Buy this, not that with Financial Samurai

This episode is on FIRE. Financial Independence and Retiring Early is a hot topic in today’s financial marketplace, and the author of Buy This, Not That knows what it takes to reach your financial independence goals. On this episode of The Yield, host Adam Shapiro welcomes FIRE pioneer and author Sam Dogen for a conversation about the issues surrounding financial independence and the ability to retire early.

Key Takeaways:

[5:30] Sam experienced more than a few detours in his own FIRE journey. 

[9:55] Insights from Sam’s new book Buy This, Not That. 

[25:10] Overcome decision paralysis with the 70/30 rule.

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Financial independence and retiring early referred to as FIRE is a hot topic in today’s financial marketplace. Sam Dogen, the author of Buy This, Not That knows what it takes to reach your financial independence goals.

“It’s very hard to know the future, but at the same time, you have to continue to try to forecast your future,” Dogen told The Yield.

Dogen helped kickstart the modern-day FIRE movement in 2009 after years of working, saving, and realizing that $80,000 wasn’t enough to provide him with the kind of financial independence that he wanted. He pivoted quickly and now works to help people stay flexible in their financial independence journey. 

Dogen says, “Forecast when you’re going to get tired of something so you can take action now so that when that time comes, you can pivot. So that was consistently one of my big albatrosses on my neck buying at the wrong time and thinking that I would continue to earn the money that I thought I would make.”

He has experienced more than a few detours in his own financial independence journey. From losing 50% of the value of vacation properties in 2009 to relying too heavily on the 4% rule regarding bond investment strategies. Dogen said he made plenty of mistakes and now has the knowledge and experience that has led him to serious financial success.

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“Recently I’ve learned I made so many mistakes that things have gotten much better, but the thing that other people pursuing FIRE need to realize is that life is not full of relaxation once you don’t have to work for money. Life is about purpose and about challenges and you’ve got to stay flexible and dynamic in your thought process because things are always changing,” he said.

Dogen says passive income plays a critical role in every financial independence journey. Whether it’s taking on the role of the landlord or investing in traditional stocks and bonds, or considering alternative investments like those offered at Yieldstreet, alternative investments can be the key to achieving FIRE. 

Dogen’s new book Buy This, Not That addresses many of life’s biggest money dilemmas with advice from people who have already been there. As Sam puts it, the key is to read the perspectives of people who have been there before, highlight the pros and cons, and consider the various blind spots you might have to help you make more optimal decisions. 

Dogen recommends a FIRE framework that includes real estate. He called it one of the best ways to generate passive income. Dogen offered advice on whether or not now is a good time to enter the market, and offered insights into what the short-term future of the real estate market might look like. “That framework says that if you believe, with a 70% probability or greater that your choice will come out to be the right one, go ahead and take it while having the humility and understanding, knowing that 30% of the time you’re going to get it wrong. And so long as you don’t blow yourself up or lose your life you’re going to learn from your mistakes and get better to become a better decision-maker, and so you can apply the 70/30 probability not only in investing but in every aspect of your life,” he advised. 

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