Presentation I did with our CFO at a national company-wide presentation event called #FinFest2017. Topics center around the concepts around Financial Independence and practical steps you can take to achieve it as quickly as possible. This talk is for educational and entertainment purposes only and should not be treated as investment or financial advice.

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James Kupferschmid
CFO – Executive Team
Robert Greiner
Principal – Dallas Office

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FOUNDATIONS OF
FINANCIAL
INDEPENDENCE

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This talk is for education and entertainment
purposes only and reflects our opinion
We are not offering financial or investment
advice to any one individual and are not
your fiduciary
We don’t know the specifics of YOUR
financial situation, adjust accordingly

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HOW TO PURCHASE THE
ULTIMATE LUXURY ITEM

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THE ULTIMATE LUXURY
PURCHASE?

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Freedom
Flexibility
Time
Basics
THE ULTIMATE LUXURY PURCHASE
A machine that generates your
income needs for the rest of
your life

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LET’S START WITH AN EXPERIMENT

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$20 TODAY
OR
$22 IN 6
MONTHS?
TODAY 6 MONTHS
 Select an audience member at random
 Offer a choice (real dollars)
 What would you choose?
 Respond to our poll! (Slido)

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 10% on $20
 20% Annual Return
 Guaranteed
$22 in 6 months is
the correct answer

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At its core, FI is about maximizing your savings rate through efficient savings
methods, reduced spending, and higher income. This will provide the freedom to
make lifestyle choices that are in line with your values while not being forced to make
decision based solely on income needs. The purpose of this talk is to discuss FI
strategies, techniques, and lifestyles regardless of your life goals or how old you are.
What would you do with your life if you didn’t have to work for money?
FI is NOT Retirement FI Before 65?!
Intentionality With
Finances
Investing
Not About Hoarding
Money

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Actionable first steps to get you on the Financial Independence Path
WHERE DO I START?
Know Your Net Worth
(personalcapital.com)
Calculate Your ACTUAL
Monthly Spending
(youneedabudget.com)
Calculate Your FI
Number
(25x Yearly Spend)
Calculate Your Savings
Rate
Calculate Your FI Date
Maximize Savings Rate
(Make More & Spend
Less)
Bank Your Promotions!
(Avoid Lifestyle Creep)

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If you implement these principles, you will build wealth, everything else is efficiency and optimization
MAGIC FORMULAS TO ACHIEVE FI
Magic Formula
• Have a Plan
• Avoid Debt
• Use Credit Wisely
• Spend Less Than You Make
• Establish Emergency Funds First
• Invest the Difference
Savings Rate (Percent)
Working Years Until
Financial Independence
5 66
10 51
15 43
20 37
25 32
30 28
35 25
40 22
45 19
50 17
55 14.5
60 12.5
65 10.5
70 8.5
75 7
80 5.5
85 4
90 < 3
95 < 2
100 Zero
If you have a low savings rate today, that’s OK – do what you can to increase it (could take years)
How Much Do I need to Retire
• Roughly 25x Your Annual Spend (4% Rule)
• YMMV based on lifestyle choices, and that’s OK
Savings Rate
• Savings / (Income – Taxes)
How Long Until I am Financially Independent?

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A very basic investment primer for those of us in the Asset Accumulation Phase of life
INVESTING BASICS
Facts of Life
• You must invest in order to become financially independent
• The stock market is probably your best bet for compounding your money
• The stock market always goes up – in the long term
• The stock market sometimes goes down – and will again, sharply
• Sequence of returns matter in the few years before and after retirement
• The only people who get hurt on roller coasters are those who jump off
• You are not smart enough to time the market
• Don’t invest until you feel comfortable with what you are doing
• The Pariveda 401k is all you need from C-P (~$53k max total contributions)
• Nobody manages your money with more care than you, learn this stuff
• Fees compound as well and will destroy your returns over your career
• Feel free to use a model portfolio (401k) or target date fund to get started
Further Reading: http://jlcollinsnh.com/stock-series/ &
https://www.bogleheads.org/wiki/How_to_build_a_lazy_portfolio
Fund Description Expense Ratio Allocation
VADDX Invesco EW S&P 500 0.04%* 60% - 80%
FSTPX Fidelity Mid Cap Index Fund 0.06% 10% - 15%
FSITX Fidelity US Bond Index Fund 0.05% 0% - 20%
FXIVX Fidelity International Index Fund 0.08% 15% - 20%
Pariveda 401k Example Basic Portfolio
Fund Description Expense Ratio Allocation
VTSAX Vanguard Total US Stock Index Fund 0.04% 60% - 80%
VBTLX Vanguard Total Bond Index Fund 0.05% 0% - 20%
VTIAX Vanguard Total International Index Fund 0.11% 15% - 20%
Lazy Portfolio – Non Pariveda Account

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The Pariveda 401k is a $54,000/year bucket that you can fill with different contribution types
FI HACK – THE MEGA BACKDOOR ROTH 401k
http://www.madfientist.com/after-tax-contributions/
$54,000$28,000
$3,000
$5,000
$18,000
ESOP TotalAfter-Tax
(Approx.)
Roth /
Traditional
Match
(3%-4%)
Convert
to Roth

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There is more to life than accumulating money or consuming
DOING WELL BY DOING GOOD: GIVING AS A SOURCE OF HAPPINESS
• Experiment #2
• People who give to others are measurably happier
• The more generous they are, the happier they are
• Don’t save money just to hoard it
The benefits to the giver and by extension the community are clear, but how best to help people be more generous?
* Not the goal

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IF YOU FOLLOW THE FI PRINCIPALS, YOU WILL HAVE MORE MONEY THAN YOU EVER
NEED FOR YOUR DESIRED LIFESTYLE AND TO LIVE GENEROUSLY
FINANCIAL INDEPENDENCE AS A SOURCE FOR GENEROSITY
• Generosity doesn’t increase based on income
earned, it increases based on how one feels about
their financial situation
• The more secure or in surplus one feels, the more
generous they are
• Creating a “healthier relationship with money” is key
• Be aware of potential pitfalls
• Bring your kids along for the ride!
Who wouldn’t want to be in a position of surplus and be able to help people – on your terms with your values?

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Today

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Ready for the next level? We’ve got you covered.
FINANCIAL INDEPENDENCE 102
Books
• The Simple Path to Wealth
• The Millionaire Next Door
• The Bogleheads Guide to Investing
• If You Can: How Millennials Can Get Rich Slowly
• Early Retirement Extreme
• Your Money or Your Life
• The Automatic Millionaire
Blogs / Websites
• http://mrmoneymustache.com/
• http://madfientist.com/
• http://jlcollinsnh.com/
• http://rootofgood.com/
• http://frugalwoods.com/
• http://gocurrycracker.com/
• http://1500days.com/
• http://financialsamurai.com/
• https://www.bogleheads.org/
• http://www.fifeeds.com/
• http://www.fierymillennials.com/
Podcasts
• http://www.choosefi.com/
• http://www.madfientist.com/podcast/
• https://www.stackingbenjamins.com/
• https://radicalpersonalfinance.com/archive/
Tools
• You Need a Budget
• Personal Capital
• CFIREsim
• Networthify
• FIRECalc
• Money Prioritization Flowchart
• Personal Capital Retirement Planner
• https://reddit.com/r/financialindependence/
Curated Articles
• Getting Rich: from Zero to Hero in One Blog Post
• The Shockingly Simple Math Behind Early Retirement
• A Millionaire is Made Ten Bucks at a Time
• Stock Series (How to Invest for the Long Term)
• Mega Backdoor Roth
• How Much Do I Need For Retirement
• Mr. Money Mustache Interview
• Lazy Portfolios (BogleHeads)
• Ten Pillars of Financial Independence
• What is Your Retirement Number (4% Rule)
• Reddit FI FAQ
• How to Access Retirement Funds Early
• HSA – The Ultimate Retirement Account
• The Millennial Path to FI (Podcast Interview)
Continue the Discussion: #financialindependence

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