financial independence

How to protect your credit and get free 24/7 identity theft monitoring.

By Brad Beckstrom

If you’ve ever used a credit card, online accounts, applied for loans or online offers, you’ve most likely already had parts of your identity stolen. Somewhere someone is keeping a file on you and that includes your Social Security number, addresses, recent passwords, and other information like your mother’s maiden name.

About once every year or so we get a new credit card number when fraud is detected on one of our two credit card accounts. This is a pain especially if you use online bill pay or financial tracking tools like Quicken or Personal Capital. (Everything needs to be updated, again.)

However, it’s relatively minor and common compared to full-on identity theft. Identity theft can come in many forms. Over the years we’ve experienced people successfully changing our address and getting a new credit card sent to them. Another fraudster created an actual credit card replica that was successfully used at Nordstrom and several other brick-and-mortar retailers. We’re also part of several data breaches per year including big ones like recent Target and Experian breaches as well as smaller ones most people never hear about. [Read more…] about How to protect your credit and get free 24/7 identity theft monitoring.

Creating a Freedom Plan

10/18 by The Frug 2 Comments

Image. Fog Rolls In. Brad Beckstrom

By Brad Beckstrom

“The message here is that people need a freedom plan, not a retirement plan. The traditional work until you’re 65 to cross some imaginary finish line is going away fast”

It’s never too late to start, but start now.

My knees burned as I climbed up the hill. It was 103° and I was hiking up a steep trail in a jungle north of Chiang Mai, Thailand. Lightheaded again, need more water. What if I just keeled over right here on this trail? How long would it be till someone found me? I have a family at home, I have responsibilities.

As I slowly got my stride back, it hit me. It’s not unusual for my knees to burn, or to feel lightheaded in hot weather. Hell, this happens when I’m walking our dog on a trail at home. But it happens more than it used to.

The Question

This is where I came face-to-face with the question…. what if I waited too long to do this? I mean, not just this trip or this hike. How late is too late to set out on that big audacious quest?

What’s a big audacious quest? That thing in your head that you’ve always wanted to do. Most likely It’s been lingering back there since high school. Not some short trip or vacation but a quest. Something that may take years and requires focus and dedication. Something you don’t want to wait too long to start. [Read more…] about Creating a Freedom Plan

Let’s Clean This Mess Up.

09/18 by The Frug 1 Comment

What you can learn from a minimalist lifestyle even if you’re nowhere close to adopting it.

By Brad Beckstrom

Minimalism is hard. After five years of working on it, I’m not even close to my original goal of a vastly simpler lifestyle. I’ve worked on applying minimalist ideas in everything I do. I’ve slowly realized that for me there is not some ultimate minimalist goal or destination. The reason is that there’s always stuff coming into our lives. And it’s not just our stuff, it’s our family stuff, our work stuff, stuff related to our home, our hobbies, our kids. The average American home has 300,000 things in it. So, I guess my family’s making progress — we’ve gotten rid of about 50,000 of these things over the past five years.

I think part of the reason adopting a minimalist outlook is hard is that many of us have lived our lives doing the opposite. It’s only much later, after decades of accumulating stuff, that we realize it’s all really just weighing us down. Given this, it’s going to take some time to unravel all that.

One of the interesting things I’ve found is that you can apply minimalism to a lot more than just cleaning out closets and garages. Over these past five years I’ve developed everything from minimalist investing strategies, work habits, and exercise routines.

As I’ve been working to apply minimalist principles, I look around and notice people adding more more more. Like spending 30 minutes driving to and from a CrossFit Gym to spend hard-earned dollars on increasingly complex workout routines. Constantly bringing complexity into life with high-tech toys often built into expensive new vehicles and smart appliances. Using social media, news apps, and productivity apps to create more and more urgent notifications. Complex volatile investment schemes involving everything from crypto currency to weed stocks. Utilizing multiple tools and technologies that were designed to lighten the load, but instead end up adding hours to the average workday.

Let’s simplify this stuff.

I don’t think anyone will ever look at me and my home or family and say “Oh, that guy is a minimalist”. For me it’s not about that, it’s about applying minimalist principles to one part of your life at a time and making small improvements. So, in the spirit of minimalism, if we could apply just one idea across everything we do it would make a big difference. Here’s one idea I use: [Read more…] about Let’s Clean This Mess Up.

Start, Stop, and Continue.

08/18 by The Frug 2 Comments

The big things I started doing, stopped doing, and continued to do on my journey to financial independence.

By Brad Beckstrom

A few months after I started my first real job, some nice folks from HR came to our regional meeting and did some “break out exercises” with our office. One of the exercises I remember was called: Start, Stop, Continue. We sat around in a circle and everyone discussed things in the office that they’d like to start to happen, stop happening, or continue to happen.

I’ll always remember this particular session because some people in the office obviously wanted to get some things off their chest and saw this as a great opportunity?! One of the recommendations was a certain manager stop yelling at field employees using the speakerphone on his desk, with his office door open. Everyone wholeheartedly agreed that this was great thing to stop doing. Or I think some people just hoped it would be a good idea to pick up the receiver and close your office door (back when people had actual offices).

Just when we were ready to move on to the next item our regional manager said “Wait a second, you’re talking about me! If you’re going to call me out on something why don’t you just say who you’re all talking about!” Our HR facilitator immediately intervened to smooth out the situation and then recommended we all stretch. I remember these times fondly, but don’t miss them. Our office really was “The Office” with meetings, weekly numbers, HR, late reports, managers, drama, all of it. The stop list was the longest list by the end of our exercise. The exercise had a big impression on me personally, well, hey I was 26. Ever since then I’ve always tried to look at things that I can start doing, stop doing, or continue doing in life.

For those of us pursuing financial independence and freedom from the corporate grind, offices, commutes, managers, and meetings, it’s important to keep those start, stop, continue ideas coming. Whether you’re looking to achieve financial independence through starting your own company, or aggressively saving and retiring early, it’s important to look at your own habits first.

Here are the most important things that I started, stopped or continued doing on my journey to financial independence. [Read more…] about Start, Stop, and Continue.

It’s An Emergency.

07/18 by The Frug Leave a Comment

For investors, the time is now to put together an emergency fund that’s more than just cash.

Preppers be Prepping

Just before I left the country with the family on vacation I reflected on how fortunate we’ve been, saving and investing during a bull market. Index funds including; S&P 500, International, emerging markets, real estate investment trusts, and bond indexes; have all grown during the second longest bull market in history. 2009-2018

This growth over the past 9 years can make investors complacent. 401K millionaires feel like geniuses, what they’re really experiencing is the power of compound interest during a sustained period of growth. I also realize the market could enter bear territory at any time (a correction of 20% or more), which many believe it’s overdue for. The fact is, no one can predict when these market downturns occur. This always seems to be the case. Past summer holidays have included front row seats for Brexit and the EU debt crisis. It turns out these were both distant, false alarms and the bull just kept on running.

The sky was not falling. Would I be ready if it did?

Through all this I stayed heavily invested in low fee total stock market index funds, letting it ride, reinvesting dividends. Even though I’m financially independent and working less than full-time, I hold only about 20% of my total investment portfolio in bonds and cash. Which is considered aggressive by many common allocation models. I keep a 30% allocation in low fee bond index funds, in my retirement accounts where dividends can be reinvested and compound tax free.

It seems odd that I’d take an aggressive stance at my age (56!) especially since I I’ve lived through several large market declines and recessions including 2001 and 2008. During those periods I stayed fully invested in the market as well, and have benefited. This includes the period some called “the lost decade” in investing 2000 through 2009 when the S&P 500 recorded its worst ever 10 year performance. However, that poor performance only hurt you if you were pulling money out of the market during that period.

For those that stayed fully invested and purchased stocks and bond funds in the market during these years, they’ve done well, but could say they have some battle scars. [Read more…] about It’s An Emergency.

Prestige Syndrome and the Startling Difference between Vertical and Horizontal Wealth.

05/18 by The Frug 4 Comments

By Brad Beckstrom

If you read enough, eventually you come across some big concepts. Whenever I see one, I like to jot a quick note or clip entire articles in Evernote. Sometimes these ideas just sit there and I later come across them accidentally when searching for something else. One of the things I’ve been thinking about for a while is prestige or, more specifically, Prestige Syndrome. A syndrome is defined as “a group of symptoms that consistently occur together or a condition characterized by a set of associated symptoms”. So, just for kicks, let’s take a look at something I like to call “Prestige Syndrome”.

Prestige Syndrome

Prestige Syndrome can be caused by earning more money and then feeling the need to spend that money to exude prestige, to do what rich people do. Continually upgrading your home, transportation, entertainment, and clothing choices to be aligned with that certain level of prestige that comes with your new higher-paying job. Sometimes this lifestyle creep can be very subtle, spending away our discretionary income on luxuries that suddenly seem more affordable to us.

An even larger problem, especially in our country, is spending money you don’t have to exude prestige. This is also more commonly known as “ Keeping up with the Joneses”.

We don’t have to look far to see examples of Prestige Syndrome. McMansions with three extra bedrooms and four extra bathrooms “just in case”. Massively oversized SUVs primarily used to run to the grocery store and sit in traffic. Prestige Syndrome can occur at all income levels.

The interesting thing about Prestige Syndrome is that there is no top. If your friends and business associates own Gulfstream jets than Prestige Syndrome tells you you should own one. You’ve earned it, and you believe people do things differently at this income level. The spending levels simply increase with the career ladder. The McMansions, vacation homes, yachts, limo services, security, valets, and private jets are all just steps on this ladder.

Vertical Wealth

This ladder is what we call vertical wealth. Spending goes up as your income increases, often surpassing your income. This is how debt-fueled spending is created. [Read more…] about Prestige Syndrome and the Startling Difference between Vertical and Horizontal Wealth.