On Board today is Mike Staunton: Investor, Personal Finance Coach and the CEO and co-founder of Money like Mike.
Mike lives in inner Melbourne, and after reaching Financial Independence he left a high stress career as an Engineer to pursue his passion of helping others take control of their wealth.
Mike has a pretty interesting story – originally from North Carolina in the USA, he trained and worked as an electrical engineer. Despite being in one of the highest paying career paths, he somehow only seemed to go backwards with money, ending up with over $100,000 in personal debt in his early twenties including loans on three cars – one of which didn’t even run!
Mike needed a change, and after being inspired by Dave Ramsey 8 years ago, jumped on board his first ever aircraft flight on a one way trip to Melbourne, taking a chance on a transfer to his employers Australian office.
Mike sold everything when he left to pay down as much of his debt as he could, and adopted a lifestyle in the city which kept his cost of living rock bottom enabling him to drag himself out of debt.
Through a combination of frugality, cycling, not having a car, being plant based and being alcohol free Mike was able to pay off his debts and start investing. Mike invests in both the US and Australia through his 401K, IRA, Superannuation, Mutual funds and a conventional brokerage account.
Ultimately, understanding the difference between a want and a need enabled Mike to pay off his debts and Reach Financial Independence in only 8 years. Now on the path to becoming a deca-millionaire, Mike shares with me some of the top saving and investing tips he uses with his clients.
Although we don’t exactly see eye-to-eye on everything, Mike certainly provided me with a refreshing perspective and I had a great time chewing the fat with him from everything to Bikes and cycling, through to saving, mental attitude and investing. Strap in because its a pretty long poddy!
- Check out Money like Mike Here or on Instagram
- Read all about the benefits of cycling; The SAFEST (and cheapest) form of transportation from the one and only Mr Money Mustache
- Check out my dedicated post on Superannuation to explain some of the differences between the Australian and the US system – although we didn’t go into it too much, Mike uses both the Australian and USA tax sheltered retirement accounts to his full advantage
- Sharesight is the easiest portfolio management tool, and is completely free for investors with under 10 holdings
Mikes Top financial tips
- Never spend more than you earn! Mike fell into this trap when he first entered the workforce, and let peer pressure and societal expectations erode his wealth as he spent like mad to keep up with the jonses. Ending up in a -$100,000 hole, he had to resort to…
- Get out of debt ASAP! – Do what millionaires do and get out and stay out of personal debt. Personal debt and interest repayments cripple you and undo any good work your doing saving or investing
- Be content and have gratitude for what you have – It could always be worse! By appreciating what you have, you find yourself wanting and therefore spending less
- Sell your car and ride a bike!
Mike Stauntons top financial Independence Books
1. The Total money make-over by Dave Ramsey – Amazon
2. Retired Inspired by Chris Hogan – Amazon
3. Simple Wealth, Inevitable Wealth by Nick Murray – Amazon
4. Boundaries by Dr Henry Cloud and Dr John Townsend – Amazon
5. The top 5 regrets of the dying by Bronnie Ware – Amazon
Hey guys, I just subscribed to Otter AI application which is an program that uses Artificial Intelligence to transcribe your audio notes. I am exploring the functionality to transcribe the poddy for those that are hearing impaired or who simply prefer to read.
So far Otter is actually super easy to use and I even used it to transcribe some of my uni lectures so I could read them when I was flying (I have to keep my ears listening out on the radios to make sure I don’t miss any transmissions meant for me!).
I have spent WAY too much time chatting to the team at Otter and they have been pretty helpful explaining how it all works. If you want to check it out you can use a free version which is more than adequate for most peoples needs, and the team at Otter even provided a sign up bonus link for Captain FI readers which gives you a free 1 month premium pass!
Captain FI 0:07
Ladies and gentlemen, this is your captain speaking. Welcome aboard Captain FI the Financial Independence Podcast.
Before we get started today, remember anything on the show is provided for general information only and should not be taken as constituting a professional advice. You should always do your own research when making any financial decision. Hey guys just wanted to give a quick shout out to share site before we get started today. I recently interviewed them before the blog and ended up chatting with the team for hours about how it all works, how I can use it I just wanted to say thanks, they were really transparent and helpful about it all. Share site is basically an accounting tool that I use to keep track of my share portfolio. So you’ll see me start to use it more and more in the network updates and on the board, because it’s really simple to use, and even does all my annual tax reporting for me with the click of a button, so no more agonising over spreadsheets in Excel. The best thing about it though, is if you have under 10 Holdings, it’s completely free. So it perfectly suits index fund investors who are on the path to financial independence. It’s not sponsored for the party or anything but I just wanted to share this useful tool. I did do a pretty big write up about it on the blog. If you want to learn more about how you can use it to simplify your portfolio management, especially at tax. Time and ditch the Excel spreadsheet. Shares like Dede kindly provide a bonus signup offer for Captain FI readers through an affiliate link. So if you want to sign up, you can score yourself four months of premium subscription for free. So here’s the blog and check out the show notes for that. I personally just use the free version which does everything I need. on board with us today is Mike Staunton investor, personal finance coach and CEO and co founder of money like Mike. Mike lives in inner Melbourne, and after reaching financial independence, he left his high stress career as an engineer to pursue his passion of helping others take control of their wealth. Mike has a pretty interesting story. He’s originally from North Carolina in the USA, where he trained and worked as an electrical engineer Despite being in one of the highest paying career streams, he somehow only ever seemed to go backwards with money and ended up with over $100,000 in personal debt in his early 20s, which included loans on three cars, one of which didn’t even run. Mike knew he needed a change. So after being inspired by Dave Ramsey, eight years ago, jumped on board his first ever aircraft flight on a one way trip to Melbourne, where he was taking a chance on a transfer to his employer’s Australian office. Mike sold everything when he left to pay down as much of the debt that he could, and then adopted a lifestyle in the city which kept his cost of living rock bottom. This enabled him to drag himself out of debt through a combination of frugality, cycling, not having a car Being plant based and also being alcohol free, Mike was able to pay off all of his debts and start investing. Mike invests in both the US and Australia through his 401k IRA, and superannuation, which he maxes out and also through mutual funds via a conventional brokerage account. Ultimately, understanding the difference between a want and a need, enabled Mike to pay off his debts and reach financial independence in only eight years. Now on the path to becoming a deca millionaire. Mike shares with me some of the top saving and investing tips he uses with his clients. Although we don’t exactly see eye to eye on everything. Mike certainly provided me with a refreshing perspective and I had a great time chewing the fat with him. Strap Guys, cuz it’s a pretty long play. Alright, with that said, Mike, welcome to the show.
Oh, amazing. Thank you, Captain. I appreciate that intro.
Captain FI 5:10
Last time, we had a little bit of an accident in the studio, and we lost all of our data. So we’re recording this again. It’s been six weeks since our first conversation. Thanks so much for bearing with me, mate. I’ve gone through a bit of stuff. with family, I’ve had some leave from work, and I’m now back into the swing of things. And
it’s good to hear that you’re back. And we all have been through something maybe not the same level of severity. But the last six weeks have been interesting in the first half of 2020. For sure. It’s been interesting for a global global scale.
Captain FI 5:53
Absolutely. And I did want to ask as well, you’re from Melbourne to how are you dealing with lockdown. So now you guys safe. And do you have enough toilet paper and playing flail?
Yeah, yeah, I mean, all of that everything that I do hasn’t changed. So you’re definitely asking the wrong human being about the rules. I don’t listen. And even if I did take the time to be told or read or learn, just not demand to know what’s going on. So my life has not changed, other than the fact that we came to a trap.
Captain FI 6:29
Well, I personally try to cut a lot of the media out of my life because I find it really stresses me out when I actually was home. Spending time with my father and my mom were both pretty sick. They love watching the news and TV and I found myself getting really anxious just with these repeating soundbites about all the coronavirus fears. Yeah. And it really it sort of started making me a bit uneasy. So I’m coming glad I’m back in my own bubble now and I can unplug that TV.
That’s, that is amazing to hear. And I love sharing the stories a quick one back when the Boston bombing happened a number of years ago, where if you watch the television, the news on the bombing for over 12 hours, you actually experienced greater PTSD than someone that was actually running the race.
Captain FI 7:31
Wow. Yeah, it’s, uh, you know, it sells headlines, I guess. And that’s why they do it. But, you know, it does take a toll on your health.
It does. It’s all affected. And that’s why I love being able to join you on this podcast and being able to talk about money because the people that are listening to you and I today that hopefully to be able to take away something and learn something filled their mind with the positivity.
Captain FI 7:57
Absolutely. So um, look Micah Thanks for coming on again. And I guess hopefully it’s a little easier this time around. But first up, can you tell us a little bit about yourself? So, obviously, you’ve got that American accent. So you know, you weren’t always from Melbourne. How did you get here? What did you do and what are some of your hobbies?
Yes, that’s very true. So I was actually born in Durham, North Carolina. And I spent my first 25 years of life there. And I came over to Australia on my first international flight, and that was a one way to Melbourne as an electrical engineer. And I do the transfer with my job. And I’ve been here for eight years now. I’m a citizen. I have two passports. Pretty, pretty happy about that.
Captain FI 8:48
I’ll pick up on your career as an electrical engineer. I don’t know if it’s just me, but I noticed that a lot of people that are interested in financial issues dependents investing, retire early. A lot of them are engineers, particularly it and software but I have seen a number of you know, I was an era aerospace engineer. It started my career path, the shuffler from lifelong shuffle. I’m pretty sure he’s a money. civil construction engineer. Your sci fi bug, he works in it. He’s software. Mister money moustache. He is a software engineer. Mad Scientist. I’m pretty sure he is in it as well. And now Mike, he’s a electrical engineer, say a recurring theme.
It really is. And if you do any research or read some books, the top five careers for everyday millionaires are engineer, accountants, teachers, management, and attorneys.
Captain FI 9:54
The engineering topping the list rather.
I’m not sure if it’s number one, but it’s definitely in the top five
Captain FI 10:00
Some people might think, oh, what about a doctor or an actor. But I would suggest from the doctors and actors that I know which you know, count for what it’s worth, they tend to have a higher spending rate. So I know a big focus of my training and engineering was about efficiency. We did a lot of plant engineering, where you say, we’re going to design a factory, you look at areas where you can recycle or reuse energy. So say a particular process gave off a lot of energy. Well, you could harness that energy and use that as a kill if you are going to dry something that was a part of that process. So just in order to make the system more efficient, so perhaps perhaps that focus on efficiency, margins of safety, those lessons become translated to one’s personal finance, which is why the engineers and accountants can potentially become wealthier quicker than other hot, higher paid jobs.
And I totally agree with you. The one that is probably my favourite is my is the teachers because I’ve always we’ve all have our favourite teachers at some point in our life. And we always talk about the, the poor salaries of teachers but they actually reach millionaire status. And my belief is that’s because they’re actually doing the things that they love to do.
Captain FI 11:27
I love teaching. I had some pretty amazing teachers. I had a lot of behavioural difficulties in school. I sort of haven’t really spoken much about this, but I actually went to about 17 different schools and I spent time in some behavioural rehabilitation schools and centres because I had a lot of trouble managing my emotions and anger when I was younger, I had a lot of energy and a lot of frustrations and honestly without some of the As amazing teachers to support and love me and help me grow, there’s no way I could be sitting here chatting to you right now. So yeah, I’m eternally grateful for some of the most amazing teachers that I’ve had in my life
until I have to do that actually still talk to you today. And it’s just amazing to have her in my life. And back to what we’re doing today, we are teaching. And that’s what I do as a coach. I’m there to teach.
Captain FI 12:29
You can have anything you want, as long as you help someone else get what they want. And so I think that it’s really important on your journey to focus on helping other people get where they want to go. And they’ll help you to it’s you know, you you’re going to be able to work together to achieve much more than you would as individuals.
Totally agree. I love zig and his quotes.
Captain FI 12:53
We could just chat all day. It’s awesome. What I really wanted to get out of you Today to pass on to the viewers is you have something really unique in that you are car free. You live in Melbourne CBD and you get around everywhere on a bike. Now I’ve had a lot of people interested I recently bought myself and electric mountain bike. I’m using it to commute to the airport and back which is great. I’m getting my time down around the Sawyer 30 to 40 minutes depending on how hot a pedal and but a lot of people are interested. And a lot of us are it’s okay for you You live in the city or, you know, I have to commute quite a long distance. Well, I mean, I’m personally doing about 20 kilometres. And I know you have cycled from interstate before like you’ve cycled thousands of kilometres So, definitely want to learn about your secrets and tips about cycling and how you could get rid of your car.
Well, just to take a step back again, I’m from North Carolina, and at one point in my 20s, I had three cars. So it’s not that I just went straight into this, I actually, you know, got into cars, like, I like my truck, back home and enjoy driving around full drive and all of that. But I sold everything when I came over to Australia because I wasn’t sure when I was going back or if I would go back. So that’s when I sold everything, learned that the public transport in the city was really, really good. And I just decided to get a bicycle. It was easy. I was convinced, especially with the traffic, like you mentioned, other than the CBD, so, man, the traffic here is just crazy, and there’s never any traffic in the bike lane and that’s what I really loved. And enjoy. It was also a forced way to stay up with my fitness. I was able to exercise without having to go an extra time at the gym. I was commuting. So it was kind of two birds one stone. And one of my favourite things that I got to learn was after work on the ride home, it was almost like a meditation for me because I rode hard. And I was weaving in and out of traffic at peak hour traffic down, you know, sometimes chapel street or St George’s row wherever I was, and it was almost like a meditation because I had to be completely present in the zone or I was going to hit a chord chord or or someone crossing the street when they shouldn’t.
Captain FI 15:46
Wow, that feeling Actually, I really I used to ride my motorcycle quite a lot. I recently sold the bike and I wasn’t Disappointed For me it was a financial decision chasing financial independence. But I really enjoyed that Zen like state of riding my motorcycle, because you’re right, you have to be completely in the zone. And I get that a lot a similar experience with flying, you need to be completely present. Otherwise, you can have some serious consequences. And since I’ve got my electric mountain bike though, I feel like it feels almost the same purpose as my motorcycle. And it’s so much fun. So how do you make it work then with your cycling because there’s obviously days when it’s really hot days when it’s really cold when it’s raining. days when you wake up and you have to go to work early. How do you get yourself out on the bike in freezing temperatures sometimes before the Even resin
Yeah, it has mentioned I was an engineer and going into the office like that and winter and Melvin sometimes you don’t really get to see the sun, right? You go to work when the sun’s still down and you get home or you’re going home and the sun’s going down just because the short Sunlight, sunlight time and people in that in the office were like exactly that question. What do you do when it’s hot? What do you do when it’s raining? And my that was probably my favourite question was about what do you do when it rains and it’s very simple. I get wet. Honestly, this is just no different than that. I personally love to eat. So bring it on. I haven’t been to Darwin yet but I have been to far north Queensland and I would consider living there very seriously believe that I could be there later this year or next year. I just love the heat. The cold in Melbourne is really getting to me this year. quite quite cold. riding around, in my opinion, that just means you’re not riding hard enough.
Captain FI 18:06
Yes, of course. Okay, so you just need to be burning more energy.
That’s it. I mean, there was there was a many years when I was doing about 100 K’s a week commuting to the office. I actually didn’t even wear pants. I wore shorts all year round.
Captain FI 18:22
Yeah, see, I have a look a bit ridiculous in the winter mornings. You know those face. It’s almost like a ski mask but it’s clear people use them when they’re using power tools. So I prediction I actually have I wear that so I basically have a clear ski mask nylex ski mask which I put on and I just stopped my eyes from tearing up because I am I am going pretty quick Eric and I’m getting to about 50 k an hour. And I just have a rain like a wind Cheetah waterproof jacket. I wear shorts, just in my wallet Explorer. So socks and a pair of gloves and that corner that keeps me going. Maybe have a little face sock, just to sit over my mouth. You know, like a, I don’t know what they’re actually called. It’s kind of like an elastic sort of scarf. But I find after five or 10 minutes, I get really hot and I need to take it off.
Yeah, that’s right. That’s what you’ll find. And I go out and shorts or years ago, not this year, but it would go out and show it to you quickly warm up.
Captain FI 19:29
So now I just want to back up a bit because you said earlier that you had three cars. And then so you sold them because you you obviously couldn’t take them with you when you came to Melbourne. What stopped you from buying cars when you got to Melbourne? Like you mentioned public transport? Was that literally it or?
Well, I am a financial coach and one of my number one things that I teach people to do is to get out of debt. Stay at it. So when I actually came 2 million years ago, actually, eight years ago, this month, I made my last debt payment that I’ll ever have for the rest of my life. So I arrived and still had just a few thousand dollars left to pay in the US for my student loans. When I and I knew I had already vowed and knew that I was never going into debt, again for the rest of my life for anything. So I had to get out of debt, then I had to save money in order to say I wanted to buy a car for five or 10 or $15,000, whatever the price was, by that time that I had that money to do. So. I was already here for nearly, I don’t know, 912 months, something like that. And so I’ve made it for a year. It just doesn’t make sense. Financially didn’t make sense and when I ran the numbers have what it would cost me if I bought if I paid $10,000 for a car in cash, man, I’ve saved at least 50 If not, probably close to $80,000 just with that car, it adds up. I mean, even if you pay for the car in cash, you still got red Joe, you got insurance, you got total fuel maintenance. And let’s be honest, we’re all going to get a parking fine here.
Captain FI 21:29
Now this was something that I was really interested to deep into more depth, and I recently actually wrote out everything that it costs me to commute. And then I looked at what some Australian averages would be. I’m just looking. I’ve just got the article now. It’s called the total cost of commuting. It’s up on the Captain FI website. And, for me, I recommend cost me around 61 cents per kilometre and that includes, as you mentioned, the depreciation on the car, the maintenance, the petrol, the wear and tear maintenance, insurance registration. Yeah, the occasional toll parking, all that kind of nonsense. Because I basically looked at that and since I’m, you know, driving over 40 kilometres per day, to the airport and back. I hope my math is getting out here, but it’s saving around $150 a week, just by leaving my car at home and cycling.
That’s right. That’s my math tells me the same thing. That’s about six $7,000 a year. Yeah.
Captain FI 22:47
That’s a lot of money. So I mean, $7,000 a year if you’re putting that into an ETF and index fund and you know, you’re gonna get roughly 10% back. That’s like giving yourself a $7,700 pay rise every year. So you’re going to save that 7000 and then you’re going to make 700 on it every year. Think about the amount of money that you would need in your portfolio to sustain that. If we’re talking the 4% rule or the you know, the 25 x rule, that’s $7,000 that you would need to commute, you would need nearly $200,000 worth of index funds invested just to support that commuting habit. On the flip side, if you’re happy to ride your bike, rather than drive everywhere, and I’m not saying get rid of your car entirely, but just you know, only mister money moustache talks about it quite a bit, only using it when it’s absolutely necessary. riding the bike just brings financial independence all that much closer.
It does and we’re only talking about the community. The office you have shared earlier that you just drove 20 hours. You know how many kilometres was that? 1500 22,000 kilometres? I’m not sure. But that also more costs.
Captain FI 24:13
Yes, absolutely. I like I don’t think I’ll ever get rid of my car entirely because I my family is so dispersed around the country that I really value being able to get in the car and drive thousands of kilometres, you know, road tripping. I’m looking at getting a van actually. But when I’m home, the idea is that that van is securely parked right in the garage, the batteries, you know, disconnected or it’s on the trickle charger, and I’m not really using it because I have my bikes. But then it’s just there as my safety net. So on I’m not quite at your level yet. I haven’t reached that awesome level of cycling, but maybe one day.
So it’s all personal choice. I mean, it’s just like your finances like I’m a personal financial coach, because everyone’s situation is different, everyone’s going to be different. So, I believe that you have the discipline to leave your car at home. I know for myself, I can’t do that. If I had the easy option, I’m choosing it. But because I don’t have a car, I can’t drive on.
Captain FI 25:33
I like it. You know, I am a little bit all or nothing when it comes to some aspects. An example is I won’t buy a gaming console. Because if I buy like an Xbox or a PlayStation, I know damn well I’m just going to sit down and play it until I finish every game. So I do have to limit myself sometimes, but thankfully, I’m disciplined enough with the car and the bikes at this stage.
It’s all a journey is an ebb and flow. Things change. You might hit 85% savings rate next year in, something may happen, you have to go back or choose to go back and see family around the country. And maybe it’s only a 30% savings rate. Right. It’s all a journey and to be okay with that.
Captain FI 26:20
Yeah, the older savings rate has taken a bit of a hit, I think on the road to deploy a bit of petrol. Thankfully, I was lucky when I got home. The meal does have some petrol powered engines, I was able to syphon a bit into the car which is a bit cheeky, but yeah, it was. Yeah, having having time off work definitely
meant I wasn’t earning, you know, the good money but hey, this is the reason we’re looking for financial independence is that with when things like that happen? You have the ability to go and take a break from work. Spend time with family.
That’s exactly what we’re shooting for here. That’s why we do what we do to have that flexibility to spend time with those that we love or do the things that you love if family is not close enough, such as mine, my family’s in North Carolina still, and it’s hard to get there at the moment. But I have the flexibility. Could I make it happen? Most likely, it’s just gonna cost a little bit more money.
Captain FI 27:25
Yeah, that must be really tricky. Having family literally on the other side of the world.
technology works great. I mean, here we are, we’re recording a podcast, we’re not in the same city, you know, in the ABLE TO FaceTime or video call and do different things to stay connected, which is very, very helpful. You’ll have to write letters anymore.
Captain FI 27:47
You know, I when I got to my dad’s farm, I found some letters that I had actually written him from years and years ago, and definitely Brought a smile to my face. But, you know, I realised gosh, I can’t remember the last time I wrote an actual letter back to the bikes. What kind of bike do you have? Or do you have multiple bikes?
I only have one bike at the moment. And it is a flat handlebar road bike. I use that as a commuter. When I get to the office, I now work from home. I’ve been working from home for the last eight months. So now it’s just a joy ride. And I have been setting it up to do the interstate travel coming hopefully in summertime or warmer weather. I don’t know about Queensland what what’s going to happen there. We’re pretty flexible in the current rules and stuff, Victoria. That’s my bike and, man, I love it. It is what it is. I have been to many bike shops and been shopping to look to upgrade, but I just can’t justify it right now. I don’t need more than one bicycle at the moment.
Captain FI 29:04
That’s Yeah, that’s really true. You can get go overboard. I started with, I think a Gosh, I think I paid $20 for it on Gumtree just a small mountain bike. And I was writing that and I even rode that to work a few times, and it was doing, you know, just over 20 Kay’s each way on a $20 bike with little wheels was challenging. So I had a look at some reviews online. I found the bike secondhand, which I currently bought. It’s a got a beat a bH neo 29 er, so it’s got a big 29 inch wheels. It’s got a integrated battery in the frame, which you can lock and unlock. I’ll tell you what is one of the best things I’ve ever bought. I think I paid $1,000 for it. I was lucky that I had some lights for all and reflectors and things, which I had on my old bike. And this thing is, this is great. In Australia, you can’t have a throttle on an electric bike. So you have like a pedal assist, but I can charge this thing up. And, you know, think with me pedalling and I’m pretty pumped when I get to work and back, I can get it to average around 30 to 40 kilometres an hour. And it’s sort of I charged up every day just to keep the battery safe. But I think it’s I think it’s good for like, hundred kilometres or a couple of hundred kilometres. Yeah, it’s probably one of the best things I’ve ever bought. Have you ever considered buying an E bike or riding an E bike at all or you Just you just a bit of a purist.
I’ve got to say I’m a purist in that sense, I can’t do it.
Captain FI 31:07
I see people riding these racing bikes, you know, the carbon slimline road bikes. And, and I’m like, keeping up with them sort of, at the end, they kind of, you know, going down a hill, they they’ve so fast, but with my pedal assist and the appeal, I can kind of catch them and pass them and I remember going to work the other day and there’s this bit of back and forth because, you know, I’d overtake him then they would overtake me and then I was just you know, and in the end they just sort of looks like they got the shits and they just went 110% to just leave me in the dust.
It is a great challenge. I mean, over the years have I’ve had a few bucks. Remember very similar. When I got here I bought my boat, my first bike on Gumtree as well a paid $15 and I ended up getting a A floor fan like one for the bedroom and the bicycle for both for 15 bucks. Ah, I feel the pain when you’re like it’s it takes a while when you’re doing that commute on a bike, I quickly learned that there are actually bike sizes, and I had no idea that fit my mice my body
Captain FI 32:19
on the Instagram and Facebook and he you’re pretty tall bloke so seeing you on a little bike would be funny right
It is now, but at the time, I had no idea what I was doing.
Captain FI 32:31
Well, it’s funny because my cheap bike that I rode when I was first go to Sydney, I’m pretty sure that’s like a teenager or child’s bike. The the bnh motion that I’m eating motion that I’m on Now, that’s a proper adult sized bike and it makes such a difference just you know that extra length on the crank, the clearance, the ergonomics, and the biggest one for me is that the wheel diameter to the 29 each wheel, it makes it so much easier to ride.
Yeah, I had a 29 or for pub five years, and I did the most kilometres a little nothing so far. And I loved the wheel diameter you can beat up is 29 inches. And my similar story of yours with the electric bike. I was riding home one day after work and this guy had an electric bike and I called him up at the lights. And we even up a hill out similar to the little carbon. The carbon guys was I was trying to keep up with this. I was going 110% and man, it was a challenge, you know, and he’s just sitting there, pedal assist kind of going along and I’m blasting and I remember that that very, very well.
Captain FI 33:49
So I reckon an electric bike fits a really important niche market on both ends of the cycling spectrum. So for me, you know I always been a fairly fit guy. I’ve enjoyed cycling. I used to do a lot of downhill riding. I did track velodrome racing when I was younger and sort of just fell fell off the bandwagon but it’s a different kind of fitness than the weightlifting and the fat leg sort of rain and swimming that I was doing. And it really helped me get into the cycle commuting. And look i’m i’m looking for like a carbon road bike now, because you know, this electric bike is wonderful, but I’m also cognizant that it’s quite heavy. And the wheels have the 29 inch wheels that have off road tires, with big treads, which are create quite a lot of drag and there’s a big contact patch. So I’m, as I’m improving my cycling ability, I’ll probably transition to a to a carbon or even just a you know, an hour medium roadbike with the really high pressure like 90 psi or whatever it is ski road tires, just so that you know, it’s sort of if I reckon if I got the road bike now, it would have just overwhelmed me and I would have just given up so the electric bike has allowed me to stick keep doing it and to stick at it. So I think it’s really good for people that want to get into cycling or know they need or should be cycling. For all the beneficial reasons we’ve mentioned the amount of money you save, like, Holy Moly thousands and thousands of dollars a year. The fitness aspect is really invaluable. And for me, it’s also a time saver. So you might go well hang on, it takes you almost an extra 50% sometimes go to drive to work, or I go Yeah, but now I’ve done my exercise for the day so there’s no need to go to the gym. So for someone who is paying For a gym membership, both you don’t need to pay anymore because you’re cycling. And we haven’t even mentioned sort of the environmental benefits as well. Geez, like roads take up so much space in the city and cause you produce so much pollution and cycling sort of just, it takes all these boxes. So, but I know some people aren’t really that keen on on cyclists. So have you had any, any bad experiences? I think, Mike,
you have some situations where you don’t always want to be in people not paying attention, car doors, those kind of things, but I haven’t actually been hit by a car. And even though sometimes you hear some, some purist cyclists is you’re not a real bicyclist if you haven’t been hit by a car yet. I’ve not been in a bad situation, which I’m very happy with. But it comes back I believe for both you I we both had motorbikes, I had one when I was 17, which is a whole nother story in itself, which was very silly, but I survived. And the only way I was able to survive was to be a defensive driver to be 100% present and make sure that other people will see you in whatever manner that means.
Captain FI 37:21
Look, I did defensive driving courses myself, ah, you know, perhaps I overdo a lot of things. When I was getting my licence, I was too nervous to sit the test. So I did the competency logbook method. And same with my motorcycle riding I did the stabroek course went through the the the training, you know, the elves and the peas and everything. And I did the defensive driving courses. And because I thought that was a very valuable return on investment. What do you think about like, would you recommend people go out and pay To do defensive driving courses, or how do you think people can be
better at driving and so often, I think it’s very helpful to understand both sides. As a owner of cars and driving cars, I have respect. And I feel like I have common sense. And I pay attention and all these other things. Now that I’m on the other side as a cyclist, I know how it can be almost Zen like in a car and you don’t even remember driving it. Sometimes I’ve been that person. So there is some grace. But I have to think like, when I’m on my bicycle, I have to think like the car driver. And if I’m driving a car, I try to fake like the bicyclist. And if there’s a biplane, or if there’s a popular route that I know, or have seen someone, or I’m past someone, that means that if I slow down in a light, there’s a high probability that they’re going to come up beside me again. So just being aware of your surroundings is extremely helpful in just being present.
Captain FI 38:59
Yeah, that’s a really good point. I really like what you said about when you ride you ride and you think like a motorist. And when you are driving, you’re thinking like a cyclist. And yeah, man, we’ve all been there. You just sort of Whoa, how did I get home? You just sort of autopilot in your way. So being present is super important. So in that way, like cycling will probably make you a safer driver.
Yes, it definitely will. And for those that hate cyclists, is most likely those that don’t ride a bicycle.
Captain FI 39:33
Yeah, people may be afraid of the unknown or the change. Correct. So it’s interesting, you know, looking at the stats on bicycle safety and traffic incidences. Some people consider it too risky to commute on a bike. When I looked at the cost of commuting for that article, I tried to look a bit into the risk of commuting in your car and it was really really hard to get proper data. Because whilst whilst the government does keep some statistics on road fatalities and serious injuries, it’s really hard to get daughter on minor injuries and just things like fender benders which haven’t injured anyone. So I’m sure that insurance companies and like actuarial have that data but it’s probably behind paywalls or it’s like really commercial insensitive probably is how they design their insurance policies. But when I looked at the total cost, it was basically I looked at the number of accidents, I looked at the number of people on the road and I will basically look at the the ratio of being in a serious injury is approximately 1.9 million kilometres driven. So for the average Australian That worked out that you had a point 1% chance per year of having a motor accident that resulted in a serious injury. I had to basically say guess, but I had to look at other nations. And I had to look at what I thought was the best guess for the rate of actual fender benders. And in my experience, my limited experience, I reckon that was around one in every three to 4 million kilometres travelled. Meaning that you kind of have an A point 3% chance of having some kind of minor vehicle accident. He, of course, when we talk about fatalities, in terms of driving Unfortunately, the US has one of the highest Apple fatality rates on the roads. But even Australia we were only We’re at 15 out of 31 always seedy countries, for the highest number of motor vehicle deaths per year. So ours is currently 5.5 per 100,000 people. So that’s nearly half the US rate, but it’s still over double what the European average is So, and I think there’s a much higher rate of cycling in in Europe, especially in those denser European cities.
That’s a great standard know that I’m in again, being from America. I know that fatalities on the road or huge are huge numbers to know about European cities and states. They do cycle more. You’re right. It’s pretty easy math. If you don’t run the car, you can’t die in a car.
Captain FI 42:48
Absolutely. You know, I often tell people that are really nervous about coming for fly with me. And I say, you know, you’re more likely we’re more likely to have an accident on the way to the airport than We will on our flight and that’s just in a light aircraft as well single engine light aircraft, multi engine aircraft are very safe driving a car for, you know, 100 kilometres is statistically equal to flying for over 10,000 kilometres in the air or air miles. So, you know, it’s it’s much safer to to fly. But look, we’ll keep this in perspective, like we said an injury point 1% some kind of accident point 3% a fatality it’s closer to point oh 4% So in, in Australia, you’re obviously much much likely to just have a minor accident or incident than you would a fatality. But you know, those minor incidents or even major incidents can financially ruin you. So, you know, you’ve got to everything is a risk reward and I can see the risk reward to cycling. is so much less risk and so much more reward than just atrophying away in a metal box sitting on your ass.
I totally, totally agree. And these are all numbers. I love the numbers and financial podcast. But the things that you can’t measure that we talked about, such as the being completely present the meditative state that you get into, one of the biggest things that I recommend are for myself, again, everything’s personal. One of the major reasons that I believe I’ll never own another car is because of my sheer short tempered pneus of road rage. When I don’t have a car, I don’t get road rage. I’m in a bicycle and meditate basically.
Captain FI 44:48
Interesting. So yeah, you’re able to basically recognise a situation that’s going to lead you to, you know, stress and basically just completely avoid that.
That’s what I do.
Captain FI 45:00
So what do you think about cycling? So we talked a little bit about accidents in cars. I mean, what do you think it’s safer to ride a bike? Like how do we, how do you work out if it’s safer to ride a bike or not?
Well, I do, I think it’s safer. But that’s because I paid attention. Or I have also not been in a car accident. Because, again, I believe I’m a good driver and I pay attention. So it’s all about you being personal. I remember a story about a father wanting his daughter to drive the newer car because it was safer. More airbags, better seatbelts, all these things, but it’s some point it doesn’t matter. Right? It’s kind of like you because you’re a pilot, because if the in the plane, seatbelts are really irrelevant, from my understanding. If you’re going down, you’re not going to live
Captain FI 46:01
Okay, well, actually, just because you mentioned that, it depends. It depends on the type of accident, right? So if you’re, if you’re doing like a C fit, like a controlled flight into terrain, and you have no idea that you’re about to fly into the side of a mountain, absolutely, it’s not going to do shit. Excuse me. But the reason we wear the seatbelts is if, for example, we have a crash on takeoff or landing, and it stops you from flinging out of the sea. And it also in turbulence can stop you from being ripped out of your seat. I remember flying once. Where was I? Gosh, I think I’d left Dubai or somewhere, somewhere that part of the world come from where I was going, but we’re flying really, really high for the aircraft and we hit a jet stream or we were on the polar side of a jet stream basically. We shouldn’t be and we all learned in grad school not to do this, but we did it anyway. And we hit turbulence, clear air turbulence associated with the jet stream so strong that the lasagna that I was eating stuck to the roof of the plane. I was basically turned upside down because I hadn’t had my silver on properly, like I was sitting in the third seat. And the captain at the time was twisted 90 degrees, so his legs were over throttles. And it disconnected the autopilot and the aircraft began to descend. And so we were just like, holy crap. Alright, let’s get out of this. So we were very glad to have our seat belts on the box. Okay, money diversion.
It’s all about how you go about it. Right? I’m not gonna ride on the M one here, Melvin. Not happy? Yeah, you know bike paths on a mountain roads Yes, that are busy, which I quite enjoy. To be honest, chapel street used to be a busy place and I love going down there. It’s more dangerous. But I am on a bicycle riding faster than those cars are driving.
Captain FI 48:18
Yeah, yeah, you you, um, like, say you have that situational awareness. And you know where the bikes are sorry, where the cars are, you’re able to keep yourself safe. Unfortunately, it’s often when you lose that situational awareness and don’t know where the threat is that that’s when it can become an issue. I’ll give you a personal example. So my mum actually used to ride to work. She would ride about 15 K’s each way. She’s a teacher. And one day she was riding along was a 60 kilometre an hour zone, you know, two lanes, not a particularly busy road. And she was unfortunately hit buy a car. And, you know, she tells me now she can remember basically just flying through the air and going What the hell is happening? And then the next thing she knows she was in hospital and you know her helmet was cracked clean in half. So when she did hit the ground, she landed on her shoulder and her head broke the helmet clean in half. So she has had extensive surgery. She’s required ongoing physiotherapy, I call her the bionic mom or the Terminator mom because she now has metal plates and metal rods in Iran, because some of her bones were just completely shattered beyond repair. And now, geez, what is it probably 1015 years later, she is suffering like a lot of arthritis related issues from that. And so, you know, to her and to our family. The risk of off Cycling is very real, very real risk.
Yeah. And that definitely touches home. There is that risk? You gave the numbers? Is it worth it? For us currently could be the male ego. It could be our age. We’re much younger, I guess than your mom is now. But it is the risk. You’re right there is a risk. And is it worth it? And you can relate that to finances? No, we can talk about investing styles and what I invest in. There’s a zero percent chance I’m investing in Bitcoin.
Captain FI 50:38
Yeah, you me both Nate. I just want bog standard index funds. For me investing is not sexy. Investing is boring.
That’s it. I love the book. One of the best investing books out there is the tortoise and the hare.
Captain FI 50:53
A slow and steady wins the race
Captain FI 50:59
So Actually, I wanted to ask you a little bit more about finance and books. Yeah, because this is a finance podcast, I guess. But I just wanted to wrap up what we were saying about bite. So I did get some, some stats from the Department of infrastructure, transport cities and regional development. And they threw out that there have been 35 fatal bicycle accidents per year. But that number didn’t include serious injuries. So I was able to go onto a website from a bicycle advocacy group, so a group that supports bikes, and they reckon that one in five injuries on Australian roads are cyclists. And so I thought, Okay, well, it’s pretty high. So I looked into our National Hospital more beautiful morbidity database, which is obviously, you know, some great white reading for the weekend. And it showed that, you know, just in 2016, there were about 12,000 cyclists who presented to hospitals with cycling related injuries.It didn’t discriminate whether it was involving involving cars or whether people had sort of just
fell off their bikes. But when I kept delving into the stats, it turned out that Australian stats on cycling was pretty similar to the American stats, but it was actually safer to ride your bicycle in Australia. So in the US, they have a cycling fatality rate of 6.9 deaths per hundred million miles, will convert that to the Queen’s English 4.3 deaths per hundred million kilometres So it makes it when you look at that, and you compare that obviously that number is higher than the STEMI car fatality rate. But when we consider the difference between American road fatalities and Australian road fatalities, I think it’s reasonable to assume that Australian cyclists would have a similar advantage. So the number I came out with was one death per 86 million kilometres cycled so I don’t know if you’re going to be able to cycle 86 million kilometres in one lifetime, but I’m sure that’s not of course how the statistics work. But again, that number one death per 86 million kilometres that is higher than the driving which is one death per 200 and 50 million kilometres. So I didn’t want to pull too many numbers out of my ass but like we kind of said before, I think you need to remember a lot of cyclists are fairly young, with no driver training, you know, there might be people have lost their licence from drunk driving or drive driving.
There might be adrenaline seeking mountain bikers like you or me weaving in and out of traffic. risk taking mammals. I don’t know if you’ve heard the term mountain before, but that stands for middle aged men in lycra. And actually those mammals between the ages of 30 and 50, they make up the vast majority of cycling related hospital admissions. So I think a much much smaller percentage are actually responsible adults with good driver skills, good situational awareness, have ridden motorcycles, driven cars and ride bikes. So, personally, I reckon it’s safer to ride a bike and drive a car even though maybe some of the numbers you know, don’t add up. I think it’s difficult to just look at the numbers alone because it’s not a big enough sample. And just the last little thing I want to touch on here is that if anyone wants to look at the health benefits of cycling, mister money moustache has written a friggin excellent article. And I’m totally just going to plagiarise his outcome here. So he recommends that even under the most pessimistic of assumptions, the net effect of driving a car at hundred kilometres an hour for an hour is dying 20 minutes sooner, or 18 seconds of life loss per mile. That’s, you know, obviously the American stats and the net effect Riding a bike at 17 kilometres an hour for one hour. He’s living two hours and 36 minutes longer, or about 13 minutes of life gained per mile. So he’s done more of a detailed number crunch. And he’s basically proven to you on his site and I’ll link to it in the in the show notes that writing a driving a car makes you die quicker and riding a bike makes you live longer. So, you know, you can’t can’t argue with that. Hey, Mike.
I totally agree. I love all those numbers in that article. I haven’t read it and I will be sure to read so. But I plan I’m in my 30s now and I plan to be on a bicycle till I’m 100 years old.
Captain FI 56:49
And you know, Mike, that’s the other thing I was going to that I was meaning to mention earlier was was the electric bike has really got me into to writing again, and it has helped me transition to commuting to work. The electric bikes actually help older Australians and or I should say older cyclists as well. So there was a bloke, a family friend who was riding quite a bit around Sydney. And he was he lived on a bit of a hilly area. So he wasn’t basically to get out to join his cycling group. Every Saturday morning, he would ride down his who catch up for a coffee that go for a ride and then he rode his bike home. But over the last couple of years, just getting his bike up that that hill to get home was just too much. So what he was doing is actually putting the bike into his ute, driving it down to the coffee shop, having the coffee going for the bike ride, putting the bike back into the And then driving home. And then even recently, it was too much effort to bring the bike in and out of lifting it up and out of the U. So by getting a electric bike, and I think the electric bike was just from healthy, he was able to then ride his bike to the coffee shop, have a coffee, right? And then basically switch on the electric assist, and both right back up the hill, and happy days. So it’s extended his ability to cycle and continue the exercise that he’s getting right up into the later stage of life. So, you know, I think the electric bikes are really good not only if you’re getting into cycling, but also on the other end of the spectrum when you’re trying to stay in cycling or trying to keep cycling as long as possible.
I totally agree. And that’s great timing because my partner. Her parents are are in their 70s. And they just, each of them both just got electric bikes. And I’d love that. I’ve never known them to own bicycles or being on bikes, but they get out, they get to exercise. They’re breathing fresh air, they’re going longer distances and it’s more fun because they get to do it together.
Captain FI 59:20
Absolutely. And you know, being active spending quality time together. That’s the whole point of this whole financial independence movement isn’t it’s to be healthy and free and spend your time the way you want. Totally agree. So just wrapping up on the box then how much do you reckon riding a bicycle has saved you as a driving a car?
Well, I did the math on this and if I was to purchase a $10,000 car with cash, eight years ago, when I got here, I would have saved over $60,000. Again, we talked about it briefly but this includes Registration insurance, fuel maintenance and fines. And I did a little bit more research and apparently according to budget direct.com for people in Melbourne in Sydney, the average annual expense to own a car is $20,000 a year.
Captain FI 1:00:23
Well, yeah, that’s the reason I am just flabbergasted by that is because $20,000 per year, that’s my fire number. So I could live off $20,000 a year.
Crazy. It is. And that comes with car payments. And the majority of people have car payments or leased cars, and they’re just operating cars the most expensive way that they can. It’s just silly and I agree my I would say that my numbers 20 grand. I mean Everyone has a different one. It could yours could involve the team later on, it could go up to 50. Anything could happen.
Captain FI 1:01:08
Yeah, well, to be honest, that number doesn’t factor in children at the moment. And I’m hoping to be a dad later in life. So yeah, I bet it’s probably gonna go.
And I totally agree. And that’s what I got to learn. I got to actually already retired, in a sense that my partner and I quit our jobs and travelled around the country for 12 months, and then continued on for another year after that in other countries around the world. And in that first year of being in Australia, it was around month eight or 10 the of not working, but I realised that this is not the life I want to live. Even if I don’t get paid and a salary and a career and all this. I needed to contribute I needed to do something and I got into volunteering a little Little bit more. And then I started diving more into coaching people. And now I’m getting paid to do what I love, which is to help people with their personal finances. So I’d truly believe what you’re doing is setting yourself up and the fire community to have the option to quit their full time job that they may not have complete, love have and do things that contributes to the world even more. For example, this year has been, or the last 12 months in Australia have been really bad with the whole Corona thing. But before that was the fires, we had really bad fires this year. And if you were in the position that we’re shooting for the fire position, you can quit and go look after your farm or someone else’s or participate in building new fences. It just gives you that flexibility. And that’s what I love about this movement.
Captain FI 1:02:51
Yeah, I can’t agree with it. Holly enough may it’s the freedom to basically have complete control over your life. So, we mentioned that $60,000 you saved from not having a car, how are you investing? Now? What is your investing style? We jokingly said we both avoid Bitcoin. But in all seriousness, how what is your investing strategy.
So being American and Australian, I have money in USD and a USD, which is going to be a big benefit later in my life. So I have funded my superannuation in Australia, and IRAs, which is an individual retirement arrangement in the US. So very similar. And I funded both of those to create an amazing Foundation, because I still have 30 years of growth, before I can access that money. So even if I’ve never put in any more money into either of those accounts, it’s going to be more than enough. After not know how to spend currently and inside of thoseI invest in only mutual funds.
Captain FI 1:04:13
Okay, so mutual funds so now in Australia, I guess they not all mutual funds appeal equally so I invested in a fund and I won’t say which one it was but the fees were really high. And the little promotional letters I got said, Dear investor, you’re making all this money You know, you’re very smart to have invested with us bla bla bla bla bla, but I fail to consider the drag effect of the fees. And when all was said and done, I think I got like four and a half percent off of these guys with full risk exposure to almost 100% stock investing And so I was horrified when I think when I think back to that. So when you say mutual funds straightaway, my ears prick up and my heart rate goes a bit higher. So Mike, can you please clarify? You’re not investing in high fee mutual funds? Are you using the word mutual fund to describe listed investment companies? Or can you give us a little bit more information?
Correct? Yes. So my understanding and how I teach my clients is that there is a slight difference in ETFs velocities and these things versus mutual funds, but I use the term mutual fund as a blanket. So I believe in my research tells me that mutual funds and ETFs are the same thing in the sense that an ETF is just a type of mutual fund.
Captain FI 1:05:55
So it’s about nomenclature and how you categorise the funds.
Yeah. Correct. So I’m saying the word mutual funds because I do not recommend investing in single stocks.
Captain FI 1:06:10
Yeah, I tried that. And after a lot of anxiety and stress, I basically underperform the index.
Yep. On average, I think it’s nearly nine out of 10. day traders do worse than if you just buy one that tracks the s&p 500 or the ASX 200.
Captain FI 1:06:30
Yeah, buy and hold baby. That’s my strategy
totally. In those are the things that you can measure. It doesn’t even count for this time that you spent, oh my goodness, I’ve done the same thing in my early 20s. The time that you spent the stress that is that causes all the things that you just don’t even talk about.
Captain FI 1:06:50
Yeah, so do you invest in the the mutual funds or we’ll just call them index funds. Probably most people will be more familiar with the term index. on here. So you invest in these index funds through your IRA and super or do you have any direct taxable investments outside of those vehicles? Great question.
Like I said, I’ve created a great foundation for those retirement accounts. So I have chosen to step out and invest outside of that, that way I can access that money before I turned 60.
Captain FI 1:07:26
Yeah, see, that was that was the big kicker for me is that because I was planning to fire, I knew that I needed that money before preservation age. So I started with, I think, was concept and I was investing through them when I was doing my individual share trading. And then when I learned more about fire, got on to self worth from the sci fi bug, and basically just open yourself up for count. So to my individual stocks And basically I just buy, like there’s three core ETF or mutual funds that I bought. So the 1800 for Australia, VTS for America, and V EU, which is total world minus America. And then I just buy a couple of listed investment companies like epic Argo, Milton or Brickworks, when they trading at a discount, so when they’re when I perceive there to be a value in a transaction, and then yes, final.
That’s amazing. And I totally agree. I would love to touch on one bit of information or share some knowledge with you and your listeners and, and things like this. Don’t chase fees, the lowest fees may not always be the best investment. There’s things that you have shared with us that I believe that they’re great. But even if you’re only paying like, let’s just give an example of point 1% and you’re getting in a hurry of 9% annually. So your net return in that example is 8.9%. And on the second part of that is if you have a mutual fund, that is your fees are point 9%. Yes, I’m paying nine times, for example, that person’s paying nine times more than the ETF or your index fund. But their return is 10% annual.
So the net return would be 9.1%.
Captain FI 1:09:39
Yes, yeah. So, but the only thing is, how do we as investors, we can’t really control the market, right. So how do you how can a one fund or another guarantee that it’s going to provide you a better return than another one
the loss. Yeah, it’s it’s hard to do. I shouldn’t say it’s hard to do. It takes time to do that. And it just comes back down to research. And I look for longevity. And, for example, I have a fund in America that opened up in the 1950s. That has averaged an annual return of over 11%.
Captain FI 1:10:28
kay, that’s yeah, that’s pretty good.
And I’m extremely happy with that. It’s been open for 70 years. Yes, it’s not going to be the same fund manager, but they have trained the new fund manager. And that is me being a passive investor because I, that’s not my love. My love is to teach people My love is to connect my love is to tell people the knowledge that I have on how to handle their money better. And his love the fund manager for in this example, is That’s his love. His love is to know these companies and investigate and make sure that they’re looking for that 1011 12% return.
Captain FI 1:11:10
Yeah, okay, so look, I look I’m I’m definitely not a authority figure on finance and investing. You know, I’m just like, I’m on my path to financial independence, I’m learning as much as I can. My core portfolio I just passive ETFs. So just the index, so basically no active Fund Management at all, and really low fees. So in for that core portion, I figure I can’t control the market, but I can control the fees that I pay. So in that respect, I you know, I try and get the lowest fee ETF, but I don’t mind a little bit of active management, as long as the fees are really low and as long as they’re not Sort of tinkering with the index to March that it’s going to spoil or increase the risk. So similar to you’re investing in these mutual funds, like I do invest in old school, or I call them the granddaddy Ozzy licks. And similar to your one that’s been around since the 15th. There are also links that have been around similar time periods. So and they do charge a higher management fee than the core ETF index funds. But I think you know, it, there are some slightly different rules between a corporate corporate companies structure which these links have, and then just the trust structure that the ETF has, which means there’s pros and cons to owning both. But personally, I’m hedging my bets and I’m just gonna own both.
And I totally agree, you have taken action. That’s my number one thing. We can get paralysis of the analysis and hopefully the people that listen to this, if they’re one of these things, and they’re judging the conversation that we’re having about fees, and how much do you make, just jump in, just do something, you’re going to learn what your emotions can handle, and you’re going to learn which one is better for you. If you’re a Bitcoin person, then go do it. Obviously, neither you or are going to do that. But for them, if they’re comfortable and doing that didn’t do that you’re not going to know until you start. Don’t get paralysis of the analysis.
Captain FI 1:13:36
Absolutely. You um, you don’t have to be great to start, but you do have to start to be great. I love that. So um, look, Mike’s been awesome chatting to you. I’m wife all the time here. But I have to ask. You know, you’ve obviously had a pretty amazing transformational journey from you know, owning three cars being in debt, student loans to Now basically running a coaching service where you’re helping people get their stuff together. What are some of the best books on your journey that you’ve read on sort of finance, personal growth and even just
lifestyle? I’ve got a few here. And I said earlier, the best one is the tortoise and the hare right? The slow and steady wins the race. But I love this question. And I hope that this motivates others to go ahead and have a have a read or investigation into these but the finance one is easy for me because my mentor Dave Ramsey in the US has multiple, multiple books that I would probably start with the total money makeover. The other one, as far as one of his team team members, has written called retire inspired, not Chris Hogan. I remember that book and how Under how much those words in the book, were powerful for my situation at that moment. Another book that one number one investing book I recommend is simple wealth, inevitable wealth by Nick Murray. Find it and read it. It is decades old, but it has stood the test of time. And I love to reread this book every year or so, because it keeps me on track to know that what I’m doing is working and not get sidetracked, man, honestly, it’s the best investing book that I’ve read. It was recommended to me it was old it looks it honestly looks shit. But I picked it up and I recommend this for any investing questions and people in my life. The book that I gift the most is called the book boundaries by Dr. Henry cloud and you He talks about when to say yes and when to say no. Now, I haven’t given this to every one of my clients, but I talk about this with everyone. Because all relationships, be it your neighbours literally a property boundary, or your family, your friends, you got co workers, and most importantly yourself.
Captain FI 1:16:21
It’s a really powerful stuff. Isn’t that that psychology because when you think about investing is really like 20% money knowledge and 80% behaviour.
That’s right. And that’s what that’s where my coaching comes in. Right? I can teach you the 20% in one session, but I have to deal with the other 80% which is the man in my mirror the man in your mirror the person of my clients in their mirror. In the final book, especially, I think this is one of the most pivotal books that I read as far as relating to the fire committee. Because why are we doing what we do? Right? We all have to do this. And that book that are that will give you some of that perspective is called the top five regrets of the dying.
Captain FI 1:17:12
I think listening to older people or people in that situation is going to be very powerful.
I totally agree. I love I’ve always connected with the older generation still do. And it really is that thing is, what have they done? What can they teach me that I don’t have to spend 10 years of my life doing? And I’m hoping that some of these podcasts and my coaching services help people do the same thing. I don’t want you to learn what I had to learn that took me 10 years. I can tell you how to do something in 90 days and change your financial life. Can you
Captain FI 1:17:46
tell us a little bit more about your coaching business and how you help other people?
Totally Thank you. I hope it turned out dreams into a reality with a proven financial planner. So I mentioned before I’m out of debt 100%, I will never go back. I teach you how to manage your spending plan your cash flow monthly cash flow plan, and get out of debt and to stay out of debt. Yeah, you can find me at money like mike.com on Instagram and Facebook as well. I just I’m there to inspire. I’m there to provide people and teach them to have hope, confidence and certainty when it comes to handling your personal finances. Now, I don’t know about you and how your journey started. But the people that listen to fire usually have a great grasp about how to do these things. It’s more for those people that we’re surrounded with, because the numbers tell us eight out of 10 people, that’s four out of five people live paycheck to paycheck to me, it’s just this is outstanding. I mean is just, I can’t even I can’t even fathom it. Even though I live there, I was there at 20 years old, I was worth negative $100,000. And now I’m on my way to deca billions. Because of what I do, it works. And it really is the behavioural side of things.
Captain FI 1:19:18
You just got to get started, you just
got to get started, you got to say no to yourself. Cut up your credit card. Honestly, that’s the number one advice I can give someone is to get rid of your credit card.
Captain FI 1:19:32
Just on that Why? And we probably got to wrap up. And I just always ask everyone this same question is, what are your top three tips for people on the path to fire or people wanting to improve their finances right now that they can do?
The number one thing that I teach people is to build wealth is very, very simple. It’s to never spend more Then you earn. It’s really that simple. And I don’t believe that the fire community is part of that. Because we’re always finding ways to invest more, how can I cut this and this, so I don’t have a problem, the fire, that’s not the fire community. But those four out of five people that live paycheck to paycheck, they need to learn to never spend more than you earn. And that comes to finance in cars to credit cards, taking out a mortgage that you may not be able to pay if you lose your job. The number at some of these books that I that I mentioned above and some of the reading that hopefully your listeners have read was if you want to be a millionaire, then you need to do what millionaires do. So my number one tip there is and their advice is to get out of debt and stay out of debt.
Captain FI 1:20:52
It was definitely the single best thing I’ve ever done.
For example, why am I trying to invest money right now? To make a rate of return of, you know, say 10% for easy numbers, but I’m paying 18 25% credit card interest. It doesn’t make sense. You’re not gonna win. You’re just giving the bank more money.
Captain FI 1:21:15
Yeah, absolutely. personal debt is a real killer of wealth creation.
Yeah. And back to being content, if your content and have gratitude for the things that you already have, man, you get to just live a happier life. And that’s not exactly money related, but it comes to fire as well. Right? Do you need to upgrade your car? Do you need to upgrade your house? You know, 10 do you have to live or if you choose to go to, I don’t know, Indonesia to retire Do you need to rent the Taj Mahal type of thing to me get by with a cheaper accommodation and I always thought Since our subject today was all about the bike, I’ll give you a bonus tip today, and that is to sell your car and ride your bicycle.
Captain FI 1:22:10
Of course, riding bikes has saved me a heap of my and, you know, most the car still in the garage. depreciating, you know, it’s not getting the paint not getting damaged. It’s not getting wear and tear. So it’s you know, preserving its value. But one day, eventually I’ll be able to sell it and just focus just on riding the bikes. So, look, Mike, it’s been an absolute pleasure. Thanks so much for carving out some time to have a chat. Again, I know this is the second time around. So double thanks. It’s been an absolute pleasure having you on the show. To get in touch with you. What’s the best way
to track you down? Either Facebook or Instagram at money like Mike and sign up. I have a weekly newsletter that I send out every Wednesday. So join me in that
Captain FI 1:22:59
I might look for To catch up for a beer and an blackriver sometime in the future.
Thanks for listening to another episode of the Captain FI Financial Independence Podcast. To read the transcripts, or check out the show notes, head over to www dot Captain fi.com for all the details. If you have a question for the captain, make sure to get in touch. You might even make it on the airwaves. You can reach me online through the Captain FI contact form or get in touch through the socials. I’m active on Facebook and Instagram as well as a number of online finance and investing forums. And finally, remember the information presented on the show and the links provided for general information purposes only. They should not be taken as constituting professional financial advice. You should always do your own research when making any financial decisions. And make sure it’s appropriate for your personal circumstance.