency fund saved,” he says. 

In Mailbag, Jean advises a woman on credit card usage and selection, and answers a question about taking a job you’re overqualified for in order to get your foot in the door at a good company. Jean also advises a woman who’s between jobs on health insurance options, including COBRA and short-term health plans that can be purchased from the marketplace. Lastly, in Thrive, Jean dishes on why people aren’t checking their credit score as often as they were in years past, and why that could be a big mistake. 

Transcript

Jean Chatzky: (00:07)
HerMoney is supported by Fidelity Investments. We want to inspire you to demand more from your money by first knowing what you own, what you owe and what you want from your money. We’ll help you reach your financial goals faster. At fidelity.com/demandmore. HerMoney comes to you through PRX. Hey everybody, it’s Jean Chatzky. Welcome to HerMoney. If you’ve been tuning in over the past months, maybe past year, you know that we’ve done a few shows on the growing FIRE movement. Fire standing for financial independence, retire early. We’ve talked to Brad Barrett, Jonathan Mendonsa, Grant Sabatier and Jamila Souffrant. They are fascinating and today we’ve got an opportunity to sit down with a guy who chronicled his FIRE journey in a new documentary that is hitting screens all over the country. It’s an interesting topic and we’ve heard from all of you that you are looking to find a way to, if not join the FIRE movement, then incorporate pieces of it in your own day to day life. Scott Rieckens is an Emmy nominated film and video producer. He’s an entrepreneur and he’s the author of Playing with FIRE. The title of this new documentary. It’s on Vimeo. We’re also going to be talking about the journey that he went on with his wife, Taylor, who’s featured in the movie. And Scott, I’m thrilled to see you to have you here. I’m excited to be with you later today as we actually watch the movie with an audience. Thanks so much.

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Scott Rieckens: (01:59)
Yeah, thanks for having me. And we’re looking forward to having you as well for the screening tonight. It’s gonna be a lot of fun.

Jean Chatzky: (02:04)
So for people who are just being introduced to FIRE, what’s the thumbnail sketch?

Scott Rieckens: (02:12)
Yeah, so I mean, FIRE is essentially a financial framework that you can apply to your life and to the degree at which you apply it, it can accelerate the time at which you have to work, where you have mandatory labor in front of you. And it’s kind of an exciting and intriguing thing to know that maybe you can cut your working life by 10, 20, 30 years and gain that time back on the back end and maybe do things that you’re passionate about other than work.

Jean Chatzky: (02:38)
And it has some very distinct math. Right? I mean, it basically says if you can save 25 times your expenses, then you can choose what you want to do with your day.

Scott Rieckens: (02:51)
That’s correct. Yeah. The 25X rule, it’s based off of this Trinity study, which basically says that if you sip off of your investments at 4%, you can essentially sip off of those dividends in perpetuity and never draw down on the principal. And there’s some arguments on whether that’s 3%, three and a half. Yeah. All that. But, that’s getting into the weeds in my mind, because by the time you’re on that path and you’re getting close to making that decision, you know, you’re in a completely different frame of mind than living paycheck to paycheck. So, I think, you know, to describe the FIRE movement, it’s essentially a financial framework you can apply to your life and there’s this incredible community of people that you can find online that you can find at meetups all over the country and really all over the world who are there to support you. And I think that’s a big piece of it is that you know, you’re doing wonderful work here and there are people out there doing that type of work, but it’s sort of far and few between. In some cases you kind of have to go searching for it to find it. And I think a lot of people feel alone in their financial journey. And so that was something that we recognized immediately is that the FIRE movement, literally, it created a physical, real mentorship around, you know, how to do this, how to apply it, what are the pitfalls, all the things you’d want to know as you get into it.

Jean Chatzky: (04:04)
In terms of the size of this community, do you have any sense for how big it’s gotten?

Scott Rieckens: (04:10)
Yeah, I mean, it’s hard to nail down, but you know, we have seen the type of traffic that some of the major bloggers in the space get. We’ve seen, you know, certain Facebook groups, like the ChooseFi Facebook group is really active. I think they’re pushing something like 30,000. You know, some of the major blogs have millions of page views a month. So there’s definitely a lot of interest out there and these meetups that are happening, I think there’s something like 15 CampFis happening around the country. There’s Camp Mustaches popping up. There’s an event called the Chautauqua that’s an international event, and you see, you know, thousands of people going through these. So there’s definitely a sizeable community, you know, I don’t know if I had to guess, maybe 100,000, active and maybe another 400,000 sort of passive…

Jean Chatzky: (04:57)
Thinking about it.

Scott Rieckens: (04:57)
Passively interested. Yeah.

Jean Chatzky: (05:00)
Thinking about it. What do you say to people who say, Oh my gosh, I could never save half of my income?

Scott Rieckens: (05:07)
Yeah. I’d say don’t let that stop you from learning all the tenants of this framework. Because you never know what you’re capable of. I’m pretty confident that whoever’s saying that to themselves, they are capable of this. But what’s more important is to ask yourself, you know, how far would you go? And you’re not going to know that until you really push yourself. And I am here to say on the back end of doing that myself, that it was well, well worth it. That we are so much better off than before because we have a different relationship with money. It’s an improved and healthy relationship with money and we see money as a tool and we know how to use it now, which is just a far cry from where I was two years ago.

Jean Chatzky: (05:51)
Tell me a little bit about where this journey started for you.

Scott Rieckens: (05:55)
Sure. I was an avid listener of the Tim Ferriss podcast and he had Mr. Money Mustache on as a guest and as an avid listener, he introduced Pete as one of the most requested guests ever and he was like, Oh, you know, I’m so glad to have you on the show. I can’t believe it’s taken so long. And I was like, I feel like I would recognize that name if I’d heard it before.

Jean Chatzky: (06:19)
Mr. Money Mustache?

Scott Rieckens: (06:19)
Yeah, it’s pretty wild. So it was really intrigued by that. But man getting into that episode, everything that they were talking about seemed to be sort of this antidote that I had been searched for it, but didn’t know it.

Jean Chatzky: (06:32)
In what way?

Scott Rieckens: (06:33)
It was this ideal life that Pete was describing where the things that he cared about, the things that he spent his time on, how money wasn’t really a driving factor in all of that. It really spoke to me because I was feeling so much stress around money. We were living in a high cost of living area. We had sort of maybe accidentally let the, you know, keeping up with the Jones’s takeover. We were keeping up, maybe not even noticing. And it just felt like we weren’t getting ahead and we were working so hard and not getting ahead and it just felt like this hamster wheel.

Jean Chatzky: (07:06)
What were you doing at the time?

Scott Rieckens: (07:08)
I was a creative director at a small agency, a creative agency in San Diego, and I liked the work. But it’s the commute. It’s the time away from family. It’s all the other things. And so I just felt like there needed to be a change. Like, this isn’t what it’s all about. And when I heard that interview, it felt like the beginning of the answers that I was searching for. And so I dove in deep, went headfirst into this world that I didn’t know was FIRE at the time. It just sounded like a cool lifestyle with some answers to, like, investment questions that I’ve always had. I never had those types of advisors and mentors in my life. And after really going through the rabbit hole of his blog, many other podcasts, big podcast fan as I mentioned, I suddenly realized how simple it really all is. But that doesn’t make it easy. And that was compelling. And I’ve been in video production for, uh, nearly 10 years. And so going down that rabbit hole and looking through the content, I was jonesing for some video and when I didn’t find any, uh, that felt like an opportunity.

Jean Chatzky: (08:12)
To create some yourself. Take me back to simple versus easy. When you say that the concepts around FIRE are simple, how is that?

Scott Rieckens: (08:24)
So to me, you know, I felt like, you know, a total amateur when it came to money. I had never gotten any formal training on it. My parents, they never saddled themselves, or taught me, to saddle myself with debt or anything like that. So I stayed out of significant debt, thankfully, but when it came to investing that money, when it came to growing that money, I mean, other than some retirement accounts, which you’re not really sure where those are invested in, I didn’t really know what to do and it felt like a world that was really vast and a bit scary. It’s almost like, well, if I’m going to commit to that, it sounds like it’s going to be a master’s degree in and of itself and I’m already so taxed and busy, how am I ever going to find the time to learn that? And after reading through Pete’s blog,

Jean Chatzky: (09:15)
Pete, by the way, is Mr. Money Mustache for those people who are not readers of Pete’s.

Scott Rieckens: (09:20)
Sorry, I go to the shorthand quick cause it’s a long name. And listening to a Mad Fientist podcast and just going down the rabbit hole, you know, reading about Vicki Robin and understanding, just sort of the mindset around money and then the way that these investments happen. And then I read this book called The Pimple path to Wealth by J.L. Collins and it was a simple book to read, this is my first finance book I’ve ever read and it didn’t take me long and it felt like everything’s stuck and it felt like, well that’s pretty simple to understand. And whether it is the absolute best way to go or not isn’t really the point. To me it was just, now I have a framework on how to get started. And so that’s why I meant it’s simple because I’m not a mathematician and I’m not a money expert and I figured it out. And so it felt like this great equalizer, like, Oh my gosh, how is this not something that’s just widely available and everyone knows about it?

Jean Chatzky: (10:11)
What tenants did you find yourself embracing? I mean, what were the simple tenants that you decided to live by?

Scott Rieckens: (10:19)
I think the big tenant for us, for me in the beginning and for my wife and I later on was this idea that we were working so hard for our money, but we weren’t letting our money work hard for us. And to flip that, you know, to flip that on its head and realize that we’re working so hard for this money and then we’re squandering it once we have it and instead let’s be hyper responsible with the money that we are earning. That was kind of the tenant of FIRE to me. It was like this almost indulgent responsibility to your money. And I think that gets mixed up with frugality.

Jean Chatzky: (10:54)
It does because there’s two parts to it, right? I mean, when we’re talking about being super responsible with our money, we’re talking about not getting on that consumption, keeping up with the Jones’s wheel where we’re spending unintentionally and on things that don’t matter to us. But we’re also talking about investing our money in a way that makes it work.

Scott Rieckens: (11:14)
Yeah. And when you add the, the word, the dirty word of frugality in there, you know, some people sort of shun, you know, at that and say, this isn’t for me. I don’t want to live like a curmudgeon. I don’t want to do this. I don’t see it that way. I see it as being responsible with your money and what the FIRE movement, what’s so special about it, where the superpower lies, is they’ve kind of pushed it to the extreme a bit to say, well, just take this a little further than you think you can and look at the effects of this. Because compound interest just keeps getting better and better the crazier you go with it. And so the subtitle of the film and the book is, How Far Would You Go for Financial Freedom? As a question. And that was a very intentional subtitle. It took us a long time to come up with that. But the reason why is because I think that is ultimately the crux of this. There’s no prescribed rules. There’s nobody like, you know, holding these concepts over your head that you have to save 70% or live off $30,000 a year or whatever these extreme cases that you can read about within the FIRE movement, there’s none of that. You can do what’s right for you. And even if you take a few of the tenants of the fire movement, apply it to your life, I mean, you’re going to be better off if you’re not already applying them.

Jean Chatzky: (12:24)
Interestingly, and we saw this in the movie, or people who watch it will see this in the film. You and Taylor, your wife, did not come along at the same speed.

Scott Rieckens: (12:35)
Right. As most people wouldn’t, right? Everybody kind of learns at their own paces and feels that their own paces. And that’s certainly happened with us. You know, a secret that I’ve kept about this whole project this whole time is I was secretly just trying to get in the door and meet all these people face to face. And I thought maybe documentary be a good way to do that because I really felt as I was learning all this stuff, I wanted to talk to them. I wanted to get my questions answered. I wanted my wife to be there to hear those answers and those questions because I didn’t want to be the only one just, you know, we have to do this, we have to do this. ‘Cause I knew it wouldn’t work. What I found out later was it was really about finding, it’s about finding your why and your why is individual. So I can’t tell Taylor what her why is. I can learn about it and I can help guide her. But she has to come to that realization. And I had come to that realization with my own why.

Jean Chatzky: (13:28)
Which was what?

Scott Rieckens: (13:28)
For me, the why was this nagging suspicion that I was doing it incorrectly. And by doing it, I meant life. I wasn’t taking care of my responsibilities and my responsibilities according to me was making sure that my life and my family, which we had just had a baby, that they were taken care of and that I was doing my part. And I didn’t feel like I was doing my part, you know, I’d go out and work hard, but then I’d be drinking the cold brew from Starbucks and also get the sandwich and I kind of want that new shiny object, whatever it is. And I knew that wasn’t in my heart what I wanted or needed. I knew that wasn’t the path to happiness. But I didn’t know any other way.

Jean Chatzky: (14:07)
And Taylor was happy going into it. I mean, in the film she said, and this is a quote, she says, I’m a fairly optimistic person. I never had to think about being happy, but now I have to think about being happy. So going through this process was really hard for her.

Scott Rieckens: (14:23)
Yeah. And that was a dark time for me as well because I was really worried that this path I had convinced her to go and share with me maybe it wasn’t the right one for her, ’cause that was hard to take, hard to swallow the idea that she was already happy and now she has to think about being happy. That’s regressive. That’s the opposite of what I wanted. That’s about in the middle of the film. So I don’t wanna give any spoilers, but at the end of the day, you know, she realized that maybe this lottery mentality that she was living in, sort of ignorance is bliss. She’s very intelligent. I’m not calling her out on that front, but there is some bliss to not knowing. And I think, you know, she just, she didn’t worry about these things even though they were there to worry about. These things being, you know, our financial position based on how hard we were working.

Jean Chatzky: (15:08)
Vicki Robin and her late partner, Joe Dominguez wrote this seminal book in the field, Your Money or Your Life, which I think was the first book that actually encouraged us to take a look at the time value of our money. Something Tim Ferriss does really well to this day. Basically they said, you choose, you know, you choose your money or your life, you choose your time or your life. And people weren’t really thinking about the value of their time. I think in that way, she’s in the movie and she says, you have to want something more than you want stuff, you know? And that’s very individual I think to everybody. Well, what does that mean to you? What do you want more than you want stuff?

Speaker 2: (15:55)
Yeah. What I want is to be able to control my time and do so in a way that that is as present and as stress free as possible. You know, that’s what I’m ultimately trying to go for. You know, I think she wrote that. I think that book came out in like ’92, something like that. And, you know, for all intents and purposes, it’s essentially like the first time somebody equated time with money and the value of that, the value proposition of that. Like, there’s a scene in the movie where she’s on Oprah, she’s at the top, in the mid-nineties, and she’s explaining how this closet of clothes that’s standing in front of them is, you know, this is three weeks of your life. This is a certain amount of your life. And you know, Vicki always says, you know, this is a finite resource and it’s one that we need to, you know, be so precious with because we’re only here for so long. And so, and then that goes down a whole rabbit hole, which is wonderful of, you know, if you’re here, what are you doing here and why are you here? And you know, and all of that. And so it starts to get up, up the Maslow’s hierarchy of needs into what’s self actualization? You know, like once you have your basic needs met, what are you doing here? And so, that’s what’s so fascinating about this whole FIRE movement thing. It’s not really about money. When you really get to the end of the road on it, it’s like, Oh, money’s just a tool.

Jean Chatzky: (17:10)
That’s what we say here all the time. I want to dig a little further into the idea of stress and using your limited resources in your financial life to alleviate rather than bring on stress, but before we do that, let me remind everybody, HerMoney is proudly sponsored by Fidelity Investments. We’re here to remind you, and this is a good time to remind you that you’ve worked too hard to just let all your money sit in savings. Whether you’re new to the workforce or you’re approaching retirement. Fidelity will help advise you through your career and beyond so that your money is just as hard as you do. It all starts with a yearly financial checkup and an understanding of what you own and what you owe. From there, the folks at Fidelity will work with you to evaluate your investment options, determine ways to grow your savings and keep you on track to reach your life goals. Start demanding more from your money today at fidelity.com/demandmore. We are back with Scott Rieckens, entrepreneur, creator of the new documentary, star by the way, of the new documentary with his wife ,Taylor, Playing with FIRE. Stress is big as far as money is concerned. And what from the fire movement helped you get rid of the stress?

Scott Rieckens: (18:34)
Well, I think it was a couple of things. To start, it’s, you know, the framework for me, the way I prescribed it for us was, let’s see how far we can take this. Let’s see how far we can push our savings rate. I’m not saying that’s where we need to keep it, but I want to see how far we can push it so we know what’s comfortable for us. I highly recommend that to people instead of kind of dabbling in it. ‘Cause then I’ll never stick, like, go all the way, see what’s uncomfortable, see what hurts and then pull it back. What are you capable of? Especially longterm, because this is a long term contract, right?

Jean Chatzky: (19:08)
It sounds like training for people who are marathoners, right? Like, I was on the treadmill this morning and I started at a nice leisurely gait, but I try to push it before I get to the end of my run just to see what I can do, you know, can I get it up to an eight minute mile? Which for me is pretty good.

Scott Rieckens: (19:24)
That’s great, nice work.

Jean Chatzky: (19:26)
But not really, you know, I can get there for like a minute and then I have to back off.

Scott Rieckens: (19:30)
But how would you ever know that if you didn’t try that? And how would you ever get better if you’re not pushing yourself?

Jean Chatzky: (19:35)
Right.

(19:36)
So, you know, I definitely agree. You know, I believe in that sort of approach, but when we did that, one of the amazing residual effects of this is, you know, we kind of went extreme, don’t get me wrong. I mean, we shed it all, you know, we got rid of almost all of our stuff. We got rid of both of our vehicles. We travel around the country trying to find a new place to live. And I’m not necessarily recommending that for everyone, but if that sounds like a fun adventure then have at it. But ultimately, you know, we were working towards that high savings rate and we got there and we got there fast and the residual effect of that was all of a sudden we could live off of one income. All of a sudden we’ve saved up an emergency fund we’ve never had. And that’s an emergency fund that we now feel like we can keep there. And there’s solace, there’s emotional solace in that. From there, now we have some more leftover. Let’s start dabbling in investments. Let’s see what that feels like, intentionally. But the other thing, you know, you were talking about stress, what I love about the FIRE movement is there is this sort of prescription on, you know, try to invest your money with the least amount of stress and over sight possible. Unless you’re fully, completely committed and prepared for that oversight, you know, it’s okay if you want to invest in let’s say real estate, just know that that’s a different type of investment. And so, you know, one of the things that I attached to early on was this idea of investing in index funds. It’s like you’re investing in the entirety of the stock market and this portfolio is chosen by experts who deal in this all day long and are better at it than you are. And that I got the advice from our dear friend Jim Collins who wrote that book, The Simple Path to Wealth. I got this advice, you know, buy as much as you can, as often as you can and hold it forever. And the hard part is going to be dealing with the, you know, the inevitable dips, the inevitable crashes and all the other things that go along. And that brings a lot of fear and stress. And so you might say, well, that’s just as stressful as any other investment. And it’s like, okay, sure. But you know, I would say get into this FIRE content and really dive in deep because I mean Jim just released a meditation about staying the course of literal meditation.

Jean Chatzky: (21:48)
Well I’ve got to say, I think the buying low cost buying all the time is it gives you something to hold on to. I mean you talked earlier about the calculus that Vicki went through with the three weeks of clothes on Oprah’s stage. When you’re looking at your portfolio that way, what you realize is that when the market dips, you just get to buy more at cheaper prices and that that’ll do you, you know, anybody who stuck with the market through 2007, 2008, 2009 and has watched it triple, if not quadruple knows this works over time. It doesn’t work in the short term. But as long as you can tune out the noise and keep buying, it does work.

Scott Rieckens: (22:39)
That’s right. And then you also mentioned low fees, you know, trying to find the best price to invest your money. That makes all the sense in the world. And it just so happens that our favorite vehicle is usually the cheapest vehicle to invest in. So it works out really well. So it’s kind of a no brainer, but the emotional side can come in. And another piece of advice that we got was you look at World War II, you look at, you know, 9/11, you look at these massive events that had huge effects of the recession, the Great Recession and the Great Depression. These are all situations that stock market has survived and surpassed, you know, time and time again. It relentlessly goes up and you have to be able to stay the course and know that that’s going to happen. And then also believe in this idea that, Oh, it’s not, this isn’t tragic. Don’t read the news. Instead, look at it like it’s all on a fire sal.,

Jean Chatzky: (23:29)
Exactly, so to speak.

Scott Rieckens: (23:30)
And you wouldn’t have money left over to start investing at a time like that when the recession is happening. People are losing their jobs. There’s a lot of fear. Well, guess what? You’ve also created this wonderful buffer when you have a high savings rate because you need less than everyone else to live off of. So it’s almost like this, this barrier, this buffer that you can put in place. And coming out of that, you know, I came into the market, you know, in the job market in ’06, you know, so it was like, you know, I was on that track for a second and coming out of college and then boom. And I said, I’ve lived through that. So there I think, you know, my generation, we’ve seen that happen and so you have this like fear and you’re not really sure how to deal with this. And that’s probably where I was when I found this. So that’s why it probably resonated as much as it did because it’s like, Oh, these are all the answers I never had, even though I went through all that. So it makes sense to me.

Jean Chatzky: (24:20)
A couple of questions as we wrap this up. The first is that we know a lot of our listeners work, not in a traditional job, but they have freelance income, they have gigs. How do you participate in this movement if that’s something that you want to do when your income is not steady?

Scott Rieckens: (24:40)
Hmm. Yeah, I mean the tenants are the tenants, you know, it’s an individual journey, but at the end of the day it’s about trying to save, you know, as much as you possibly can. I like to say just save half, you know, I think that’s kind of a nice standard to try to go for. And you can either do that by slashing what you’re spending or you can do that by increasing what you earn and there’s great materials out there and resources within the FIRE community to help you learn both ways. But yeah, I mean, as far as people, advice that I would have for people that are freelancing and trying to earn more money, I mean, I don’t know, it’s never been easier, you know, in this gig economy, with remote work opportunities, it’s never been easier to earn money in really interesting and unique ways. You just have to be open to doing those things. But, you know, I mean, that’s, that’s an individual path.

Jean Chatzky: (25:26)
Yeah, absolutely. Where can people see the movie

Speaker 2: (25:30)
Right now we’re screening the movie in theaters. We are prepping for a digital release later this year. Hopefully in a couple of months. We’re shooting for November and so it’ll be available on iTunes, Google Play, Amazon, you know, anywhere you can kind of buy and rent movies. And so, yeah, we’re trying to get it out to the world as fast as we can. There’s a whole bunch of interesting, weird processes in the world of independent filmmaking that we’re going through right now, but it’s been a fun journey and yeah. And we’ve had a wonderful response from the screenings thus far. It’s just been kind of overwhelming to be honest. It’s played in over a hundred theaters across the country. We sold over 9,000 tickets in less than two months, lots of sold out shows. It’s just been overwhelmingly positive. So we’re really encouraged by that because ultimately what we’re trying to do is we’re trying to spread this message to as many people as we can so at least they have a chance to see if it works for them. And then we also wanted to give the existing FIRE community sort of a calling card, you know, cause it is kinda hard to explain this stuff. It’s hard to talk about money with your friends and your peers and your family. So to just say, Hey, you know, check out this documentary. This talks a lot about, you know, the main tenants of what I prescribe to or what I’ve been kind of working on or kind of what I agree with. Or maybe this is all what I agree with. We tried to give that to them and it seems like we’ve done an okay job.

Jean Chatzky: (26:43)
Scott Rieckens. Thank you so much for being here. I appreciate it.

Scott Rieckens: (26:46)
Thanks for having me.

Jean Chatzky: (26:48)
And we’ll be right back with Kathryn and your mailbag. And HerMoney’s Kathryn Tuggle has joined me in the studio. Hi Kathryn.

Kathryn Tuggle: (26:59)
Hi.

Jean Chatzky: (26:59)
So we’ve done I guess three or four FIRE shows at this point.

Kathryn Tuggle: (27:05)
We have.

Jean Chatzky: (27:05)
Does it make you think about, well, I’m being way too transparent here because it always sort of makes me think about the excess in my own life. Like I don’t want to, as we’ve determined already, retire early if ever, but these conversations always make me feel kind of wasteful.

Kathryn Tuggle: (27:27)
I think they’re designed to, right? I think that if you walk away from a conversation like this and you think you’re doing everything right, then you’re probably part of the FIRE movement.

Jean Chatzky: (27:38)
Yeah, I guess. I mean I just came from a lunch. I actually just had lunch with Kelly. Yeah. She says hello to everybody by the way. And I was pissed off that there was a paper straw in my iced coffee. I was and that makes me part of the problem because I have studiously avoided the iced coffee place over the summer near my house in New Jersey where they’ve just gotten rid of straws altogether. They just have it so you drink it through a spout, which seems to me ridiculous because they had to make new lids for the cups. So why not just make a straw paper straw, bamboo straw, whatever you want to do. But yeah, these paper straws that melt make me part of the problem because I get pissed off.

Kathryn Tuggle: (28:27)
I don’t know anyone who is a proponent of the paper straw. This is a constant conversation I have every time I am out with my friends. And oftentimes we have to ask for five or six paper straws for our table because we know that we’re going to sit there long enough that they’re all going to disintegrate. And then I start to wonder, what did they bleach this straw with? This straw is purple. What am I actually drinking?

Jean Chatzky: (28:51)
I did have a bamboo straw. One of the, one of the other places switched from plastic straws to bamboo straws. And I remember being in Japan about, I dunno, almost a year ago now, and being in a bamboo forest and the tour guide saying how long do you think it takes the bamboo to grow to what was a height taller than my house? Like way taller than my house, moral guessing, like five years, 10 years. And she said two weeks. And because bamboo is one of those incredibly durable and renewable resources. So I can sort of get behind the bamboo straw. It was a little small. It did the trick and it didn’t disintegrate. And I know this is not what the FIRE movement is about, right? I totally us off course, but it does make me think about the excesses in my own life and how if I got rid of those excesses that were not meaningful to me, I could have more money to do things that were more meaningful.

Kathryn Tuggle: (29:58)
Right. I mean, I think that the dialogue around FIRE, when you play devil’s advocate with FIRE, that thing that you always hear is at what point are you stripping the joy out of your daily life?

Jean Chatzky: (30:11)
Right.

Kathryn Tuggle: (30:12)
And that’s the big question, right? The trips that you don’t take or the meals that you don’t enjoy for a friend’s birthday, these are life experiences that will not come around again.

Jean Chatzky: (30:23)
Yeah, and we heard Scott and Taylor struggling with some of that.

Kathryn Tuggle: (30:27)
For sure. At my wedding, a friend of mine said that this is the only moment when all of these people will ever be in the same room at the same time. And of all the things that were said to me that day, that was the most profound because I started thinking about even like a yoga class or a friend’s birthday. These are moments in time that will never occur again. And when I overspend, sometimes I hear that in my head. Right. Inspiring me to say, you got a carpe the diem, right? You got to say, yes, you got to go do this thing because it’s not going to happen again.

Jean Chatzky: (31:06)
Yeah. No, I know. Well, I guess that’s the point, right, to get you to think about it. Even if you’re not going to do it, to just think about your level of conspicuous consumption or meaningless consumption or mindless consumption, whatever we want to call it, but I would really like a straw that works.

Kathryn Tuggle: (31:24)
I would love that too. Do you, what about a stainless steel straw? Would you consider carrying one of those around?

Jean Chatzky: (31:29)
I would consider it. I’m a little afraid of the hygiene issues because my bag, my tote bag, not the cleanest place in the world. You know, I ended up with a lot of stuff on the bottom of my tote bag. I could do it. I’m also a little bit skeeved out. It feels a little, teeth on a stainless steel straw feels a little like nails on a chalkboard except that we use spoons so maybe it wouldn’t be so difficult.

Kathryn Tuggle: (31:57)
Yup.

Jean Chatzky: (31:58)
I dunno. I’ll give it a try.

Kathryn Tuggle: (31:59)
Give it a try, let us know.

Jean Chatzky: (31:59)
I’ll buy a pack for the office. We can all, we can all give it a try. Let’s go to mailbag. What do we have today?

Kathryn Tuggle: (32:06)
Our first question is short and sweet. It is from Chris from Pittsburgh. They write when searching for a job is it wise or foolish to accept a position you are overqualified for in order to quote, get your foot in the door of your dream company?

Jean Chatzky: (32:21)
I think that’s the way of the world these days in it to some extent, and granted Chris, I wish you would have told us your age. I have a whole cadre I feel of 50 year old men in my life who are in the job market and are constantly being told that they are over qualified for a position and have been asking one by one, should I take a step back? Should I take a position that I’m clearly overqualified for just to get employed again and sometimes it’s even a tough slog to get people to take you on for a job they know you’re overqualified for. So I do think it’s a double edged sword. Is it wise or is it foolish? I think it really depends on the trajectory that you can see ahead of you. If you’re taking a job that looks like there won’t be room to move up quickly or at all, I think you’re going to be really frustrated really fast. But if you can see opportunity to make yourself valuable, to make yourself known and to escalate, I don’t think it’s a bad thing to do, to take a step back in order to move forward. It’s something that I did a number of times, switching gears early in my career. I did it in terms of salary. I have my salary at one point in order to get back where I wanted to go. So clearly dream company is somewhere that you really want to be. I would probably go for it.

Kathryn Tuggle: (33:59)
Is it fair to ask directly and say, I’m taking a pay cut, I’m taking a step back. Can you let me know if I’m a good performer? What my chances for advancement are?

Jean Chatzky: (34:10)
Yeah, or when my next evaluation will be. I think that’s an absolutely fair thing to lay on the table and I think first of all, I wouldn’t do it until you get the offer because I do think it’s a little bit of an expectation setter. But if they have expectations that are misaligned with yours, I think you want to know before you start.

Kathryn Tuggle: (34:34)
Great point.

Jean Chatzky: (34:35)
Yeah. Thanks Chris.

Kathryn Tuggle: (34:37)
Thanks Chris. Next up is from Meg in Richmond. She writes, I greatly enjoy your podcast and newsletter each week. I love learning and getting smarter on my commute and eagerly await the newsletter coming through each week. I had some questions bubble up from recent listening and reading. I’m curious how many credit cards is too many if you’re using them the right way? And as an added layer to that, If you have five or six credit cards that you use for different things, how many is it okay to be paying an annual fee for? I’ve used the Capital One Venture Card for a long time, but I’m excited by all the benefits of the Chase Sapphire Reserve. You’re the best. Thanks again for all you do.

Jean Chatzky: (35:15)
Meg, you’re reading my mind this week. I don’t have as many credit cards as it sounds like you do, but I did just add another one with an annual fee to my wallet. I actually added an American Express Gold Card for Business and the reason I did it was because you get four points for every dollar that you spend on travel and I’m spending a lot of money on travel these days. I also happen to have the Amex Platinum Card and I decided that that’s worth the money as well because I use the airport lounges and I use the 10 credits for free wifi each year. And so if you add those things up, both of these cards are going to pay for themselves in my wallet. And so I think they’re two different questions. First of all, the annual fee question, I won’t pay an annual fee unless I can actually earn it back in terms of added miles that I couldn’t get elsewhere or perks. And perks or things like free credits against your bill. That Chase Sapphire Card gives you a $300 travel credit each year. And even though it costs close to $500, you’re already getting so much of that back that if you’re going to earn that benefit, it will very likely pay for itself. The five or six or more credit cards? I don’t believe in keeping credit cards that you’re not using that have an annual fee and the other barometer that I’d check is your credit score. If your credit score is not as high as you want it to be, one reason may be that you have too many credit cards, that they are looking at you as a risk for overspending. I’m assuming if you’re qualifying for the Chase Sapphire Card that your credit score is just fine, but if you start to see it waver, I might look to get rid of one or two of those cards. That said, it’s a tough line to walk because we also know that closing credit cards can hurt your credit score because you’re essentially digging into your credit utilization ratio. Your credit utilization is the percentage of credit that you have that you’re actually using and when you close cards, you shrink the denominator of that fraction. You get rid of credit that you have. So I’d say be careful. No need to close them if your score is where you want it to be and if you’re not paying annual fees on most of those cards. But I love a question like this as you can tell.

Kathryn Tuggle: (38:03)
Great feedback. All right. Our last mailbag is from Katie. She writes, thank you so much for all you do to bring clarity to the sometimes overwhelming world of finances.

Jean Chatzky: (38:13)
Aw. Thanks Katie.

Kathryn Tuggle: (38:14)
Thanks Katie. I just accepted a job at a new company, which is very exciting. However, my new health insurance doesn’t kick in for 30 days. I’m terrified of going without health coverage. I can avoid making routine doctor’s appointments for a month, but if I were in an accident or had a medical emergency, I hate to even think what it might cost me. What are my options for health insurance during this short period, other than Cobra? It’s quite expensive. So I was hoping there might be more affordable options out there. Also, let me add that I’ve worked at the same job my entire adult life, so I’ve never gone through this transition before. Thank you so much.

Jean Chatzky: (38:48)
So Katie, there are short term health plans. And you should look at them. You should look at the benefits. Some of them don’t cover the everyday trips to the doctor, but really are there only in terms of covering a big medical emergency. In other words, they operate a little bit more like a hospitalization or indemnity plan, but they are out there for precisely this purpose. The folks ehealthinsurance.com, they have a lot of them, so I would send you there and if you find that they, too, are not economically desirable, the one thing I would say is your inclination is right — don’t go without, because something could happen. Life does happen and we can’t always control the timing of it. So if you have to bite the bullet and either pay for Cobra or one of those policies, I hope that you will do that.

Kathryn Tuggle: (39:42)
I agree.

Jean Chatzky: (39:43)
Absolutely. Kathryn, thanks for the questions.

Kathryn Tuggle: (39:45)
Absolutely. Please write into us mailbag@hermoney.com.

Jean Chatzky: (39:50)
And in today’s Thrive. While we’re on the subject of credit, how long has it been since you checked your credit report? Given the huge number of data breaches we’ve had in recent years, the number, for the record, was 6,500 in 2018 alone. I would hope that the answer to that question is that you’re checking your credit often, particularly if you don’t subscribe to a credit monitoring service. But a survey out recently from the Consumer Federation of America showed consumers are actually checking our credit less often, which can spell big trouble in the identity theft department. From 2012 to 2019 the number of consumers who said they believe it’s important to check their credit dropped from 82% to 67%. What’s going on? Well, it seems that far too many of us are operating with an out of sight out of mind mentality. If you think back to 2012 many of us were still facing those challenges leftover from the great recession. We were dealing with mortgages and credit cards that were not functioning optimally, so credit was top of mind. But when the economy is doing well, when jobs are plentiful, when money is coming in, those things become less of a priority for us. In other words, we’ve gotten less vigilant because we’re feeling good even though we’re living in an era when we should be just as vigilant, if not more vigilant. So here’s a reminder, we are all entitled to check our credit reports for free by requesting one report from each of the three credit bureaus, Equifax, Experian, and TransUnion, each year annualcreditreport.com. I like the idea of checking a report every four months so that you just are doing it on a continuing basis. And then once you’ve checked it, freeze your credit with each of the three credit bureaus. Credit freezes are now free in all 50 states, and that means you are officially out of excuses for not having done it yet. Thanks so much for joining me today on her money. Thank you to Scott Riecken for the fantastic conversation. If you like what you hear, I hope you’ll subscribe to our show at Apple Podcasts. Leave us a review. We love hearing what you think. We want to thank our sponsor Fidelity. We record this podcast out of CDM Sound Studios. Our music is provided through Track Tribe and our show comes to you through PRX. Join us next week. We’ll be back with another great guest and we’ll talk soon.


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