Today, I feature Keith, better known as The Wealthy Accountant. In today’s post, Keith regales you with the excellent tale of how we met. Don’t believe the part about me drinking all of the Spotted Cow though. That was Jim. And Keith. And me, but just a little bit.
Don’t ask me the year, but when I had cable for a short while I only watched educational programming (something in limited supply on paid TV) and the business channel: CNBC and to a seriously lesser extent, Fox Business. One evening I had the TV on with the sound muted as I was writing. CNBC didn’t have anything that interested me in the evening so I had Fox Business on. It was the first time I heard of Dave Ramsey.
I know, I know! Everybody has heard about Dave Ramsey and his debt snowball! Except me. I was living under a rock when they handed out said information. I guess Dave is on the radio a lot; I don’t listen to radio either. Sorry.
Dave caught my eye. He looked intelligent, so I decided to turn off the mute to listen for a while. In thirty seconds I was sold. How could I have not known about this Dave fella all these years?
What attracted me to Dave and his philosophy was the simple message of destroying debt. Plenty of clients crossed the threshold of my office with wheelbarrows filled with debt. I gave the best advice I could, but I had no program. Until Dave. Dave had an awesome, ready to go, program to refer my clients deep in hock to.
There was a reason for my interest in Dave and helping my clients: The more money my clients have the more they would pay for sound tax advice. We had a bit of quid pro quo going on here. Poor people make poor clients. It’s hard to collect a fee from someone who is broke. They tend to end up in the write-off column; not good for the profitability ratios.
Part of the Herd
I did a background on Dave and his company and discovered he had a referral program. I contacted The Lampo Group, Dave’s organization, and applied for the tax Endorsed Local Provider (ELP) program. After some serious vetting I was in.
Clients were referred at a steady pace. These weren’t the easy accounts. These people were in some serious debt. It was going to require the sleeves get rolled up to fix some of these problems. The work went beyond simple tax preparation and advising.
After a number of years as an ELP, Dave and I went our separate ways. The referrals he sent took more time than I had available to give and much of the work was done pro bono. I have a kind heart, but I also have a business to run. You can read more about my experience with Dave Ramsey here and here as these issues are not part of today’s story.
My Eyes are Opened
My personal experience at building wealth was an outlier in my mind. I knew I was lucky in many regards, but luck is more about consistency than chance. I came from a poor agricultural background and built a seven figure net worth by 32 and an eight figure net worth by 53. It all happened faster than I planned. Luck, I told myself, just plain dumb luck.
My clients sought my advice over the years on a variety of financial issues because they knew I was successful and managed my wealth without a penny of inheritance or lottery winnings. As an ELP I was working the debt elimination process more deeply than ever before. Gone were the days where I gave sound advice and moved on, allowing the client to navigate the minefield on their own.
As I worked with more and more clients from the ELP program I started to notice an interesting pattern: people were reaching debt freedom sooner than anticipated! My math was correct! The issue was how money worked. Investing has compounded returns. Well, reducing debt has compounded returns, only it all takes place below the zero line.
The baby steps were mapped out with precision. A game plan sure to eliminate debt was created and set in motion. And while the inevitable setback occurred—a furnace repair, car maintenance, medical expense, if I was able to keep the client on course, they would survive AND thrive. Life will throw curves, I would teach, and your options are to duck or knock it out of the park. My advice is to swing hard and true.
It didn’t take long before the original plan was not taking place in the real world. The best laid plans of mice and men often go awry. Only the deviation was to the client’s advantage. They were reducing debt faster than expected! How could this be?
Research showed the clients were viewing the program as a floor. Spending was reduced with excess funds used to retire debt. Only unannounced miscellaneous money showed up now and again and opportunities to reduce spending more than originally thought possible occurred. Extra income and excess cash from reduced spending kills the debt demon faster than anticipated. The faster high interest debt (the kind of debt these people had) is eliminated the faster the interest expense column declines. It’s a positive feedback loop.
Sunrise at Shamba; where I didn’t drink all of the Spotted Cow
It Works on the Other Side of Zero, Too
I prefer working with people building wealth. Fighting out of debt is such a defensive game. I prefer the offensive nature of wealth accumulation. Before I met the FIRE (financial independence/retire early) community up close and personal I worked with local clients building wealth. The same issue Dave Ramsey clients experienced existed with mywealth accumulators. They reached financial goals earlier than expected.
It was around this time while browsing personal finance blogs when I ran across 1500 Days to Freedom. As I recall I didn’t read far the first visit (sorry, Carl). In short order I summed up the gist of the blog. Here was a guy with some existing coin looking to leap to a million bucks cash in 1500 days. Sounded interesting.
I commented on 1500 Days to employees and a few clients. My remark each time 1500 Days came up was the same: The guy will get there early.
Prior experience told me the odds were high—80% plus—he would reach his goal early. Of course when my prediction came true, I get the litany of excuses: The stock market bailed him out; he got lucky at work with a raise; he received an inheritance. The stock market performed nicely, but none of the other complaints are true that I am aware of.
Mr. 1500 note: No inheritances or anything else; just a very healthy stock market tailwind.
It’s always something. Four out of five times you reach your financial goals faster than planned. Compounded returns have a way of messing with your math. Dividends reinvest while the underlying index fund also climbs. It’s hard to include every variable pushing your net worth higher.
Every so often I would return to see how things were going for good old Carl and family. Once again I didn’t read far; I just wanted confirmation of my prediction. (Sorry again, Carl.)
Lo and behold, before the expiration date of 1500 days Carl reached his destination. SALUTE! (Readers under 50 years of age should go to YouTube and search “Hee Haw”. Enjoy!)
I knew it would happen. If I wore suspenders I would’ve hooked my thumbs is them, puffed out my chest and raised my nose to the sky. I, my dear reader, am good. (Arrogant too, if you haven’t noticed.)
But then Carl changed the rules! CHANGED THE RULES! How dare he? Our good friend Carl decided on his very own without any input from us, readers, to adjust for the fact he had a mortgage. He noticed he had a pile of hundred dollar bills, but if he paid off the mortgage he would not have a million dollars! So he adjusted for the mortgage.
My response was immediate, “He’ll beat that goal, too.”
Time counts and keeps counting. It is wise to be kind to everyone you meet online and in the real world. One day you just might meet them. And so it goes.
Earlier this year I’m sitting in a cottage on the shore of Lake Michigan in Oostburg, Wisconsin (yes, Oostburg, Wisconsin) with Jim Collins and our very good friend, Carl, Mister 1500 Days, himself. I was very pleased to make his acquaintance.
Plastic dinosaurs and spotted cows
The world comes full circle in all we do. From a random discovery of 1500 Days to Freedom to sitting in the same room with the man a few years later is poetic. I made a prediction about a complete stranger I never met before and now was drinking Spotted Cow beer with the guy. (For the record, Carl drank an awful lot of the Spotted Cow I brought with me.)
Friends arrive in mysterious ways sometimes.
Mr 1500 note: When I first heard that I’d be meeting Keith, I was a little intimidated. I had see this picture on his blog:
The Hairless Terminator
So, I was expecting Keith to pull up on a Harley decked out in black leather and kick my ass. Just because. It turned out that Keith is a nice guy.
Your Journey
If you stumbled in the room to see this post before any other on this blog, know this is a guest post. Also know that the journey you are on to reduce debt and build toward financial independence is a journey you don’t have to walk alone. Many have gone before you. We have felt your pain, experienced your struggles.
Nothing you are going through is new. Someone in this community experienced a similar event. Lean on us. We are about the friendliest group of cusses you’ll ever meet. We come from every walk of life and every background. You might be surprised where some of us have come from. The common denominator is we all made it and we are happy to reach out and give you a hand to the next level.
There is a blog tailored for your current position on the ladder. Dave Ramsey is awesome when you struggle with debt; Pete (Mr. Money Mustache) is awesome in keeping spending low and happiness high; Jim Collins is awesome in his investment teachings (Stock Series); and your humble accountant author can seam it all together as you deal with issues surrounding having a lot of money.
Don’t let anyone BS you. The smartest people don’t do the best. The consistent and persistent will reach their goals of financial independence sooner than expected. We call it focus in the demographic.
Stay true to the program. Eliminate high interest debt, invest in index funds regularly and enjoy every day with family and friends. That’s it! There is no more. Regular investing in index funds will yield superior returns over nearly every other option with the least amount of risk.
There is no need to worry. You will get there before you arrive.
Now would someone pass me a beer before Carl drinks all the Spotted Cow!
Keith Schroeder writes over at The Wealthy Accountant where he enjoys helping his clients in his accounting practice of over 30 years. He lives in the backwoods of NE Wisconsin with his wife, Mrs. Accountant (how lucky can an accountant get than to find a life-mate with a last name of Accountant!), two daughters, a cat named Pinky and a herd of chickens. When he isn’t
punching buttons on his laptop he has his nose buried deep in a book.
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Awesome post!!! I love hearing people’s backstories and how you became familiar with Mr. 1500. I definitely agree with your breakdown of Dave Ramsey and Mr. MMM. There are certain seasons of our lives when certain people speak louder to us than others. It’s amazing how that works!!! I am definitely going to check out your work 🙂 Mustard Seed Money recently posted…Three Ways to Max Out Your Retirement Savings
There is a wide variety of reading material in the demographic, Mustard. There is nothing wrong with reading what benefits you most at the moment and moving on as you evolve. Even my writing changes over time as my worldview changes. Keith Schroeder recently posted…Reading Vacation
The beer aside – and more importantly (at least right now) – thanks for the post. I found both entertaining and useful. A few key points that stuck out:
– Leveraging the community. Agreed – there have been so many folks who can at least offer / share some experience.
– The Consistent and persistent – great point. I find this so important to continue to apply in many areas of life beyond just personal finance. I believe consistency / behavior is more important than just knowledge alone.
– The best of plans go awry. Enough said.
I’ll be sure to check out your site. Thanks again for the post.
Balanced, I never know how my story will resonate with readers. Often I find readers gain benefits I didn’t originally intend. It’s a bonus. Keith Schroeder recently posted…Reading Vacation
So true, the momentum of a debt snowball carries through during the accumulation phase. Hardcore savings + prudent investing + frugal living = jackpot! at a surprisingly fast rate. We used that formula to save over $500k in less than 5 years. I’m still shocked when I think about it, but it wasn’t miraculous. Why? Because I can attribute it to those three factors.
Congrats Carl…thanks for being an example of what can be. Great post Keith, keep cranking them out. Ed
Great post, so many wise words and advise. “The consistent and persistent will reach their goals of financial independence sooner than expected.”, so true! Team CF recently posted…Successful Eindhoven BENL Meetup
“The smartest people don’t do the best. The consistent and persistent will reach their goals of financial independence sooner than expected.”
I know many smart people in terms of IQ that are financial disasters. And vice versa. I’m FIREd and I’m not a rocket surgeon. 🙂 Mr. Freaky Frugal recently posted…How much do you REALLY need to retire?
Mr. FF, I added those words intentionally. So often I hear clients say they aren’t smart enough to build wealth. When it comes to building net worth you can outsmart yourself. People who consider themselves “less smart” (but are really smart in other areas) tend to drop money into a mutual fund and let it alone. You become dangerous once you think you can beat the market. Keith Schroeder recently posted…Reading Vacation
Thank you for sharing your experience with Dave Ramsey and his ELP program.
I don’t agree with him 100% about personal finance, but I’m a big fan of his philosophy, especially paying off the mortgage early before acquiring rental properties. I’m practicing it in my own life now. 🙂
My biggest issue with Dave , Ms Frugal, is the cost to the ELP. Many clients he sent needed plenty of help and I charged very little to help them. However, Dave kept charging me more and more for the people he sent. He didn’t make business sense anymore. That said, I am still a fan of Dave and his work. Keith Schroeder recently posted…Reading Vacation
I guess you guys are on BS7? We are on BS6 and hope to reach BS7. Dave program is a good program even if you are not heavily indebted. You don’t even have to agree with every step, you can tweak it to customize for yourself. Ms99to1percent recently posted…Blog Report for First Full Month (9,262 pageviews) and Our Strategies
You are dead-on, Ms99to1. No matter what you hear or read, you need to tweak it to your personal situation, including my work. Keith Schroeder recently posted…Reading Vacation
Mr. Tako, I wasn’t an avid reader back then before I knew Carl personally. Times have changed. I check in on a regular basis now. Always best to keep an eye on the guy who has an eye on your beer. Keith Schroeder recently posted…Reading Vacation
I heard Keith’s interview on the ChooseFI podcast the other day and really loved his energy. I’m FIREd and don’t currently have any businesses making enough to warrant restructuring my LLCs, etc. but I’m holding on to that one for when I do.
Give me a holler, Notes, when you get close. I can smooth the edges to when it is best to make the transition. Keith Schroeder recently posted…Reading Vacation
“Research showed the clients were viewing the program as a floor. Spending was reduced with excess funds used to retire debt. Only unannounced miscellaneous money showed up now and again and opportunities to reduce spending more than originally thought possible occurred. Extra income and excess cash from reduced spending kills the debt demon faster than anticipated.”
Very interesting perspective and in line with my less than scientific observations of others who set a goal to get out of debt and made it happen faster than they thought they could.
I was inspired to set a goal to pay off a mortgage on a second home within 5 years. We’ve paid off 20% of it in the first 9 months and I’m thinking, “how did that happen?”
The answer is as you explain – unannounced miscellaneous money shows up and we keep spending less than we make. In a month or so we’ll cross that line with our regular payment where more of it goes to principal than to interest and escrow. And the snowball will pick up a little more momentum.
Also appreciate the Hee Haw reference. That was some quality TV right there.
Sometimes when I write, Brian, I’m not sure I’m getting the point across. I’m glad you made the intuitive leap on how this works.
Your response is typical: How did this happen? If you had free time to play with the numbers you’ll see what I outlined in action. The easy route is to enjoy your early arrival in Retirementville. Keith Schroeder recently posted…Reading Vacation
“Compounded returns have a way of messing with your math.” That’s some inspirational stuff. It’s been borne out in my own experience over the last couple of years from when I buckled down and got my wife on board — we’ve been beating our assumed returns by a couple of points, in addition to somehow beating our expected annual savings by five figures.
We’ve gotta keep pushing up our FIRE date and figuring out how to best stash money for easy access prior to age 59.5. These are fantastic problems to have.
Having your significant other on board is critical. The best part is when things go better than planned it becomes very motivational.
As or the 59 1/2 tax thing, don’t worry about it. There are outs in the tax code. Section 72(t) allows “equal and periodic” withdrawals from a traditional retirement account. There are limits, but usually 72(t) can do the job. Plus, future lower income due to retirement means your tax bracket may be higher now than when you retire even if you pay a penalty!
Consider a Roth IRA, too. After 5 years you can withdraw your basis without penalty or tax. The gain would face tax if taken before 59 1/2 unless 72(t) is used. Keith Schroeder recently posted…Reading Vacation
tru dat about it all happening faster than you think. once we started seeing results it was easier to spend less and to work the hell out of the side hustle (my side hustle was lucrative overtime in a big factory lab). it only took a few successes and showing off the numbers in the ledger to mrs. me. before you knew it we owned everything outright including our palatial estate (just a house). then before you knew it all of the investment accounts had snowballed into a monster! turns out you just gotta start and overcome that inertia.
you guys are pretty entertaining and informative. wine is expensive. i would be long retired if i could just grow 2 plants in the basement and leave that wine expense behind.
A very nice write up. I need to do some research on Section 72(t) apparently. Tax law isn’t my specialty but it is massively important when it comes to retirement.
Spotted Cow has quite the reputation but I’ve yet to try. I have a friend that brings several cases back when he goes to his yearly Packers game. I need to swing over to his place sometime when he gets back and sample 🙂 Mr Defined Sight recently posted…Why I Gave Up My TV Shows and What I Gained in Return
Great post. I too have certainly found that smart decisions from early on in my career and wealth accumulation phase are now paying huge dividends. The long bull market has had a big impact, but our continued efforts to save approximately 50% of our income is by far the biggest driver. Freedom40Plan recently posted…The Cost of Kids – Prenatal Costs
We are about the friendliest group of cusses you’ll ever meet.
So true! I’ve been a longtime reader of many FIRE and money blogs and have picked up so much great life advice, besides the obvious money-hacks. And the community is as down-to-earth as it is smart. Great post! Accidental Fire recently posted…Dead Man Walkin!
To quothe the man: “Don’t let anyone BS you. The smartest people don’t do the best. The consistent and persistent will reach their goals of financial independence sooner than expected. We call it focus in the demographic.”
Damn, bro. So true. Except for maybe me. I should have made it to my goal early. I set a 10 year goal when I left undergrad. I “failed well” as it took me 14 years. I had some setbacks including losing a few years of work early in the process to care for my terminally ill mother. No regrets.
If you are still on the journey or just getting started, read the above post carefully. You can totally do this. Hope you join us in the FIRE cohort soon. Financial Velociraptor recently posted…Stopped Out AmTrust Financial (AFSI)
Fun fun! I think Spotted Cow is a bit over-hyped though. I guess if you make some funky shiz in the middle of nowhere Wisconsin (New Glarrus?) you get some instant cred.
Great post Keith! And by the way, I spent a lot of time in Wisconsin when I was younger, and while I like Spotted Cow, I LOVE Fat Squirrel. Been a long time since I’ve had any!
Great post, Keith! This money math is powerful, and as a current teacher of Dave’s Financial Peace University, I get the privilege of trying to convince people that these things are truly possible in their lives. It took my wife and I a short 10 years to get to Baby Step 7, and we’ve been on the FI journey for the last few years.
The hardest part is getting people to believe that they can make positive changes in their finances. They don’t have to be financial geniuses or trust fund babies to turn their life around. These strategies are openly available to everyone.
Thanks for sharing your story, and thank you Mr. 1500 for showing the world what is possible!
So good to hear from a fellow Wisconsinite on FIRE! It’s very encouraging to read about how often people reach their financial goals early. My husband and I have a massive amount of student debt, upwards of $200K, but we are confident we can be debt-free someday, and eventually financially independent. We have just recently gotten serious about our finances and long-term goals, and have been encouraged in our journey by Frugalwoods, Mr. 1500, and other frugality/FIRE bloggers. It’s a long haul, but we’re determined and I’m discovering there is a great community out there full of advice, encouragement, and know-how to help us get there.
I’m just getting into Dave Ramsey’s stuff. We have his book and we have a chance to do the Financial Peace workshop for free, so I’m excited to learn something from that. My first impressions are that he doesn’t seem to understand student debt–or maybe that he understands student debt as it was when he was college-aged, and doesn’t realize how things have changed. For example, avalanche seems like a much better approach than snowball. But, we’ll see what he has to say, and I’m sure we can glean some wisdom even if his program doesn’t fit us perfectly.
Anyway, thanks for sharing your insights here; I’ll be checking out the Wealthy Accountant blog for sure!
Awesome post!!! I love hearing people’s backstories and how you became familiar with Mr. 1500. I definitely agree with your breakdown of Dave Ramsey and Mr. MMM. There are certain seasons of our lives when certain people speak louder to us than others. It’s amazing how that works!!! I am definitely going to check out your work 🙂
Mustard Seed Money recently posted…Three Ways to Max Out Your Retirement Savings
There is a wide variety of reading material in the demographic, Mustard. There is nothing wrong with reading what benefits you most at the moment and moving on as you evolve. Even my writing changes over time as my worldview changes.
Keith Schroeder recently posted…Reading Vacation
I love Spotted Cow! It was my meal #4 on our trip. I would have had it all, too.
https://www.balanceddividends.com/how-do-you-vacation-800-in-48-hours-or-1500-in-192/
The beer aside – and more importantly (at least right now) – thanks for the post. I found both entertaining and useful. A few key points that stuck out:
– Leveraging the community. Agreed – there have been so many folks who can at least offer / share some experience.
– The Consistent and persistent – great point. I find this so important to continue to apply in many areas of life beyond just personal finance. I believe consistency / behavior is more important than just knowledge alone.
– The best of plans go awry. Enough said.
I’ll be sure to check out your site. Thanks again for the post.
Balanced, I never know how my story will resonate with readers. Often I find readers gain benefits I didn’t originally intend. It’s a bonus.
Keith Schroeder recently posted…Reading Vacation
So true, the momentum of a debt snowball carries through during the accumulation phase. Hardcore savings + prudent investing + frugal living = jackpot! at a surprisingly fast rate. We used that formula to save over $500k in less than 5 years. I’m still shocked when I think about it, but it wasn’t miraculous. Why? Because I can attribute it to those three factors.
Congrats Carl…thanks for being an example of what can be. Great post Keith, keep cranking them out. Ed
Ed, as long as you’re here, I predict you’ll hit seven figures sooner than you expect.
Remember readers, you heard it here first.
Keith Schroeder recently posted…Reading Vacation
Great post, so many wise words and advise. “The consistent and persistent will reach their goals of financial independence sooner than expected.”, so true!
Team CF recently posted…Successful Eindhoven BENL Meetup
Well said and I particularly liked…
“The smartest people don’t do the best. The consistent and persistent will reach their goals of financial independence sooner than expected.”
I know many smart people in terms of IQ that are financial disasters. And vice versa. I’m FIREd and I’m not a rocket surgeon. 🙂
Mr. Freaky Frugal recently posted…How much do you REALLY need to retire?
Mr. FF, I added those words intentionally. So often I hear clients say they aren’t smart enough to build wealth. When it comes to building net worth you can outsmart yourself. People who consider themselves “less smart” (but are really smart in other areas) tend to drop money into a mutual fund and let it alone. You become dangerous once you think you can beat the market.
Keith Schroeder recently posted…Reading Vacation
Thank you for sharing your experience with Dave Ramsey and his ELP program.
I don’t agree with him 100% about personal finance, but I’m a big fan of his philosophy, especially paying off the mortgage early before acquiring rental properties. I’m practicing it in my own life now. 🙂
My biggest issue with Dave , Ms Frugal, is the cost to the ELP. Many clients he sent needed plenty of help and I charged very little to help them. However, Dave kept charging me more and more for the people he sent. He didn’t make business sense anymore. That said, I am still a fan of Dave and his work.
Keith Schroeder recently posted…Reading Vacation
Hey WA and Mr1500,
I guess you guys are on BS7? We are on BS6 and hope to reach BS7. Dave program is a good program even if you are not heavily indebted. You don’t even have to agree with every step, you can tweak it to customize for yourself.
Ms99to1percent recently posted…Blog Report for First Full Month (9,262 pageviews) and Our Strategies
You are dead-on, Ms99to1. No matter what you hear or read, you need to tweak it to your personal situation, including my work.
Keith Schroeder recently posted…Reading Vacation
Mr. Tako, I wasn’t an avid reader back then before I knew Carl personally. Times have changed. I check in on a regular basis now. Always best to keep an eye on the guy who has an eye on your beer.
Keith Schroeder recently posted…Reading Vacation
I heard Keith’s interview on the ChooseFI podcast the other day and really loved his energy. I’m FIREd and don’t currently have any businesses making enough to warrant restructuring my LLCs, etc. but I’m holding on to that one for when I do.
Give me a holler, Notes, when you get close. I can smooth the edges to when it is best to make the transition.
Keith Schroeder recently posted…Reading Vacation
“Research showed the clients were viewing the program as a floor. Spending was reduced with excess funds used to retire debt. Only unannounced miscellaneous money showed up now and again and opportunities to reduce spending more than originally thought possible occurred. Extra income and excess cash from reduced spending kills the debt demon faster than anticipated.”
Very interesting perspective and in line with my less than scientific observations of others who set a goal to get out of debt and made it happen faster than they thought they could.
I was inspired to set a goal to pay off a mortgage on a second home within 5 years. We’ve paid off 20% of it in the first 9 months and I’m thinking, “how did that happen?”
The answer is as you explain – unannounced miscellaneous money shows up and we keep spending less than we make. In a month or so we’ll cross that line with our regular payment where more of it goes to principal than to interest and escrow. And the snowball will pick up a little more momentum.
Also appreciate the Hee Haw reference. That was some quality TV right there.
Sometimes when I write, Brian, I’m not sure I’m getting the point across. I’m glad you made the intuitive leap on how this works.
Your response is typical: How did this happen? If you had free time to play with the numbers you’ll see what I outlined in action. The easy route is to enjoy your early arrival in Retirementville.
Keith Schroeder recently posted…Reading Vacation
“Compounded returns have a way of messing with your math.” That’s some inspirational stuff. It’s been borne out in my own experience over the last couple of years from when I buckled down and got my wife on board — we’ve been beating our assumed returns by a couple of points, in addition to somehow beating our expected annual savings by five figures.
We’ve gotta keep pushing up our FIRE date and figuring out how to best stash money for easy access prior to age 59.5. These are fantastic problems to have.
Having your significant other on board is critical. The best part is when things go better than planned it becomes very motivational.
As or the 59 1/2 tax thing, don’t worry about it. There are outs in the tax code. Section 72(t) allows “equal and periodic” withdrawals from a traditional retirement account. There are limits, but usually 72(t) can do the job. Plus, future lower income due to retirement means your tax bracket may be higher now than when you retire even if you pay a penalty!
Consider a Roth IRA, too. After 5 years you can withdraw your basis without penalty or tax. The gain would face tax if taken before 59 1/2 unless 72(t) is used.
Keith Schroeder recently posted…Reading Vacation
tru dat about it all happening faster than you think. once we started seeing results it was easier to spend less and to work the hell out of the side hustle (my side hustle was lucrative overtime in a big factory lab). it only took a few successes and showing off the numbers in the ledger to mrs. me. before you knew it we owned everything outright including our palatial estate (just a house). then before you knew it all of the investment accounts had snowballed into a monster! turns out you just gotta start and overcome that inertia.
you guys are pretty entertaining and informative. wine is expensive. i would be long retired if i could just grow 2 plants in the basement and leave that wine expense behind.
A very nice write up. I need to do some research on Section 72(t) apparently. Tax law isn’t my specialty but it is massively important when it comes to retirement.
Spotted Cow has quite the reputation but I’ve yet to try. I have a friend that brings several cases back when he goes to his yearly Packers game. I need to swing over to his place sometime when he gets back and sample 🙂
Mr Defined Sight recently posted…Why I Gave Up My TV Shows and What I Gained in Return
Great post. I too have certainly found that smart decisions from early on in my career and wealth accumulation phase are now paying huge dividends. The long bull market has had a big impact, but our continued efforts to save approximately 50% of our income is by far the biggest driver.
Freedom40Plan recently posted…The Cost of Kids – Prenatal Costs
We are about the friendliest group of cusses you’ll ever meet.
So true! I’ve been a longtime reader of many FIRE and money blogs and have picked up so much great life advice, besides the obvious money-hacks. And the community is as down-to-earth as it is smart. Great post!
Accidental Fire recently posted…Dead Man Walkin!
To quothe the man: “Don’t let anyone BS you. The smartest people don’t do the best. The consistent and persistent will reach their goals of financial independence sooner than expected. We call it focus in the demographic.”
Damn, bro. So true. Except for maybe me. I should have made it to my goal early. I set a 10 year goal when I left undergrad. I “failed well” as it took me 14 years. I had some setbacks including losing a few years of work early in the process to care for my terminally ill mother. No regrets.
If you are still on the journey or just getting started, read the above post carefully. You can totally do this. Hope you join us in the FIRE cohort soon.
Financial Velociraptor recently posted…Stopped Out AmTrust Financial (AFSI)
Fun fun! I think Spotted Cow is a bit over-hyped though. I guess if you make some funky shiz in the middle of nowhere Wisconsin (New Glarrus?) you get some instant cred.
Great post Keith! And by the way, I spent a lot of time in Wisconsin when I was younger, and while I like Spotted Cow, I LOVE Fat Squirrel. Been a long time since I’ve had any!
Great post, Keith! This money math is powerful, and as a current teacher of Dave’s Financial Peace University, I get the privilege of trying to convince people that these things are truly possible in their lives. It took my wife and I a short 10 years to get to Baby Step 7, and we’ve been on the FI journey for the last few years.
The hardest part is getting people to believe that they can make positive changes in their finances. They don’t have to be financial geniuses or trust fund babies to turn their life around. These strategies are openly available to everyone.
Thanks for sharing your story, and thank you Mr. 1500 for showing the world what is possible!
So good to hear from a fellow Wisconsinite on FIRE! It’s very encouraging to read about how often people reach their financial goals early. My husband and I have a massive amount of student debt, upwards of $200K, but we are confident we can be debt-free someday, and eventually financially independent. We have just recently gotten serious about our finances and long-term goals, and have been encouraged in our journey by Frugalwoods, Mr. 1500, and other frugality/FIRE bloggers. It’s a long haul, but we’re determined and I’m discovering there is a great community out there full of advice, encouragement, and know-how to help us get there.
I’m just getting into Dave Ramsey’s stuff. We have his book and we have a chance to do the Financial Peace workshop for free, so I’m excited to learn something from that. My first impressions are that he doesn’t seem to understand student debt–or maybe that he understands student debt as it was when he was college-aged, and doesn’t realize how things have changed. For example, avalanche seems like a much better approach than snowball. But, we’ll see what he has to say, and I’m sure we can glean some wisdom even if his program doesn’t fit us perfectly.
Anyway, thanks for sharing your insights here; I’ll be checking out the Wealthy Accountant blog for sure!