The why behind financial independence

Lastly, Reed will discuss the framework for the executive boards at the local, state, and national level. In part two of this episode, John and Louie will discuss the three pillars of financial independence and why it is important to try to achieve financial independence before retiring. This episode will set the foundation for all future financial topics and discussions moving forward. Without further interruption, everyone, welcome to the Fiscal Firehouse.

This is another episode of the fiscal firehouse. I'm one of your co hosts, John Beatty, super excited to be here with me in the 1309 studio. I have my partner in crime, Louie. I've never bought a share of GameStop. I like that I get a new nickname every episode. I was the index fund guy, the zero episode. And now first episode, I'm never bought an individual share of stock guy, which is not true, but game stop. Oh, game stop. Game stop.

So I'm going to, every time I introduce you, it's going to be another little caveat, part of this goal is just to understand Louie. I mean, he's an onion. Keep peeling back those onions. Keep peeling back them onions. Don't smell that good and can make you cry. I guess that's good. That is definitely good. So in studio, we also have a special guest speaker.

This is one of those things when we started talking about what we wanted to do with this podcast and where we saw it heading is we have a lot of talent here. At West Metro and the membership, and we want to demonstrate and display some of that talent. And these are some of the things that we thought it was important, not only to Louie and I, but the rest of the membership and the executive board is to highlight and demonstrate that. So in the studio, we also have a guest speaker.

Yep. And so we actually decided to use our very first special guest to have someone speak to you about fiscal responsibility as it relates to the union. We are having the secretary treasurer of our local 1309 present today in the union. I am honored to welcome the captain of. Station three, as well as your secretary treasurer, please welcome Reed Norwood. Welcome to the show. Wow. Thanks. Thanks fellas.

I first want to apologize to everybody who was all built up with that intro expecting a truly special guest and. We'll cut that out and just say guest. It doesn't have to be a special guest. We'll just say guest, the first guest. Absolutely. Absolutely. But no, part of this, one of the reasons Reed, we wanted to have you on this was that Louie and I, and a lot of other people felt that this podcast was necessary.

Not only talk about the financial and fiscal responsibility of not only the union, but our members, but also just get a little bit more understanding of. What the union does on a day to day basis. Um, we know a lot of our members don't come to the union meetings and what they hear is either what happens at the kitchen table, or if they come upon one of us, they'll ask us what's going on in the union.

We just thought this would be a better format and a way to not only demystify personal finance, but also demystify what the union's all about and what we're trying to do on our members on behalf. So we just wanted to talk a little bit more about you and your role in the union and how you even got involved. With the union to begin with. So if you can elaborate a little bit on what got you interested or hooked as some of those other people's, I'm way deeper than I ever thought I'd be, buddy.

We all, yeah, we all are. Right. I had never worked a union job prior to come to the fire department. Like a lot of us, when I came to my first union meeting to be sworn in, I was intimidated. I was like, didn't know how to, what I should say, if I could even participate. And then as the time went on, I got more comfortable. I realized I really. enjoy what unionism is and I wanted to get more involved.

I didn't even know what that really meant, what unionism was, but I knew that I could be a contributor to the department in a way that, you know, was, I guess, more than myself. I could do a little more for the, for the department. So my first kind of foray into other than just regular union attendance, cause that's how I really started was just showing up to the monthly meetings when I could, when it was over at Cafe Del Sol.

We'd sit there and get a smothered burrito and listen to Frenier and Rogers yelled each other. And it was a, it was a good intro to what was important. And then I found out there was, we used to do what was called the joint apprenticeship council. We used to have an apprentice firefighter program. So your first three years as a firefighter, you were an apprentice and that had some oversight in it. Which is now the RCS committee. But back then it was a appointed position or an elected position.

I got elected into being a joint apprenticeship council member, the union rep for that. So that was super cool. And I, and I did that early on in my career. So that was in 2006. So I'd only been on a couple of years and got in as a JTC guy and then went right from there into becoming a trustee, which was that next step for me where I wanted to be More involved in the union and then went on to become a vice president and now one of the principal officers as a secretary treasurer.

I'm in my 21st year here at West Metro and I've been involved in the union. Pretty much since the start beautiful. I love that. And I love that this union specifically, we've got all different walks of life, right? You and Mulcahy were, and honestly, Louie worked some of those people that got hooked right away and got active involved right away. And I'm an outlier or one of those people that kind of found a little bit later.

In my career and I love that we have that diversity amongst our executive board as well. I want this to be encouraging for those folks that maybe have been here for a little bit and it's never too late to get involved. That's the other part. I know we've focused so much on our new folks and how important we want to hear from them. But also if you're that person that's been here for 15, 20, 25 years, but now all of a sudden you're like, man, I want to be more involved.

It's never too late to be involved. So I wanted to just pitch that out there for those folks that are maybe mid career or towards the later part of their career. It's like, we are open for all thoughts and ideas and diversity and just wanting to get all sorts of different experiences and not just from our newest folks. So one of the things we recently did is go to Boston for the international convention.

And so we were hoping you can talk to us a little bit about that, what was accomplished at the convention as well as. What what per capita means because that always comes up when we talk about the convention So we can speak to some of those things. Yeah, and like what is convention exactly, right?

Um, yeah every two years we hold Uh convention, uh changes cities It's you know, either in the u. s or canada Um, the iff convention is essentially a huge union meeting, uh that lasts Three four or five days sometimes depending on the resolutions So as you mentioned, the entire e board went out there to Boston for the 57th convention. It was awesome being in Boston, being that that's where it's the home local of our general president at Kelly. So that was super cool.

We got a lot of perks out of that. Just having that kind of presence in Boston, the fire department in Boston is hugely respected, man. I think you guys saw it like the fire department runs things out there. That was super cool to see. And then we got some awesome guest speakers that came in too, right? So. Both vice presidential candidates came and spoke to the delegation, which I thought was, was pretty awesome. We've had vice presidents, we've had sitting presidents, past presidents.

I'll come in to talk to conventions. That's pretty cool. The main thing about convention is we sit out there on the floor and we talk about resolutions, which are essentially the equivalent of a motion being made in the hall. But these come with a lot of work being done in the past, as far as like crafting the right verbiage. There's a lot of whereas statements resolve statements and some key ones. The key ones that are most important to our membership are those that affect per capita.

Per capita is essentially easily defined as per person. So it's, it's our union dues. The IFF per capita is what we pay, uh, every month for each individual. Currently, that number is 17. 52 per month, 2024 per capita. With resolutions that get passed during convention, we approve additional funding that will then increase that per capita amount. So based on this convention in Boston, we approved 0. 95.

Of resolutions that will be added to our new per capita on top of a consumer price index adjusted amount for inflation So that was 58 cents. So now our new per capita is going to be 19 And five cents. Yep before we get into The details of some of that 95 cents. I just want to talk about per capita and and what that is, right? Demystify that because I think a lot of people don't understand what that means Does that mean?

Yeah, we're getting an increase in our union dues or how does that how does that relate? So we as a local we fund our union dues as a percentage of firefighter first grade salary So it's one and a quarter percent currently the union dues per month per member is 107 and 40 cents, uh, so within that 107 dollars and 40 cents You I then pay out per capita to the IFF. I also pay out per capita to the CPFF, and then we use the remainder to fund the general operations of our. Local, right?

So it's to cover our salaries. It's to cover our program costs. It's to cover our antiques and maintaining those It's to cover our travel expenses and registration fees for going to conventions and meetings around the country It covers our office space motions in the hall Motions in the hall all that stuff.

Yeah, generally about 75 percent of what we spend a month After per capita goes towards those operational costs and then I like to hold at least hopefully 13 to 15 percent Towards adding to our investments to our Schwab account, which so you're that means you're you're saving 15 percent of our income for the future. That's right. It's a pretty good financial principle that applies to personal finance as well Right new fiscal firehouse guys.

I'd like that There's a reason we had Reid on here more than just his ginger good luck. Yeah Smooth buttery tone. Oh, yeah, this directly ties into what Louie and I will talk about in the second part of the podcast and that's financial independence, but we do love and I love that my philosophy around finance and financial responsibility and accountability directly reflects that of the union and its serendipitous power.

Personally for me to share those same values and it makes, it makes life way easier, honestly, to be so aligned financially with the union and my own personal beliefs. Yeah. And it's, it's not only important to save, but it's really important to have that war chest is what we consider it. That Schwab account. If we didn't have that, we couldn't put up a fight, right?

If something came along that this local had to fend off, whether it's political or even inside, whether it's a bad fire chief or a bad board, we wouldn't have any way to fund that. So having that, and we're currently sitting at about 1. 5 million in our kitty. That's a, it's a big chunk of money that the district knows we have, right? Our politicians know we have like, we carry some weight and so we can use that money.

It's not just an investment for our future, but it's also an investment that we can utilize as a tool. As a tool to fend off any, anything that comes our way. I got a question for you, Reed. And obviously you allow the folks just regionally here.

And then also on the national level, how unique is it in our kind of position where we have that war chest and just comparing ourselves to other locals and the way that they do budgeting, maybe like a, for the captains out there, like a zero based budgeting. And they basically spend everything that they have every year. And they don't have anything in reserves. Is it, are we in a unique situation like that?

We are in a unique situation, especially for a local of our size, a 400 person local to have a 1. 5 million. Investment account is unique. We're in a really, really good position. There's a lot of locals that don't do that. They spend, they have a zero based budget. They spend it all in the union dues that are coming in or spent.

Um, and I think, you know, luckily based on the leadership we've had over the past 30 plus years of this local, we've been really good at setting aside money and growing our funds instead of just. Either maintaining or spending them down. Yeah. So it's been huge and huge credit to our past secretary treasurers and principal officers. Kevin Reichenbach was a prior secretary treasurer to me. Mike Vernier was before him, before he stepped over into the president's seat.

Yeah. Just a ton of people who are, are really invested in the health of this local and want to do right by this local. And I think we're, we pride ourselves on transparency. Uh, we pride ourselves on doing the right thing.

And spending money where it needs to be spent and not spending it where it doesn't need to be And just being really open with our financials, you know with the membership and with the internationals Yeah, and we'll say that we've said it before and we'll say it again You are not doing this alone with your the roles of the secretary treasurer in our finances. You have basically a Oversight over you in the sense that we use trustees to audit the books and make sure everything is above board.

And we also have an investment advisor that we use, the third party who helps direct our investments. So there's just a lot of openness into the books. Any member can always ask about that. You can always talk to one of the vice presidents as well, and we'll explain it to you. But I think we do a really good job. I think I would, I'd put our books and our reports up against anyone out there just because I think they're that transparent, easy to understand. And, and.

Honest in how we deal with it. Yeah. Thanks. And then we use an outside accountant as well. Yeah, that's right. It is even a triple check. She files our nine 90 every year and she's, I'm on the phone with her throughout the year, just, Hey, I screwed up this journal entry. Can you fix it? And she's great at that.

So, yeah, I have a tremendous amount of gratitude for all, not only what Reed's doing, but Kevin and everyone before them just setting us up for success and it makes our job so much easier to not have to worry about that. So one of those things that we did recently as an executive board is we created. What's called an investment policy statement, basically tells our financial advisor how we want the money managed, so to speak, like how much risk do we want to take and everything else like that.

And we met as an executive board and discuss that. And quite frankly, some of it was good timing. Some of it was a little bit luck, but we've had an extended bull market. In stocks for the better part of a decade here. And we've had that opportunity for that war chest to grow and grow and grow. And we met as an executive board and thought, maybe it's time to become a little less risky, a little bit more, let's protect the assets that we have this money.

And we just need to make a little bit off of that. We don't want to try to hit another home run when we're sitting on third. We just want to keep hitting singles from here on out. So just so you guys know out there, if you want to know how, We're allocated or how our investments are being invested. It's pretty conservative right now. We really are in kind of that retirement aspect where we're trying to preserve a lot of that principle and not grow it so much anymore.

So just if anyone ever has questions about that is we have that investor policy statement available. If anyone ever wants to see it or what we know, what we're invested in, but I'm, I'm really grateful that we made that pivot, especially based on what could be happening in the future. Yeah, me too. And both of your input was extremely.

Helpful when we all met with with Clinton and our new advisor to suss out questions that you guys had and make sure we were On the right path now, so I feel really good about it. Cool. Yeah Thanks for explaining that the financial aspect of it with per capita union dues. I want to circle it back though to the convention Yeah, so international convention Multi day union meeting. Can you talk a little bit about some of the important things that were done at that meeting?

Just so our members have an idea of what we accomplished out there. Yeah. That per capita, that 95 cents that was approved in those resolutions, that's a pretty big spend relative to other conventions. We've had other conventions where 22 cents maybe gets added to per cap. It's, it's incredible. So we've got, you know, that room has. 3, 000 people in it, right? I mean, it's a, it's a giant machine.

And when somebody stands up and talks about a resolution and they want to add a penny to per cap, it's to us, that sounds like nothing, right? Let's say 35, 000. It is unbelievably debated. And a lot of times these motions fail, these resolutions fail. And there's a lot of locals who.

Are struggling and maybe don't have the funds to be able to support an increase in their per cap Or they have what we call pass through dues So any amount that the iff raises their per cap they in turn are going to raise that Due structure for their members right and their members are now going to have to pay that increase We don't do that at west metro, but that's you know goes back to that one and a quarter percent that we do for our Union dues that helps us.

It insulates us to those kinds of fluctuations in per cap. And as long as we can still support our operations here and still invest enough, then we won't have to raise our members dues. And we haven't in a long time. Nice. So of that 95 cents, just two resolutions made up almost more than half or just about half of that. The first one I want to talk about is resolution seven, and that's the emergency disputes fund. What that is set up for.

is it helps union leaders, vice presidents and principal officers of a local. It helps them when they are either terminated, suspended, disciplined, anything by a fire chief, by a board, by a city for union activities, union related activities. Unfortunately we see this all over the country. We've been very lucky to be insulated from that. Westminster's dealt with it. View Mountain view is currently dealing with it. Their union president's been off the job for. Two, two years, I want to say.

Now. So he is currently involved in a guardian case through the EDF. So that fund is set up purely for that. It helps, it's a legal fund. The IFF comes out in force. It gets these guys their jobs back. It pays back pay. And it lets cities and chiefs know that they just can't, can't do that. Legally can't do that. Um, In that same vein. So what that is, that fund only, like I said, it only supports union related cases, right?

What we saw happen in Aurora with Pete and Jeremy, that's a criminal case. And we, as an IFF have nothing to do with that. There's no, there's no nothing in the bylaws that directs the IFF to step in and help out on these cases, right? Yeah. There's no safety net or anything. There's no safety net. So Aurora, with the help of the 9th District Frenier, our DVP, crafted a resolution, Resolution 37, which creates the Firefighter Fidelity Fund. That was a 20 cent spend. 20 cents.

So that raises 750, 000 a year for that 20 cents, for the international. What that does is set up a fund, similar to the EDF, but it's purely, there's a legal defense fund, as a out front PR fund, you know. It's a fund to help out any IAFF member who is criminally sued or charged and is now finding themselves in a situation similar to Pete and Jeremy. We've never had that before. That is a massive benefit. To answer the age old question of like, why should I join the union?

There's a lot of reasons and I can sit here and we can talk about it all day. That reason alone should be enough to be like, where do I sign? We've got our members out there on our medic units that are doing that.

Really stressed out about their job and they should be it's there's a lot of liability and what we do But then to think that you could be criminally charged with doing your job and doing absolutely everything by the book to the t Medical director stepping in saying everything was done correctly and these guys are ending up in prison. Are you fucking kidding me? That's ridiculous.

Yeah, so Luckily this fund is now going to be there for us and it's going to be there to step in and the IFF will be in front. They'll be jumping in. We'll have the right lawyers. We'll get the right messaging. I mean, it's just, it's a, it's a huge benefit. Yeah. This resolution, it was interesting how it hit the floor, just talking about like convention and how that all. went down, there was a lot of people that were going to be hard nose on the resolution just based on the per capita cost.

And I don't really think we need that. Hey, we don't need to support guys that are getting DUIs and stuff like that. And then once they actually learned the reality of the language and what it was actually there to protect that entire floor stood up in support of it. Yeah. A hundred percent. There was even, there was even discussion early on, if we're not EMS based, we're not an EMS based fire department. So this is not going to impact us.

And we set the record straight with, Hey, one of the guys that was tried and convicted was an officer like there, this is not just something that's going to impact paramedics on, on ambulances. This is going to impact officers, engineers who are driving these big trucks, going to cause emergent like this, this could impact any one of us in any fire department, like the political. Environment has changed. The public opinion environment has changed.

And so we need, we need to give our members some protection, some help in those situations. Yeah. There were a lot of departments that were like, Hey, this, this is an outlier. This won't happen to us. This isn't happening. And then a lot of other departments got up and said, Oh, it absolutely is happening. It's happening to us. It's happened before and it will happen again.

Yeah. You had people, I think it was a brother from Houston got up there and be like, yeah, this is not just a democratic state issue either. Like Houston still. And texas is still pretty republican. So this is a bipartisan problem, right?

And the way that we're Being uh evaluated not only by prosecutors and politicians, but just the court of public opinion So I thought it was a huge win I am interested to see how fast this money goes and and talking to the folks that Have been doing this a way a lot longer than I have they're like, you know Sometimes you just got to get the money You got to plant the seed and just get it in front of people.

And then when we come back in 26, when we come back to another convention, they might have to like with the EDF fund, they might just have to say that we've actually burned through all that money. And we're actually looking for more money, but at least you've got that in place. You've got people used to it. And I think that's only going to demonstrate, unfortunately, more of a need to do that. And the other part is we're talking 20 cents for our members.

If we were to do this on our own, like the folks in Aurora have their own legal protection. I thought it was very poignant in that. I mean, this truly shows what unionship is about. This is not going to benefit those guys at all. When they talked about bringing this to the floor, they're like, Hey, we're already locked in.

Our members pay a significant amount of money for legal protection, the same legal protection that most law enforcement agencies have because they're always under scrutiny, both civilly, criminally, all sorts of things. They brought this to the floor, basically knowing that they're already covered, but they want all other members to be covered. Just knowing that this is coming down the pipeline.

I thought, man, that really touched on my heartstrings recognizing once I learned that I'm like, People that are doing this work for the most part, they're in it for the right reasons. It's not any kind of own personal gratification or anything else. Like they're really looking out for the greater good. So when you got that stick around there that says IFF, it means something more beyond just your own local and what's benefiting you. And I thought that was pretty cool.

So shout out to the guys from Aurora for bringing that forward and, and Big Mike for bringing that even further down the food chain and getting it up to the floor. I thought that was pretty cool. I thought that was pretty special. So, yeah, yeah. The, uh, the policy that they have, they looked at getting a similar policy. Yeah. Let's get going through PORAC for, Hey, what would it take for 350, 000 of us? And the cost was just unbelievable, right?

Setting it up this way and running it through the IFF is going to be. Really good. Yeah. Membership. And so I know we're in the weeds here with it. We just think it was very important for our members. So I just want to clarify for all of my B shifters out there who might be having a struggle understanding this. Hey, Hey, Hey, you got your B shift rep right here. Leave the old B shift. Love you guys. I just want to clarify and make this very clear for all of our members.

If you are following your protocols and you are performing your duties and Some litigation comes out as a result of that. This measure that was passed will ensure that the international association of firefighters comes to your defense, both financially and politically and legally. That is massive. I mean that it cannot be understated. So I just wanted to say that very crystal clear.

If you are following your protocols and performing in the line of duty and something comes of that litigation wise, we got your back. That is what your union does for you. That is a huge benefit. And it's something that I'm very proud that we were a part of being at that convention in Boston. I mean, I think that is just massive. So thanks Reed for explaining that. I think that is very, very important. Yeah. Anything else that you want to talk about as it relates to the.

Convention in Boston any other major thing? What was your favorite thing? We did Boston outside of the union work So I want to disclose a big myth that everyone thinks the Union Service is all about playing in golf tournaments And that couldn't be further for the truth. Although we do participate occasionally But honestly, like it's, it's, we're, we're, we're there for four or five days.

And typically the union business runs from eight 30 to four 30 or five, depending on what's being discussed during the day. But then at night you obviously have some free time and they typically have some other venues that we get to participate in. You get to go out to eat and do some of that stuff. Like what was, I'm going to ask both of you, what was your takeaways from Boston? We'll start with you, Reed. What did you, what, what resonated the most with you? Boston is, is a great town.

It's probably been 20 years since I've been there. I love that city. I love just walking around it with you guys. I think it was great. We did not play a single round of golf in Boston. They were long work days for me. The time after the meeting is. Like just spending time with other locals. We, we do hang out with a lot of the Colorado guys, right? Like we hang out with the Springs guys, South Metro, Denver, some, it was just great time.

I love just hanging out and having those conversations even though they end up in bars, like whatever I don't drink. So I drink way too much bubbly water and feel disgusting at the night. But honestly, my favorite part was the freaking lobster roll on the last day, right before we got on the plane, we went on Novello's recommendation cause he's a Gloucester guy. And we went out there and had the best lobster roll. Some of them, some of us had lobster rolls. I will admit, yeah, Louie's allergic.

I will admit I took a bite of my lobster roll and like a sandwich and I lost like a 5 cloths worth of meat on the floor and I freaking ate that meat. Zero hesitation. Zero hesitation. No, it just picked it up and was like, let's actually, you did it a little bit more eloquently where he recognized it fell on the floor. He even acknowledged everyone like, Hey guys, this fell on the floor. He put it back on his plate. And then about 45 seconds later, he hits me.

He goes, hey dude, I ate the meat off the floor. But he wasn't that good. He wasn't thinking like should I eat it or not? He knew he was going to. He put it, he just recycled it. He just had to get through the piece he was currently eating before. And it was worth it. Zero regrets. Zero, zero regrets. A keynote though. If you go to Boston for anyone that's traveling out there, bring cash. Cash is king. Those guys do not like the credit cards. They don't like the transaction fees.

They probably don't like to report some of their income, but I freaking loved it. Louie, what was, what was your favorite part? So. I kind of agree with Reed, like just going out and, you know, getting dinner after and getting to kind of talk about the day's events and what happened and then doing our long walks back.

Sometimes we'd go to the north end and we'd walk all the way back just to kind of like help our food digest and walk off some of these calories because we're sitting all day in these conventions. In these meeting rooms and stuff, but I I'll say that I think the coolest thing was after about day. I mean, let's be real It was day one after day one.

We were all talking in boston accents there I mean, we were just going around and I can't even do it here because I don't even know now but we were like, hey What are you host tuggers doing? What what's going on over here? We all have these probably terrible fake boston accents I have zero doubt that if I lived in boston It would take me about one or two months before I was completely speaking in a boston accent. It's a great thing Badass accent. Oh, yeah gives you a little bit of edge to it.

I wish I had a boston accent I wish I was from boston because I think that'd be cool But that's my favorite part is we would just be doing these walks and we were all talking in boston accents to each other So just saying haba haba going down to the haba. Yeah, it was awesome It was interacting with the cops right after the red sox game was hilarious. We're like Hey guys, can you point us to a good bar or whatever and like, oh yeah, yeah, you need to go there.

Oh wait, are you guys, you, you bunch of host tuggers? Oh yeah. No, no. Don't go that way. No, we're changing our recommendation. You got to go this way. Yeah. He was trying to get us. Yeah. They were awesome. They call them host tuggers. The cops were calling us host tuggers, which I like that term. I think we're going to, we're going to, we're going to definitely incorporate that into many different facets throughout this, but it was, it was spectacular.

And I think next set, we're going to make our FI candidates. patients only in Boston accents. Like we're going to make them do that for the whole call. The whole shift may be just, Hey, sweetheart, what's your problem here? What's going on? What, what do you need help with? What are we here for? Yeah. Novello might come out and ride on the medic with you. Just so you can correct my terrible Boston accent. John, what was your favorite part of this?

Man, I've ridden on your guys coattails as always. I think it was a culmination of everything. I thought the night that we went to a Red Sox game at Fenway Park was super special just for the history. Man, like the history, if you're a history aficionado, you just respect history, love to learn from history. Man, like Boston. Is it the home of our independence?

And I don't know, maybe it's just where those people grew up, but there's a level of patriotism in that city that you don't see a lot of other places. Whether you work for the fire department or the police department or any other kind of public servant. I think they just have a little bit more respect for that position.

And man, that was just really cool, especially in some of our environments now, where some people feel less enthralled about the job and how we're being received and everything else, man, it was really welcomed to get that kind of level of reception, but. Man, it's just a fantastic city. A walkable city, felt safe the whole time. I mean, just the level of history, the food was fantastic.

The, the company was even better than the food, but it was, for me, it was all that stuff that I, I would definitely go back. It's become my new favorite. Big city, so big shout out to Boston local 718 that, that hosted us. They did a great job. It was just a fantastic venue. Yeah. Loved it all. Reid, thank you for being on the podcast. We thought it was important to have you. Like we said, it's, this has a fiscal bend to the podcast, but we want to talk about union things.

And this is, this is, you're both of those. You are the guy who's fiscally responsible for the union, for all of our member dues. You do a great job at it. And similar to the concepts that we're going to talk about in coming Weeks and months regarding fiscal responsibility. You do that for us. You do that for the union. So we thought you were the perfect first guest for it. Since that is the blending of the two things that this podcast is about. I have a final question for you.

And that is because you're bankrolling this podcast. What, what do you want to see as accomplished? What do you hope? Our members get out of this podcast. Let me be clear. I am not the man behind the curtain here. I am not telling these guys what to do or say. When you guys came to me with this idea and said, Hey, Mike, we want to do this podcast. What do you think? I was like instantly excited about it.

I think both of your, the knowledge you guys have in the personal finance realm, And just finances in general is, is awesome. It's, it's way more than I have to be honest. I mean, you guys could do my job probably with both eyes closed. No way. No way. But yeah. So what you guys bring to this podcast and where you're going to take it, I'm just super excited about.

I think the, The questions we get daily in the union hall and we can help answer about members, personal financial questions, whether it's pension or RHS or whatever we answer in the union hall, but it doesn't get out to the whole membership. And that's always been a sticky point for me. It's like, how do we communicate better with our membership? And we try to do it like we, We publish our union meeting minutes online now on our website.

That's good, but you can't gleam a lot of that information through what I jot down on the union meeting minutes. We send out texts and emails, but still none of that can really come through. Like we can't really get into the meat, that firehouse table discussion like you could on a podcast. So this is a phenomenal way to reach our membership and answer all those questions, to have feedback, to, to be able to.

To open up that gmail inbox and answer the questions that our members have specific to their finances It's just awesome. We I think we do a really good job as a local on forcing people to save Forcing people to plan for their retirements, right? Because if you were in any other sector any other job, they don't give a shit About your retirement.

I mean, yes, they're gonna pay into your 401k because they have match or whatever you have to But there is no They're, they're not fighting for increases in benefits, right? They're not looking at, Hey, what about healthcare? What about when you retire before Medicare age? How do we support that? Your union cares about that, right? And we're at the forefront of trying to set all that up for you.

So if you're not a money guy, and I don't consider myself a money guy, even though I'm secretary treasurer, that is done for you, this local will always be fighting for you along with our administration to set up the right stuff. For you. And so. Now you just got to understand it, understand what it all means and how you can maximize. Your, your effort in that realm. So you can get to the finish line, so to speak. Yeah. Yeah. So this podcast is going to be huge for that.

I'm just excited wherever you guys take it. I know it's going to be a lot of fun. I know your special guests will all be way more special than me. Couldn't be further from the truth. I'm looking forward to whoever you got on here next, but yeah, I'm, I'm super excited for what you guys are doing and I can't thank you enough. No, we, we love having you read. We love working with you. Um, and all the things that you've done on all our members behalf for, for us.

We're grateful for that, but I would be remissed if we didn't talk about the convention And the setup you set it up really good But just so everyone understands and once again, we're trying to make this as base level as possible Just like the structure of what the international looks like I know we talk about like districts and vice presidents and all sorts of stuff but maybe we'll just take a minute to just demystify what that is too and Part of it is a plug for how respected our own local is

represented on a national level. And I think a lot of our members have zero idea about what that is. Can you talk about just what the framework of the national level looks like? And it looks very similar to our own local here, but it's a little bit bigger scale and maybe just some of the people that serve in that capacity. Sure. Yeah. So at the lowest level, Is our local local 1309.

And even though we're at the lowest level, we're at the forefront of what the IFF or international really wants to support. Right? So all of our union dues, all of our per cap goes up the chain and it funds all the programs that we can reach out to as a local. So you go local and then we have our state association. So that's our CPFF, which our very own Kevin Reichenbach is the secretary treasurer of. Our very own Mike Furnier was the president of before he stepped into a DVP role.

So we have a lot of presence at the state association level, which is great. It gives us, we share offices out at the CPFF event center with the CPFF, Denver and Aurora. So Mike and I are always in touch with our bigger, bigger locals, and we're always going to know and up, up in front of those discussions. Moving past the state associations, you then move into kind of a regional, uh, districts. So we have 16 districts across the IFF.

Um, Colorado is part of District 9 and our very own Mike Furnier is our District 9 DVP. He was just reelected for another term at convention. So huge shout out to him. He has just, just to say DVP is district vice president, district vice president, and that is only one of a handful of people that report to the general president and the general secretary treasurer. So that's a, it's a big deal that he comes from our local and he represents numerous states. That's huge. Yeah. Thank you.

Yeah, he is one of 16 that sits at a table and they, they make up the executive board. So just like you all. Are on our executive board. Those DVPs make up the executive board for the international. So to have Mike in that position is, is huge. Like you said, our local is known throughout the country and I don't want to toot our horn too much, but it's, it's true. We're, we're really active and we're doing the right things and we're getting the right people in those positions.

And so just a huge shout out to Mike for what he's done for this local, his entire career. And okay. He said it best. He's done more. For this union and this department in a suit this year than he has in his uniform. It's true I mean, he is a labor guy through and through and he just I mean he is impassioned So I just can't can't thank him enough. Yeah, and then we move on up to our uh, principal officers who Are ed kelly. He's our our general president and frank.

Lima is our general secretary treasurer for the iff Those two guys lima is still on the job out in la and And Ed is still technically on the job. Ed's always working in Alata 17 on the South side. Yeah, that's right. He'll go ride the real step on the, on the Alata. He's a firefighter, unpromoted firefighter. Unpromoted firefighter. So it's great. We got East coast, West coast representation. They ran again on a, on a ticket. They were both elected.

Lima ran unopposed and was elected and Ed had minimal. A minimal competition and was elected with 98 percent of the vote. So we've got fantastic principal officers that are dead set on doing right by you, by the IFF member, making sure our finances are right and clean all the way up at the top and as that funnels all the way down to us.

So beautiful said, I just thought I was important because I think, you know, once you kind of get involved in this, it kind of just goes, it just becomes like regular terminology and jargon that we all speak, but I know there's a lot of our folks being like, I have no idea what the ninth district is or what that is. And part of me, though, just wanted to highlight like, I mean, how, how impactful this local has been, not just here at West Metro, but at the state level.

And then even furthermore at the national level, and I thought that was super, super cool to point out. So thanks for a little history lesson there, Reed, and hopefully people just have a better understanding of kind of how the union framework works now only here locally, but also state national. So. Big shout out to those guys and huge shout out to Frenier. He's retiring at the end of the year.

He's, he's termed out as far as his drop is, is concerned, but yeah, we're going to miss him, but he's going to continue to work hard for us for the ninth district being reelected. So huge shout out to Mikey and big, big congratulations. Thanks again, and a big shout out to Reed Norwood for being part of the conversation. And now let's turn it over to part two of today's episode. John and Louie will talk about the importance of financial independence.

So in today's episode, we're going to focus on kind of the why of financial independence. This is going to be super important. This is going to really set the foundation for future financial successes, right? All of this stuff is going to be focused on some of these very simple principles. A lot of these, we're going to go on tangents and later episodes, but we're going to give you that.

30, 000 foot view of what it's meant to be financially independent and why that's so important, not only for Louie and I, but all of our members to grasp as a philosophical question or a concept and really trying to achieve that. We think it's super important for all our members to be a part of that. Yeah. John, I feel like this is really the roadmap that all future episodes will be.

About will be based off of, so before we can talk to you guys about the pension or why you need to have a four 57 or why you should contribute to a Roth IRA or anything like that, we need to know why we're doing this, why we're all striving for that, why we want to be financially independent. So this is really. In some ways, probably going to be the most important episode that we do, because it is really the groundwork for everything else that we'll discuss. Yeah, a hundred percent.

And it's some of this stuff, you guys are going to be like, man, this is basic. This is, I could tell my kindergartner, I could explain this to them and they would grasp it. And it's that simple concept of this is very simple to understand, but it's not easy. Because there's so many things life throws us challenges and how we deal with those challenges. But yeah, there's going to be nothing. I feel like Louie and I are going to discuss today. That is going to blow your guys hairs back.

But I do feel like it is super important and essential to get a base foundation of financial literacy. This is financial literacy 101. And without setting that roadmap. That foundation, it's going to be really tough to have us have additional, more complex topics and conversations if we don't have the basics down. So really important that we're going to discuss this today. So we'll start with, and I'll kick it off to Louie and just get your thoughts.

And this is something that, you know, that you've been given as far as a recruit presentation for several years now, and this is one that you always open up with, and I always love to hear some of the responses back from some of the recruits, because I think a lot of us have not internalized this or even Thought about this concept, but when we talk about financial independence, what's it mean to you? What's financial independence? It's a, always a good question.

Always good to get people's feedback on what that means, because I think there's a lot of different definitions. There's a lot of misconceptions about what it means. I think. Some people will say, Oh, it's someone that has like a, it's a multimillionaire. Somebody has 10 million or someone who's just absurdly rich. That's what financially independent means. And that's not really the definition that we use. We believe that as firefighters, we can achieve financial independence.

The definition that I like to use is financial independence is having enough income from investments, from pensions, from. Secure sources to cover your reasonable living expenses indefinitely, or at least for the longterm 30 years, 25 years, 35 years. So that is the definition that we go on.

I think in the fire movement, which we'll talk about later, financial independence, retire early, they accept that having investments equal to 25 times your annual living expenses.+---- Is enough to be considered financially independent. And John, that is called the 4 percent rule. The 4 percent rule. Yes. And the 4 percent rule has actually been around for a long time.

And for those of you that like math and like nerdery and stuff, this guy named Bill Bingen, who was a financial advisor, actually a really smart mathematician as well, but he basically came up with this formula. He did a, basically a back study. He combed through a bunch of data and said over a 30 year retirement career. You could have this much money taken out of your portfolio and basically you wouldn't ever run out of money. You'd have enough of the principal left to live that last 30th year.

And it assumed a portfolio of 50 percent stocks and 50 percent bonds. And yeah, that's basically what he came up with is the safe withdrawal rate is what that's called 4%. Of your pool of money. You can withdraw safely and have a very low chance of running out of money in retirement. So you have a million dollars saved up. You can take out 40, 000 every year, and you'll be good to go with that over that 30 year retirement. This is just what is widely accepted in financial planning.

And how much money you can safely take out without having to take on too much risk is really what the 4 percent rule is all about. So John, how do you feel about that? Is that something that you and your family are pretty confident in? Do you think it's going to be more than 4%? Less than 4%? Yeah, man, we could go, we could probably talk about hours for withdrawal rates and percentages and everything else. I am of the belief in the school that I like to have flexibility.

So rather than have just this one number that you're trying to live the next 30 years of your retirement through is to be dynamic and be adaptable. So sometimes when the market's ripping and you've made a lot of money, Maybe you take a little bit more and then other times where the market's depressed or you're actually lost a little bit of money, the belt, we're going to tighten the belt. And we all do that.

And in so much of this is what I've learned from the psychological component of investing in behavioral side of investing is like, this is naturally what we do every day in our lives. And just, we got to be adaptable and mold to what the market is doing and how you're constructing some of those, uh, investments. But I think generally good rule of thumb, I think it still holds true.

I think there's been a lot of research done by Morningstar and some of these other big companies that do a lot of, uh, Time and effort and resources into investigating this and they've all kind of settled around give or take a half a percent here and there Four percent has been pretty widely accepted whether that's over 30 years Sometimes they might even forecast that a little bit longer. I think generally for our group. I think that's a good That's a good goal to have.

Yeah, let's save up enough money that in theory We could take out four percent of this and and we would be just fine all right, so john it sounds like now we have a kind of a working definition here is financial independence is You know Uh, basically having enough income that you can withdraw somewhere around 4 percent of your portfolio in retirement. And that 4 percent would cover all of your reasonable living expenses for.

A long period of time, 25 years, 35 years, hopefully for some of these guys, 40 years, cause they get out of here in a really fairly early age and they live a long time. I think that is super important to understand that working definition of financial independence. My question to you would be, why should our members care about financial independence?

We're telling these guys to download this podcast and to listen to us and bear with us as we figure out how to do podcasting, but why should we as firefighters achieve financial independence? It goes back to, I think, everything that we hold near and dear to this profession, and that's, um, planning for the unexpected. Like every call we go on, there's always a little wrinkle that happens that we didn't foresee. We had the best laid plans, and then something else happened, and we didn't know.

We had to come up with a plan B and a plan C, and I think that should be no different in your personal finances. I think everyone wants to put in a good career here. Life happens. Life happens every day and I think more than anything in this career, it is put in front of our face every day when we see things happen that people never accounted for or planned on. For sure. Yeah. You can't turn a blind eye to not being able to anticipate what tomorrow is going to bring.

Tacking on to that, we've had members this year. That have unexpectedly had to retire numerous members over the last 12 months that have had to do that. They weren't expecting that. I don't necessarily know their financial situation and if they were financially independent and if they're going to be okay, but you're right to your point. We, we don't know when we can't work or when we're done working. Huge reason to be financially independent. Huge reasoning.

And I'll tell you what, this place, the fire department and this organization, you already have a pretty significant safety net more than any other corporation or industry. And that's with our death and disability plan that we have through FPPA. And we'll talk about that in a later segment, because that's a huge later episode. Yep. But that is one of those we've already have an additional safety net. So a lot of those folks that had to leave. Typically it was for a medical reason, right?

And they weren't able to perform this job anymore, at least from what NFPA says. So they already had a little bit of safety net, but nonetheless, you always want to kind of plan for the unexpected. And I think for me, this understanding of financial independence changed viscerally. With me when I had a family and it wasn't more just about myself, right? I had to think about people beyond just myself and thinking about my wife, Katie and my two boys.

And that, I think naturally that paternal instinct takes over and you want to start providing for them. In case something else happens to you, or you just want to be the best guardian that you possibly can be for your family. And that's for the fire family too. That's not just for our own personal family.

And we want to make sure that we carry on that message, that things are going to happen in life that we just can't account for, but we can definitely give you some tools and some strategies to help weather those storms because they're going to come. Yep. Yep. I think when we ask this to the recruits, we, you know, when we do our financial presentation, the recruits, I. We, I asked them what, why should we care about financial dependence and caring for loved ones is always at the top of the list.

I mean, that's like one of the top two or three all the time. Like people are like, I got children, I got a wife, I, or a husband, or I got someone who depends on me. And I think that being able to care and provide for your loved ones, whether you live a long time or you die unexpectedly early, like you want to make sure that you leave them not hanging on the rope, so to speak. That's a huge reason for it. Another reason that we hear a lot is people want freedom.

People want, you mentioned flexibility. People also want just freedom that could be freedom to retire early. It could be freedom to continue to work because they like this job. It could be freedom to pursue. Passions and hobbies and things outside of work. People want that, that freedom to do what they want to do. And in my opinion, the best way to have that freedom is to have financial independence.

I think a lot of people actually call it financial freedom for that reason, because you're not beholden to the banks or to creditors or to whatever. You can pursue those things that you want to. And then just, we've talked about this a lot too, in general, but with recruits as well. Being broke sucks, right? Like I think we've all been there. We've all, whether, whether it was in college or whether it was early on in our careers, we've all been broke and it. Damn, does it suck?

No one wants that, right? Like it sucks to stress out about bills and about creditors and about your credit score I mean, no one wants that. That's awful. No one wants that. I mean, I remember being younger This is college level and I was with the devil with Wells Fargo And I remember the worst And I just remember some of the overdraft fees and just being in the hole and just being like how did I get myself in?

this position and just not A taking personal accountability, but just going through the motions and not having a plan. And I think so much about what Louie and I really focused on moving forward is just how important it is to have a plan. So we're not just shooting from the hip and we'll talk about just how important having some financial goals and. Financial plans in the future.

But yeah, being, being in debt sucks being beholden to creditors or all these other things, feeling you have to be obligated to work, not just cause you want to, but you have to not being a burden is also a lot of things that we hear about people. And I think this is more for folks that are older when they've got adult kids and adult children, they typically don't want to be a burden to them and they want to have everything in line for them.

So. There's so many things that go into this concept of financial independence or freedom and people's intrinsic motivations to try to achieve that. But I think it's just super important that the discussion is being had. And I think the longer you do this career, you just realize like it's a great career and it's a great organization to work for and work with and all the members. But at some point you do reach your threshold where you're ready, where you're just ready.

And we want our members when they get to that point, right? To be ready and financially ready and not work here because they have to right? We want them to work here because they want to I mean, let's be real We've both seen guys that are here way past their expiration date. They don't they Physically, they're past their expiration date or mentally. They've just had it but they have to work because they have Debt to pay off. They have a mortgage payment.

They have all these things They just can't financially retire and now that sucks like that. It's terrible to see that like we don't want those guys working here We don't want them to be here longer than they want to be here And if they had financial independence, they'd be able to say I'm gone. I'm done. I've put in my time. I'm ready to go do whatever my next adventures are in retirement, but That's what we shoot for.

That's what we should all shoot for is being able to get out of here when we want to get out of here That's the name of the game with financial independence. That's the name of the game. And so many of those things are things that they feel might've been out of their control to some level. And we'll talk about some pitfalls here coming up, but getting divorced, all these other things, especially later on in your career.

It's just, it's once again, it's these, it's these, Weathering these storms and how we try to absorb that and how do we try to pivot and move forward and come up with a good cohesive plan. But, you know, we talked about what it is to be financially independent, at least a working definition. We talked about a why's, uh, uh, beyond why people want to become, uh, financially independent or both personally, our reasonings. Now it's the meat and potatoes. Once again, this is the pillars of how.

To become financially independent. And I'm going to preface it once again, the pillars that we're going to talk about, everyone is going to be like. This is so obvious. This couldn't be more simple, just not easy, but we're going to nonetheless, we're going to walk through them.

We're going to discuss them just so once again, when we move forward in future episodes, and we always are going to come back to some of these first principles, we want to make sure that everyone's on the same level about what financial independence is. So talking about that, Louie, there's obviously different, different pillars, but live below your means. All right, this is concept number one, kind of first level principles number one. What's that mean to you?

Yeah, I think living below your means, like you said, John, is the key. Basically the first step, if you want to become financially independent, the first thing you have to do is create a surplus in terms of what you bring in versus what you have going out. So we call that living below your means spending less than you earn. And to me, what that means is having a budget. I think those that know me know that I'm a huge budget nerd and that I have huge spreadsheet, spreadsheets.

and all these budget programs and things like that. Uh, and it doesn't have to be that way. I think at the highest level, what a budget is a plan. It's a plan for how you are going to spend your money. It's a plan for how you're going to pay yourself and pay your retirement. You got to have that. If you do not live below your means, with the help of some kind of structure, some kind of budget, then you're setting yourself up to Get into debt to fail to save for retirement.

So for me, John, I would say living below your means is having a budget, sticking to it and making sure that you have a surplus of income at the end of the month. Once again, and you said it from the get go, that's not, it's simple. It's very simple. It's a, it's just, it's a numbers game, right? It's a simple math problem, but it's not.

Easy to live below your means and you know for firefighters, especially we like toys We like to spend we like trucks and that kind of leads us into Number two the second pillar that we're going to talk about in terms of achieving financial independence and that is getting out And staying out of debt. Can you talk to us a little bit more about that? Yeah, I would love to I just want to go back really quick on the live below your means and in air quotes It's budgeting to a certain degree.

You have to realize what's coming in versus what's going out and it's always a it's always A word that is thought of with some disdain and, oh man, that sounds hard. I don't want to do that. That sounds like that's too restrictive. Like I want to have more freedom in how I spend money. And we'll talk once again, I think we're going to have a huge episode, probably just on budgeting.

But I think it is good for those that are trying to hit the ground running right now and start to come up with some strategies as far as budgeting. You mentioned one thing specifically that you used YNAB, which stands for you need a budget. And you're really passionate about this.

When we were sitting on the plane coming back from Boston, Louie, Reed, and I were all sitting in the same row and he was showing Reed and I like all the things he could do with this software and how he could see the accounts that he could set up and how he was delegating from one account to the other account. And it's all real time. It tracks where the money's going, where it comes from. I mean, extremely detailed, right?

Very detailed to, I feel confident that, you know, where all your money is going to the scent exactly on what it is. Some people might think that's OCD, right? And some people will think, man, that is way too detail oriented for me. And it's not. It's all about what works for you. Absolutely.

And I think that's one of the things that we want to discuss There's no perfect solution you have to You know The best plan is the plan that you're going to stick with and what's going to work for you and yeah Not what's going to work for louis what's not going to work for me, but what's going to work for you?

and you mentioned that you don't really have a A detailed budget like that, but you do have a plan for your money You do have an amount that you save you have targets that you hit you need to save for Long term goals or short term goals and then you live off the rest. That's a budget It's maybe not as structured as mine, but that's still a budget that you And Katie worked through and set up so that you guys can have a plan for your money. Yep, exactly. We know what we need to say for retirement.

And we always hit that goal. We know what we need to say for our kids education and we hit that goal and then any other additional kind of big purchase things we set aside and we know, and we want to hit that goal and pretty much whatever is remaining is what is free to spend. It is funny though. Once we got back from Boston, we had some credit cards come up and we're just like, man, did we really spend that much money?

Yeah. And to Louie's credit, I actually signed up for YNAB and we just started importing some of the credit cards and everything else. And I honestly, I don't think it's going to change a lot of our spending, but I think it was what it's going to do. And if you talk to any financial expert, really were a lot of the happiness with spending money is in the intentionality of it and being intentional with your money.

And man, if you take 20, 000 vacations and that brings you a tremendous amount of joy. Then More power to you, but then maybe you take less money on, maybe cars aren't important to you, so you don't spend as much money on that. So it's basically just prioritizing your life's goals and what truly derives passion and happiness and allocating that money for that. And I think that's what Katie and I talked about when we, when we, Look at some of these credit card bills.

Like we've got the money to pay for it, but it's man, did we really spend that much money on whatever it was? And this just really, this software specifically can tell you to a T where your money's going. It does. And I would say the average person has zero idea. I mean, to a degree they do, but if you asked them, how much do you spend on eating out? They'd be like, no idea. Yeah. And all that other stuff or Amazon, right? That's everyone's bane.

It seems like these days is like Amazon or streaming services. Yeah. And so Caitlin and I, my wife, Caitlin and I have been budgeting for, I mean, ever since we were married, I think maybe even more engaged, we created a, like a wedding budget together. We've used YNAB during that time. And just to clarify, we are not sponsored by YNAB. We do not even endorse it. This is just a tool that we've used that I use particularly.

Not saying that if YNAB doesn't want to reach out to us and sponsor us, we're always, we're willing to listen to offers. But so I've been, I've had a YNAB budget for probably 11 years and it's contrary to popular belief. I think a lot of people think of budget and they think of restrictions. They think of constraints, they think of. Oppression. This is telling me no, what I can't do. I actually find it very freeing hitting on what you said. We want to save for a vacation or whatever.

Caitlin and I've had to do that too. We've, over the years, we've been able to set money aside and give it a job of buying a new house or buying furniture or saving for that vacation. And our budget makes sure that we don't spend those dollars are our vacation dollars or furniture dollars on. Chipotle or on something silly that on Amazon. So it really makes us be intentional about our money and Contrary to what people think I don't think it's restrictive. I actually think it's very freeing.

I can't imagine actually not living Without a budget and I don't think anyone should doesn't have to be a YNAB budget doesn't have to be very detailed But you gotta have a plan for your dollars If you want to live below your means you have to be intentional And you have to have a plan and that plan is generally formally called the budget. Yep. Perfect. I think that was well said. And yeah, I'm really curious. I'll report back. We get a free, I think it's like a 31 day or 34 day trial period.

We're going to go through a month and just see what it looks like. And it's just nice because it really does tabulate all your spending. Oh, and in this, I should preface this. We spent. Put most, almost all of our expenses on credit cards that we pay off every month. But this is going to be a way to track that spending and where the money's going. Thanks Louie for just pointing that out. Um, there's several other, like this is not the only software that does this.

There's other stuff that, that, that looks at it. So once again, I would just, you know, encourage our folks to at least if you don't have a budget, think about it. Think about where your money's going. Think about the intentionality behind it. And I think you're just going to be better served if you know where your money's going and really putting your dollars. What drives the most happiness from you. But that gets back to point number two, as far as how do you become financially independent?

And that is this concept of getting out and staying out of debt. Oh, huge one, right? Huge one. Biggest pitfall for Americans generally and firefighters specifically is getting out of debt, staying out of debt. It is hard. And we're not, you know, we're, we're not trying to beat up on anyone.

We don't want, we know there's a lot of shame and a lot of Really strong emotions tied to to debt and we understand that but at the end of the day I think John and I are both willing to draw a hard line and say it's important we as People that care about your finances as people that want to see our co workers do well We want you guys to get out and stay out of debt Yeah, no, and that's one of those things and we'll once again, we'll have further episodes on this specific topic But it's one

that's definitely front and center and it's not lost on louis or myself on The challenges, especially our new firefighters are facing. Our incomes have never been higher. Big shout out to the negotiation team and us getting best in class salaries. But you know, the cost of living in this area specifically between housing for one. Insane.

And then a lot of our, uh, Folks are realizing this too, and they didn't really account for it or think about it is the cost to have a child and childcare costs and those two by themselves, I'm going to go on record and say, that is probably where the majority of our members salaries are going. I mean, almost exclusively just for that bit, by the time they pay the mortgage.

And or rent and if they have a child and they're paying for child care Those two I would go on record as saying those have to be the two most Expensive line items every month. Yeah, I would say truck payments are probably way up high there, too It's probably a they're very close third there, but I agree with you Those are probably the two biggest things and to clarify when we talk about debt, getting out of debt. We're not saying, Hey, you need to pay off that mortgage. Cause that's terrible.

Or have all cash to go in on a 1, 000 house. Like we know there's going to be a certain level of debt that, uh, our members and Louie and I specifically are going to have to take on, right. That's just part of life. That's just part of life. And that's okay. Yeah. So we're not saying avoid any of those things because that's a need.

That you have to do, I mean, that's the only way to facilitate that, but we definitely do recognize that we just don't want to be on the surface being like, Oh yeah, just get out of debt and stay out of debt. Like it, we understand like there is some significant headwinds that our members are facing right now. And we're acknowledging that. And on future episodes, we're going to try to try to give the best guidance, if you will, on ways to help manage it and mitigate some of those things.

But the things that really, I think our members starting today, one, no can avoid, or, you know, Credit card debt for the most part, stuff that you're putting on your credit card. Once again, I think a lot of our members do this as well as they put a lot of their spending on credit card, but like those are easy to do, right? Like the one flick method and all these other things they have for spending money. Like we are constantly.

Americans having to fight off consumerism because there's so much money that's spent on advertising and marketing. And it's just so easy now. Just have it. It's just a buy now culture, right? Like we all know that's just what we are. We want it now. We want to deliver it. Amazon will give it to you the same day. I mean, come on, let's just put it on the card, figure out how to pay it off later. And that's just, I mean, that's just so financially unhealthy. Like that leads to some very.

Very bad long term repercussions when you live above your means, when you're basically spending more than you're earning. It's a vicious cycle. You're constantly feeling like you're pushing that rock up the Hill and you get a little bit there. Maybe you pay off a little bit more than the minimum on the credit cards. You're like, okay, cool. I'll make a little headway. And then something else in life happens. And then all of a sudden you, that that rock comes rolling right back over you.

And all of a sudden you're back at square one, pushing that rock back up the Hills, trying to avoid. Those levels of debt that are manageable, right? Are those levels of spending that are manageable, not getting into credit card debt, not paying 28 percent interest, which is like loan shark, like shouldn't even be allowed, should be completely illegal type of, but that's it. But that's not rare for a credit card. That's probably very common or very accepted.

And that's, people are paying that every time that credit card bill comes in and you don't pay it off in full. That is what you're paying. Like you cannot, it, it is very hard to get outta that cycle, but that's, you're throwing a lot of money away when you do that. Yeah. It was a little bit of a tangent, but that made me think of something that we've seen a lot in the recruit classes when we give this presentation, when they talk about debt. Good Tet versus bad debt. Oh, sure.

Yeah. And this is something that always gets brought up and an understanding and something that Louis and I in the last couple classes incorporated was this concept of your credit score and what makes up a good credit score. Mm-Hmm. I'll be honest with you.

I was Mortified about what some of the responses from our folks were because they just don't understand How credit scores are calculated and then also what makes up a good credit score like all these other things So, you know in the future we're going to talk more about this like once again I think this is a segment all to itself is talking about credit scores and how to improve your credit scores But we just know that we've got some work to do to do, um, on some education on some of that stuff,

but it all really goes back to, yep, living below your means. Number one, trying to manage the debt that you have the best, your ability and not take on excessive debt when it's not needed. And I think that also, so, you know, this is probably going to cause us to lose some subscribers already, even though we don't have a lot, but I'm going to say it too, is that also includes. Car loans vehicle loans. I mean that is for firefighters. We all like to drive nice cars, right?

And you go into any fire station parking lot and you see some oh, man, this ain't very expensive vehicles This ain't the chief Armstrong. This is the Geo Metro. Yeah, I've been rocking around 30 years Shout out to your chief. You could have a nice Range Rover if you wanted to I know the salary you're committed But you choose not to yeah, it's obviously not a priority for him and look and we're not saying that You You shouldn't have a nice truck.

Like we're not even, we're not even trying to tell you like that's a silly thing to do. But what we're saying is the car loans that come with it, especially with today's interest rates, I mean, it is brutal. And we get into this cycle as Americans generally, firefighters specifically, of having a car carrying around this massive loan payment on the car of 700, 800, 9, 000. Like that, that there are guys out here.

I promise you there are guys in this department that have a 900 or a thousand dollar truck payment. So they'll do that for six or seven years. That's the term of loan. The average length of a, of a loan today is over six years. Like that is nuts. So they'll do that for six or seven years. They get tired of the truck at that point. It's not new. It doesn't have all the bells and whistles. They go to the dealership and the dealer says, Hey, guess what?

I can keep your 900 truck payment the same and take this truck off your hands and give you a brand new one with all the bells and whistles and You got it for another seven years and then they do that again and again And if you were to you know add up what that would cost over the course of a career it is I mean hundreds of thousands of dollars hundreds of thousands of dollars and that is something that We do as firefighters a lot we do as Americans a lot and that is really robbing from your

future if you're doing that I just want to be clear if that's your priority and you think that it's so important to you that you need that Understand that in the long run, it's gonna cost you hundreds of thousands of dollars and it might be worth it for you But I would challenge podcast to really think about if they think it's worth it in the long run Any kind of debt that you get into but especially credit card debt Car loans it robs from your future by crippling your number one wealth building

tool, and that's your income You're crippling your income because you're diverting a large amount of your income to debt repayment and you can't put it to work for the future, which is what we're going to talk about in just a second, that third pillar of financial dependence. But, uh, And I think the, just a last part of that is, is I think so many things like the car loan specifically or the new vehicles, I think there's so many soft costs that go into that, that people don't even realize.

Think about like the cost of register, this thing, how much more your insurance now, like auto insurance is up in a lot of places, like 20, 30, 40%. So it's not only this 700, 800, 900 more payment. It's now it's an extra 250 per month. To ensure this it's an extra. Oh, man, that registration cost me eighteen hundred dollars And it's all of these like things that we think of not as the monthly payment But all the associated payments for that that just continue to make that snowball.

I mean just bigger and bigger. Yep Yep, very well said I completely agree with you. That's there's hidden cost not just Your loan payment.

All right our three simple steps that we said we were going to talk about to become financially independent We talked about living below your means with the budget We talked about getting out and staying out of debt And then the reason why we do those two things why we live below our means and create the surplus The reason why we're out of debt is that so we can start investing so that we can invest early and often Really at the end of the day if you Want to be financially independent.

You got to have some money. You got to have a pool of money. That's not being eaten up by credit cards and by student loans. That's not being spent as you make it. Uh, you got to have a surplus that you invest. What do you think about that? Yeah. I mean, that's the, that's the key to success. It's like a three pillars, if you will, a bar stool kind of concept of tripod, right? You got the two legs and now we're talking about the third leg.

If any one of those legs goes, we're not, that thing is not going to be upright and standing. So yeah, investing for the longterm, that's the key for everything. And Louie and I will talk more in the future about what we think. Beal is like appropriate amounts to be saving and all these other things, just generally speaking, not giving specific financial advice, but generally speaking, some good rules of thumb.

And the old saying is it's always better to have time in the market and not try to time the market and the market being the stock market. So the sooner you can get that in, the better it is. And there's a little magical thing we call. Time, value of money, the old time value of money and compounding interest. And that's really what it's all about.

And that's the irony of the whole situation is when you're just getting started out, you just got hired, you're making this money, you're trying to make ends meet by either paying for your apartment or your house, or you got a car payment, you got kids. It's honestly the best time that we need to have some of that extra money to be saving because the longer we let that ride, we know those last few years of compounding is really. Where you start to see the difference.

If you talk to anyone here that's pre 2007 that is still in our money purchase plan So our general retirement our 401k plan type thing. They'll let you know like for the first 20 years. It sucks You're like dude, I'm throwing money in here all day long I keep putting on all this money the apartments matching this and putting in all this money But it ain't going anywhere and it's not always the investments that you're in.

It's just like It takes so long for that money to start compounding that you feel like, once again, like this is a fruitless in Denver. I just keep doing this thing and I'm not seeing a lot of movement. All of a sudden though, things start to change and they change rapidly. And you talk to people and all of a sudden their one year difference can be three, 400, 000. And it took them 20 years to get any type of that movement. And now they're seeing it.

In one year, and that's really where the magic happens. We can show you all sorts of charts and graphs and exactly how compounding works, but feel free to research any of this stuff on your own. And there's plenty of financial calculators that will tell you exactly based on your savings, what this looks like, but the major point is. Saving early and saving often is the key to success. It makes everything so much easier and we don't want to discourage you.

If you're a little bit late to the game or you've had some pitfalls in your financial journey, that's okay. You can still make up for it, but we do really want to let our members know, or maybe earlier in their careers that this will be exponentially, literally exponentially, Easier for you. If you invest early, the sooner you can start getting that money in the market. And John said, earning compound interest, compound gains, the better it will be. And there's, there's this rule.

It's called the rule of 72. We encourage you guys to look that up too. It's basically, once again, it's a rule of thumb, not like a principle, but the rule of thumb or the rule of 72 is that if you take an interest rate, if you divide 72 by an interest rate, that will tell you how long it's It would take for your money to double. So let's say you take out some type of a bond. So it's fixed income. It's not going to change. It's going to be 10%.

You know, that based on the rule of 72, basically every seven years, a little over every seven years, that thing is going to double in value. So if you had a hundred thousand dollars in there in seven years, it would be 200, 000, but in another seven years, it won't be. 300, 000, it'll be 400, 000. And then the next doubling goes from 400 to 800, 000. I mean, that is, and that's not counting anything else that you're putting in there, your other investments.

So now you're talking about after three doubling periods, you might be close to a million dollars. That's the power of compound interest and of the time value of money. So we really encourage people that if you really want to achieve financial independence, at the end of the day, you have to invest in In the market. And we will talk it. We'll talk in future episodes, like John said about our preferred investment methods and our opinions, not our advice, but our opinions.

But at the end of the day, those three things are what we believe leads you to financial independence, living below your means. Getting out and staying out of debt and investing. And what those three things mean to me, Louis, just like anything else in life, those are habits. All of those are habits. Everything that we just discussed are habits that you can form or not form or take on later in life or take on now and building those good habits.

So even for those folks, you guys that are just starting out and you can put in 50 into your four 57, a hundred dollars, 25, whatever, get it started now. And then when you do have some more runway, when you do have some more flexibility, when your income starts coming in, maybe you get married and you have another income or you got another income from a different source. Like then you can start. Um, building those habits, but it really does start with like contribute now.

And I'm really proud of this, uh, organization and the membership. And we have a really strong, uh, position when it comes to people contributing to their four 57 plans. We have a really high take up rate of that. And I think those are creating those really good, solid, um, foundational values that will help you achieve financial independence in the future. Yep. Yep. So that's the roadmap. That's how you achieve financial independence. And that is. That's the forest.

If you will, the trees will be that we discuss in our next and future episodes will be the tools that we use to achieve those three steps. So we'll talk about budgeting. We'll talk about the pension. We'll talk about Roth basis versus traditional basis. And we'll start really laying the groundwork. I'm sorry, not laying the groundwork, but actually building out. We're going to build the house.

Yeah, we've got the foundation after today's episode, the foundation is in, it's cured and I will start forming it up. And we'll start designing an exquisite house for all of our members out there. One of the things that we typically came up and we've already touched on some of them, but some of the pitfalls that will prevent us from getting to some of these successes, we've already hit on a couple of them. The debt and the credit card's a big one. I briefly mentioned it.

And if you talk to Captain McCullen, this is the one that he highlights. Yeah. Always tells him recruits this every time. Actually, I want to say day one stuff. He's always comes in and. In typical McCullin fashion, his glasses down around his, around his nose. And he's looking down and then he's looking back up. He's looking down and he, he jokingly always asks all the recruits, what's the most important financial decision you'll ever make in your life? And he says it just like that.

And I've been in there for several times when there's been some responses and he kind of shakes his head and everything else like this and what's his, what's his response to that? His response to that is the most important financial decision you will ever make is. The person you marry and I would like to take credit for that actually though because I put that in a slide and then he liked it so Much because he has some stories man.

That guy has some scars and some stories He liked it so much that he decided to start talking to the recruits about that At the beginning of academy like way before I got there with the financial presentation, but that is true I would say, you know Not only is the person you marry the most important financial decision you'll ever make, it's the, it's the most important decision you'll ever make. Life decision, 100%.

But when it comes to financial independence, who you marry will make it Much easier or much harder depending on that person and you know, we're definitely not advocating.

Okay, let's Start over end your relationships like this person's not making it easy for me to achieve financial independence But you got to be mindful about it You got to think about it because you will have an easier time or a much much harder time Achieving your financial goals And, and part of why I brought that up specifically is, you know, that has derailed a lot of our members here and they're achieving their financial independence first and foremost.

But the other part I wanted to highlight is we want this. Podcast to be available to all, not only just our local members, but any spouses, significant others, and share that information because we want you guys to be on the same team. Like it's much easier to move down the stream when you guys are rowing in sync versus going the other way. And so many of these conversations, they can be difficult conversations to have, um, but they're important conversations to have.

And if you're, if your teammates, uh, in line with, A lot of your values and visions around money and how you guys are going to save or spend. Oh my gosh. It just makes things so much easier. So much easier. And that's what we want for you guys. We're doing this and we've said it before, but we'll say it again. We're doing this because we care about your financial future. We want you guys to not be stressed out about money. We don't want you guys to be broke.

And John said earlier, we want you guys to get out of here when you want to get out of here. The only way we can get you there though, is if you start following those three principles, you got to do those three things. Otherwise, you're going to be one of those guys that are here way longer than you should be. Yeah. Unless you're, yeah. Unless your retirement strategy is a plain power ball or mega millions and just hoping for the big win. It's going to be, it's going to be a challenge.

The last little plug we'll make is if you guys are interested in financial independence, financial freedom, a really good resource to use. And it's a generic resource, but it's this concept. Called the FIRE movement, uh, Louie mentioned it kind of in the beginning. And it stands for financial independence, retire early. Do you know where that term came from, Louie? Do you know who's the first one that kind of got credit for that? I don't, I'm not sure, but I know the term has been around.

It was really popular about six, seven years ago. There was just this massive movement. There was all kinds of podcasts and all kinds of personalities that came out saying, Hey, we're going to retire at 35. 80 percent of our income and we're going to retire. Work hard for 10 years and then we're going to retire it by 40 or by 35 or something.

But, you know, even though that might be extreme and we're not saying you should achieve that and you should do that, the principles are really good because they're all about living below your means and about investing for the longterm. So. Yeah, it's a great resource to look at. There's a lot of fire personalities, financial independence, retired early personalities that can give you some resources on how to do all the things that we just discussed.

Yeah. And I love it for, so I actually had to look it up and it actually first got. Accredited for a book that was written in 1992. It was called your money or your life. It was by Vicki Robbins and this guy named Joe Dominguez. And she was the one, they collectively created this nine step framework for how to. Achieve financial independence. She's the first one. They're both kind of the first ones of being the the Generators of that the genesis of the fire movement.

Did they coin the fire term or did that I didn't think that came later I think they were the ones that basically put in the steps that we Louie and I talked about and just really it was more of a philosophical question is What is money supposed to be used for? Why do you make money? What is money do for you? And it was more of this reprioritization of your life's goals. And once again, prioritizing your life goals in money and making those align and making things be intentional.

And we all know that we all have a limited time on this planet, on this earth, and the number one, most valuable resource we have. It's time. And we want you guys to be able to enjoy your time, um, not only your time working here at the FD, but also your time long after the FD. So I would once again, just encourage if you guys are interested in this concept, and there's a lot of different bloggers, podcasts, books, all sorts of things.

There's a lot of different forms that fire has taken people that save beyond aggressive, like 80 percent versus some people that save less because they spend less. It's just a good reference. If you guys are interested at all in this concept of financial independence. And it's, man, there's years worth of material to research on this. Louie and I, in the future, we'll delve on some of the topics that they hit on, but I just wanted to plug that in.

If this is at least piqued an interest in the concept and you guys want to get a little bit more context with it, we just wanted to get a shout out to the fire movement and just the concepts behind that, because really, whether you like it or not, everyone pretty much that works here, minus a couple of us, we're going Are going to be subjected to the fire movement because we're going to retire early based on what society thinks what we should retire A lot of our members will retire before 60.

I had to do some research and figure out what the average retirement age is Do you know louie for a firefighter? No, just in general society Oh boy today I want to say it's probably something something like 65 if I had a guess 65 So it's actually 61.

Okay, but the caveat to that is the average person feels like they're going to work till 67 So once again thinking about financial independence being adaptable coming up with wrinkles all these other things having Maybe more than you think you need or being able to have a plan b People think that they're going to work longer than they actually do And I would say that we are every bit as subjected to that working here with the stressors of the job and the things that we're encountering and

everything else. There's a lot of things that are very applicable to the fire movement and the concept of the challenges of having to retire early than a lot of our other, the general population doesn't face. So just wanted to make that plug, but hopefully this was beneficial. Once again, this was very Baseline, like very basic stuff to hopefully comprehend and grasp, but really we're going to take those, that three pronged approach moving forward.

When we get a little bit more in depth into some of the benefits that the organization that we have as a members here at local 1309, we're going to. Get more in the weeds and talk about some of that stuff. Thanks already for those of you that we've got some, several responses back to ask the fiscal firehouse at gmail. com for questions or concerns or topics that you guys want to hear. I'm receiving those. So we'll definitely going to think about that for future episodes. And thanks for everyone.

That's been so gracious on kind of the rollout of this. We've gotten Louie and I both have gotten a lot of positive feedback that definitely gives us energy moving forward. We want to make sure that this is landing well and that this is it's needed. And Louie and I just aren't up here talking just because we feel like we need to talk about something. We're hoping that this is being well received. So huge shout out to the membership for all of that. Yep. Thanks for bearing with us guys.

And we know it was a long episode. We know we covered a lot of stuff, very heady information that we discussed. We think it was all good though. The union stuff with Reed, the financial independence topic. Really, like we said, sets the groundwork. So thanks for bearing with us. Once again, John just briefly mentioned it, but if you have any questions, if you have any concerns, of course you can reach out to us directly. You guys have our phone numbers.

You guys have our personal emails, but we encourage you to also use that, that email to send your questions in that email is ask fiscal firehouse. At gmail. com send your questions your way. We'll address them in a later episode. If we can, if we think it's relevant, if we think it's good. And yeah, we're here for you guys. We really want to see you guys do well financially, but thanks for joining us. Yep. Sounds good.

Signing off and you guys be safe out there and we'll catch you next time here in the local 1309 studio. Take care. The Fiscal Firehouse Podcast is a podcast curated specifically for local 1309 members. This podcast is for informational and educational purposes only, and should not be construed as professional financial advice. Should you need professional advice, consult a licensed financial advisor or tax advisor.

The opinions of John Beatty, Louie Barela, and their castmates are solely their own, and don't reflect that of West Metro Fire Rescue.