#69： Be Your Own CFO with J.D. Roth
Episode Stats
Summary
J.D. Roth is the founder of a popular personal finance website called GetRichSlowly.org, and he just came out with a new ebook called "Be Your Own CFO," along with an online personal finance course. In today's podcast, J.D and I talk about what it means to be CFO of our own personal finances, and how it's switching to that sort of mentality can help us immensely with getting ahead financially.
Transcript
00:00:00.000
Brett McKay here and welcome to another edition of the Art of Manliness podcast.
00:00:19.300
So we've talked about on the site that an important part of manhood or manliness across
00:00:24.380
cultures, across time, is being autonomous and independent. And for modern Western men,
00:00:31.920
a big part of becoming autonomous and independent and freestanding is getting a hold of our finances,
00:00:37.740
being on top of our finances. But if you're like most men today, you probably don't think much about
00:00:42.640
your money except for checking your checking account balance every now and then. But if you
00:00:47.120
really want to get ahead with financially, you need to treat your personal finances much like a
00:00:53.440
CFO or chief financial officer of a business would. At least that's the argument that personal
00:00:58.960
finance writer J.D. Roth makes in his new ebook, Be Your Own CFO. So J.D. Roth, he's the founder of a
00:01:04.320
popular personal finance website called GetRichSlowly.org. And he just came out with a new
00:01:09.260
ebook called Be Your Own CFO along with an online personal finance course. And in today's podcast,
00:01:15.960
J.D. and I talk about what it means to be CFO of our own personal finances and how it's switching to
00:01:22.180
that sort of mentality can help us immensely with getting ahead financially. Great podcast. It's
00:01:29.780
crammed with just like really useful, practical takeaway tips. So I think you're really gonna enjoy
00:01:34.060
it. So stay tuned. J.D. Roth, welcome to the show. Thanks, Brett. Glad to be here. Let's tell,
00:01:42.320
let's talk about you, you for our listeners who aren't familiar with you or your work.
00:01:46.200
You call yourself the accidental personal finance expert. How did you accidentally become a personal
00:01:53.340
finance expert? Well, the bottom line is I sucked at money for a long time. I grew up in a household
00:02:00.840
where my parents didn't really know how to manage money. They were always broke. When they did have
00:02:05.580
money through a windfall or whatever, they would just spend right through it. So their balances in
00:02:10.060
their checkbooks were always zero. I went to college. I developed poor personal finance habits
00:02:15.320
myself. And by the time I graduated, I had the start of a credit card problem. And I just grew
00:02:21.280
throughout the 1990s until by 2004, I had over $35,000 in consumer debt, which is less than some,
00:02:29.180
but a lot more than others. And trust me, $35,000 in consumer debt, it feels like you're chained,
00:02:36.600
you're enslaved to your creditors. So spurred by some friends, I started reading everything I could
00:02:44.080
about personal finance and then trying to put some of this stuff into practice. And as I did this,
00:02:49.820
I started writing about what I was doing for the web. I started a blog called getrichslowly.org.
00:02:56.080
And I documented the things I was reading about, the things I was trying, what worked, what didn't,
00:03:01.920
the mistakes I made, the successes I had. And for whatever reason, getrichslowly built an audience
00:03:08.860
and rather quickly. So I started the blog on April 15th, 2006. And within a couple of years,
00:03:15.580
I built that audience so that I had 100,000 subscribers and was making a lot of money from
00:03:22.740
the website, which naturally helped me get out of debt quicker than I thought I would.
00:03:26.900
And eventually I was able to quit my day job. It was awesome.
00:03:33.040
Yeah, that's how we met. And then you inspired me to start my first blog with a frugal law student.
00:03:41.800
Those were the days. Yeah. And I think the reason why it grew so quickly is because people resonated
00:03:47.960
with your story. There's a lot of people who were in the same boat. And at the time, there's all
00:03:53.680
these like, yeah, there's all this personal finance books and things like that. But it was always
00:03:57.740
written by experts who probably never had to deal with having $35,000 in consumer debt or overcoming
00:04:05.340
that. And you provided a narrative like, hey, look, this is what I'm doing. It works. I'm an average
00:04:10.760
guy. I was a screw with my money, but now I'm not so much of a screw up anymore.
00:04:14.820
Right. I think you've hit the nail on the head there, Brett. I think that a lot of personal finance
00:04:22.540
books at least, say, a decade or more ago were written by people who were on Wall Street or they
00:04:29.240
were accountants or certified financial planners, people who had their act together. And yes, the
00:04:33.360
information they were providing was correct, but it didn't take into account a lot of real world
00:04:39.100
stuff. It didn't take into account psychology and emotions and relationships and all these things
00:04:44.520
that make personal finance messy. Because as I think most people realize, smart money management
00:04:51.240
is more about mindset than it is about math. It's about mastering your emotions and mastering
00:04:56.500
psychology and learning how to do things in complex relationships where you're dealing with
00:05:06.020
your friends and your family. And so I think not just me, but a lot of personal finance bloggers
00:05:14.940
that were getting started in the mid-2000s, they were telling their personal stories. And you're
00:05:20.020
right. This resonated with people. And also at the time, behavioral finance, the field of behavioral
00:05:25.280
finance was beginning to take off. And that actually is a field where people write about
00:05:31.120
how people handle money in their real life instead of in ideal ways.
00:05:36.720
Very good. So you started to get rich slowly. And yeah, you were able to quit your day job. This
00:05:43.380
helped you earn a very lucrative income. You're able to pay off your consumer debt. And basically,
00:05:49.360
went from JD, the screw up to JD, like I got my financial act together. And so now you've come
00:05:57.160
out with this new guide called Be Your Own CFO, right?
00:06:02.240
Right. And I think it's interesting because it's such a great idea and a great concept. Because
00:06:08.620
you talk about in the guide or ebook that when you worked at your day job, you took care of your
00:06:15.620
business finances meticulously. You took care of that because you didn't want to get audited by the
00:06:19.880
IRS. But then your personal finances were a wreck. And I think a lot of people are like that. They'll
00:06:25.820
be very meticulous if they own a business with their business finances. But to their personal
00:06:29.700
money, they just don't care. Why do you think people are like that? Why do you think people
00:06:35.220
could be so meticulous when it comes to business but not personal finance?
00:06:38.980
You know, I don't actually know the reason. I think maybe people are forced to be meticulous
00:06:44.720
with their business finances because of the IRS. And because if they aren't meticulous,
00:06:52.260
the business can't survive. I think we all understand that in order to survive, a business
00:06:58.260
has to make a profit. Now, profit is not necessarily the purpose of business. Some people would argue
00:07:03.540
that it is. But I've seen plenty of research that indicates profit is a byproduct of other
00:07:10.760
objectives, of doing other objectives well. And the great example is Apple Computer, which they're
00:07:17.680
very explicit. Steve Jobs was very vocal about the fact that their purpose was not to make a profit.
00:07:23.620
Their purpose was to make great products. And if they were able to do that, then the profit would
00:07:28.000
come. And so profit is kind of like food and water for a business is the way I look at it. We need
00:07:34.600
food and water for our bodies. We don't live to eat. That's not our purpose, right? But we need the
00:07:40.340
food and water in order to survive. And that's the same thing with a business. So I think people grasp
00:07:44.800
that, that a business needs a profit in order to continue being a business. Otherwise, it goes out of
00:07:50.680
business. But what people don't realize is the same idea applies to your personal finances. If you have
00:07:57.080
an objective, if you have a mission, if you have things you want to get done, in order to accomplish
00:08:01.520
those things, you have to have a profit. That's the only way you're going to reach your objective.
00:08:06.760
And most people, for example, have an objective of retiring. And in order to be able to retire,
00:08:13.020
and retirement is the same thing as financial independence. They're essentially the same thing.
00:08:16.780
In order to achieve these goals, you have to have a certain amount of money that can support you
00:08:22.280
for the rest of your life, however long your life will be, or however long you think your life will
00:08:27.340
be. So you've got to earn a profit until you've accumulated enough money to sustain that goal.
00:08:33.460
Interesting. So I mean, how did you come across, I mean, so when did it click for you when you were
00:08:36.300
like, hey, I can do what I do with my business finances to my personal finance? I mean, how did that
00:08:44.360
Well, it was kind of a gradual thing. I mean, when I finally decided to get out of debt and take control
00:08:48.340
of my personal finances in 2004, it occurred to me that if I used some of these same skills
00:08:54.780
that I had used to make my business successful, then perhaps I wondered, you know, what would
00:09:01.560
happen if I used them in my personal life? And so I began applying them. And the more I applied them,
00:09:06.820
the more successful I was. And at first, I mean, it was a conscious thing. I was making a conscious
00:09:12.240
decision. And it's kind of funny. I don't want to go too much into this because it's a
00:09:17.320
deep rabbit hole. But part of this was based on I had set up a sort of business, we'll put business
00:09:23.300
in quotes in the game World of Warcraft, where I bought and sold. I would buy things cheap at the
00:09:28.520
auction and then resell them at higher prices. And I was basically doing arbitrage. And that too
00:09:35.380
serves as an inspiration, this fake business. I was like, you know, why am I not trying to do some
00:09:39.540
of this stuff in real life? Why am I doing it in a computer game where it doesn't matter at all?
00:09:44.900
Why not try to do some of this stuff in real life? So just over time, the more I put these
00:09:50.380
principles into practice, the better results I had. And so when it came time to write this
00:09:57.220
particular guide, this guide is part of Chris Guillebeau's unconventional guide series. I don't
00:10:02.480
know whether your listeners are familiar with Chris, but he writes a blog called The Art of
00:10:06.460
Nonconformity. And he founded a convention here in Portland, Oregon called the World Domination
00:10:11.920
Summit. He also has a series of online guides called The Unconventional Guides. And they're
00:10:16.920
like The Unconventional Guide to Art and Money for artists who want to make a profit or The
00:10:20.900
Unconventional Guide to Travel Hacking and so on. So he said, JD, why don't you write me
00:10:25.380
a guide, an unconventional guide to money? When he asked me to do that, I kicked him out a lot
00:10:31.260
of different ideas. I had three false starts, as I told you before we started recording.
00:10:34.880
And it was only once I latched onto the idea, I thought, you know, I remember when I was trying
00:10:41.020
to get out of debt and I did that whole business thing. What would happen if I like carried that
00:10:46.060
metaphor even further? And so I started writing the guide as Be Your Own CFO and it just clicked
00:10:54.140
and it made so much sense. I love the way the metaphor worked. And every time I would then bring
00:10:58.820
this metaphor to the people I was talking to about personal finance, my friends and my family
00:11:02.880
who were asking me questions. And when I would explain it to them, it was like this light bulb
00:11:07.720
went on in their head. They're like, oh, I get it. Try to aim for profit. So anyway, that's the
00:11:16.820
So, OK, let's get talking about some of the things you talk about in the e-book because it's
00:11:20.120
really good. I mean, it's just very practical, but also relatable at the same time.
00:11:27.540
And so you start off talking about the first thing you need to do is come up with a mission
00:11:31.840
statement, which for a lot of people, they'd be like, well, why is this doing in a personal
00:11:36.540
finance book? Like what is my mission statement have to do with anything? What does that have to
00:11:41.420
do with personal finances? Like having your, I guess you kind of touched on that before with
00:11:45.360
Right. Well, you know, I think that I would venture to say that most people don't really have
00:11:52.980
particular direction in their lives. They're very reactive. And I don't mean this in a, I'm not
00:11:59.960
trying to condemn people for doing this because nobody tells us, oh, you need to have direction.
00:12:04.060
So people just kind of move aimlessly through life, reacting to things and maybe planning a
00:12:09.440
little bit ahead. But as a result, because they don't have a destination in mind, they
00:12:13.400
just kind of wander. On the other hand, the people who do decide that they have a goal,
00:12:18.720
whether that goal is to travel the world, to retire early, to buy a house, to send their
00:12:24.220
children to college, whatever those goals are, they help provide focus and direction
00:12:30.480
to whatever it is you're doing. So if you have a particular goal in the guide, I call
00:12:37.620
it a mission statement. And I talk about how you can develop a mission statement and then
00:12:41.680
sub goals that go along to support it. If you develop this mission, it can keep you focused
00:12:47.500
so that it's much easier to make choices with your money. If your goal, for example, for example,
00:12:54.120
one of my goals is to travel across the United States next year. I want to leave here, leave
00:12:58.500
Portland, buy a used travel trailer and travel across the United States for six months, interviewing
00:13:04.300
people as I go. That goal keeps me focused. I know that I need to save money to purchase
00:13:10.180
a used travel trailer and to support my travels as I'm no longer writing about money. I'm going
00:13:17.740
to have to live off my savings and I don't want to have to tap my retirement savings.
00:13:20.860
So this goal keeps me focused. And it means when a friend calls me and says, Hey, JD, do
00:13:27.580
you want to go out for dinner tonight? I'm more likely to suggest something like, well,
00:13:31.620
why don't you come over here? I'll grill up some hamburgers. It'll be cheaper. And then
00:13:35.720
we can go for a walk because I know that that's going to save me money, keep me fit. And it's
00:13:42.840
going to be more aligned with what my personal goals are than going out to dinner and sitting
00:13:47.820
around drinking and not doing anything. Yeah. Well, yeah, I know for me, um, a few years
00:13:52.100
ago when my wife and I were like in debt pay down mode, like it was just like pay off our
00:13:55.500
debt. That was our goal. And then like, we just, every decision we made financially, it
00:13:59.040
was just like, what can we do to pay this debt off as fast as we can? And it really helps
00:14:03.360
because like, you know, we were eating like what Dave Ramsey says, like beans and rice,
00:14:07.040
like spaghetti and like nachos, like every day, you know, cause it was cheap, but it paid off.
00:14:12.500
Yeah. And every once in a while you'll realize, or you'll make a decision, uh, and say, you know,
00:14:17.740
right now I do want to go out to dinner with my friend. The example I'm thinking of is right now,
00:14:22.300
uh, my girlfriend and I have both managed to put on a little bit of weight over the past, uh,
00:14:27.200
year or two. And so we're, uh, we're in fitness mode. We're trying to do what we can to eat right.
00:14:34.080
And, and so on. And that means we're consuming a lot less alcohol. And so our default is because we
00:14:40.380
know we want to lose weight. We are not drinking alcohol and we're especially not drinking beer.
00:14:45.100
On the other hand, last night it was beautiful, beautiful sunny day here in Portland. And, uh,
00:14:52.240
we went out to dinner with some friends and we still know that our goal is to lose weight,
00:14:57.180
made this conscious choice. We decided intentionally, we are going to drink. And so, uh, she had a glass of
00:15:03.420
wine and a cocktail and I had a beer and a glass of wine. And so, uh, it's not that you have to deprive
00:15:09.220
yourself, but when you have a mission, it's much easier to make decisions and be conscious about how
00:15:14.560
you're spending money. Yeah. Yeah. That's, it's great stuff. So you have a section I thought was
00:15:19.320
really great about like financial rewards, right? So every business has these different financial
00:15:22.720
reports they produce out on a quarterly and yearly basis. Um, you suggest some financial reports or
00:15:28.740
metrics that you should keep track of in your personal finances. Is there one in particular that
00:15:33.320
you think is like the most important that people need to start thinking about more
00:15:36.820
and they might not be doing it right now? Yeah. I think the most important personal
00:15:42.020
finance metric is what I call profit margin. And most people would know this as saving rate
00:15:48.740
and your saving rate is basically, uh, the percentage of your income that you're setting aside
00:15:53.660
for future use, whether that's in savings accounts or retirement accounts or investment accounts or
00:15:57.920
whatever. And in general, we are told by financial experts that you should set aside a 10% of your
00:16:04.200
income and the, uh, really ambitious financial experts will say 20% of your income. So they're
00:16:09.480
suggesting a 10% saving rate or profit margin or, or as much as 20%. And you know, that's what I
00:16:14.900
recommended for a long time too. In my first book, your money, the missing manual, uh, I'm all over the
00:16:20.080
20% thing, but after talking a lot, uh, in the past year or two with people who have achieved financial
00:16:27.400
independence at a young age, people who've, uh, uh, basically retired early. And by that,
00:16:32.920
I mean at 35 or 40 or 50, uh, especially a fellow named, uh, Pete who writes a blog called
00:16:39.460
mrmoneymustache.com. It's the coolest blog name. Yeah. It's, it's awesome. He's got passionate
00:16:45.420
followers because of his advice. And the advice is, yeah, this 10%, 20% saving rate or profit margin,
00:16:51.940
that's great. But if you follow that advice, you're going to be working at your job for 45 years
00:16:57.240
because that's how long it takes to save enough to retire. On the other hand, if you bump that
00:17:01.800
savings rate up to 30%, uh, you can retire much quicker. That's my ex-wife. She's saved 30% of
00:17:08.560
her income. She's going to retire at age 50. But Pete says, you know, if you bump it up to 50%,
00:17:14.420
you can retire by 40. Or if you're really, really industrious and bump that savings rate or profit
00:17:20.640
margin up to 70%, you can retire in about 10 years. You can, you'll have accumulated enough money
00:17:27.000
money to, uh, live off, uh, at your current spending rate for, uh, the rest of your life.
00:17:33.240
If you keep your spending rate there. Um, and at first I kind of blew that off as like
00:17:38.240
extreme thinking is it, and it wasn't really possible, but looking at the math, no, he is
00:17:43.400
absolutely right. If a young person coming out of college, man or woman says, all right, I'm going to
00:17:50.860
just do this. I'm going to buckle down and save 70% of my income, no matter what in 10 years,
00:17:57.660
they can retire and fund their, uh, spending level. And the amazing thing about that is when you
00:18:04.640
retire, uh, I think a lot of people think of retirement as just lounging around playing golf,
00:18:08.840
that kind of thing. But from what I've seen of the people who do achieve early retirement through
00:18:13.240
this sort of extreme saving, uh, they, they continue to make money. It's like me now I've
00:18:19.280
accumulated enough money. I'm 45 years old. I've accumulated enough money that I could retire if I
00:18:24.400
wanted to, but I continue to do other things like this be your own CFO guide, which is part of the
00:18:29.980
get rich slowly, uh, year long course by the way. And that produces income for me. And it's just kind
00:18:36.520
of a sidelight. I don't need the income, but it's, I'm doing something that I enjoy and I think provides
00:18:42.100
value. And even though I'm retired, I'm continuing to generate income. So bottom line, and I'm very
00:18:48.740
talkative today, aren't I? I love it. The bottom line is the most important metric a person can
00:18:55.760
look at in their personal financial life. I think is what their profit margin is. And if your profit
00:19:00.860
margin is small, say 5%, do what you can to get it up to 10 or 20%. But if it's already at 10 or 20%,
00:19:07.960
see what you can do to bump it to 30 or 50%. So that may mean cutting back on expenses or trying
00:19:14.860
to find ways to make more money. Yes, exactly. So my philosophy is, uh, the best way to do this
00:19:21.320
isn't through like clipping coupons, although there's nothing wrong with clipping coupons
00:19:24.880
or, uh, uh, other things that produce tiny, uh, benefits, but you want to see what you can do
00:19:31.780
to produce, uh, big changes to your financial situation at once. And this is much easier to do
00:19:38.840
if you're just starting out, if you're, if you've just graduated from college, if you can refrain from
00:19:43.880
adopting the adult lifestyle, when you graduate from college, get an adult income, but don't have
00:19:49.660
adult spending levels, uh, you're going to be so much better off. But if you already have an adult
00:19:54.300
lifestyle, there are a few changes you can make that produce big results. Uh, unfortunately people
00:19:59.880
are very, very resistant to these changes because they go against, uh, the way our culture operates,
00:20:05.800
it's what we tend to value. The, the big changes that I try to stress are, uh, number one is housing,
00:20:11.880
cut back on your housing costs. Uh, the typical American household spends a third of its budget
00:20:17.160
on housing. And this is enormous and it's much larger than it used to be in the past. And I feel
00:20:24.360
like people would cut their housing costs back to say 20% or even 15% of their budget. They could save
00:20:30.600
huge, huge amounts of money. Second source that people can cut back is transportation.
00:20:36.460
And most people actually could cut back on transportation today. If they just made the
00:20:40.160
resolution, okay, I'm going to find other ways to get around and drive to my car. And again,
00:20:45.820
transportation is the second largest, uh, piece of most American households budgets.
00:20:50.940
It's if people could find alternate routes or ultimate, alternate means of getting around,
00:20:56.480
like taking the bus or biking, or, uh, I've got a motorcycle, which is much cheaper than driving a
00:21:01.180
car. Um, these things, this cut would, uh, provide a huge impact to the bottom line. And then the,
00:21:08.180
the third big change that people can make is boosting their income. And this could come through
00:21:14.280
negotiating the pay raise, uh, taking a second job, selling things, uh, whatever it is, generating
00:21:21.460
additional income is another great way, uh, to boost your profit margin.
00:21:29.440
Exactly. Right. Big wins. All right. Um, so you have a section about budgets, right? So if you're
00:21:34.200
in run a business, businesses have budgets. So if you're going to be the CO CFO of your life and
00:21:38.400
you'd have a budget too, but the thing is lately you've been, you see a lot of talk in the personal
00:21:43.000
finance sphere that budgets don't work, right? Like sort of like how diets don't work. You know,
00:21:47.940
you need to make lifestyle changes instead of trying to go on a diet. You want a lifestyle
00:21:51.580
change. Um, how do you respond to that, that argument that, yeah, budgets don't work. So
00:21:57.180
just kind of focus on general lifestyle changes in your finances. Well, I think that there is
00:22:04.480
merit to the argument that the lifestyle changes are most important because that's true. However,
00:22:09.140
to say budgets don't work is misguided. Uh, some budgets don't work. And the reason they
00:22:15.420
don't work is they can be very fussy. They get overly complicated. They try to track too much
00:22:19.840
detail. So, uh, I'm a huge advocate of, um, what you might call budget frameworks, which are broader
00:22:27.720
budgets that might have, for example, just three categories. Uh, I've been a long time advocate of
00:22:33.180
a budget framework or a budget, if you prefer called the balanced money formula, which was suggested
00:22:39.140
by Elizabeth Warren and Amelia Tiagi in their book, all your worth. But anyway, the balanced money
00:22:44.520
formula suggests that, uh, you just have three budget categories. Uh, the first category is needs
00:22:51.040
and your goal is to get your spending on needs to be below 50% of your take home pay.
00:22:56.400
So that means, uh, needs include things like your, uh, basic housing, basic clothes, basic food,
00:23:02.620
and so on. You want those to be below 50% of your take home pay. And you also want to save more than
00:23:08.180
20% of your income. Now, again, remember I said earlier that ideally you'd be saving 50% or more of
00:23:14.200
your income, because that's going to get you to your goals much quicker, but this is a good start,
00:23:17.640
20% or more of your income. And then that should leave you roughly 30% to spend on want. And, uh,
00:23:24.200
Warren and Tiagi say that this balanced money formula is a way to provide peace of mind. Um,
00:23:30.760
and you're able to, uh, have everything you want and everything you need while saving for the future.
00:23:36.100
And I think it's, uh, by limiting it to just three categories, it makes it a lot less fussy and it's
00:23:42.000
something that people can follow. And yeah, I agree. So my experience with budgeting has been
00:23:46.400
like, yeah, you start a budget and then you're always just tinkering with it. Like you spend all
00:23:51.960
your energy, like trying to like tinker with it and like set everything out. Like every dollar has to
00:23:56.180
have a place. And then like, it just saps so much mental energy that like, you don't have the willpower
00:24:00.560
to actually follow it anymore. Yeah. For me, a budget is kind of like a roadmap to take you in the
00:24:06.060
direction you want to go. And I don't necessarily need a roadmap that shows me every little twist and
00:24:12.840
turn that that's good. Just going to drive me nuts. Uh, what I want instead is just a, a general
00:24:17.680
map that says, yeah, stay on the freeway until you hit San Diego and then take this exit. I don't
00:24:22.400
need to know about all the other exits or, uh, how many lanes are in the freeway at this point and so
00:24:27.180
on. Um, so yeah, I think a broader budget framework is best for most people. Definitely. Okay. So you
00:24:34.660
kind of hit on this a little bit, you know, a lot of our listeners are in their twenties,
00:24:38.280
maybe early thirties, um, just starting out in life, any specific advice you have for them?
00:24:43.920
Uh, you mentioned like, don't have adult lifestyle, right? Don't, don't, don't pay for that
00:24:48.840
inflated lifestyle, but anything else they can do to like, that'll just have a huge payoff, um,
00:24:53.340
years down the road for them. Uh, well, uh, you know, Brett, I would go back and, uh, point to this,
00:24:59.820
uh, having a mission statement and having goals, because I think that, uh, being clear
00:25:04.540
on what your purpose is and what's important to you, knowing what's important to you can keep you,
00:25:10.120
uh, focused when your friends are doing things that, uh, might not be in your best interest.
00:25:16.580
If I were to pay attention to how my friends spend money, I would buy a lot of cigars and a lot of
00:25:21.780
booze. And I'm not saying that I don't drink and that I don't smoke cigars, but, uh, I let them do
00:25:27.880
whatever the hell they're going to do because they're following their priorities. I pay attention to my
00:25:33.320
priorities. And it took me a long time to get to there. When you're young, it's very easy to be
00:25:39.100
taken with the notion that you need to have the sorts of things that your friends have or that
00:25:44.040
your parents had when you're growing up. But if you can resist the urge, uh, to compare yourself to
00:25:50.140
others, to, uh, uh, be seduced by the notion that you have to have what other people have or, or what the
00:25:56.140
people on TV have, that's even worse. You're going to get so much further ahead than anybody else,
00:26:02.640
any of your other peers, as far as your personal finances are concerned. And the key is becoming
00:26:10.340
clear on what is important to you so that you're able to make these choices wisely.
00:26:14.620
Yeah. I think that's nails that you, I mean, that's awesome because like, I've noticed that
00:26:18.980
there's a lot of, there's a tendency for young people to be like, I just want to keep my options
00:26:22.420
open. It's like, like coming up with a mission statement, like a purpose, it seems sort of
00:26:26.320
constraining what they don't realize is like that it can change. Like you're not stuck in it for
00:26:30.920
the rest of your life, right? Like you can change this as your life progresses, but you had something
00:26:36.380
like at least one thing you're focusing on that will give you some sort of direction in your life.
00:26:41.420
So you don't go off to someplace you don't want to be. Yeah. And I think it's important to realize
00:26:46.440
that there are opportunity costs associated with everything that we spend and whether it's time or
00:26:51.640
money. Uh, when we choose to do one thing or choose to spend money on one thing, we are basically
00:26:57.940
saying, okay, I'm choosing not to spend it on something else. And so if you go out and you
00:27:03.040
buy a new car for say $25,000, you're choosing not to spend that $25,000 or $30,000 after financing
00:27:10.960
on something else, whether that something else has traveled around the world or a retirement or a new
00:27:18.300
house or whatever. And it may not be a conscious choice. You may not be consciously saying, oh, I would
00:27:24.040
rather have this car than to travel around the world for a year, but it is effectively the decision
00:27:29.620
that you're making. And so you need to realize that these opportunity costs exist and, uh, they
00:27:36.960
really have a huge impact on your future. I was really dumb with money when I was in my twenties,
00:27:42.220
Brett. I got into huge, huge credit card debt and I made choices that once I got down the road,
00:27:50.520
10 years later, I was like, what in the world was I thinking? I basically mortgaged my future, uh, for
00:27:56.220
the sake of a few like luxury items, uh, when I was younger. Yeah. Well, that that's, I think that's
00:28:04.640
solid advice. I mean, it's something we try to hit on the site a lot for, uh, young guys is like, have a
00:28:09.940
mission, have a purpose. Yeah. Something. Right. All right. Well, JD, um, last question, um, we'll wrap
00:28:16.580
things up. So tell us a bit about this guy. So it's, it's this, you know, be your own CFO, but
00:28:21.120
it's a part of a course as well. Yeah. So this was kind of fun for me. Um, I'd never done anything
00:28:27.980
like this. I, I thought it was just going to be like a, uh, standard PDF ebook that people could
00:28:33.480
download, but Chris Guillebeau is like, no, no, no, let's make this a part of a bigger project. So
00:28:37.780
we created the be your own CFO guide and it's about 120 pages. It contains all the, it's like the
00:28:43.820
distillation of everything that I've learned reading and writing about personal finance over
00:28:47.920
the past 10 years. And it's got all my, uh, uh, all my latest ideas because I'm constantly evolving.
00:28:55.400
I'm constantly learning new things about personal finance. And so it's got all the latest information
00:28:59.600
that I've been able to, uh, accumulate. And Chris said, well, let's add some more stuff and make it
00:29:05.180
into a course. So we basically have a 52 week email series where every, uh, every week we send out our
00:29:11.040
new email about a personal finance topic. Some of the stuff is about how to handle psychology,
00:29:15.180
how to handle relationships, but it's also some practical stuff too, like, um, how to set up an
00:29:20.620
estate plan, which sounds boring, but everybody needs to do. And, uh, then I also, uh, you do this
00:29:28.000
podcast, but I'm kind of new to this kind of thing. Uh, and I decided it would be fun to interview,
00:29:33.620
uh, some of my friends in the personal finance world, cause I have a lot of contacts. So I interviewed
00:29:38.380
18 different people and, uh, those interviews are available as part of the course. And then there's
00:29:44.960
a whole lot of other stuff, like a guide on how to negotiate your salary, a guide to setting up a
00:29:49.300
Roth IRA, which is a basic retirement account that everybody should have. And it's a, it went from
00:29:55.780
being just an ebook to this large comprehensive course. And I'm really proud of it. I feel like
00:30:01.260
it's the best work I've ever done. That's awesome. Where can people find out more information
00:30:04.640
about it? We set up a website at moneytoolbox.com and people can go there and learn more.
00:30:11.620
Awesome. Well, JD Roth, it's been a great conversation. It's always a pleasure to talk
00:30:15.440
to you. Uh, been a big fan of your work since way back when. So, uh, thanks so much for taking
00:30:19.800
the time to talk to me. Thank you. Our guest today was JD Roth. JD is the founder of getrichslowly.org
00:30:26.380
and he continues to write there today. And he just released his new ebook slash online money
00:30:30.800
course called be your own CFO. And you can find that at moneytoolbox.com. Uh, you can
00:30:37.080
sign up for it there. Well, that wraps up another edition of the art of manliness podcast. For
00:30:43.660
more manly tips and advice, make sure to check out the art of manliness website at
00:30:47.280
art of manliness.com. And also if other days is coming up, check out our store store.artofmanliness.com.
00:30:53.640
We've got some new cool coffee mugs, really manly and hefty and cool looking. I'm really
00:30:59.220
excited. I think they're cool. Let's check them out. Uh, store.artofmanliness.com. And until