April 23, 2025 • 58 mins
In this episode, Bill & Jackie joined Doc G (Jordan Grumet) on the 'Earn & Invest Podcast' to talk about what it feels like to be a late starter in these uncertain times. Questions about a recession are looming and it's scary, especially for those just waking up and trying to catch up. They discuss the ups and downs and how late starters can still stay on track.
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⏰ ‘Catching Up to FI’ Episodes
Bonus Episode: The Market is Crashing, Now What? | Bill & Jackie | 135
International Educator, Bali FIRE | Amy Minkley | 137
The pURPOSE Code | Jordan Grumet | 115
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:01):
Hey, catching up to FI.
You're about to hear an episode that Billand I recorded with our friend Doc G on
the Earn and Invest podcast, and we lovegoing on other shows to spread the message
that it's never too late to catch up.
So listen in.
Jackie, there are rumblingsthat we have a recession coming.
(00:27):
What do you hear from yourcommunity of late starters?
Are they anxious?
Yes, of course.
And maybe even more so becausethey're getting a late start, right?
They're just trying to getgoing and now this happens.
And I don't know that there's any goodway to sort of calm those feelings
except to try to talk a little bitabout history like I when 2008 happened.
(00:52):
And that's a good thing for most of us.
Late starters.
A lot of us remember 2008, and if Icould bottle up those feelings in 2008.
And then look at what happened after that.
That just helps you putthings in perspective.
But nonetheless, people areanxious, they're nervous, they
don't know what's gonna happen.
People don't like uncertainty.
(01:15):
it's a bit manufactured.
Policies that have been instituted,you know, party independent are
creating this, the fundamentalsof the market didn't change.
It's just the anxiety and theuncertainty changes and the
market doesn't like uncertainty.
The thing I worry about is we may be in astate of uncertainty for four years, so.
(01:36):
Maybe it is a little different.
The average American is a late starter,you know, there's a huge community of late
starters to tap into, and they feel alone.
They feel isolated and they'relooking for a community like ours to
say, you know what, I'm not alone.
I've done exactly whatother folks have done.
(01:57):
I've lived, quote unquote, the AmericanDream, maybe a little too much.
There's a spectrum between deprivationand paycheck to paycheck, and you wanna
find that balance, and the balance comesin around a 30 to 40% savings rate.
(02:41):
I'm Bill Yo.
I'm Jackie Cum Koski, andyou're listening to The
Earn and Invest podcast.
I felt like it was too late Often in mylife as I get older, my dreams of being of
consequence feel farther and farther away.
In fact, it took me almost half acentury to publish my first book.
(03:05):
What if I had done it earlier?
I encounter the same senseof loss with my dying.
Patients told they have weeks to live.
It feels impossible to undo theirregrets to catch up to all that
has been left unsaid or undone.
But even for the dying,there's still hope.
There's always a possibility of onemore trip to the ballpark, one phone
(03:26):
call away from fixing a relationshipthat feels irreconcilable broken.
Even for the dying, it issometimes not too late.
So why would it be?
For you,
Billy Out and Jackie CummingsKowski are co-host of the Catching
Up Def five podcast, which focuseson mindset, money, and life.
(03:49):
Late starters on the journeyto financial independence.
They aim to support and inspireindividuals who feel behind in
their financial journeys emphasizingthat financial independence
is achievable at any age.
Bill and Jackie, welcomeback to Earn and Invest.
Jackie, there are rumblingsthat we have a recession coming.
(04:12):
What do you hear from yourcommunity of late starters?
Are they anxious?
Yes, of course.
And maybe even more so becausethey're getting a late start, right?
They're just trying to getgoing and now this happens.
And I don't know that there's any goodway to sort of calm those feelings
except to try to talk a little bitabout history like I when 2008 happened.
(04:37):
And that's a good thing for most of us.
Late starters.
A lot of us remember 2008, and if Icould bottle up those feelings in 2008.
And then look at what happened after that.
That just helps you putthings in perspective.
But nonetheless, people areanxious, they're nervous, they
don't know what's gonna happen.
People don't like uncertainty.
(04:58):
So there are some people that are doingsome, you know, drastic things, you
know, pulling money, money out of themarket, um, you know, changing their
asset allocation and things like that.
But we do have a group of peoplethat are like, stay the course.
Stay the course.
So it's all over
the place.
Bill, our friend j Collins often saysthat if you're in the accumulation
(05:20):
phase, you are almost rootingfor a recession, especially if
you know you're gonna have a job.
Does that argument workwith late starters?
I mean, can we calm them downand say, no, no, no, wait.
This is a great buying opportunityas long as you have an income.
Yeah, exactly.
I mean, there's actuallydifferent phases of late starting.
There's early, mid, andlate, late starting.
(05:42):
Uh, the, the journey is about 15years, 12 to 15 years, give or
take, and you can be for eight, 10years, a hundred percent stocks.
As long as you have that.
Five to seven year, oneway on the back end.
And those of us that like myself, whoare within five years of retirement,
may well be a little more nervous,but I did downshift my portfolio
(06:03):
and I have that cushion, that bufferthat allows me to weather this.
I am still working and I plan ondoing so for the next four years.
So I'll work through whateverit is, recession or not.
And yesterday or the day before,I used the, the downturn, the
correction to do tax lost harvesting.
This was an opportunity to takeadvantage of that and buy more.
(06:25):
We have seen in our community, afew people that said, I'm so smart.
On January 20th I sold out to cash.
And you know, we tell 'em, okay,when are you gonna get back in?
You know, how are you gonna avoid thewhipsaw being right on both ends of this?
So yeah, you can feel smart onthe front end, but you can also
wait too late to get back in.
Jackie Bill mentioned thatmagical 12 to 15 years.
(06:48):
This idea that you can go from, let'scall it even, or, or maybe even in debt
to financially independent between 12and 15 years, even for late starters,
do you think that still holds?
I mean, you guys have now beendoing this podcast for a few years.
Your community has grown.
Do those numbers work?
I, I think they do.
For me personally, ittook about 10 to 12 years.
(07:11):
And I think it all depends on whenyou wake up, where are you at.
You know, a lot of people don't realizethat they, they've already been doing
things that actually has moved themforward without, without even realizing
maybe they were putting money in their401k, like up to the match, or maybe
the 10% that everyone talks about.
Well, that's something so.
(07:34):
In a lot of cases, they're not startingat zero as far as the investments.
Now, if they have a ton of debt,they have to do that, but I feel like
when you have that mindset shifts,boy you can move a lot faster.
Then you thought, I, I think aboutthe mom and how her adrenaline flows
when she is protecting her cubs.
She's so much stronger than she everthought she could be, and I kind of
(07:57):
feel like late starters are that way.
So I definitely believe that timeframe,you know, for me it was 10 to 12
years, but 12 to 15, absolutely.
Um, our traditional, I guess.
Career advice and working Lifetime societysays that it needs to be 30 or 40 years.
It really doesn't.
(08:18):
Whether you're starting early, let'ssay at 25, and you do it in 15 years
and you're done at 40, or if you'rewaking up late and you're starting at
50, or let's say 40, and you do it at55, so it's still that same window.
(08:39):
Except, you know, we'reshaving some time off.
So whether you start at young or startin the middle, I would say, you know, 10
to 15 years is a reasonable timeframe.
Still, bill.
We
always run into those people who run awayscreaming from the stock market because
they say, this time is different, right?
This time is different.
(08:59):
All of a sudden it's notgonna look like past history.
Which begs us as financialpeople out there, right?
Having podcasts, talkingabout personal finance.
Should we be suggestingsomething different or should
we stick to the playbook?
Do you feel like you are.
(09:19):
Financial advice.
I don't wanna say financial advice becausebasically we don't really advise people.
We create content and helpthem kind of make decisions.
But do you think that out therein the world, people should be
doing things slightly differentthan they have in the past?
Or do you think as always,this shall pass and it's gonna
be the same as it always was?
Well, there are some smart people likeScott Trench in our space who, you
(09:43):
know, exited some of the market andwent into real estate because they felt
sort of the, you know, the greed of themarket and it was making them nervous.
So again, there are smart people likehimself that sort of made a shift.
I'm staying the course.
You know, I think, uh, that 15 yearrunway, we need to make sure people
know that that is a 30 to 40% savingsrate and you have to escalate that.
(10:05):
It isn't just a runway basedon a 10 or 20% savings rate.
And that's where we've been at.
You know, for example, we weresingle digit savers, 10% savers,
and within a year we went to 40%.
And it was amazing how we wonderedwhere all the money had gone.
And it's amazing how you cancollect yourself and learn
from your mistakes and make.
Significant end roads inthat 12 to 15 year timeframe.
(10:28):
But you gotta tighten your belt, you gottadownsize your life, you gotta upsize your
income, you gotta increase the gap and,uh, monitor your leaky bucket expenses.
So if you do those three things, uh,you will achieve that 15 year journey.
But I'm not doing anything different.
Uh, I'm staying the course.
I've got.
Four years left.
So I feel good about what's happening now.
(10:49):
I don't mind a bit of a crash if,if that's what it's gonna be to me,
it seems it's a bit manufactured.
Policies that have been instituted,you know, party independent are
creating this, the fundamentalsof the market didn't change.
It's just the anxiety and theuncertainty changes and the
market doesn't like uncertainty.
The thing I worry about is we may be in astate of uncertainty for four years, so.
(11:14):
Maybe it is a little different.
Bill, I wanna get back to policy, butfirst I wanna jump to Jackie and and
talk about Scott Trench for a moment.
Scott Trench is someonewe all love, right?
He is the CEO of BiggerPocketsBiggerPockets Money podcast.
He surprised a lot of us in thisFacebook comment about talking about
how he really was in a sense saying,I'm going to market time, right?
(11:36):
I feel uncomfortable because ofwhat's happening currently, so I'm
gonna change my asset allocation.
And we always say, well, you're notreally supposed to change your asset
allocation based on acute market changes.
You're supposed to put together a planfor yourself over decades and then
stick to that plan because we know.
That when our emotions get inthe way of something that just
(11:56):
happens, we tend to sometimes makedecisions that aren't the greatest.
On the other hand, like I said, likeScott has read the tea leaves, right?
He got into business.
He's done some amazing things.
What do you think that does tosome of these late starters who are
just finally starting to buy intothis idea that there's this set.
Number of rules and that maybewe need to put emotions aside.
(12:19):
I, I see the same argumentwith cryptocurrency, right?
We have all these people who talk aboutnever, never speculate, and all of
a sudden they're saying, well, maybeyou should hold some cryptocurrency.
Is this confusing?
And I would say especially the latestarters who are just kind of getting
their mind around what we would callthe most important personal finance
advice that we're trying to get them.
(12:39):
I think it's extremely confusingand there's no shortage of
information out there these days.
There's a shortage of good information andsometimes people don't know or, or they
can't decipher the good from the bad orthe information that's given in order for
someone to, you know, benefit themselves.
(13:00):
So I still, you know, you'll always haveprobably the majority of Americans, they
don't pay attention to this stuff, and it,it's a, you can barely get them to default
into a target date fund in their 401k.
Okay, so most of them arenot paying attention to it.
So it's the one area in your life thatprobably doing less will help you more.
(13:25):
Now, arguably this timemight be different.
You know what?
We thought coronavirus wasdifferent too when that happened.
Okay.
In my opinion, the averageperson, they don't want to
watch their portfolio like that.
Now, there's some people that willhear, you know, Scott Trans, you
know, made this, you know, brilliantdecision to go into real estate.
That's for him, and he'sa genius at real estate.
(13:48):
So I wouldn't be the one trying that.
So I, I don't think it's much different.
I mean, broadly, I think what'sdifferent than might've been different
10 or so years ago, you don't havethe pension out there anymore.
That's safe.
And a lot of us, late starters, let'ssay people in their forties and fifties
are that generation, gen X, where.
(14:09):
They, they're likely to have afrozen pension, a partial pension.
Some of 'em may still have one,but that's pretty much gone.
So it's almost a hundred percent dependenton your own management of your portfolio.
And an index fund will.
Get it done.
You know, like J Collins, you know,talks about, but some people have an
(14:29):
inclination of wanting to do a littlebit more and that's totally fine.
But it's not to say that keepingit simple doesn't still work.
The index fund, again, it's all thosedifferent stocks that send one fund.
What's the, what's the likelihoodof everything going down?
So, so I'm, I'm like, bill,I'm staying the course.
I did a few tweaks, like I,any cash I had sending around.
(14:53):
It was a great time to add alittle bit more to, you know, into
the index fund that I invest in.
And that's about all, but it, it, itdoesn't feel good to me either, even
though I know market history and Idon't feel like this time is going to
be much different than any other time.
We'll get over it and more thanlikely it'll be more like a
(15:15):
trampoline when it does come back.
So, so that's what I'm holding on to.
Bill, I wanna get back to this policyquestion 'cause there are a lot of people
who were anxious at the possibility ofa Donald Trump presidency and let's say
there were probably also people, youknow, four whatever, eight years ago who
are anxious about a Joe Biden presidency.
(15:35):
And the argument you hear from thefinancial gurus as well, whoever's
in power doesn't really matter.
We hear this all the time, it's like,well, the stock market makes money
when Democrats are in H in office.
Stock market makes money whenRepublicans are in office, and this
is something we often clinging to.
Now I'm gonna talk aboutmy personal interest here.
My wife is leaving work.
(15:57):
May.
So for me, the decumulationphase begins May one.
And what is our biggestfear with Decumulation?
It's sequence of returns risk.
Like you do not wanna start yourretirement during a recession.
You mentioned policies, and unlikewhat everyone says, policies seem to
(16:18):
be having an effect here, maybe onboth sides, but currently right now,
these policies seem to be pushing usa little bit more towards recession.
Again, was that bad advice?
I mean, does it matter who's in office?
Do the POL policies in theend make a huge difference?
I think policies do make a difference.
(16:38):
'cause this is a dramatic shiftfrom what's been done for decades.
I think the last time we saw policieslike this were in the 1930s, you know,
and there was a Republican, RonaldReagan who came out with a speech that
said tariffs are bad for business.
And that's very interesting because thisis an individual policy and you know.
(16:59):
We haven't experienced it.
Is it going to be another coronavirus?
Is it going to be a shockthat's relatively short-lived?
It may well be where people readjust to.
You know what?
Things haven't really changed.
The market fundamentals are there,but what we have seen is a lessen, a
diversification because in the last threeor four months, international stocks
have been trouncing in domestic stocks.
(17:21):
So, you know, we, we may be infor, uh, a reversion to the meme.
What do you think Jackie?
Does it matter who's in
office?
History says no.
History says no because um, Ithink the conventional thinking
is that when Republicans are inoffice, the market does better.
And when I went back and looked at howthe market did based on whether it was
(17:44):
a Republican or Democrat, the Democratsactually won out, but not about much.
So let's just call that even.
So I think it matters short term.
As we're working these things out,because you know, our president is
saying, Hey, we got a little short.
We're gonna have a short termpain, and then everything is
gonna be much, much better.
You just watch.
You just watch.
I don't know if that's the case ornot, but typically right after the
(18:07):
election as we saw that big bump, I.
Based on sentiment and how peoplefeel, but four years from now, or
eight years from now, or 20 yearsfrom now, it's gonna be like a blip
on the screen and it's really notgoing to matter in the long term.
But then short term, I thinkmarket temperament, you know,
people's temperament, investortemperament, will start to shift
(18:29):
the market, you know, as it has.
But over the long run, Isay no because we've had all
kinds of presidents that had.
Implemented certain policies.
If we weren't living back then, wedon't feel it the way that the people
did that were living back then.
And, and I just remember, uh,you said your wife is retiring.
Congratulations, by the way.
(18:51):
I retired December, 2019, sothree months before Covid.
Yeah,
and it felt awful, and I askedmyself the same questions, you
know, sequence of return risk.
I picked the wrong time.
This is horrible.
And within a year later.
It was like, what, you know, I'm, I'mgood and, and I had, you know, liquid
(19:13):
cash that I was supposed to have sothat I wasn't worried about what the
market did short term because I, youknow, you need to have enough money
to be able to live on if you are nolonger, you know, drawing an income.
So I can feel your wife on that,uh, I think you're gonna be okay.
I have a question for you.
Did you guys do anything, knowingyour wife was gonna retire with your
(19:36):
portfolio, did you make some alterations?
So we have not yet, but we'regoing to be moving her 401k and
rolling it over into an IRA.
And so based on the fact that we areleaving the accumulation phase, I'm
going to increase my bond allocation.
So right now we're about 90 10.
I think I'd probably ratherbe somewhere around 70 30.
(19:59):
So as we roll over now, of course,you know, we might be rolling over
right in the middle of recession,which kind of, you know, is a bad
time, unfortunately, to be sellingequities and then moving over to bonds.
But the goal would be to realign slightlyfor the decumulation phase by having
a slightly higher bond allocation.
I'm a big fan of our friend FrankVasquez, and although I don't do a risk.
(20:22):
Parody portfolio.
What I draw from him talking about a riskparody portfolio is really when you go
from accumulation to decumulation, you'renot really worried about returns nearly
as much as you're worried about losses.
And so what's great about a riskparody is what you're trying
to do is trim down the worst.
Moments of your portfolio's futureso that the losses aren't as deep
(20:45):
when the market does funny thingsand you're willing to accept slightly
less returns at other times whenthe market's doing great things.
And so I think a lot about riskmitigation, risk management, not can
I get the uppermost returns of myportfolio, but can I mitigate the
downturns in the portfolio enough?
'cause even if, you know,if, if your allocation drops.
(21:08):
5%, but the rest of themarket drops 10% long term.
That's gonna serve youreally, really well.
And so that's how I think about it andwhy I very much had a plan as I moved
out of the accumulation phase to ease upa little bit on the equity allocation.
And so that will be the plan.
You have any regrets that youdidn't do it on January 20th?
(21:29):
You know, I, I can't, I'm not, I can'tread a crystal ball and so, you know,
I would never, ever make a decisionbased on who, for instance, got elected.
I, my, you know, a family member ofmine famously when Trump got elected
in 2016, cashed out a 401k andleft it there for the next bunch of
(21:49):
years, and so she lost out big time.
Wow.
I don't believe I can readthe tea leaves that well.
Same here, Jordan.
Yeah, it's, it's,
yeah, same, same here too.
I have no regrets.
If I was a day before retirement,I might, you know, to have lost
10% and had the opportunity to, youknow, garner that risk downshift.
(22:12):
But I run at about 75, 25, so I,I've always been a little bit more
conservative and it gives me a sleepfactor that, you know, it is what it is.
But Bill, let's talk about that becausenow we're talking about the news cycle.
And the news cycle can be scary, right?
We hear the talking heads talk aboutpoliticians, we hear the talking heads
talking about the financial markets.
(22:35):
What advice are yougiving to late starters?
Are you saying, look, don't even payattention to the news media, or how can we
live in this world where the news media'severywhere, but have it not freak us out?
Especially if you're a late starter.
Well, what, what I'm telling 'em isif you're in the first 10 years of
late, starting full steam ahead, youknow, accumulation and you can, your
(22:56):
maximum risk tolerance is the way to be.
If you're on the precipice of thelast five years, then you need to be
doing exactly what you're doing to.
To mitigate sequence of returns risk.
And people say generally, you know, CarsonEska, who would say, yeah, three to five
years before you're exiting the workforce.
You know, definitely downshiftyour risk so that you don't suffer
(23:17):
the maximum drawdown problem.
We are talking to Jackie Cummings Kowskiand Bill Y. They are the hosts of the
Catching Up Tophi podcast and we aretalking about what it feels to be catching
up in what feel like uncertain times.
(23:39):
We're gonna take a short break.
I'm Doc G and this is theEarn and Invest podcast.
We are back with Bill yt and JackieCummings Koski of the Catching Up
to five podcast, and we are talkingabout what it feels like to be a late
(24:00):
starter today in uncertain times.
Jackie, how do we even definea late starter nowadays?
So a late starter is notthat much to do with age.
It's just someone that is figuringout their finances and starting
their path to financial independencea little bit later than normal.
(24:20):
Whether they think that in theirmind or if it, it's, it's true.
So Bill mentioned that we kind of havethree different buckets of people.
So we've got people in their thirtiesthat feel like they're just late because.
They can look at the trajectory andif they've got a ton of debt and
save nothing, then they're behind.
So that's could be a late starter.
(24:42):
Someone in their forties, you know,where they haven't done much, maybe they
did the minimum or whatever, but theyare just getting going, but they still
have a little bit of a runway beforethey believe that they need to retire.
And then someone that might bereally close to retirement and are
like, how am I ever gonna retire?
Then they wake up.
(25:02):
So those are the main ones.
And, and sometimes they're circumstantial,like certain things that happen,
divorce, maybe even someone thatimmigrated, uh, from another country.
So you've got those people as well, that'sjust restarting and trying to get going.
So it, it goes all over the place.
But a lot of it is in the mind.
(25:24):
Like I woke up at about 38, I believe.
That's a late starter, but some peoplewill tell me that's not starting late.
Late starting is a state of mind, andthat's why we have 30 year olds in our
community, 40 year olds and 50 year olds.
It really is a state of mindbecause generally there's a shock.
There is some kind of shock toyour system, a job loss, a divorce,
(25:47):
that's very common in our community.
I. That causes you to wake up and realizeI need to take control of my money.
I've abdicated control.
Like in my case, we were in a privatebank, we were paying lots of money to
get very little and it feels good to takecontrol of your money and to, because
you're gonna be your best advocate.
Nobody is gonna care foryour money better than you.
(26:10):
Jackie, the name of thepodcast is Catching Up to Phi.
Phi, of course, is Financial independence,reminiscent of the fire movement, which
I think all three of us at one pointor time would say we were definitely
a big part of financial independence.
Retire Early, started as a movementof fairly wealthy people who hated
their jobs, wanted to grind it outand retire early, but it has evolved.
(26:34):
Over the years evolved into this ideaof passive income and side hustles,
and it also recently, more recentlywith SoFi and kfi have really evolved
into this idea of lifestyle design.
This idea that maybe we're rushingtowards financial independence
too fast, and we need to make surethat we're going to live our best
lives to today as well as tomorrow.
(26:55):
Jackie, how does that feelto late starters, and is the
advice changing a little bit?
I mean, the advice used to be.
Hammer down on the savings.
Hammer down on the frugality.
Maybe you won't love life now, but it'llall be worth it in five or 10 years.
Do you think the late starters arebringing this newer message of lifestyle
(27:17):
design into their fire trajectories?
Are they leaving some space to actuallyspend money and enjoy today, even if
they're, maybe it'll take 'em a littlelonger to get to financial independence.
I,
I think so that it's kind oflike a little relief valve.
But yeah, I was there in the early,I, I still very much consider
myself a part of the fire movement.
Uh, there's, uh, amazing people.
(27:38):
I love the mentality.
I'm, I'm proud to be associated with it.
But yeah, early on we hadthis grind, grind, grind.
I think when I first foundit, it was like 2013, 2014.
But yes, now a lot of the mentalaspects is talked about more.
Which again helps our late startersnot running so fast to the finish
(27:59):
line, creating that lifestyle design.
I think that has created a more realistic,you know, opportunity for late starters
and anyone that wants to be a part ofthe fire movement and don't feel like
they have to just be so rigid and likethere's no doctrine to sign or anything.
So you design it the way that youwant to, I think as more voices.
(28:21):
And more people have shared how theyare approaching their fire journey.
That's encouraging other people tosay now that's kind of what I want.
And, and remember in the earlydays we didn't have the coast fire
and all of that, so I think thosenames or those flavors or Phi.
Were developed because fire was soundingso rigid and soul sucking, taking all
(28:45):
the fun outta life and things like that.
So I think it's definitely been a plus.
And I'm, you know, I'd like to thinkme, you and Bill have been kind of,
I. A part of that to say, you know,we just really wanna do what we love.
I personally had to make theclear cut from my corporate job to
retirement, and then I slowly startto bring back in the things that
(29:07):
I wanted to do that I enjoy doing.
And not all of them are paid.
The average American is a late starter,you know, there's a huge community
of late starters to tap into, youknow, and, and they feel alone.
You know, they, they feel isolated andthey're looking for a community like ours
to say, you know what, I'm not alone.
(29:28):
I've done exactly whatother folks have done.
I've lived, quote unquote, the AmericanDream, maybe a little too much.
There's a spectrum between deprivation andpaycheck to paycheck, and you wanna find
that balance, you know, and the balancecomes in around a 30 to 40% savings rate.
It really does, you know, liveon one income, save the other
(29:49):
one live within your means.
You can do the thingsyou want to do in life.
You don't need to deprive yourself.
And if you start by 35, you'reaverage and you can still finish.
Early, as long as youmake the right decisions.
And we wanna get people to start,say by 40 or 45 because then they'll
finish on time or early at 55 or 60.
(30:11):
You know, the thing you gotta worry aboutin, in Living a balanced life is burnout.
People don't think about this,and we've had many discussions
about burnout along the way.
You know, my saying is, work 20for the money and the rest for joy.
You know, you pay off your debt in five,get to five and 15, and then you, you are
financially free and or independent, andyou can do, and we're always gonna work.
(30:38):
We always have a driveto work and do something.
We're not gonna sit athome and watch Netflix.
I'm gonna be podcastingwith Jackie No, forever.
It's forever.
You're gonna, you're gonna be podcasting.
We're, we're gonna try and getthese messages out there so,
you know, it, it, it feels.
It's good to be on the precipiceof freedom and you just need to
know that there's no magic buttons.
You've gotta do the work, but thework has a a finite time period as
(31:02):
long as you live that balanced life.
Bill.
Talk about that a little bit.
I want you to be personal here.
I mean, you are the posterchild for late Phi, right?
Late Starter Fi.
In fact, you partially started thispodcast with Becky Haptic, 'cause you
felt known, was talking about people whohad kind of your set of circumstances.
On the other hand, I would argue,knowing you over the years, you burnt
(31:25):
out on fire in some ways, right?
You, I think, had a plan toget there really, really fast
and then had to rejigger.
Reorient.
I think even this podcast is, I. Kindof more of a passion project, right?
You could make more money being adoctor, but you do this podcast because
on some level you said, well, I don'twanna spend more time being a doctor.
I wanna spend time doing someother things that light me up.
(31:46):
So talk about your personal journey of,of getting to the point where like, when
it was too much, I. Thinking about themoney and not enough thinking about life.
Well, therein lies the balanceof a marriage, a partnership,
a joint venture, a business.
My wife is the big picture personand she's much more the balance.
And I was hard driven becauseof burnout and wanting to exit
(32:09):
my job and in in order to.
Work longer.
I had to cut back on work, as you call it.
It's the art of subtraction.
And I love that because I, Icouldn't work hard charging and I
work 10, 12 hour shifts a month.
I have free time to do this withyou and, you know, talk to other.
(32:30):
Really wonderful minds.
Do me search on, you know, my journey.
Just like Christine, Ben says, I,I, I love learning from other folks.
I am not gonna retire on a podcast.
People don't realize that podcasts,unless you're in the top half
a percent of podcasts, you arenot gonna retire on podcasting.
(32:51):
We're lucky that our costs are covered,which makes it a a, a net zero hobby.
And you know, it's, it's a passion thingand that will carry me into retirement
because you have to plan for that time.
You can't just go cold Turkey.
Jackie, are you optimisticlooking towards the
future?
(33:13):
I, I'm, I'm, I, I think allof us, all three of us have
gotten to a point of financialindependence, but we have choices.
And I remember how it waslike it was yesterday.
You know, growing up when I was inpoverty, there was so much we couldn't
do, and money was always the reason.
So to have the choices that I havetoday, I would've never imagined.
(33:34):
And I know that there's a tonof people like me, like, you
know, the 30% or 40% saving rate.
Savings rate.
That's great.
Some people can never imagine thatbecause if you are a lower income
earner, you know, these days,let's say 40, $50,000, the average
household income in America is 70.
So lower income, let's say is 50.
That's darn hard to get to 30 or 40%savings rate, but I always say, is
(33:57):
your $50,000 salary a permanent stateand nine times outta 10, it's not.
You're going to start to increaseyour income rather through a
promotion side, hustle or whatever.
So as long as their movement.
So even if you don't reach that magicalfinancial independence or retire early,
(34:18):
if you are getting on the path oflearning more about your money, becoming
more educated, becoming financiallyliterate, you are advancing somehow,
and more than likely you've got eitherkids or other young people in your life
that are watching what you're doing.
I'm optimistic because the, themovement that you make is so
impactful to your life and possiblyimpactful to the others around you,
(34:44):
and that can make a difference.
I completely agree because therecovery from late starter, uh, creates
generational financial literacy.
We talk about generational wealth,but hopefully the next generation,
your kids, your nieces, your nephews,the people that you're surrounded by.
Well, uh, by osmosis realized thatI need to pay attention to this.
(35:07):
And there's some simpleprinciples, tenets of financial
independence that are critical.
Jackie and I just gave, uh, a talk atthe University of Tennessee to 25, uh,
students in the School of Agriculturebecause the professor had the foresight to
say, you know what, it's not just about.
Options trading.
We need to learn basic personal finance.
(35:28):
And they all came up afterwardsand said, this is great.
They lit their fire and they're allgonna be different and financially
free sooner than other folks.
We, in the financial independencemovement need to take the responsibility
of getting the message out there.
We can't live in our own bubble, you know,we want people outside of the five bubble
to find our community of late starters.
(35:50):
Jackie, what is the
biggest hurdle you thinklate starters face right now?
I mean, I always say the firstpart is, is the mental part.
Believing that they can do it.
Maybe acknowledging certain thingsthat have happened in the past
that their path is different.
I think that's the hardestpart to do because everything
(36:11):
else you can read in a book.
You can, you know, watch a,you know, a YouTube channel
or, or listen to a podcast.
So, um, the mental part isby far the hardest part.
And then I guess after that, it would betrying to decide which of these financial
levers should they be working on first.
(36:31):
And in order to do that, you haveto know where you're starting.
So you have to pull togetherthings like, where is your debt?
Do you know how much debt you have?
Do you actually know howmuch you got coming in?
And, you know, gross versus net income.
How much taxes are you paying?
What are, what are your investments?
Do you have investments as atfive different former employers?
(36:54):
Pull those all together.
So knowing where you start, a lotof people have, you know, they
don't have any idea about that.
And it seems like most of them wannaget right into the investing part.
But taking a look at where you're at, youknow, almost like a, you know, using a
compass to decide what is the area thatyou have the biggest opportunity for.
(37:16):
Start there.
I wanna circle back to somethingI refer to as Phi Envy.
And, uh, it's sort of a, a fomo.
You know, when I hit 50,that's when I woke up.
That was the shock.
Nobody was gonna take care of me.
That was, you know, the reasonto dived on the rabbit hole.
I was, it resulted in analysisparalysis, and I read.
(37:39):
You know, dozens of books for a year.
'cause I'm a physician andI have to be type A about it
and I have to get it right.
The important part here isstarting and starting simple.
I started complex and worked my wayback to simple as a physician and
physicians and high income professionals.
Men tend to do that.
Women are better investors, aswe've talked about on our show.
(38:02):
So, you know, you, you've gotto, you know, keep it simple,
stupid, uh, get started.
And the Phi Envy was a big deal becauseonce I'd gone down the rabbit hole, I
saw my contemporaries who got it rightin their thirties and even at 40 and
they were retiring in their fifties.
And here I am, you know, sloggingit out still, and you've got, you
(38:25):
know, the, the shame doesn't getprocessed right on the front end.
You know, you've, you've,you've gotta work through it.
Gradually, through eachphase of late starting.
Bill and Jackie, I really wannathank you for coming on the show.
When I think about our conversation,it all comes down to this idea
that it is never too late to start.
Yes, you might be behind the eight ball.
On the other hand, you almost alwayswill land in a better place whether
(38:49):
you have days, weeks, months, or years.
Listen, I deal with hospice patients.
They have weeks.
The rest of us have years,maybe decades to get better.
And if not for you, then foryour family members in the next
generation, what you do now matters.
Bill, first I want you to tell us whatis coming up with catching up to Fi
(39:10):
and then Jackie, I want you to tell usabout your book as well as a retreat you
might be going on later on in this year,and I might just happen to be there.
So first and foremost, bill.
Talk to me about theCatching Up to Five podcast.
Well, we're two years old.
It's hard to believe.
You know, most podcasts don't last 10episodes, and we've lasted two years.
(39:33):
I've had two fabulous co-hosts.
We, we've interviewed a diverse natureof guests, people who've had their
first podcast telling their storyof late starting, and experts that
help our late starters get started.
And with the mechanics of starting.
We've created a community of over17,000 people in our Facebook community.
(39:55):
We're pushing a million downloads,which I never thought would happen.
What's really cool about this is.
This is part of our legacy.
This is part of our gift to the world.
I never thought I'd have a graphicon Apple Podcasts or Spotify that
might live forever, you know?
And this podcast, wheneverit's done and gone will help.
(40:19):
I. Others, and I've had more gratitude,as I've said many times before in
two years of podcasting with peoplesaying, you've changed my life.
I've binged all 120 some episodes.
I've taken notes, I'vespread the word to my family.
You know, it, it's heartwarmingbecause I haven't had as much
(40:40):
gratitude as a physician.
In 30 years of practice.
Yeah.
Yeah.
Yeah.
Me
neither.
Jackie, tell us about, uh,your book and specifically what
retreat are you gonna be going to?
Yeah, the book is right behind me.
Fire for Dummies.
That came out last year, so I'mcoming up on a year, April 30th.
It'll be a year.
As you know, writing a book is tough, so Ihad to hunker down and I had been retired.
(41:03):
Not used to a rigid schedule, but itwas a rigid schedule writing that.
But as you know, it's like.
Having a baby, you know, you spend a lotof hard work and time developing and all
of that, and to see it come out, I wantedto get it out in the atmosphere because it
is, you know, it, it puts things in order.
I.
For anyone that is seeking fire,at least it will walk you from A
(41:27):
to Z. Very clear, very concise,and I'm happy I got that out there.
So the retreat is called, uh, as you know,buy Freedom Retreat with our wonderful
friend Amy, and she lives in Bali.
I have not done a lot of internationaltravel, so I was a little bit
anxious and by the time I talkedto Amy, my nerves were calm.
(41:49):
She absolutely loves the Bali.
Area, the community, the culture.
And she's inviting us, you know,through this retreat to enjoy and
experience, you know, this paradise.
And we're going to talk about, youknow, the mental, the emotional,
and all the sides of our moneyand financial independence.
(42:12):
And I'm honored to be one of the speakersand even more honored to be along with
you because I respect what you do.
I feel like you have a very uniquelens and I just love that you.
How you, you know, calmly and alwaysvery in a balanced way, talk about things
and approach things and you're so deep.
(42:32):
So that's gonna be a lot of fun.
So it's the five Freedom retreat.
I, it's both.
There's two weeks this year soldout, both sold out within minutes,
uh, or at least within 24 hours.
So she will have it again next year.
She'll just have one, but it'sgoing to be an amazing time.
It's in September of thisyear, and I cannot wait.
(42:53):
Bill y and Jackie Cum Koski.
Thank you so much for beingon Earn and Invest today.
It's our pleasure, right, Jackie?
We love it.
Yeah.
Thanks Doc.
Jay, we love ya.
Thanks.
Thanks for having us
back.
That's a wrap,
Earnin.
Invest is now part of theAirWave Media podcast network.
(43:15):
Visit AirWave media.com to listenand subscribe to this show as
well as other fine podcasts.
During this conversation with Jackieand Bill of catching up to Phi, I
touched on this idea whether forlate starters times are different.
(43:41):
What do I mean by this?
Well, whenever we have investing,we always have people say,
well, this time is different.
I, I can't tell you how many times marketgoes down, and everyone says this time
is different for plethora of reasons.
Most of them, not even worthgoing into, but I find myself
asking the same question.
Now, listen, if you look at the politicalparty in charge or who's president.
(44:08):
Historically, it doesn't make a hugedifference, especially in the short term
economy, maybe in the long term economy,maybe in the long term stock market,
but certainly not in the short term.
In fact, whether it be a Democratic orRepublican administration, generally
the stock market does about the same.
The idea is that an administration'spolicies don't change our
(44:32):
economic outlook that much.
I find myself asking the same question.
Now, the reason why is everyone seemsto think we're on the cusp of recession,
and the truth is, I don't know.
I've heard people say this before, butfor the first time in my life it seems
like the policies of the administration.
(44:52):
Are making a recession more likely Now,I'm not giving you a value judgment on
the policies of this administration.
Uh, this is not a political podcast.
You could argue that even if there is ashort term recession, that those policies
maybe will help America long term.
You could say they'lldestroy America long term.
I am not making that value judgmentabout whether these are good policies
(45:16):
or not, but I will tell you all thetalk of tariffs, uncertainty and the
likelihood that businesses are afraid toinvest in the future right now because
they're not sure what's going to happen.
All of these things make it likelythat a recession is more likely to
happen, which means that the policies,the short-term policies of this
(45:38):
administration may actually impactour economy in the stock market in
a way that we've never seen before.
This is an administration like no other.
Again, whether you believe in it ordon't, whether you support it or are
fighting against it, I'm not makingthat value judgment, but either way.
I think anyone can look at thisadministration and say it is different,
(46:02):
and so if it is different, the policiesof this administration seem to be
pushing us more towards a recession.
Which again makes us ask thequestion, is this different than
something we've seen before?
And if it is something differentthan we've seen before, should
we be reacting differently?
Right?
We're usually not supposed tochange our asset allocation
(46:24):
because of short-term changes.
We're usually supposed to set thatallocation far in advance and then
stick to our investing policy plan.
Yet, I would argue that most peoplecould not have foreseen that things
would change in the way they're changing.
So do I know what's gonnahappen in the future?
(46:44):
No.
But the bigger question is,should we hold the course or
should we be changing something?
I think the answer's fairly simple.
If you're in the accumulation phase,if you're in the accumulation phase,
you have a good job, you're makingmoney, you're investing, then you should
continue investing and hold the course.
No question about it.
We may have a recession and recession.
(47:04):
In fact, if you're at the beginningof your career, may actually serve
you and allow you to buy moreand more of these assets, which
eventually will go up in price.
And so if you're in the accumulationphase, I think the answer is simple.
Don't change anything.
Stick to your investing plan.
Nothing likely is gonna change foryou as long as you have some time
(47:26):
to ride out all these changes.
The bigger question I. Reallycomes for people like me who
are either in Decumulation orabout to start decumulation.
So my wife stops working in May.
We're getting to the point where we'rethinking about decumulation and guess what
A recession would be kind of bad for us atthe beginning of our decumulation process.
(47:49):
Talk of sequence of returns risk, if.
We crater our economyfor the next five years.
That could really change myfinances, even though again,
we're not making a value judgment.
Let's say we had to create theeconomy for five years, for it
to all of a sudden pick up and beenormous and wonderful and fantastic.
In 10 years, that might be a tradeoff that young people are willing to
(48:12):
make, but someone who just starteddecumulation may not be the best
for us because sequence of returnscould really cause us a big problem.
So if you're in the decumulationphase, should you change, should
you mix up that asset allocation?
Should you become more conservative?
I don't know the answer to that.
I really don't.
(48:32):
I wish I did.
I think I'm gonna hold the course.
We're gonna keep doing what we're doing.
We're gonna maintain ourbroad based index investing.
Because I'm entering thedecumulation phase, I might
be a little more conservative.
I might have a little bithigher of a bond allocation.
Otherwise, I'm gonna keepdoing what I'm doing.
I don't know if that's the right answer.
(48:53):
Uh, if we're headed for a majorrecession, the truth of the matter is
I probably would be in trouble justas all of us would be either way, uh,
depending on how long that recessionis and how deep that recession is.
Uh, but I will adjust and pivotjust like we all have to adjust
and pivot if that's necessary.
But I wish I had a betteranswer to whether this time
(49:15):
is different than the past.
I don't know.
I think the inputs are different.
This administration is acting differentlythan administrations have in the past,
so that part certainly is different.
But will the outputs be different?
Will the stock market be different?
Will the likelihood of arecession be higher or lower?
Will our economy be different?
(49:36):
Unfortunately, we all aregonna have to wait and see.
All right.
As you guys know, I leave thingsrunning for our after show bill.
You know, you said something that Isay a lot and it's, it's weird, right?
(49:59):
Uh, Jackie, and you can chime in onthis, like, I was a physician for all
these years, and every year I might beable to touch a thousand lives, right?
Some I helped, some, maybe I didn't help.
Who knows?
But you know, you do your thing.
I would've never believed thatI could start doing stuff.
I just really liked, like writingbooks and talking about personal
finance and having a podcastand affect, you know, millions.
(50:22):
Right?
I've had millions ofdownloads on my podcast.
I've sold my book to thousandsand thousands of people.
Um, it's crazy, right?
Bill, like, 'cause we think of being adoctor is this big, deep, important thing.
But in some ways, I think for bothyou and I. Our impact and legacy, the
enduring lasting impact and legacy wemight have, might have more to do with
(50:42):
this kind of stuff we're doing as opposedto our day-to-day work as physicians.
Oh, I'm fortunate to be thefounder of this movement.
It was a space that hadn't beenaddressed and people that hadn't been
talked to, I think in the five movementand you know, it's been a pure joy.
It started out, uh, with Becky Heping,and I have to give her a shout out.
She had a great journeywhere she went from.
(51:04):
50 broke or net zero,zero net worth to 63.
Retired with over a milliondollars with her husband.
She was an inspirationto many for her journey.
And you know, now with Jackie,she legitimizes the show.
She has the CFP, you know, she hasthe numbers, she has the background,
she has a financial counselingdegree and she's written two books.
(51:27):
So, you know, it makes me looksmart to have such a great team.
Around me.
Jackie tell you, did you ever, did youever imagine Jackie that in quote unquote
retirement would be where, really whereyou had a bigger effect on on the world?
I mean, jail councils willtell you the same thing.
He like worked all this time andhe is like, and then I retired
and wrote, you know, this.
Blog and books and all of a sudden I'm
(51:49):
like, famous.
Right?
It, it's, um, I would've neverimagined, um, you know, going
all the way back to my childhood.
Definitely these aren'tthings I would even dream of.
My big dream was just being middle class.
Like that was my big dream.
But, um, when I retired, I guess the onething I knew is that financial literacy
and education was very important to me.
And the reason why is because that wasthe key for me that changed my whole life.
(52:14):
That took me from poverty.
To middle class, and I'mlike, I'm not that special.
And there's a lot of other people.
And as you know, the fire movement,like you said, it started with,
you know, mostly wealthy people,high income and things like that.
But I know that there's stillso many people that think, oh,
I can't do that, or whatever.
(52:34):
But there is still a place for peoplethat aren't making a ton of money,
but they can make some movement.
And those are typically thepeople I'm trying to talk to.
And so that's why I think me andBill have a really good balance.
'cause he's a rich doctor.
I'm the poor black girl that grewup in South Carolina and he hates
when I say that, but it's true.
(52:54):
And, and that's how society sees it.
That's how society sees me.
Yeah.
Sometimes I think I get more attentionbecause I'm more of an anomaly.
She's a, you know, I'mthe demographic check.
All the surveys and all the research andstatistics, I'm the demographic that they
say is the most likely to be in poverty.
(53:15):
Black single mom.
Mm-hmm.
So I was up against that stereotype andthose statistics as I, as I'm doing this.
So because I did it and I don'tthink I did anything extraordinary.
You know, I did go to college.
I got a four year degree, you know, um,I didn't have any huge special talent.
I worked for a company that, youknow, the company was fine, but
(53:38):
I did the job to get a paycheck.
I never made over six figures,so I wasn't a high income earner.
So.
I didn't have any unique s somethingsprinkled on me or anything.
Well,
well, can I jump in though?
I have to say, uh, and, andtake this for what you will.
Yes.
The things you've done are reproducibleor we wouldn't be trying to teach them.
(54:01):
Right?
What was unique about you is youbelieved a different way in a society
that told you you shouldn't believe it.
That is is unique to you and that isunique to people we see in this community
who have had to buck the social normsthat were placed on them by birthright.
(54:23):
What we see in this group of peoplewho are exactly like you is they didn't
buy the story that was told to them.
It didn't buy it.
It's so true.
Yeah, so true.
And I'll accept that.
And that's why I say the hardestpart for a late starter, really
anybody, is the mental part.
It's like nothing is happening unless youin your head believe that it's possible.
(54:45):
Maybe because you've seen it, you wereexposed to it or whatever the reason is.
But if you don't have it uphere, it's just not happening.
And let me just
clarify.
It's not that.
I say, you don't buy the story.
Everything should have madeyou want to buy that story.
'cause everyone is telling you thatit's not that the people who do
(55:05):
buy the story are flawed, it's thatthe story is so goddamn pervasive.
Right.
That it's really hard.
And that does make you unique because Ithink you had every reason to not believe
in yourself or your ability or the ideathat you could be where you are today.
And yet you did.
Anyway, go ahead, bill.
I gotta push back againstthe rich doctor here.
(55:28):
People need to understand thatMore money, more problems.
Okay.
Yeah.
Uh, lifestyle inflation is moreprevalent, I think, among the
higher income professionals.
We have targets on our back for thefinancial services industry, and I
need to tell you that there's at, atage 60 among doctors, there's 25% of
(55:50):
'em that don't have a million dollars.
And that's been in surveyafter survey that Jim Dali
has published to his website.
He is the white coatinvestor, and that is sad.
You can be a high incomeprofessional and not be wealthy.
Wealthy is different from rich.
Wealthy means you bought assets andrich means you spend it all and you,
(56:14):
and you look rich, but you're not.
You're not the millionairenext door by any means.
So are you saying you used to be richwhen you were the broke doc, when you
were not saving anything?
I, I lived a rich life, which,yeah, you lived a rich life.
A lot of memories, but I did notlive a balanced, wealthy life, and
that's what we're trying to achieve.
Hey, catching up to FI.
You're about to hear an episode that Billand I recorded with our friend Doc G on
the Earn and Invest podcast, and we lovegoing on other shows to spread the message
that it's never too late to catch up.
So listen in.
Jackie, there are rumblingsthat we have a recession coming.
(00:27):
What do you hear from yourcommunity of late starters?
Are they anxious?
Yes, of course.
And maybe even more so becausethey're getting a late start, right?
They're just trying to getgoing and now this happens.
And I don't know that there's any goodway to sort of calm those feelings
except to try to talk a little bitabout history like I when 2008 happened.
(00:52):
And that's a good thing for most of us.
Late starters.
A lot of us remember 2008, and if Icould bottle up those feelings in 2008.
And then look at what happened after that.
That just helps you putthings in perspective.
But nonetheless, people areanxious, they're nervous, they
don't know what's gonna happen.
People don't like uncertainty.
(01:15):
it's a bit manufactured.
Policies that have been instituted,you know, party independent are
creating this, the fundamentalsof the market didn't change.
It's just the anxiety and theuncertainty changes and the
market doesn't like uncertainty.
The thing I worry about is we may be in astate of uncertainty for four years, so.
(01:36):
Maybe it is a little different.
The average American is a late starter,you know, there's a huge community of late
starters to tap into, and they feel alone.
They feel isolated and they'relooking for a community like ours to
say, you know what, I'm not alone.
I've done exactly whatother folks have done.
(01:57):
I've lived, quote unquote, the AmericanDream, maybe a little too much.
There's a spectrum between deprivationand paycheck to paycheck, and you wanna
find that balance, and the balance comesin around a 30 to 40% savings rate.
(02:41):
I'm Bill Yo.
I'm Jackie Cum Koski, andyou're listening to The
Earn and Invest podcast.
I felt like it was too late Often in mylife as I get older, my dreams of being of
consequence feel farther and farther away.
In fact, it took me almost half acentury to publish my first book.
(03:05):
What if I had done it earlier?
I encounter the same senseof loss with my dying.
Patients told they have weeks to live.
It feels impossible to undo theirregrets to catch up to all that
has been left unsaid or undone.
But even for the dying,there's still hope.
There's always a possibility of onemore trip to the ballpark, one phone
(03:26):
call away from fixing a relationshipthat feels irreconcilable broken.
Even for the dying, it issometimes not too late.
So why would it be?
For you,
Billy Out and Jackie CummingsKowski are co-host of the Catching
Up Def five podcast, which focuseson mindset, money, and life.
(03:49):
Late starters on the journeyto financial independence.
They aim to support and inspireindividuals who feel behind in
their financial journeys emphasizingthat financial independence
is achievable at any age.
Bill and Jackie, welcomeback to Earn and Invest.
Jackie, there are rumblingsthat we have a recession coming.
(04:12):
What do you hear from yourcommunity of late starters?
Are they anxious?
Yes, of course.
And maybe even more so becausethey're getting a late start, right?
They're just trying to getgoing and now this happens.
And I don't know that there's any goodway to sort of calm those feelings
except to try to talk a little bitabout history like I when 2008 happened.
(04:37):
And that's a good thing for most of us.
Late starters.
A lot of us remember 2008, and if Icould bottle up those feelings in 2008.
And then look at what happened after that.
That just helps you putthings in perspective.
But nonetheless, people areanxious, they're nervous, they
don't know what's gonna happen.
People don't like uncertainty.
(04:58):
So there are some people that are doingsome, you know, drastic things, you
know, pulling money, money out of themarket, um, you know, changing their
asset allocation and things like that.
But we do have a group of peoplethat are like, stay the course.
Stay the course.
So it's all over
the place.
Bill, our friend j Collins often saysthat if you're in the accumulation
(05:20):
phase, you are almost rootingfor a recession, especially if
you know you're gonna have a job.
Does that argument workwith late starters?
I mean, can we calm them downand say, no, no, no, wait.
This is a great buying opportunityas long as you have an income.
Yeah, exactly.
I mean, there's actuallydifferent phases of late starting.
There's early, mid, andlate, late starting.
(05:42):
Uh, the, the journey is about 15years, 12 to 15 years, give or
take, and you can be for eight, 10years, a hundred percent stocks.
As long as you have that.
Five to seven year, oneway on the back end.
And those of us that like myself, whoare within five years of retirement,
may well be a little more nervous,but I did downshift my portfolio
(06:03):
and I have that cushion, that bufferthat allows me to weather this.
I am still working and I plan ondoing so for the next four years.
So I'll work through whateverit is, recession or not.
And yesterday or the day before,I used the, the downturn, the
correction to do tax lost harvesting.
This was an opportunity to takeadvantage of that and buy more.
(06:25):
We have seen in our community, afew people that said, I'm so smart.
On January 20th I sold out to cash.
And you know, we tell 'em, okay,when are you gonna get back in?
You know, how are you gonna avoid thewhipsaw being right on both ends of this?
So yeah, you can feel smart onthe front end, but you can also
wait too late to get back in.
Jackie Bill mentioned thatmagical 12 to 15 years.
(06:48):
This idea that you can go from, let'scall it even, or, or maybe even in debt
to financially independent between 12and 15 years, even for late starters,
do you think that still holds?
I mean, you guys have now beendoing this podcast for a few years.
Your community has grown.
Do those numbers work?
I, I think they do.
For me personally, ittook about 10 to 12 years.
(07:11):
And I think it all depends on whenyou wake up, where are you at.
You know, a lot of people don't realizethat they, they've already been doing
things that actually has moved themforward without, without even realizing
maybe they were putting money in their401k, like up to the match, or maybe
the 10% that everyone talks about.
Well, that's something so.
(07:34):
In a lot of cases, they're not startingat zero as far as the investments.
Now, if they have a ton of debt,they have to do that, but I feel like
when you have that mindset shifts,boy you can move a lot faster.
Then you thought, I, I think aboutthe mom and how her adrenaline flows
when she is protecting her cubs.
She's so much stronger than she everthought she could be, and I kind of
(07:57):
feel like late starters are that way.
So I definitely believe that timeframe,you know, for me it was 10 to 12
years, but 12 to 15, absolutely.
Um, our traditional, I guess.
Career advice and working Lifetime societysays that it needs to be 30 or 40 years.
It really doesn't.
(08:18):
Whether you're starting early, let'ssay at 25, and you do it in 15 years
and you're done at 40, or if you'rewaking up late and you're starting at
50, or let's say 40, and you do it at55, so it's still that same window.
(08:39):
Except, you know, we'reshaving some time off.
So whether you start at young or startin the middle, I would say, you know, 10
to 15 years is a reasonable timeframe.
Still, bill.
We
always run into those people who run awayscreaming from the stock market because
they say, this time is different, right?
This time is different.
(08:59):
All of a sudden it's notgonna look like past history.
Which begs us as financialpeople out there, right?
Having podcasts, talkingabout personal finance.
Should we be suggestingsomething different or should
we stick to the playbook?
Do you feel like you are.
(09:19):
Financial advice.
I don't wanna say financial advice becausebasically we don't really advise people.
We create content and helpthem kind of make decisions.
But do you think that out therein the world, people should be
doing things slightly differentthan they have in the past?
Or do you think as always,this shall pass and it's gonna
be the same as it always was?
Well, there are some smart people likeScott Trench in our space who, you
(09:43):
know, exited some of the market andwent into real estate because they felt
sort of the, you know, the greed of themarket and it was making them nervous.
So again, there are smart people likehimself that sort of made a shift.
I'm staying the course.
You know, I think, uh, that 15 yearrunway, we need to make sure people
know that that is a 30 to 40% savingsrate and you have to escalate that.
(10:05):
It isn't just a runway basedon a 10 or 20% savings rate.
And that's where we've been at.
You know, for example, we weresingle digit savers, 10% savers,
and within a year we went to 40%.
And it was amazing how we wonderedwhere all the money had gone.
And it's amazing how you cancollect yourself and learn
from your mistakes and make.
Significant end roads inthat 12 to 15 year timeframe.
(10:28):
But you gotta tighten your belt, you gottadownsize your life, you gotta upsize your
income, you gotta increase the gap and,uh, monitor your leaky bucket expenses.
So if you do those three things, uh,you will achieve that 15 year journey.
But I'm not doing anything different.
Uh, I'm staying the course.
I've got.
Four years left.
So I feel good about what's happening now.
(10:49):
I don't mind a bit of a crash if,if that's what it's gonna be to me,
it seems it's a bit manufactured.
Policies that have been instituted,you know, party independent are
creating this, the fundamentalsof the market didn't change.
It's just the anxiety and theuncertainty changes and the
market doesn't like uncertainty.
The thing I worry about is we may be in astate of uncertainty for four years, so.
(11:14):
Maybe it is a little different.
Bill, I wanna get back to policy, butfirst I wanna jump to Jackie and and
talk about Scott Trench for a moment.
Scott Trench is someonewe all love, right?
He is the CEO of BiggerPocketsBiggerPockets Money podcast.
He surprised a lot of us in thisFacebook comment about talking about
how he really was in a sense saying,I'm going to market time, right?
(11:36):
I feel uncomfortable because ofwhat's happening currently, so I'm
gonna change my asset allocation.
And we always say, well, you're notreally supposed to change your asset
allocation based on acute market changes.
You're supposed to put together a planfor yourself over decades and then
stick to that plan because we know.
That when our emotions get inthe way of something that just
(11:56):
happens, we tend to sometimes makedecisions that aren't the greatest.
On the other hand, like I said, likeScott has read the tea leaves, right?
He got into business.
He's done some amazing things.
What do you think that does tosome of these late starters who are
just finally starting to buy intothis idea that there's this set.
Number of rules and that maybewe need to put emotions aside.
(12:19):
I, I see the same argumentwith cryptocurrency, right?
We have all these people who talk aboutnever, never speculate, and all of
a sudden they're saying, well, maybeyou should hold some cryptocurrency.
Is this confusing?
And I would say especially the latestarters who are just kind of getting
their mind around what we would callthe most important personal finance
advice that we're trying to get them.
(12:39):
I think it's extremely confusingand there's no shortage of
information out there these days.
There's a shortage of good information andsometimes people don't know or, or they
can't decipher the good from the bad orthe information that's given in order for
someone to, you know, benefit themselves.
(13:00):
So I still, you know, you'll always haveprobably the majority of Americans, they
don't pay attention to this stuff, and it,it's a, you can barely get them to default
into a target date fund in their 401k.
Okay, so most of them arenot paying attention to it.
So it's the one area in your life thatprobably doing less will help you more.
(13:25):
Now, arguably this timemight be different.
You know what?
We thought coronavirus wasdifferent too when that happened.
Okay.
In my opinion, the averageperson, they don't want to
watch their portfolio like that.
Now, there's some people that willhear, you know, Scott Trans, you
know, made this, you know, brilliantdecision to go into real estate.
That's for him, and he'sa genius at real estate.
(13:48):
So I wouldn't be the one trying that.
So I, I don't think it's much different.
I mean, broadly, I think what'sdifferent than might've been different
10 or so years ago, you don't havethe pension out there anymore.
That's safe.
And a lot of us, late starters, let'ssay people in their forties and fifties
are that generation, gen X, where.
(14:09):
They, they're likely to have afrozen pension, a partial pension.
Some of 'em may still have one,but that's pretty much gone.
So it's almost a hundred percent dependenton your own management of your portfolio.
And an index fund will.
Get it done.
You know, like J Collins, you know,talks about, but some people have an
(14:29):
inclination of wanting to do a littlebit more and that's totally fine.
But it's not to say that keepingit simple doesn't still work.
The index fund, again, it's all thosedifferent stocks that send one fund.
What's the, what's the likelihoodof everything going down?
So, so I'm, I'm like, bill,I'm staying the course.
I did a few tweaks, like I,any cash I had sending around.
(14:53):
It was a great time to add alittle bit more to, you know, into
the index fund that I invest in.
And that's about all, but it, it, itdoesn't feel good to me either, even
though I know market history and Idon't feel like this time is going to
be much different than any other time.
We'll get over it and more thanlikely it'll be more like a
(15:15):
trampoline when it does come back.
So, so that's what I'm holding on to.
Bill, I wanna get back to this policyquestion 'cause there are a lot of people
who were anxious at the possibility ofa Donald Trump presidency and let's say
there were probably also people, youknow, four whatever, eight years ago who
are anxious about a Joe Biden presidency.
(15:35):
And the argument you hear from thefinancial gurus as well, whoever's
in power doesn't really matter.
We hear this all the time, it's like,well, the stock market makes money
when Democrats are in H in office.
Stock market makes money whenRepublicans are in office, and this
is something we often clinging to.
Now I'm gonna talk aboutmy personal interest here.
My wife is leaving work.
(15:57):
May.
So for me, the decumulationphase begins May one.
And what is our biggestfear with Decumulation?
It's sequence of returns risk.
Like you do not wanna start yourretirement during a recession.
You mentioned policies, and unlikewhat everyone says, policies seem to
(16:18):
be having an effect here, maybe onboth sides, but currently right now,
these policies seem to be pushing usa little bit more towards recession.
Again, was that bad advice?
I mean, does it matter who's in office?
Do the POL policies in theend make a huge difference?
I think policies do make a difference.
(16:38):
'cause this is a dramatic shiftfrom what's been done for decades.
I think the last time we saw policieslike this were in the 1930s, you know,
and there was a Republican, RonaldReagan who came out with a speech that
said tariffs are bad for business.
And that's very interesting because thisis an individual policy and you know.
(16:59):
We haven't experienced it.
Is it going to be another coronavirus?
Is it going to be a shockthat's relatively short-lived?
It may well be where people readjust to.
You know what?
Things haven't really changed.
The market fundamentals are there,but what we have seen is a lessen, a
diversification because in the last threeor four months, international stocks
have been trouncing in domestic stocks.
(17:21):
So, you know, we, we may be infor, uh, a reversion to the meme.
What do you think Jackie?
Does it matter who's in
office?
History says no.
History says no because um, Ithink the conventional thinking
is that when Republicans are inoffice, the market does better.
And when I went back and looked at howthe market did based on whether it was
(17:44):
a Republican or Democrat, the Democratsactually won out, but not about much.
So let's just call that even.
So I think it matters short term.
As we're working these things out,because you know, our president is
saying, Hey, we got a little short.
We're gonna have a short termpain, and then everything is
gonna be much, much better.
You just watch.
You just watch.
I don't know if that's the case ornot, but typically right after the
(18:07):
election as we saw that big bump, I.
Based on sentiment and how peoplefeel, but four years from now, or
eight years from now, or 20 yearsfrom now, it's gonna be like a blip
on the screen and it's really notgoing to matter in the long term.
But then short term, I thinkmarket temperament, you know,
people's temperament, investortemperament, will start to shift
(18:29):
the market, you know, as it has.
But over the long run, Isay no because we've had all
kinds of presidents that had.
Implemented certain policies.
If we weren't living back then, wedon't feel it the way that the people
did that were living back then.
And, and I just remember, uh,you said your wife is retiring.
Congratulations, by the way.
(18:51):
I retired December, 2019, sothree months before Covid.
Yeah,
and it felt awful, and I askedmyself the same questions, you
know, sequence of return risk.
I picked the wrong time.
This is horrible.
And within a year later.
It was like, what, you know, I'm, I'mgood and, and I had, you know, liquid
(19:13):
cash that I was supposed to have sothat I wasn't worried about what the
market did short term because I, youknow, you need to have enough money
to be able to live on if you are nolonger, you know, drawing an income.
So I can feel your wife on that,uh, I think you're gonna be okay.
I have a question for you.
Did you guys do anything, knowingyour wife was gonna retire with your
(19:36):
portfolio, did you make some alterations?
So we have not yet, but we'regoing to be moving her 401k and
rolling it over into an IRA.
And so based on the fact that we areleaving the accumulation phase, I'm
going to increase my bond allocation.
So right now we're about 90 10.
I think I'd probably ratherbe somewhere around 70 30.
(19:59):
So as we roll over now, of course,you know, we might be rolling over
right in the middle of recession,which kind of, you know, is a bad
time, unfortunately, to be sellingequities and then moving over to bonds.
But the goal would be to realign slightlyfor the decumulation phase by having
a slightly higher bond allocation.
I'm a big fan of our friend FrankVasquez, and although I don't do a risk.
(20:22):
Parody portfolio.
What I draw from him talking about a riskparody portfolio is really when you go
from accumulation to decumulation, you'renot really worried about returns nearly
as much as you're worried about losses.
And so what's great about a riskparody is what you're trying
to do is trim down the worst.
Moments of your portfolio's futureso that the losses aren't as deep
(20:45):
when the market does funny thingsand you're willing to accept slightly
less returns at other times whenthe market's doing great things.
And so I think a lot about riskmitigation, risk management, not can
I get the uppermost returns of myportfolio, but can I mitigate the
downturns in the portfolio enough?
'cause even if, you know,if, if your allocation drops.
(21:08):
5%, but the rest of themarket drops 10% long term.
That's gonna serve youreally, really well.
And so that's how I think about it andwhy I very much had a plan as I moved
out of the accumulation phase to ease upa little bit on the equity allocation.
And so that will be the plan.
You have any regrets that youdidn't do it on January 20th?
(21:29):
You know, I, I can't, I'm not, I can'tread a crystal ball and so, you know,
I would never, ever make a decisionbased on who, for instance, got elected.
I, my, you know, a family member ofmine famously when Trump got elected
in 2016, cashed out a 401k andleft it there for the next bunch of
(21:49):
years, and so she lost out big time.
Wow.
I don't believe I can readthe tea leaves that well.
Same here, Jordan.
Yeah, it's, it's,
yeah, same, same here too.
I have no regrets.
If I was a day before retirement,I might, you know, to have lost
10% and had the opportunity to, youknow, garner that risk downshift.
(22:12):
But I run at about 75, 25, so I,I've always been a little bit more
conservative and it gives me a sleepfactor that, you know, it is what it is.
But Bill, let's talk about that becausenow we're talking about the news cycle.
And the news cycle can be scary, right?
We hear the talking heads talk aboutpoliticians, we hear the talking heads
talking about the financial markets.
(22:35):
What advice are yougiving to late starters?
Are you saying, look, don't even payattention to the news media, or how can we
live in this world where the news media'severywhere, but have it not freak us out?
Especially if you're a late starter.
Well, what, what I'm telling 'em isif you're in the first 10 years of
late, starting full steam ahead, youknow, accumulation and you can, your
(22:56):
maximum risk tolerance is the way to be.
If you're on the precipice of thelast five years, then you need to be
doing exactly what you're doing to.
To mitigate sequence of returns risk.
And people say generally, you know, CarsonEska, who would say, yeah, three to five
years before you're exiting the workforce.
You know, definitely downshiftyour risk so that you don't suffer
(23:17):
the maximum drawdown problem.
We are talking to Jackie Cummings Kowskiand Bill Y. They are the hosts of the
Catching Up Tophi podcast and we aretalking about what it feels to be catching
up in what feel like uncertain times.
(23:39):
We're gonna take a short break.
I'm Doc G and this is theEarn and Invest podcast.
We are back with Bill yt and JackieCummings Koski of the Catching Up
to five podcast, and we are talkingabout what it feels like to be a late
(24:00):
starter today in uncertain times.
Jackie, how do we even definea late starter nowadays?
So a late starter is notthat much to do with age.
It's just someone that is figuringout their finances and starting
their path to financial independencea little bit later than normal.
(24:20):
Whether they think that in theirmind or if it, it's, it's true.
So Bill mentioned that we kind of havethree different buckets of people.
So we've got people in their thirtiesthat feel like they're just late because.
They can look at the trajectory andif they've got a ton of debt and
save nothing, then they're behind.
So that's could be a late starter.
(24:42):
Someone in their forties, you know,where they haven't done much, maybe they
did the minimum or whatever, but theyare just getting going, but they still
have a little bit of a runway beforethey believe that they need to retire.
And then someone that might bereally close to retirement and are
like, how am I ever gonna retire?
Then they wake up.
(25:02):
So those are the main ones.
And, and sometimes they're circumstantial,like certain things that happen,
divorce, maybe even someone thatimmigrated, uh, from another country.
So you've got those people as well, that'sjust restarting and trying to get going.
So it, it goes all over the place.
But a lot of it is in the mind.
(25:24):
Like I woke up at about 38, I believe.
That's a late starter, but some peoplewill tell me that's not starting late.
Late starting is a state of mind, andthat's why we have 30 year olds in our
community, 40 year olds and 50 year olds.
It really is a state of mindbecause generally there's a shock.
There is some kind of shock toyour system, a job loss, a divorce,
(25:47):
that's very common in our community.
I. That causes you to wake up and realizeI need to take control of my money.
I've abdicated control.
Like in my case, we were in a privatebank, we were paying lots of money to
get very little and it feels good to takecontrol of your money and to, because
you're gonna be your best advocate.
Nobody is gonna care foryour money better than you.
(26:10):
Jackie, the name of thepodcast is Catching Up to Phi.
Phi, of course, is Financial independence,reminiscent of the fire movement, which
I think all three of us at one pointor time would say we were definitely
a big part of financial independence.
Retire Early, started as a movementof fairly wealthy people who hated
their jobs, wanted to grind it outand retire early, but it has evolved.
(26:34):
Over the years evolved into this ideaof passive income and side hustles,
and it also recently, more recentlywith SoFi and kfi have really evolved
into this idea of lifestyle design.
This idea that maybe we're rushingtowards financial independence
too fast, and we need to make surethat we're going to live our best
lives to today as well as tomorrow.
(26:55):
Jackie, how does that feelto late starters, and is the
advice changing a little bit?
I mean, the advice used to be.
Hammer down on the savings.
Hammer down on the frugality.
Maybe you won't love life now, but it'llall be worth it in five or 10 years.
Do you think the late starters arebringing this newer message of lifestyle
(27:17):
design into their fire trajectories?
Are they leaving some space to actuallyspend money and enjoy today, even if
they're, maybe it'll take 'em a littlelonger to get to financial independence.
I,
I think so that it's kind oflike a little relief valve.
But yeah, I was there in the early,I, I still very much consider
myself a part of the fire movement.
Uh, there's, uh, amazing people.
(27:38):
I love the mentality.
I'm, I'm proud to be associated with it.
But yeah, early on we hadthis grind, grind, grind.
I think when I first foundit, it was like 2013, 2014.
But yes, now a lot of the mentalaspects is talked about more.
Which again helps our late startersnot running so fast to the finish
(27:59):
line, creating that lifestyle design.
I think that has created a more realistic,you know, opportunity for late starters
and anyone that wants to be a part ofthe fire movement and don't feel like
they have to just be so rigid and likethere's no doctrine to sign or anything.
So you design it the way that youwant to, I think as more voices.
(28:21):
And more people have shared how theyare approaching their fire journey.
That's encouraging other people tosay now that's kind of what I want.
And, and remember in the earlydays we didn't have the coast fire
and all of that, so I think thosenames or those flavors or Phi.
Were developed because fire was soundingso rigid and soul sucking, taking all
(28:45):
the fun outta life and things like that.
So I think it's definitely been a plus.
And I'm, you know, I'd like to thinkme, you and Bill have been kind of,
I. A part of that to say, you know,we just really wanna do what we love.
I personally had to make theclear cut from my corporate job to
retirement, and then I slowly startto bring back in the things that
(29:07):
I wanted to do that I enjoy doing.
And not all of them are paid.
The average American is a late starter,you know, there's a huge community
of late starters to tap into, youknow, and, and they feel alone.
You know, they, they feel isolated andthey're looking for a community like ours
to say, you know what, I'm not alone.
(29:28):
I've done exactly whatother folks have done.
I've lived, quote unquote, the AmericanDream, maybe a little too much.
There's a spectrum between deprivation andpaycheck to paycheck, and you wanna find
that balance, you know, and the balancecomes in around a 30 to 40% savings rate.
It really does, you know, liveon one income, save the other
(29:49):
one live within your means.
You can do the thingsyou want to do in life.
You don't need to deprive yourself.
And if you start by 35, you'reaverage and you can still finish.
Early, as long as youmake the right decisions.
And we wanna get people to start,say by 40 or 45 because then they'll
finish on time or early at 55 or 60.
(30:11):
You know, the thing you gotta worry aboutin, in Living a balanced life is burnout.
People don't think about this,and we've had many discussions
about burnout along the way.
You know, my saying is, work 20for the money and the rest for joy.
You know, you pay off your debt in five,get to five and 15, and then you, you are
financially free and or independent, andyou can do, and we're always gonna work.
(30:38):
We always have a driveto work and do something.
We're not gonna sit athome and watch Netflix.
I'm gonna be podcastingwith Jackie No, forever.
It's forever.
You're gonna, you're gonna be podcasting.
We're, we're gonna try and getthese messages out there so,
you know, it, it, it feels.
It's good to be on the precipiceof freedom and you just need to
know that there's no magic buttons.
You've gotta do the work, but thework has a a finite time period as
(31:02):
long as you live that balanced life.
Bill.
Talk about that a little bit.
I want you to be personal here.
I mean, you are the posterchild for late Phi, right?
Late Starter Fi.
In fact, you partially started thispodcast with Becky Haptic, 'cause you
felt known, was talking about people whohad kind of your set of circumstances.
On the other hand, I would argue,knowing you over the years, you burnt
(31:25):
out on fire in some ways, right?
You, I think, had a plan toget there really, really fast
and then had to rejigger.
Reorient.
I think even this podcast is, I. Kindof more of a passion project, right?
You could make more money being adoctor, but you do this podcast because
on some level you said, well, I don'twanna spend more time being a doctor.
I wanna spend time doing someother things that light me up.
(31:46):
So talk about your personal journey of,of getting to the point where like, when
it was too much, I. Thinking about themoney and not enough thinking about life.
Well, therein lies the balanceof a marriage, a partnership,
a joint venture, a business.
My wife is the big picture personand she's much more the balance.
And I was hard driven becauseof burnout and wanting to exit
(32:09):
my job and in in order to.
Work longer.
I had to cut back on work, as you call it.
It's the art of subtraction.
And I love that because I, Icouldn't work hard charging and I
work 10, 12 hour shifts a month.
I have free time to do this withyou and, you know, talk to other.
(32:30):
Really wonderful minds.
Do me search on, you know, my journey.
Just like Christine, Ben says, I,I, I love learning from other folks.
I am not gonna retire on a podcast.
People don't realize that podcasts,unless you're in the top half
a percent of podcasts, you arenot gonna retire on podcasting.
(32:51):
We're lucky that our costs are covered,which makes it a a, a net zero hobby.
And you know, it's, it's a passion thingand that will carry me into retirement
because you have to plan for that time.
You can't just go cold Turkey.
Jackie, are you optimisticlooking towards the
future?
(33:13):
I, I'm, I'm, I, I think allof us, all three of us have
gotten to a point of financialindependence, but we have choices.
And I remember how it waslike it was yesterday.
You know, growing up when I was inpoverty, there was so much we couldn't
do, and money was always the reason.
So to have the choices that I havetoday, I would've never imagined.
(33:34):
And I know that there's a tonof people like me, like, you
know, the 30% or 40% saving rate.
Savings rate.
That's great.
Some people can never imagine thatbecause if you are a lower income
earner, you know, these days,let's say 40, $50,000, the average
household income in America is 70.
So lower income, let's say is 50.
That's darn hard to get to 30 or 40%savings rate, but I always say, is
(33:57):
your $50,000 salary a permanent stateand nine times outta 10, it's not.
You're going to start to increaseyour income rather through a
promotion side, hustle or whatever.
So as long as their movement.
So even if you don't reach that magicalfinancial independence or retire early,
(34:18):
if you are getting on the path oflearning more about your money, becoming
more educated, becoming financiallyliterate, you are advancing somehow,
and more than likely you've got eitherkids or other young people in your life
that are watching what you're doing.
I'm optimistic because the, themovement that you make is so
impactful to your life and possiblyimpactful to the others around you,
(34:44):
and that can make a difference.
I completely agree because therecovery from late starter, uh, creates
generational financial literacy.
We talk about generational wealth,but hopefully the next generation,
your kids, your nieces, your nephews,the people that you're surrounded by.
Well, uh, by osmosis realized thatI need to pay attention to this.
(35:07):
And there's some simpleprinciples, tenets of financial
independence that are critical.
Jackie and I just gave, uh, a talk atthe University of Tennessee to 25, uh,
students in the School of Agriculturebecause the professor had the foresight to
say, you know what, it's not just about.
Options trading.
We need to learn basic personal finance.
(35:28):
And they all came up afterwardsand said, this is great.
They lit their fire and they're allgonna be different and financially
free sooner than other folks.
We, in the financial independencemovement need to take the responsibility
of getting the message out there.
We can't live in our own bubble, you know,we want people outside of the five bubble
to find our community of late starters.
(35:50):
Jackie, what is the
biggest hurdle you thinklate starters face right now?
I mean, I always say the firstpart is, is the mental part.
Believing that they can do it.
Maybe acknowledging certain thingsthat have happened in the past
that their path is different.
I think that's the hardestpart to do because everything
(36:11):
else you can read in a book.
You can, you know, watch a,you know, a YouTube channel
or, or listen to a podcast.
So, um, the mental part isby far the hardest part.
And then I guess after that, it would betrying to decide which of these financial
levers should they be working on first.
(36:31):
And in order to do that, you haveto know where you're starting.
So you have to pull togetherthings like, where is your debt?
Do you know how much debt you have?
Do you actually know howmuch you got coming in?
And, you know, gross versus net income.
How much taxes are you paying?
What are, what are your investments?
Do you have investments as atfive different former employers?
(36:54):
Pull those all together.
So knowing where you start, a lotof people have, you know, they
don't have any idea about that.
And it seems like most of them wannaget right into the investing part.
But taking a look at where you're at, youknow, almost like a, you know, using a
compass to decide what is the area thatyou have the biggest opportunity for.
(37:16):
Start there.
I wanna circle back to somethingI refer to as Phi Envy.
And, uh, it's sort of a, a fomo.
You know, when I hit 50,that's when I woke up.
That was the shock.
Nobody was gonna take care of me.
That was, you know, the reasonto dived on the rabbit hole.
I was, it resulted in analysisparalysis, and I read.
(37:39):
You know, dozens of books for a year.
'cause I'm a physician andI have to be type A about it
and I have to get it right.
The important part here isstarting and starting simple.
I started complex and worked my wayback to simple as a physician and
physicians and high income professionals.
Men tend to do that.
Women are better investors, aswe've talked about on our show.
(38:02):
So, you know, you, you've gotto, you know, keep it simple,
stupid, uh, get started.
And the Phi Envy was a big deal becauseonce I'd gone down the rabbit hole, I
saw my contemporaries who got it rightin their thirties and even at 40 and
they were retiring in their fifties.
And here I am, you know, sloggingit out still, and you've got, you
(38:25):
know, the, the shame doesn't getprocessed right on the front end.
You know, you've, you've,you've gotta work through it.
Gradually, through eachphase of late starting.
Bill and Jackie, I really wannathank you for coming on the show.
When I think about our conversation,it all comes down to this idea
that it is never too late to start.
Yes, you might be behind the eight ball.
On the other hand, you almost alwayswill land in a better place whether
(38:49):
you have days, weeks, months, or years.
Listen, I deal with hospice patients.
They have weeks.
The rest of us have years,maybe decades to get better.
And if not for you, then foryour family members in the next
generation, what you do now matters.
Bill, first I want you to tell us whatis coming up with catching up to Fi
(39:10):
and then Jackie, I want you to tell usabout your book as well as a retreat you
might be going on later on in this year,and I might just happen to be there.
So first and foremost, bill.
Talk to me about theCatching Up to Five podcast.
Well, we're two years old.
It's hard to believe.
You know, most podcasts don't last 10episodes, and we've lasted two years.
(39:33):
I've had two fabulous co-hosts.
We, we've interviewed a diverse natureof guests, people who've had their
first podcast telling their storyof late starting, and experts that
help our late starters get started.
And with the mechanics of starting.
We've created a community of over17,000 people in our Facebook community.
(39:55):
We're pushing a million downloads,which I never thought would happen.
What's really cool about this is.
This is part of our legacy.
This is part of our gift to the world.
I never thought I'd have a graphicon Apple Podcasts or Spotify that
might live forever, you know?
And this podcast, wheneverit's done and gone will help.
(40:19):
I. Others, and I've had more gratitude,as I've said many times before in
two years of podcasting with peoplesaying, you've changed my life.
I've binged all 120 some episodes.
I've taken notes, I'vespread the word to my family.
You know, it, it's heartwarmingbecause I haven't had as much
(40:40):
gratitude as a physician.
In 30 years of practice.
Yeah.
Yeah.
Yeah.
Me
neither.
Jackie, tell us about, uh,your book and specifically what
retreat are you gonna be going to?
Yeah, the book is right behind me.
Fire for Dummies.
That came out last year, so I'mcoming up on a year, April 30th.
It'll be a year.
As you know, writing a book is tough, so Ihad to hunker down and I had been retired.
(41:03):
Not used to a rigid schedule, but itwas a rigid schedule writing that.
But as you know, it's like.
Having a baby, you know, you spend a lotof hard work and time developing and all
of that, and to see it come out, I wantedto get it out in the atmosphere because it
is, you know, it, it puts things in order.
I.
For anyone that is seeking fire,at least it will walk you from A
(41:27):
to Z. Very clear, very concise,and I'm happy I got that out there.
So the retreat is called, uh, as you know,buy Freedom Retreat with our wonderful
friend Amy, and she lives in Bali.
I have not done a lot of internationaltravel, so I was a little bit
anxious and by the time I talkedto Amy, my nerves were calm.
(41:49):
She absolutely loves the Bali.
Area, the community, the culture.
And she's inviting us, you know,through this retreat to enjoy and
experience, you know, this paradise.
And we're going to talk about, youknow, the mental, the emotional,
and all the sides of our moneyand financial independence.
(42:12):
And I'm honored to be one of the speakersand even more honored to be along with
you because I respect what you do.
I feel like you have a very uniquelens and I just love that you.
How you, you know, calmly and alwaysvery in a balanced way, talk about things
and approach things and you're so deep.
(42:32):
So that's gonna be a lot of fun.
So it's the five Freedom retreat.
I, it's both.
There's two weeks this year soldout, both sold out within minutes,
uh, or at least within 24 hours.
So she will have it again next year.
She'll just have one, but it'sgoing to be an amazing time.
It's in September of thisyear, and I cannot wait.
(42:53):
Bill y and Jackie Cum Koski.
Thank you so much for beingon Earn and Invest today.
It's our pleasure, right, Jackie?
We love it.
Yeah.
Thanks Doc.
Jay, we love ya.
Thanks.
Thanks for having us
back.
That's a wrap,
Earnin.
Invest is now part of theAirWave Media podcast network.
(43:15):
Visit AirWave media.com to listenand subscribe to this show as
well as other fine podcasts.
During this conversation with Jackieand Bill of catching up to Phi, I
touched on this idea whether forlate starters times are different.
(43:41):
What do I mean by this?
Well, whenever we have investing,we always have people say,
well, this time is different.
I, I can't tell you how many times marketgoes down, and everyone says this time
is different for plethora of reasons.
Most of them, not even worthgoing into, but I find myself
asking the same question.
Now, listen, if you look at the politicalparty in charge or who's president.
(44:08):
Historically, it doesn't make a hugedifference, especially in the short term
economy, maybe in the long term economy,maybe in the long term stock market,
but certainly not in the short term.
In fact, whether it be a Democratic orRepublican administration, generally
the stock market does about the same.
The idea is that an administration'spolicies don't change our
(44:32):
economic outlook that much.
I find myself asking the same question.
Now, the reason why is everyone seemsto think we're on the cusp of recession,
and the truth is, I don't know.
I've heard people say this before, butfor the first time in my life it seems
like the policies of the administration.
(44:52):
Are making a recession more likely Now,I'm not giving you a value judgment on
the policies of this administration.
Uh, this is not a political podcast.
You could argue that even if there is ashort term recession, that those policies
maybe will help America long term.
You could say they'lldestroy America long term.
I am not making that value judgmentabout whether these are good policies
(45:16):
or not, but I will tell you all thetalk of tariffs, uncertainty and the
likelihood that businesses are afraid toinvest in the future right now because
they're not sure what's going to happen.
All of these things make it likelythat a recession is more likely to
happen, which means that the policies,the short-term policies of this
(45:38):
administration may actually impactour economy in the stock market in
a way that we've never seen before.
This is an administration like no other.
Again, whether you believe in it ordon't, whether you support it or are
fighting against it, I'm not makingthat value judgment, but either way.
I think anyone can look at thisadministration and say it is different,
(46:02):
and so if it is different, the policiesof this administration seem to be
pushing us more towards a recession.
Which again makes us ask thequestion, is this different than
something we've seen before?
And if it is something differentthan we've seen before, should
we be reacting differently?
Right?
We're usually not supposed tochange our asset allocation
(46:24):
because of short-term changes.
We're usually supposed to set thatallocation far in advance and then
stick to our investing policy plan.
Yet, I would argue that most peoplecould not have foreseen that things
would change in the way they're changing.
So do I know what's gonnahappen in the future?
(46:44):
No.
But the bigger question is,should we hold the course or
should we be changing something?
I think the answer's fairly simple.
If you're in the accumulation phase,if you're in the accumulation phase,
you have a good job, you're makingmoney, you're investing, then you should
continue investing and hold the course.
No question about it.
We may have a recession and recession.
(47:04):
In fact, if you're at the beginningof your career, may actually serve
you and allow you to buy moreand more of these assets, which
eventually will go up in price.
And so if you're in the accumulationphase, I think the answer is simple.
Don't change anything.
Stick to your investing plan.
Nothing likely is gonna change foryou as long as you have some time
(47:26):
to ride out all these changes.
The bigger question I. Reallycomes for people like me who
are either in Decumulation orabout to start decumulation.
So my wife stops working in May.
We're getting to the point where we'rethinking about decumulation and guess what
A recession would be kind of bad for us atthe beginning of our decumulation process.
(47:49):
Talk of sequence of returns risk, if.
We crater our economyfor the next five years.
That could really change myfinances, even though again,
we're not making a value judgment.
Let's say we had to create theeconomy for five years, for it
to all of a sudden pick up and beenormous and wonderful and fantastic.
In 10 years, that might be a tradeoff that young people are willing to
(48:12):
make, but someone who just starteddecumulation may not be the best
for us because sequence of returnscould really cause us a big problem.
So if you're in the decumulationphase, should you change, should
you mix up that asset allocation?
Should you become more conservative?
I don't know the answer to that.
I really don't.
(48:32):
I wish I did.
I think I'm gonna hold the course.
We're gonna keep doing what we're doing.
We're gonna maintain ourbroad based index investing.
Because I'm entering thedecumulation phase, I might
be a little more conservative.
I might have a little bithigher of a bond allocation.
Otherwise, I'm gonna keepdoing what I'm doing.
I don't know if that's the right answer.
(48:53):
Uh, if we're headed for a majorrecession, the truth of the matter is
I probably would be in trouble justas all of us would be either way, uh,
depending on how long that recessionis and how deep that recession is.
Uh, but I will adjust and pivotjust like we all have to adjust
and pivot if that's necessary.
But I wish I had a betteranswer to whether this time
(49:15):
is different than the past.
I don't know.
I think the inputs are different.
This administration is acting differentlythan administrations have in the past,
so that part certainly is different.
But will the outputs be different?
Will the stock market be different?
Will the likelihood of arecession be higher or lower?
Will our economy be different?
(49:36):
Unfortunately, we all aregonna have to wait and see.
All right.
As you guys know, I leave thingsrunning for our after show bill.
You know, you said something that Isay a lot and it's, it's weird, right?
(49:59):
Uh, Jackie, and you can chime in onthis, like, I was a physician for all
these years, and every year I might beable to touch a thousand lives, right?
Some I helped, some, maybe I didn't help.
Who knows?
But you know, you do your thing.
I would've never believed thatI could start doing stuff.
I just really liked, like writingbooks and talking about personal
finance and having a podcastand affect, you know, millions.
(50:22):
Right?
I've had millions ofdownloads on my podcast.
I've sold my book to thousandsand thousands of people.
Um, it's crazy, right?
Bill, like, 'cause we think of being adoctor is this big, deep, important thing.
But in some ways, I think for bothyou and I. Our impact and legacy, the
enduring lasting impact and legacy wemight have, might have more to do with
(50:42):
this kind of stuff we're doing as opposedto our day-to-day work as physicians.
Oh, I'm fortunate to be thefounder of this movement.
It was a space that hadn't beenaddressed and people that hadn't been
talked to, I think in the five movementand you know, it's been a pure joy.
It started out, uh, with Becky Heping,and I have to give her a shout out.
She had a great journeywhere she went from.
(51:04):
50 broke or net zero,zero net worth to 63.
Retired with over a milliondollars with her husband.
She was an inspirationto many for her journey.
And you know, now with Jackie,she legitimizes the show.
She has the CFP, you know, she hasthe numbers, she has the background,
she has a financial counselingdegree and she's written two books.
(51:27):
So, you know, it makes me looksmart to have such a great team.
Around me.
Jackie tell you, did you ever, did youever imagine Jackie that in quote unquote
retirement would be where, really whereyou had a bigger effect on on the world?
I mean, jail councils willtell you the same thing.
He like worked all this time andhe is like, and then I retired
and wrote, you know, this.
Blog and books and all of a sudden I'm
(51:49):
like, famous.
Right?
It, it's, um, I would've neverimagined, um, you know, going
all the way back to my childhood.
Definitely these aren'tthings I would even dream of.
My big dream was just being middle class.
Like that was my big dream.
But, um, when I retired, I guess the onething I knew is that financial literacy
and education was very important to me.
And the reason why is because that wasthe key for me that changed my whole life.
(52:14):
That took me from poverty.
To middle class, and I'mlike, I'm not that special.
And there's a lot of other people.
And as you know, the fire movement,like you said, it started with,
you know, mostly wealthy people,high income and things like that.
But I know that there's stillso many people that think, oh,
I can't do that, or whatever.
(52:34):
But there is still a place for peoplethat aren't making a ton of money,
but they can make some movement.
And those are typically thepeople I'm trying to talk to.
And so that's why I think me andBill have a really good balance.
'cause he's a rich doctor.
I'm the poor black girl that grewup in South Carolina and he hates
when I say that, but it's true.
(52:54):
And, and that's how society sees it.
That's how society sees me.
Yeah.
Sometimes I think I get more attentionbecause I'm more of an anomaly.
She's a, you know, I'mthe demographic check.
All the surveys and all the research andstatistics, I'm the demographic that they
say is the most likely to be in poverty.
(53:15):
Black single mom.
Mm-hmm.
So I was up against that stereotype andthose statistics as I, as I'm doing this.
So because I did it and I don'tthink I did anything extraordinary.
You know, I did go to college.
I got a four year degree, you know, um,I didn't have any huge special talent.
I worked for a company that, youknow, the company was fine, but
(53:38):
I did the job to get a paycheck.
I never made over six figures,so I wasn't a high income earner.
So.
I didn't have any unique s somethingsprinkled on me or anything.
Well,
well, can I jump in though?
I have to say, uh, and, andtake this for what you will.
Yes.
The things you've done are reproducibleor we wouldn't be trying to teach them.
(54:01):
Right?
What was unique about you is youbelieved a different way in a society
that told you you shouldn't believe it.
That is is unique to you and that isunique to people we see in this community
who have had to buck the social normsthat were placed on them by birthright.
(54:23):
What we see in this group of peoplewho are exactly like you is they didn't
buy the story that was told to them.
It didn't buy it.
It's so true.
Yeah, so true.
And I'll accept that.
And that's why I say the hardestpart for a late starter, really
anybody, is the mental part.
It's like nothing is happening unless youin your head believe that it's possible.
(54:45):
Maybe because you've seen it, you wereexposed to it or whatever the reason is.
But if you don't have it uphere, it's just not happening.
And let me just
clarify.
It's not that.
I say, you don't buy the story.
Everything should have madeyou want to buy that story.
'cause everyone is telling you thatit's not that the people who do
(55:05):
buy the story are flawed, it's thatthe story is so goddamn pervasive.
Right.
That it's really hard.
And that does make you unique because Ithink you had every reason to not believe
in yourself or your ability or the ideathat you could be where you are today.
And yet you did.
Anyway, go ahead, bill.
I gotta push back againstthe rich doctor here.
(55:28):
People need to understand thatMore money, more problems.
Okay.
Yeah.
Uh, lifestyle inflation is moreprevalent, I think, among the
higher income professionals.
We have targets on our back for thefinancial services industry, and I
need to tell you that there's at, atage 60 among doctors, there's 25% of
(55:50):
'em that don't have a million dollars.
And that's been in surveyafter survey that Jim Dali
has published to his website.
He is the white coatinvestor, and that is sad.
You can be a high incomeprofessional and not be wealthy.
Wealthy is different from rich.
Wealthy means you bought assets andrich means you spend it all and you,
(56:14):
and you look rich, but you're not.
You're not the millionairenext door by any means.
So are you saying you used to be richwhen you were the broke doc, when you
were not saving anything?
I, I lived a rich life, which,yeah, you lived a rich life.
A lot of memories, but I did notlive a balanced, wealthy life, and
that's what we're trying to achieve.
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