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Creating Space to Execute a Fully Funded Lifestyle Change, with Jonathan Mendonsa

Presented by Borrowell

Welcome to The MapleMoney Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.

We’ve talked about financial independence on this show before, but how do you align your finances to be able to make that major change to your lifestyle?

Jonathan Mendonza, from Choose FI, stopped by the show to explain how to create space to execute a fully funded lifestyle change. It’s a jam-packed episode, as we cover a wide range of topics, from eliminating debt to increasing your savings and creating additional income, to become less dependent on your job.

Jonathan tells us why being fixated on how much you make is not a great indication of how much money you need to live. The question shouldn’t be, how do I replace my income, rather, how much money do I need to fund my lifestyle.

Drawing on his own personal story, Jonathan shares why getting out of debt should be the first step in your path to financial freedom. From there, the focus shifts to increase your savings as well as your income.

Find out how a trip to Africa became a trigger of sorts for Jonathan to leave his 9-5, and what he said to his boss before he left. It’s an episode you don’t want to miss, right here on the MapleMoney show.

Our sponsor this week is on a mission to help Canadians make great decisions about credit. Borrowell has taken what used to be $23/month and made it absolutely free. To get your free credit score, free credit report, as well as monthly monitoring, head over to Borrowell today!

Episode Summary

  • How much does your life cost?
  • A budget will help you focus on your goals
  • Recognizing the opportunity cost by looking at things differently
  • How student debt can result in a lost decade
  • What does it mean to ‘increase the gap’?
  • The first place you should look when cutting expenses
  • Career hacking is a skill set that can make you real money
  • Don’t get a degree just for the degree
  • The role of geoarbitrage in financial independence
Read transcript

We’ve talked about FIRE which is Financial Independence Retire Early on the show before but how do you line up your finances to be able to make that major change to your lifestyle? Jonathan Mendonza from ChooseFI stopped by the show to explain how we can create space to execute a fully-funded lifestyle change. We cover a lot today such as eliminating debt, increasing your savings and creating additional income so you’re not dependent on your job. Plus, just how many your years of education and career loyalty are really worth.

Welcome to The Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. I love our sponsor Borrowell’s mission to help Canadians make great decisions about credit. They’ve taken a product that used to be $23 a month and made it absolutely free. To get your free credit score, free credit report and continue on monitoring, head on over to Now, here’s Jonathan…

Tom: Hi Jonathan, welcome to The Maple Money Show.

Jonathan: Hey, Tom. Thanks for having me, man. I’m excited to be here.

Tom: I had your other half, Brad, on last week so I wanted to bring you on as well. Obviously, with ChooseFI, a great part of that is financial independence but I wanted to go further back than that with you in terms of the building blocks we can use to get there. Say someone’s just kind of getting onto this whole FI and FIRE movement, what is step one of their path towards that?

Jonathan: This may be obvious to some people but maybe not so obvious to others. You need to know how much your life costs. You need to track your spending. How much does it cost you to get from the beginning of the month to the end of the month? And when you stack 12 of those together, how much does your life cost over the period of one year? That gives us a lot of information. It’s very easy to get fixated on how much you make but it’s not really a true marker of how much you need. So, if you’re always thinking about how you can replace your income you’re sort of losing sight of the forest for the trees. What we need to do is make sure we can fund our lifestyle. In the concept and framework of financial independence, what would it look like to get to the point where our job is no longer funding our lifestyle but rather an income stream that doesn’t rely on us showing up 9 to 5 with a three-hour car commute? How can we get to the point where we have this third income earner in the home that’s working for us working 24/7 and doesn’t care about traffic!?

Tom: (Laughs) That’s great. The idea of figuring out where you’re at in a month or a year, I’ve found Mint to be a huge help with that. I don’t know about you, but for me it just showed me how much I was wasting money on certain things.

Jonathan: Yeah, that’s the intentionality component. Obviously, I think most of us would say, “Hey, if I can make a million bucks a year then funding my lifestyle isn’t going to be very difficult.” Mint may or may not be important. I mean, we certainly know people who have won the lottery and are bankrupt a year later. Not to discount it, but for the average individual who’s not making a million dollars a year, knowing how much your life actually costs… and more importantly, focusing on items that are actually bringing value to your life gives you a better metric. Here’s the thing; it would be nice to have all the “ands” (like I want this “and” this “and” this) but by knowing what you need gives you a lot more authority. That’s not to say you can’t have the “ands” but by focusing on covering the needs gives you security, options and flexibility. It gives you the ability (as we’re going to explore a little bit more, hopefully) to make decisions in the immediate, mid and long-term future that are really in your best interest.

Tom: So, on the expense side of that, are you a fan of budgeting then?

Jonathan: This is one of those interesting points. I’m not dogmatic about it. I know individuals that have crushed the game without budgeting but I think you do need to look at your personality. I’m a spender. That’s just my natural bias and that’s really cool because it basically implies that financial is not just for people that are naturally frugal. It’s for everybody. It’s based on simple math. Not to say it’s easy, but it’s simple. Regardless of where you fall in the spectrum, you can do this but you have to acknowledge who you are as a person. Know thy self, guiding light. If you have a 100% savings rate until you spend a dollar… You talked to my co-host Brad recently. That’s him. A 100% savings rate—I will relinquish $1 to purchase food and turn the lights on. (Laughs) He’s never budgeted and does not need to budget. It’s not a priority for him. But, if you’re closer to me, “Wow, look at all this cools stuff I can buy. Look at all these things that are out there, all these gadgets I can get,” then a budget can help you focus your goals. You know what your life costs so you focus on what you need to cover it. Then you focus on what your goals are. In my case, I’m from America and live inside the United States and in 1998 I was introduced to Google. I remember that being in my English class. And I’m thinking about careers and one of my very first Google searches was the top 10 professions. A lot of us, at some point in time have entered in that top 10 professions thing. What should I do with my life? That’s the existential question you ask yourself at the age of 17 that somehow you have to lock yourself into for the next 40 years. I asked that question of Google early on. One of those options was pharmacy. As I understood it coming from a lower middle-class family in the United States, that entrepreneurship was for people that were going to go bankrupt and just didn’t realize it yet. There was no way that was going to work for me so I needed to get a high-paying, W2 income job. I realize W2 probably doesn’t translate (in Canada) but I think most of us know we can think of those stem jobs that everybody should get. It’s just obvious. In my case, medicine, pharmacy—you’re going to make an entry-level, six-figure salary. But I guess I wasn’t quite as good at math as I thought because I didn’t totally appreciate the opportunity cost that came with my chosen career path. In the States, it is four years of undergrad and four years of pharmacy school before you come out. So I’m coming out at the age of 28 years old with $168,000 in student loan debt. And I can tell you, it’s a lot easier to take that student loan out than it is to pay it off. So when you come out and you have this entry-level, six-figure salary, you are also going to be in a somewhat higher marginal tax bracket than if you make $30,000, $40,000 or $50,000 a year. It’s just the way our country’s basically set up. I’m sure Canada has something similar.

Tom: It’s the same here. We’ve got the different tax brackets as you work your way up.

Jonathan: You’re making this higher income. And, simultaneous to that you have this high debt of $168,000. Now, in some areas of the country that’s a mortgage. You can very easily find a mortgage for a very modest home for that same amount of money. I have the debt and no home to show for it. I’m committed to paying this down because I’m already coming from this kind of mindset that debt is going to limit my options so I decided to pay it off. Basically, I take my income and send 75 to 80 percent of it back to the government to pay off my student loan debts. We were living off my wife’s income which was much smaller than mine. She had a teacher’s salary but we were able to basically just live on that. I think I was keeping about $3 or $4 an hour of my salary. And for four years I basically worked my tail off in a job that was kind of slowly killing me. I didn’t love it but I was doing well at it. It wasn’t lighting me up. I found myself just basically handling the equivalent of TPS reports (if you’re an accountant) plus doing paperwork adjustments and talking on the phone with insurance companies. Not exactly what I felt like I went to school for. At the end of these four years I had basically paid back all my student loans. I’m essentially debt-free at the age of 30. I’m actually doing a little bit better than that because I had been doing my match with my company so I had some amount in savings. But, I’m kind of just getting back to “broke” at the age of 30. I look at this now and think, was that really the best path? Because I kind of flipped that head on the coin if you just look at it a little bit differently. Instead of going $168,000 in debt, had I (at the age of 18) thought, “How can I actually save $168,000?” what would it look like to just get a medium income job maybe making $50,000 a year, figure out a way to maybe be a little bit extreme? Now, you’re going to be a little bit extreme but college students are extreme by nature. You’re living in a dorm room with other people. You’re sharing bathrooms with five or six other people… Instead of doing this in the context of school I just focused on figuring out how to get a median in. There are a bunch of options to do that. Figuring out how to save 20, 30 or 40 percent of my income—saving $16,000 a year. Do that for 10 years and you have $168,000 saved up. This is like the magic if you’re looking at the problem differently. If you never save another dollar, for the rest of your investing career you’re just doing paycheck to paycheck, you may not be saving anything but you’re not going into debt either. You’re just living within your means and nothing else. At the age of 50 you’d be a millionaire. It’s that simple. Basically, if I hadn’t made any other decisions by following the path I followed, it cost me a million dollars. I don’t think we think about that. I don’t think we think about the opportunity cost of looking at the problem differently so many of us get bogged down with the idea that we have to get a degree that guarantees us success, guarantees us that job and we need to do it at any cost. Do you know how many doctors and physicians are getting back to broke at 40? It’s like an ongoing meme that your student loans are going to outlive you. They’re just going to be there for the rest of the time. What is that costing you? What is that costing your financial future?

Tom: Yeah, for sure. I never had a huge student loan debt story. I just went to the local community college but I was terrible at spending. I have a similar look at this where my entire 20s were lost to the inability to invest. It was all spending.

Jonathan: Yes, I look at it as a lost decade. I think a lot of us do. For millennial in particular, that period of time between your 20s and 30s is basically in service to education and paying down student loan debt. You see that with the demographics now where our generation is pushing back all these other aspects of our life—all these other big, major decisions are just getting pushed back in service of figuring out how to stay afloat and make the minimum payments on the massive debt we just signed up for.

Tom: I was in business administration and had an economics teacher show us the graph of what that extra decade can do for you with the compounding. But I wasn’t ready to hear that so I just kept doing what I was doing.

Jonathan: There was nobody in my social group who thought my current path was a bad idea. My parents thought going to pharmacy school was the best idea. I’m not even saying it was a bad idea. It’s just that I wasn’t aware of the power of the equation I just laid out for you. I didn’t know how to look at the numbers or analyse what a successful path would look like. I think our society has passed down to us that this one little lane involves student loans at all cost… Whatever it costs, you just get the degree and it’s going to be okay. And I think, as a society—maybe not for my sake but for my child, we need to look very critically at that equation and ask, “Is that really the case?” If it is, I’m fine with it. If getting a college degree is still the best guarantee of a solid financial career, I am not looking for an answer. But, I suspect, based on my own experience and based on those of my peer group, individuals that came out with a teaching degree which pays (at least in the United States) somewhere around $40,000 to $45,000 a year yet they have $60,000, $70,000 or $80,000 in student loan debt, the math becomes increasingly difficult. And I don’t want that for my child. I want a better alternative. That’s kind of like what I’ve been doing personally with Brad. We’ve been trying to find examples of people that made a different choice and got a different result. Surprisingly, it’s not all tech-engineers in California. That’s not the only path to success.

Tom: I hope with podcasting and the Internet in general, two things are starting to happen; people are realizing that college isn’t always the best choice for them when all the news comes out about student debt. On the other side of that, there are so many new ways to make money that didn’t exist when I was in college. Again, with the Internet there is an app for almost any kind of service you can offer whether it’s driving a car, mowing a lawn, or walking a dog. What are your thoughts on the income side of this? Say someone is in a career right now, what should their next step be? Is it asking for a raise or doing a side-hustle? What are their options?

Jonathan: That’s a great question. We have an equation we’re all subject to; what earn minus what you spend is equal to the difference (or the gap). We want to increase the gap, ultimately. We don’t want to just focus on one side of things. You can only frugalize so far. On the extreme end we know Jacob, from Early Retirement Extreme, figured out how to pull off (for an individual) $7,000 a year and he’s managed to sustain that in the face of inflation over the past 8 years. Again, he’s still pulling that off but that’s not the vast majority of us. Clearly, the situation if you’re making $15 an hour isn’t to say that 40 years from now while we’re still making $15 an hour, how can we pull off the 50 percent savings rate? We’ve got to be intellectually honest and say it’s a lot easier to hit a 50 percent savings rate when you double or triple your income. So we don’t need to just limit ourselves to focusing on one side of it. There is a baseline amount for food. There is a baseline amount for rent, for a mortgage, for owning a car—having a car payment. I suspect that for the vast majority of people it’s a lot less than you would think. I think if you’re intentional to it and apply some real critical thought you can cut your expenses. I suspect that within an ultimately short period of time you could cut your lifestyle 20 to 30 percent by focusing on your car cost by focusing on your food cost. And certainly your housing cost has to come into that. I realize that in some cases you may feel like you’re locked in depending on your situation, but if you start with your food and work your way down looking at your cars and your house, those big three are easily going to account for 50 percent of your living. So, talk about the latte if you want, that’s fine. But when you look at your life as a pie, what makes up that pie? And what’s going to have the biggest impact? Let’s talk about your grocery bill, your transportation and let’s talk about your house. That’s the expense side of things. Let’s go back to the income side of things. If you have a solid income job and a good paying career—career hacking is a big part of it. This is something I’ve been studying increasingly because I realize that’s one of the needs of our community. What does it look like to be able to out-earn and increase the raises our peers are getting? The squeaky wheel gets the oil. We know that in theory. But practically, do you realize it’s a skill-set? While you’re settling for the one, two or maybe three percent raise which is roughly keeping up with inflation, there are individuals who are in the exact same sector as you who are getting 8 percent every year or 10 percent—double-digit raises. It’s happening. Just because you don’t know them has to do more with your zone of awareness rather than the actual realities of the job. It’s across the board. It’s for all of us in every aspect of life. How do we increase our zone of awareness? One of the ways to do that is, honestly, to listen to shows where people have done that. It’s that simple. You can search for individuals in your shoes whether it is the fire department, coding, entrepreneurship or pharmacy who are getting outsized results. What if one of the easiest, most obvious choices could be just knowing the range? Do you actually know what people in your industry are making? Have you logged onto an app like “Glass Door” to see what the range is for your position? Have you contacted a recruiter? Think about the benefits that recruiters have—their incentive alignment. The way they (recruiters) get paid is to get you to leave your job and go to the job they’re recommending. What is going to cause you to do that? Well, the most obvious thing would be for an increase in pay. If they can’t present you with an offer that shows you an increase in pay, why would you leave? That’s a good thing. So why aren’t we talking to recruiters if we feel stuck? That’s one possibility. Have you updated your resume? Sometimes your resume is a way telling a story about yourself to a future employer. I’ll be honest with you, although I have tons of words on this podcast, when I go to write something down I gridlock. I just lock down. Nothing flows. I can’t tell the story about myself on paper. What if there was someone else who had this gift? They look at you the same way you look at yourself but you can’t come up with a single positive thing to say about yourself. They can look at your same set of accomplishments and absolutely crush it. This was actually the case with Gwen, who has a podcast, Fire Drill. She actually left work for a period of time to focus on entrepreneurship and that really wasn’t panning out so she decides to go back to work. She’s looking for jobs and is able to find some but is kind of stuck at a particular income level. She hears about this person that can redo resumes—a person that actually works in tech recruiting and is very good at knowing what recruiters are looking for. So they look at her portfolio and discover she has it all but she’s just not really showing off her skill-set. They rearrange things, reword it (her resume) and suddenly she’s getting offers for $20,000, $30,000 or $40,000 more than she was getting. And it only costs about $200. It’s still you. You’re still the same person but that’s all that was separating you from that next level. I think we need to look at this a little more realistically. What would it look like to get eight percent raises year over year when everybody else is getting one, two or even three percent on the high end? If you stack up three, four or five years of those you are going to crush it. Don’t be afraid to leave your current job and go across the street. Unfortunately, I don’t like having to say this but it’s true. I’ve seen it enough. I’ve seen it personally where people who are able to get ridiculous bumps in pay are those willing to leave their current jobs. Those who are loyal to the current company are going to get current company bumps in pay… one, two and three percent. Those that are willing to look outside of that and find out what the company across the street is paying and do one of two things; take the offer from across the street back to their current employer or actually leave, move or relocate are able to outperform their peers. And you only need to stack a few of these wins together over a period of a decade to drastically outperform your peers. So think about your options as a portfolio of ideas. What do you want to do? You don’t have to do everything but you’re going to have to do something if you want to get a different result than you’re getting now.

Tom: I’ve found the same thing in my career where loyalty is not rewarding here yet you do get that one, two or three percent. Although three percent would be on the high end here. I know a lot of people where if they’ve jumped around a lot, especially in their 20s…

Jonathan: I was just thinking, what if we could reclaim that lost decade where we had a tribe of individuals who (while everybody else was hemorrhaging $168,000 in student loans) figured out how to pay it off? They were focused on that single decade not on how to get a degree. We could go for the degree, I’m not saying don’t get one. My real focus is how to get that first six-figures saved up? How do I get that first $168,000 saved up? You’re just set. You’re set for life if you can put in that same energy. In my case, if you can go and get a doctorate in anything, a Masters or frankly even a Bachelors in anything, you can apply the same intensity into it. Was I interested in it? Maybe. Do people get degrees in things they’re not interested in? Absolutely, all the time. If you could take that same energy and put it into how to outperform this equation, you’re going to crush life.

Tom: Right, 20 would be the new 30 where people would focus on investing and career advancement instead of being stuck in school. You mentioned the idea that some people don’t even know what they want to do with university. I think that’s the saddest thing of all.

Jonathan: People get to that senior year and that’s what they’re saying. They haven’t figured out what they’re doing so they decide to get that “extra” degree. They think they have to get a Masters degree in order to really lock down what it is they want to do. And you’re sitting there knowing full well it’s going to be on the back of student loan debt. Do you think that is going to be solved at the end of Masters? At the end of Doctorate? Come up with a plan. I think our parent (rightly so) believed the best thing they could do for their kids was to have them go to college. I understand that. The paradigm in the late 1980s, early 1990s was if you went to college, statistically you were going to do better. I’m sure that statistic still holds true but it is a lot dicier because we have a student loan debt burden that is just swelling in both of our countries. Our generation is getting buried in this stuff. So you’ve got to be intentional. I’m not saying don’t go to school. I’m saying, have a plan because the only thing that’s fixed is them saying, “Hey, we’ve got your back. Take out as much in students loans as you need. If the Federal loans don’t cover it, don’t worry, you can take out private loans. We’re going to make sure you’re comfortable while you’re here in school.” But does that school follow up with you two months after you graduate and say, “Hey, how’s the job? By the way, we have some leads for you. We really think you should do this…” Once you graduate, it’s on you to figure it out. You need to be realistic about that. When you actually get started with this, don’t just get a degree for the degree.

Tom: Just using your story as an example, how did you make that decision to leave your career? Were you financially independent at that point? Or did you make that leap which is kind of a scary thing to do?

Jonathan: I am not working in pharmacy anymore. I am 33-years-old and I am no longer working in pharmacy. Remember we talked about how entrepreneurship was so scary? Well, I’m an entrepreneur now. That transition is actually worth highlighting. Let me start by saying that transition would not have been possible with six-figures of student loan debt (as it was with me). I’m what you would call a “chicken” entrepreneur. There are these guys that it doesn’t matter what it takes—burn the boats… they’re just going to do it. Not me, not me at all. I have a family. I have one son and my wife and I live here in Richmond, Virginia. Richmond is a relatively affordable place. There are areas of the country that have starter homes that cost $800,000 and they’re condemned or they’re just empty lots. That is not where we live. In Richmond you can get a starter home for around $220,000. Actually, you can probably get a home for less than that but we are in a home that costs $220,000. It’s a beautiful home in a nice suburban neighbourhood. I say that because due arbitrage is a big part of this. It is harder in some areas of the country to make the math work than it is in others. If that’s the case, you don’t need to take a fix that your only path is to figure out how to do it in our area. I think some of us do. My co-host, Brad, is from Long Island which is a very expensive part of the country where homes are probably very close to what I just described (for $800,000) and it just keeps getting worse. Their choice to move to Richmond, Virginia was a massive piece of their story. We talked about that pie; your food, transportation and housing. Their cost of housing here is similar to ours. It’s just that it was nothing in comparison (to where they came from) so it gave them a huge leg-up. So we’re here in Richmond, Virginia. We didn’t get a humongous, massive mansion. We didn’t have a huge mortgage hanging over our heads. We kept it lean. Our lifestyle costs somewhere between $30,000 and $40,000 a year for those first four years when I was paying off debt. Because I made that choice, which was hard choice, it’s great to say it’s paid off now. But the reality was I was working every other weekend. I would get home after that two-week rotation, after finishing up my Sunday shift which was a position where you are standing for eight to 10 hours at a time, in this exhaustive “I need to decompress” state of mind and walk up to the spare bedroom where we had this whiteboard with checkmarks. This whiteboard represented every pay period. Every two weeks was a pay period. I knew it was going to take me four or five years to pay off my student loan debt so one checkmark would represent the end of one pay period. At the end of this two-week pay period I would go in and checkmark the box off. After that I’d just stumble my way down to the couch and sigh, “Oh, done!” It was a slug but I did that for four years. It was a grind that was wearing me out but at the end of that I had no debt and I had roughly about two years of savings in place. The subtext for this was I started a small passion-project on the side talking about my favorite topic in the world, financial independence. As you can see, this is something that lights me up. This is something I’d get excited about long before I was financially independent. I was excited about finding out what people who had gone down this path had done because nobody in my peer group, my social circle or even my parents had this information. They were not able to give it to me. The best they could give me was a void credit card debt. That’s what I was working with. So to find out there were people who had made these radically different choices and were getting radically different results, I just wanted to be a part of that conversation so I decided to start a podcast with Brad, my co-host. We weren’t making any money on day one or anything. It wasn’t even necessarily the plan. It was just a way of documenting. It was going to be this situation where Brad, who had already reached financial independence and me who was still on the path, kind of doing experiments in financial independence. With my journey to go from debt-free to financial independence, I was expecting it to take five to 10 years. You get back to debt-free with some savings built up then the magic of compounding. We’ll get to talk about that later. I’m sure you’ve already discussed that to some degree on your show. But what happened—what was interesting is, keep in mind, I’m bootstrapping this thing. As you know, you can start a podcast for free if you want to but even on the high-end, it’s less than $1,000. This is not a major business expense to get started. You need a microphone and a computer. You can obviously spend more. And as we’ve gotten more polished we do have more equipment but on day one $200 is about all you need to get started. We were just having this fun conversation and people really started to enjoy it. I remember I made something like 30 cents from an Amazon affiliate link overnight. Obviously, we had put a ton of time in but we weren’t really actively monetizing the show and I had suddenly made 30 cents. It kept happening and I realized there were people who were getting value from both our show and our recommendations. They were spending time pouring through the content we’d been producing and the show was growing. It wasn’t paying my bills. It wasn’t even coming close. Thirty cents isn’t going to cover my electric bill, but there was something here. And it didn’t cost me anything to pursue this. This is what I’d be doing anyways for fun and to share it. I mean, I couldn’t just go and share it in my neighbourhood, right? I can’t get my friends to round up and have a great conversation about this because money is still kind of a weird taboo topic. People find it easier to talk about sports than money. But, there are tons of people like me around the world that honestly would rather talk about financial independence and the path to financial independence. For me, this is my default conversation. I was at a baby shower relatively recently and my friends know who I am now in terms of what my default status also know I’m not going to try and pretend I know who is in the Super Bowl. We’re going to talk about employee stock purchase programs and maxing out your investment vehicles. Increasingly, this is awesome but it’s not where it started. As the business grew I just realized there was something there. I remember there was this point in time where the podcast was kind of picking up more and more of my time—and I’ve got to be honest with you, it’s not a whole lot of work to create one podcast. But as we started to do two podcasts a week and consistently produce them, handling all the stuff that goes along with running a type of business like this which it was quickly becoming was now taking up 10, 20, 30 or 40 plus hours a week and I thought, “Wow, I have a job! What’s up with that?” It was great because I could also see this was really becoming a thing but it was becoming a little bit unsustainable side-by-side with my day job, my pharmacy job. I got to the point where there were three things happening all at once. One, was a documentary which is actually going to be released this year called, Playing With FIRE. Two, we want to go to a conference to represent our podcast. It’s a FINCON conference where you and I first met in person. It’s an awesome, awesome conference. And the third thing, and arguably the most important, was that we were due to go visit my wife’s family. My wife is actually from Zimbabwe in Africa and that’s not a trip you can take with a one or two day turnaround. It would take you that long just to get over the jetlag. So it’s a two-week trip. We usually get out every other year. And I work in corporate America. And with corporate America you get 10 calendar days off in a row. That’s it, that’s the cap. And that’s if your boss is generous. It wasn’t going to happen. I’m the manager at the pharmacy I work at and I looked at our company’s policy and saw they had something called an unpaid family leave of absence. I went to my employer and said, “Hey, I’ve got everything in great shape. I have someone that can fill in for me to make sure the ship runs perfectly so I have to take this three-week unpaid leave of absence. Would it be okay if I did that?” And my boss said, “I don’t think it’s in the company’s best interest to let you do that.” Now, 99 percent of the time when a boss says that to an employee that’s on the financial cliff owing $168,000 in student loan debt and doesn’t have any significant savings, the employee usually turns meekly around and goes back to work and makes excuses to his family as to why they couldn’t go see his wife’s parents—why they weren’t going to be able to make the trip this year. But because of what I laid out—because I had been a “chicken entrepreneur” and started something in the background which was just starting to replace my expenses, when I had finished paying off my debt I had kept that really intense savings rate and had about two years of expenses set aside. I could always go back. You can always go back. People think it’s a one-way door. It’s a turnstile. I realized I could always go back so I said to my boss, “I don’t think it’s in my best interest to stay.”

Tom: That’s great.

Jonathan: Yeah, this is my F-you money story. I heard about this before, this idea that when you’re not on the financial cliff living paycheck-to-paycheck, you get to make decisions that may not be in your employer’s best interest, but they’re in your best interest. And they’re in the best interest (potentially) of your family. And honestly, at a very selfish level, the reason we’re talking about my business, ChooseFI right now is because when it came down to it, I had to make a choice between my corporate obligations and my passion-project/side-hustle. I was able to choose that because I wasn’t weighed down by the mountain of debt. Talking about flexibility, some people get out of their college degree—they have their student loans and the ability to pay it down but they just say, “No, why should I do that?” Or they have credit card debt and still say, “Why? I can afford the payment. It’s easy. Why should I pay it down?” When you don’t pay it down, when you have that—when you actually have is risk, you’ve locked yourself into one particular scenario where as long as everything stays the same, you’re going to be fine. Twenty-five years from now don’t look at how much you actually paid, just keep thinking you’re going to be fine. But if anything changes remember, you do not know what your future self is going to want. Some people say, “I love my job. You couldn’t pay me to leave my job.” Great. Your current self may say that. Your 10-year self may say that. But I guarantee you a percentage of the people listening to this who think that will disagree because their boss, who they love, retires and they have a new boss that’s a jerk. Or because their sector goes away or because automation takes something… Because, because, because! Because the future is uncertain. Whatever you can control now by reclaiming that lost decade and by not financing the remainder of your life, do it. Your 10-year future self will thank you.

Tom: Can we quickly run through some of the goals to FI such as how many years should someone have saved up of income; how much they should withdraw? Can you give people a ballpark idea of what they’re aiming for?

Jonathan: Yeah, cool. This is like one of those “it depends” type of questions. First of all, track your finances. Then once you’re there, figure out what it looks like to get back to debt-free. What does debt-free mean, anyway? Does my mortgage or student loans count? Maybe. I typically put the mortgage aside as an investment. I treat it more as an investment. But if you make the decision to pay down your mortgage aggressively think about it the same way you would about investing in bonds. You’re basically locking in a fixed interest rate savings. But let’s focus on the consumer debt where you’re looking at student loans, credit card debt, and car payments. Then you’re dividing that up by interest rate. But let’s just assume we’re talking about crazy consumer debt. You’ve got couch payments, you’re financing your blinds. You’re a rent-a-center customer. Come on, let’s clean it up. Let’s get all that out of the way. You’ve got a one-percent note. Should you really focus on paying that off? Maybe, if it’s indicative of a mindset. But, if you’ve got a plan and mapped everything out then maybe it’s not. The other half of this is what path to find. Know how much your life costs. Here’s the basic route; if you save one percent of your income every year it’s going to take you 99 years to replace one year of your expenses. Yeah, you work 99 years and you get one year off, right? That doesn’t sound ideal does it? So if you’ve got a 25 percent savings rate that means you work for three years and get one year off. If we can get to a 50 percent savings rate—that means we work a year and get a year off. It’s obvious, you work a year and get a year off. If we can stack enough of those together, say 10 or 15 of those together, what’s amazing about it is essentially the magic of compounding investments. You create for yourself a perpetual money-making machine that can fund your lifestyle. We talked about that third income earner in the home—that can fund your lifestyle for the rest of the time… it’s more fun than that and more nuance because if along the way we can create other forms of income as well it kind of counts towards that. So people who start on this path may diverge and get a couple rental properties. Rental properties mean cash flow and that’s coming off what you need to replace. Maybe you start a little side-hustle and it’s producing a little bit of income. Hopefully, that’s more or less passive. If it’s passive, that’s kind of replacing a piece of that. The idea is flexibility is where we’re slowly getting to the point where we’re actually creating a life we can get excited about. Very few people in my social sphere now are truly looking for a way to get to the point where they can do nothing. They’re looking for a way to carve out the aspects of their life that do not light them up. It’s like in my case, handling TPS reports. How do I get rid of those and spend more time having the types of conversations like what I’m having with you right now. I get that it’s not pharmacy for everybody. One person I heard about was creating tutorials on how to make artisan loaves of bread. For the first time in your life, if there was a way you actually had space to do whatever you want, what would you be doing? I think there are a few ingredients there that get me excited. In my life, the perfect life looks like autonomy, mastery, purpose, identity and connection. I want to work on what I want to work on, when I want to work on it. You may think it’s dumb. But for me, I love digging into this stuff. So I’m going to spend two weeks (if I want to)… and this is the mastery piece as well. I want to go back and learn how to play piano. Maybe I played it for around three years when I was a kid and thought it was dumb. But now it suddenly sounds really cool and I wish I had spent more time doing that. I want to dig into that. You see those kids who are trying to learn how to skateboard and end up breaking their arms and legs but they just keep trying and you wonder how the hell they are motivated to do that? There is mastery in other aspects of your life so what would you want to apply that to? What purpose? I want to feel like what I’m doing has some sort of impact on the world. When they get to the point where working is optional, I think a lot of people, like Bill Gates for example, does not need to work. But what is he doing? You can see he’s increasingly passionate about the Bill Gates Foundation—he’s giving back to the world and making the world a better place. He doesn’t need to do that. Purpose is what drives him as well as being able to have some impact. For us, it’s identity and connection.  Doctors struggle with this a lot because their identity is a physician. If your identity is a physician, what do you do when you retire? Are you still a physician because that’s part of your identity. Then your connection; who are your tribe of people? Who are the people you’re connecting with? That’s why the financial independence community is such a big part of this as opposed to, “Hey, it’s just math.” Community and connection is a massive piece. I would just like to make the case that as you design a life you can get excited about, you don’t necessarily need to get all of those. But as you’re thinking about crafting your life you should be looking to hit some of those because if you can nail a few of them and lock them all into place you’re going to be very happy where this intentional life actually drives you. From a mathematical prospective there are some obvious markers. When you actually get to debt-free (whatever version your debt-free looks like) I would make the case that it’s everything except for the mortgage. When you get to debt-free, in my mind, that’s when your financial freedom clock really begins. I think other people can back that up. I knew a few individuals that have looked at the math and said, “My student loan interest is actually pretty good, sub three percent so I’m going to make the minimum payment on that. On everything else I’m going to put into an investment vehicle that I suspect (over the long-term) will do better.” If that’s you, I’m not going to tell you you’re wrong. But that person clearly has a plan. The next piece of that is that you’ve got to pick some arbitrary points in time. I’ll give you a couple to hopefully inspire people because that idea of financial independence is really awesome. Let me get to the point where working is optional. Getting there is also really cool, “Hey, I’m here.” But if there are 10 to 15 years in the middle with nothing to keep you motivated, how do you not fall off the wagon? Well, community is part of that but what about actual metrics? Getting to the point where you’re debt-free, give yourself a big shout—a big scream. Have a celebration. It’s amazing how few people hit that. You could throw checkpoints in there like the first time you max out all of your tax-advantaged accounts because now all that money is not having to go to student loan debt. That’s a really, really big deal. There are certainly milestones. The first time in your life you have a six-figure net-worth. You know, when you have $10 saved up in an investment account compounding may not sound super cool. But when you get up to six-figures and you have that $100,000 for the first time in your life and the next day something crazy happens in the market and goes way up—or maybe it goes down but you see how that volatility actually effects you. Your portfolio is affected by swings in the market. When the market goes dramatically up, you go up with it. That’s massive! I remember that point in time where suddenly I had $100,000 saved up in an investment account. Depending on your lifestyle, maybe these can be moved around a little bit but when you have a couple years worth of expenses saved up for the first time, think about that. Most people are one or two paychecks away from the financial cliff. And you… if you get fired you have two years to figure it out. If you decide to leave and focus more on your side-hustle, now it’s no longer risky. It’s just an opportunity because you can always go back. But you’ve got two years before you run out of runway. That’s amazing. And the cool thing is, this isn’t binary in the sense, “Hey, am I financially independent or not?” No. Even in my case, control is continually going to your side of the court and what’s really crazy about this is the more control you have, the more likely raises are to come at you. The less you need your employer, the more they need you, suddenly. It’s weird. It shouldn’t work that way. I’m not making the case that it’s fair. I’m telling you it’s reality. You see it over and over again. When you have the ability to walk away because you don’t need the job, because you’ve got two years, because you can relocate… because, because, because… your employer will do anything to keep you. And to keep you, they will incentivize you with extra income so it just gets easier. But don’t lose sight of that. From there, there are other real cool points in time. The crossover point is a big one. I’m kind of skipping ahead here to the crossover point. The point in time where your investments (for the first time) in the first month create more income than you are. So you create this income and put it into and account then compare it to what your investments actually appreciate to and see your investments did more. It’s the first time your investments are working harder than you are. That’s insane. There are these little things—don’t lose sight of them. The point is, don’t lose sight of them because you’re getting these cool little dopamine hits along the way and that’s a big piece of it. We need to gameafy this. This isn’t like boring old academia stuff in a book somewhere. The people that gameafied this a long time ago are so far down on the path. And the problem is, just as a society, we don’t talk about this stuff. It’s just an out-layer but it doesn’t have to be. It can be fun. And what if you can do this and motivate people in your social circle to do this with you is even more fun.

Tom: Alright, this has been great. Can you let everyone know with ChooseFI, where they can find you online? And also, give a shout-out to the Facebook group in Canada?

Jonathan: Yes, absolutely. I would love to hook you guys up with the Facebook group for people pursuing financial independence in Canada. To find that, just go to to find a group near you. Also, our podcast is, ChooseFI and can be found anywhere podcasts are found. And, if you want to get started with us, just go to We try to make it super-easy to dig through all of our content on that page.

Tom: Great, thanks for being on the show.

Jonathan: Tom, thanks so much for having me. I really appreciate it.

Thanks Jonathan for breaking down the steps to achieving a fully-funded lifestyle. You can find the show notes for this episode at Have you joined our community on Facebook yet? You can become part of the Facebook group by looking up Maple Money Community on Facebook or going to Thanks for listening and we’ll see you next week.

'What’s the path to financial independence? If you save 1% of your income every year, it’s going to take you 99 years to replace 1 year worth of expenses...but if you can get to a 50% savings rate, you work a year, get a year off.' - Jonathan Mendonsa Click to Tweet