Mad Fientist Podcast

Greetings and happy summer to all!  Last month I did a podcast interview with one of my favorite bloggers, the Mad Fientist.  On his show, we talked about some of my favorite subjects:  debt avoidance, hardcore savings, prudent investing, tax minimization, and frugal living.  We also talked about how we use geoarbitrage to maximize our savings while also minimizing our expenses.  If you haven’t read his blog, you have some summer reading to do.  (Yes, this is homework…you are responsible for the material on his blog…it will be on the test!)

If you made your way here via the Mad Fientist website, welcome to my blog.  For what it’s worth, this is my take on personal finance, financial independence, and extreme early retirement.  I am certainly no guru, but I believe that many of the concepts that we used to build our wealth might also help others looking to find their financial footing.  It is my sincere hope that a few of my posts might actually help my fellow teachers improve their finances.

Take a look at some of my posts and let me know what you think.  Finally, if you know any educators who might benefit from one of my posts, PLEASE help me spread the word by forwarding it to them.  Thanks for reading and I look forward to your questions and comments.

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Investing:  The majority (90%+) of our money is invested at Vanguard.   If you know of a better low-cost option, please let me know.  Why Vanguard?
Net Worth Tracking:  We use Personal Capital to track our various accounts.  Personal Capital is an great way to aggregate all of your financial accounts at one easy-to-use website.  (If you have less than $100k in assets, please register with this link.)
Banking:  We have used USAA for our checking and savings accounts since 1997.  We also have checking and savings accounts at three credit unions:   AlliantElements Financial, and Navy Federal.  Finally, we have an online checking account with Simple.
Health Savings Account:  We use Elements Financial to access commission-free, low-cost Vanguard ETFs at TD Ameritrade.
Phone Options:  My wife loves her $10 a month plan at Republic Wireless (new plans now start at $15 a month).  I had the same plan and liked it too, but unfortunately I broke my phone in Mexico.  I currently use a WiFi-enabled phone at a cost of $0 a month thanks to three Google apps: Voice, Hangouts, and Hangouts Dialer.  We also have a Skype subscription with its own number for unlimited U.S. calls ($80 a year).
Travel Rewards:  If you'd like to learn how to get "free" flights and hotel rooms, take the free course at Travel Miles 101.  When we slow travel, we use Airbnb to find low-cost, month-long rentals.  Whenever possible, we try to use Uber instead of taxis.
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  1. Ed,

    As it happens, I did come here via the podcast — of which I am a big fan — and I wanted you to know, you are far too humble. What you and your wife did is nothing short of awesome, and you should both be proud.

    I actually posted about this particular episode today and am currently in the middle of my second listen. I’m not a teacher, but am just inspired by the way you two kicked, scratched and fought your way to that million dollar mark.

    Just wanted you to know that I’ll be adding you to my blog roll and will definitely be doing some summer reading. 🙂


    • Ed Mills

      FM, thanks for the kind words and welcome to my site. I hope you find some info of value here. I look forward to checking out your website. Enjoy your summer. Ed

  2. Joe

    Great job Ed!

    I’d be interested in hearing your retirement plans. I know most teachers earn pensions – how does that play into your planning?

    • Ed Mills

      Greetings Joe,
      My wife and I are vested in the Georgia teachers’ pension. After next year, my wife will have 13 years vested and I’ll have 16.5 years. The defined benefit plan is figured by years vested times a factor of 2%. That means she’ll receive about $16,000 ($62K * .26) a year when she turns 60, and I’ll receive about $24,000 at 60 ($72K * .33).

      The way we live $40K should be enough for us live on. Of course, we’ll still have our IRAs and 403b accounts. Plus, we’ll have a paid off house before age 60. That’s our retirement plan in a nutshell.

      Thanks for checking out my blog,

  3. Mabel

    Hi Ed,

    I am so glad you were a guest on the madfientist’s podcast; it was informative and motivating! My husband and I are both teachers as well and your interview inspired me to spend this summer whipping our finances in even better shape!

    I do have a question for you…which 403b plans would you recommend? If you school is like ours, lots of vendors come and lure you with free lunch to get you to sign up and sign up we did! But after listening and reading many early FI-er’s blogs, I’d really like to get on a 403b plan that is an index mutual fund (we are both currently in a fixed annuity product), preferably Vanguard but I can’t find any that is offered by our district (and our district is huge…LAUSD, Los Angeles).

    Your thoughts are highly appreciated! And thanks again for a wonderful podcast!

    • Ed Mills

      Hello Mabel,
      I’m glad you liked the podcast; I certainly enjoyed doing it. I took a look at the LAUSD 403b offerings and it’s a 403b minefield. The good news is that you have two possible options: USAA and Tiaa-Cref. If I went with USAA, I’d use their S&P 500 index fund (within the mutual fund platform, not the annuity platform) at .30% (30 basis points). I realize that is much more expensive than a Vanguard option, but it would be far less costly than accessing an index fund with a variable annuity platform. Even this USAA mutual fund option does impress me that much because there are few index fund options and they are more expensive (30 to 50 basis points = .30-.50%) than Vanguards options.

      As for the Tiaa-Cref option, I’m a little confused. I know that they have much lower costs than the other annuity products, but in all honesty I could not pin down the expenses for the products offered in the LAUSD 403b plan. I am sure that Steve Schullo could help you sort the fees out; he was a 403b reformer within the LAUSD. You can contact him here:

      403b vendors:
      457 vendors: Tiaa-Cref

      Just looking over the LAUSD 403b/457 site reminded me why I quit working on reforming the 403b system and just decided to become a quitter. I know that Steve Schullo worked tirelessly to reform the 403b offerings and to at least get a few low-cost options. However, the LAUSD offerings depress me…how could such a huge school district continue to offer so many fee-bloated variable annuity products. Wow, it is unreal! For example, look at this site:

      It warns LAUSD employees about the impact that fees have on 403b/457 investment. It provides a calculator, but nowhere is than an information on any of the fees associated with the various LAUSD plans. Hey LAUSD, how about some real information, instead of your wimpy CYA info, regarding the fees within your retirement plans? Disgraceful! Sorry to get negative, but the current state of the 403b/457 marketplace brings out the worst in me.

      I hope this info helps you as you go forward.

  4. I just discovered your blog through the Mad Fientist podcast. I also just learned about 457 accounts and am excited to get one started (I’m a professor at a major university). I write a lot about avoiding the excesses of consumer culture in order to live a wealthier and happier life. Thanks for providing such great insight. It’s always so great to see the personal details of true success stories.

    • Ed Mills

      Professor Else, thanks for the visit. I like your theme of increased happiness and wealth by avoiding excess; may the consumption zombies see the light! I’m glad you found the 457 info useful…I know we always fund our 457 accounts first since they can be accessed before 59.5. Have a great school year.

  5. Mike L

    Hi Ed,

    Found you through the Mad Fientist. Great interview. Your story is inspiring to me and my wife who is an educator!

    We got her 403b rolling, luckily we could choose low cost index fund options through Fidelity. We can afford to also contribute to a 457 and have started to look into it, but I am frankly discouraged with the options. The district directed us to two advisers to meet with prior to enrolling – we chose the one who is a CFP. Still learning, but her district apparently has five account types, three of which are annuity style and two of which are investment style. He recommended Security Benefit as the investment option based on their “lower” fees. However, as I read through the literature I’m finding that just to have an account costs $35/year plus 0.35-1.25% wrap fee on top of whatever fund expense ratio. And from what I can tell, there are no index style funds; they are nearly all actively managed funds with expense ratios starting at 0.61-2.12%! Even the Target Retirement funds have expense ratios that high!

    Are fees like this normal? I understand some expensive funds being included, but zero low cost options shocks me. Is it sometimes necessary to suck up these expenses for the tax benefits and flexibility a 457 has?

    Mike L

    P.S. If you’re sick and want to look this plan in the eyes, this looks like the online version of the booklet we got:

    • Mike, congrats on getting the 403b ball rolling. I’m also glad you got something from my Mad Fientist interview…maybe I’m not so crazy, right? As for 457 fees, you are correct: high fees are to be expected in 403b and 457 plans. If you try to invest in such plans, your invest will suffer due to the constant fee extractions. Most 403b & 457 plans I see exist to slowly convert investors’ money (via fees) into the financial intermediary’s money. Quarter after quarter and year after year, fees are skimmed off such plans to the detriment of the investor. It’s that simple.

      The good news is that you did find a decent 403b option with Fidelity. You might be able to use a 457 account to save money until you can find a better investment option. If you’ve read any of my other articles, you know that I will quit a job just to improve my retirement plan options. Maybe your wife could win by quitting too. Take a look at some of the other variable annuity plans in the district to see if there any without surrender charges and a decent “stable value” fund. If there is such a plan, you could “park” money there until you’re ready to make a move.

      Finally, I looked at the Security Benefit site…what a typical steaming pile of manure! Good luck deciphering that plan. Actually, there is no need to look any further. That plan is a fee extravaganza with fees everywhere. I saw the wrap fee plus the underlying mutual fund fees; it would be easy to hit 2% in total fees. Once you know that you get the Total Stock Market Index for .05% at Vanguard, you start to understand the degree of financial sodomy such fees represent. Sorry to get so negative, but 403b and 457 plans tend to bring out my inner a$$hole.

      Good luck going forward and let me know if you find a suitable 457 plan. Thanks for visiting my blog. Ed

  6. I loved your podcast with the Mad Fientist. I just discovered it yesterday. I have listened to it a couple of times and have taken notes. I was most interested in hearing about your experiences in utilizing HSA’s, since that is an option that has just become available to me with my 2016 benefits. My husband is a professor, so the fact that you have gotten so far with educator’s salaries is INSPIRING. I look forward to reading through your articles.

    • Li, thanks for stopping by. We started using HSA accounts in 2012 when we first signed up for a HDHP. Our first HSA was with Alliant Credit Union. While it had low fees, the Alliant HSA did not offer a good investment platform. In 2014 we opened a new HSA at
      Elements Financial because their investment platform was with TD Ameritrade where we could access Vanguard ETF’s at super low costs. We rolled all of our funds to our Elements Financial HSA with the intention of investing the money in Vanguard ETF’s in 2016. If you find other interesting HSA options, please post your findings here or send me an email. Good luck. Ed

  7. Tom sherry

    Yup. Found you through the MF Podcast. I’m so late to the podcast thing. So the recording I heard is a year old. So glad I heard it. I’m almost giddy about the wealth of information and people I’ve found through his podcast. Ed you and your wife are now on my must read list. Love your website and all the advice, tips and life stories. I’m probably FI now just looking for the right time to make the leap. Thanks for all the Inspiration and life hacks! Once a teacher always a teacher!

    • Tom, thanks for making my day. It’s always nice when someone finds value in something I wrote. Congrats on your own FI. Making the FIRE leap is never quite as easy as it should be. We’re currently in the packing out stage with plans of a big trip to Mexico in 6 to 8 weeks. We’re excited, energized and nervous all at the same time. That said, I’m sure once the move is done, we’ll figure it all out and have an awesome adventure. Thanks for reading. Ed

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