Video

Thanks! Very true

Absolutely true! Capital gains would count towards your MAGI when obtaining insurance through the healthcare exchange.

Yes totally agree! It's good to have multiple buckets at your disposal during retirement, and a taxable account has a lot of benefits as you mentioned. For those planning for early retirement, their strategy would typically include a taxable account as well as tax deferred retirement accounts, versus those planning for a traditional retirement relying primarily on tax deferred retirement accounts. This strategy is just to convert as much as possible of your tax deferred bucket to Roth before RMDs start.

Thanks for sharing your perspective. That is true, I’ve had a few close friends get cancer at a relatively young age. Tomorrow is not guaranteed. The more knowledge you have, the better equipped you will be in making right decisions for your own life. Glad you’re on a better path now!

Hey! Thanks for watching. So the Roth conversion itself isn't meant to be used as income to cover your fixed costs, you'll be utilizing your taxable brokerage for that in early retirement. The Roth conversion process is to eventually convert as much of your pretax rollover IRA to Roth over the course of 10-15 years or more, before you start dipping into this account when you hit age 65. Then when you start using your Roth IRA, you'll continue converting the remainder of the pretax rollover IRA over the remainder of your life until it's entirely Roth. Alternatively, could just keep using your taxable brokerage account until it's completely depleted, before dipping into your Roth IRA, by this time the entire amount would've likely been able to be converted to Roth.

Ah ok. So the goal is to convert all the 401K to Roth in 14K chunks to not pay taxes and to also maybe avoid RMD’s in the future?

Hey! Thanks for watching, when I found out I was so excited to make this video. I hope it helps you have a richer retirement!

also im not sure if i am right about this, but i think you can only withdraw money from your IRA without paying any fee or tax if the money is from the money you put in, not from the profits you make.

Hey! Thanks for watching, personally, it was a game changing piece of information to have learned myself.

So here is the kicker, when you do a Roth IRA conversion, that entire amount (which include prior basis and capital gains from your rollover IRA) becomes your "contribution". After 5 years, this "contribution" amount can be withdrawn penalty-free and tax-free. Hope you found this content helpful!

Hey! That is a tough situation to be in. Having open communication in regards to shared financial goals is important, and I do agree that a healthy relationship involves equal stake and voice in this shared future. I would start by having a conversation as to what that financial future looks like for each of you, and see if you could align on a shared vision that you could both be excited about. You don't have to get this right on the first meeting, but I would try to approach the conversation from a position of love and support, the glue that brought you guys together in the first place. Defensiveness could be reactionary, but hopefully you could break down this barrier with supportive communication. Without knowing any more about your situation, I would start there. Good luck!

Hey Shanelle! Haha thanks, welcome, I release a video semi-regularly, whatever I could squeeze in around my clinical schedule. Hopefully you find some helpful tips or entertainment from these videos. Cheers!

Hey Warren! I definitely have heard of that book in reference on some physician podcasts, I'll check it out! Haha will give you a shoutout if a video comes of it.

Hey! Thanks man, really appreciate it. What are your plans for post-financial independence?

Hey! Thanks for watching. There has been an evolution of sorts on the concept of retirement and financial independence, and multiple pathways to get there. It may not mean full retirement, but it could mean shifting to part time to pursue other things. Just starting the journey, you'll be well ahead of your peers. Good luck!

Yes! Well that’s the ultimate financial transparency, your money becomes our money. Combining finances is the most powerful tool to get ahead in life, especially in a high cost of living area.

Hey! I can understand where you’re coming from. I had hundreds of thousands of dollars in debt when I started dating my now wife, and if I allowed my debt to control my life, I wouldn’t have two beautiful daughters now. Your life is yours to live, let your future partner decide in an open conversation about your financial picture. Much love -Thai.

Thanks! Give it a read

Thanks! True, noted haha, was doing some experimentation, always wanted to say the phrase "this video was sponsored by".

@@thefinancialneurologist you’ll get there my friend!

Hey Nikki! Yep totally agreed. It's an analogy that has been picked up in other personal finance books as well. I think having relatable narratives in our lives allow us to balance the negativity that can sometimes hold us back. When I was struggling working an entry level job for years after graduating from college, trying to get into medical school, I would spend my free time reading the narratives of other docs that have overcome obstacles to also reach their goals. Like Dr. Quinones-Hinojosa who went from immigrant migrant farmer to neurosurgeon, or three brothers who made a promise to each other to escape poverty and systemic racism to become physicians. It allowed me to hope, and when I was ready to internalize the message that I was worthy and capable as well, to give me the confidence to start planning concrete steps towards my goals. Similarly, from the different studies on millionaires in America, the majority do not come from generational wealth. They are those who are driven to move forward with their lives, with the humility to properly invest and channel their wealth. I hope you are taking some steps this new years to plan some actionable steps to reach your own goals Nikki, good luck!

@@thefinancialneurologist Thank you! Wish you and your family health and prosperity as well!

Hey! Thanks for watching, and definitely understandable, FIRE is still for a niche audience. I’m married with two kids man. My wife is pretty much like me, different strokes for different folks. Having a partner that is a match financially really helps.

You think like i do and we are in the minority. Just about all the women I know have no vision of the future. They live in the here and now. Tomorrow is 100 years away. Keep up the good work. Heaven knows it is needed. @@thefinancialneurologist

Hey Paul! I love your message, and that you were able to help your kids avoid crippling high interest debt, while giving them the wiggle room to figure out what a fulfilling and rewarding life would mean for themselves. As I highlighted in this video, I am not a huge fan of unearned generational wealth, that fungible asset can do a lot of good in our world now and it really doesn't take much to lift up the lives of others.

That is where we are at. Finding a balance in how much to give so they have joy vs giving too much .

Thanks! Each video is intentionally made to condense some unique and important bolus of information to live our optimal life. Stay tuned, I’m going back to a once weekly release schedule after the holidays.

Congrats! Amazing job, what are your plans for this next phase of your life?

@@thefinancialneurologisttravelling to South/Southeast Asia for a year and figure out from there. May end up moving somewhere there. Thailand and Philippines high on the list. Also focus on physical and mental health!

I'm so jealous haha! Keep me updated on your adventures.

why do u regret not doing it at 55 and why didn't you?

Thanks! I try to provide value in each video by condensing all of the books I've read on personal finance. It's also a creative outlet to talk about materialism and the psychology of money. I believe that most individuals could reach personal financial independence, if given the right tools, or at least they can start taking those initial steps in the general direction of their goals. Stay tuned, it's post holiday season, so I'm planning to ramp up the videos to once per week.

Thanks! This video was really fun to make. There should be an alternative perspective to the hustle and grind until retirement culture we have in America.

Hey! Thanks for watching. So I referenced data from the 2018 paper by Banerjee et al on "Asset Decumulation..." So the purpose of their paper, aside from doing a retrospective analysis of retiree non-housing asset spending over a 20 year period post-retirement, was to speculate why that was the case. One of the discussion points for future studies would be if the fears of "uncertain medical expenses [...] might cause many to spend their retirement assets more slowly". It is a common concern, unfortunately their data does not subcategorize expenses, just the % of preserved assets over a period of 20 years after retirement, it would be a great point for a future study! Other perspective are that retirement expenses follows a U-curve, with initial high expenses due to traveling, a deceleration due to decreasing health, then an increase in spending due to increased medical costs. The interesting aspect of this paper's results was that asset decumulation was so conservative, that retirees still had 73 to 89% of their non-housing assets left after 20 years of retirement. Whether or not we will need 73 to 89% of our assets to pay for medical expenses, will need to be studied, but personally it implies our fears are holding us back from living our rich life.

You’re right Nikki! Contributing to a 401K/IRA is investing, it’s just the tax designation for those investment buckets, just make sure it’s not sitting in a money market fund and actually invested in stock or bond equities. Early retirement utilizes multiple investment buckets and withdrawn according to their tax advantage, so the buckets are 3-6 months of emergency expenses in cash, taxable brokerage, traditional 401K, Roth IRA, and usually drawn in that order to meet retirement income needs. As you’re starting your journey, I would recommend building 3-6 months of expenses in emergency fund cash in a high yield savings account, defer at least 15% of your gross income to your 401K/IRA but up to the maximum, then the rest should be invested in a taxable brokerage account so the value of your money appreciates instead of depreciate with inflation. Unlike the 401K/IRA, investments in your taxable brokerage can be accessed at any time, which is key if you’re planning to retire before the age of 59 1/2. Withdrawals during retirement are assessed at the low long term capital rates since you’ve already paid income tax on it, which is taxed at 0% up to $123K withdrawal/year if married filing jointly and taking the standardized deduction as of 2024. I made a separate video on the order of investing if you want to check it out: czcams.com/video/OuV5T0n_uKA/video.htmlsi=W0ecww7JqP8WIbG0. Thanks for watching and good luck on your investment journey!

@@thefinancialneurologist Thanks for the detailed response!

Thanks for watching! Not sure what you mean by this?

Noted thanks for watching!

Haha books are all virtual now! Thanks for watching!

Hey! So I respond to comments here, also I have a channel email on my home page. I am not interested in solicitation though.

Thanks man! Definitely gives me the motivation to keep making these videos, each one takes several days of scripting, filming and editing (the process for this one took about 2 weeks), but in the end it’s very rewarding to put information out there. Good luck on your goals, time with friends and family is most important and good health allows you to do that. If you haven’t already, set up automated transfers to your investment accounts, so it will be a guaranteed win for you in 2024. Enjoy that journey towards self improvement with that certification, there should always be a next step because that’s what makes life rewarding. No comment on the Rolex haha, jk, life is meant to be enjoyed as well, but you might be surprised at how rewarding it is to donate to a local organization you believe in. Thanks for watching!

@@thefinancialneurologist Thanks for the response and your time invested. I agree with all of those comments. Contributions are automated and we give to our local church. Watch collecting is a long time hobby of mine and I have a sinking fund for the purchase. Best of luck this year on your goals as well!

Definitely agree! When you have the financial ability, you can gain access to certain lifestyle purchases that adds value to your life, including owning your home. My message is primarily for those seeking an optimal path towards financial independence with a finite limit on time and resources, so the secret for me is optimizing anything that drags on net worth as well as income revenue. That means my overall messaging is to reduce payments towards interest, fees, taxes and keeping a close eye on monthly and annual fixed costs. Thanks for watching!

Thanks! Wanted to mix in some influential book reviews with the usual financial talk.

Hey! Very interesting argument. Yes there is definitely a compelling issue in terms of how housing supply is meeting demand. Usually in these scenarios, in heavily populated metro areas as I am in, or downtown city centers. It becomes prohibitively expensive to own, so most rent in areas with high population density. Most areas of the world do not own single family homes on a large lot, it’s a phenomenon of abundance in the US, but I could see the trend towards primarily leasing a space as density increases. But I also believe in the free market in deciding the natural balance of housing supply meeting demand.

Hey Robert, so this last strategy, I’m recommending to households with higher income, or those who are able to save at a higher rate with a modest income. That being said, it’s 15% beyond what’s deferred to 401K and IRA mainly because the traditional 401K/IRA allocation does not lend to early financial independence. Hope that answers your question!

Thanks man! I think that research outcome had the most change on my perspective, and that’s why it’s the first sentence I put in this video. I wanted to spread that knowledge. I came from a mindset of hyper-optimization, and this let me let go of the reigns a bit to live life a bit more intentionally. Thanks for watching, more content about the psychology behind a meaningful life is coming next!