How to Calculate Your Savings Rate

ChooseFI | Financial Independence Podcast

Jonathan Mendonsa & Brad Barrett | Choose FI Media, Inc

Careers, Investing, Business

4.8 • 5.2K Ratings

🗓️ 4 January 2019

⏱️ 61 minutes

🔗️ Recording | iTunes | RSS

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Summary

Your family's entire annual leave could vanish on a single trip—if you're lucky enough to take it at all. Jonathan just spent 20 days in Zimbabwe with his wife's family, more time than he was previously allowed in a full year. But this episode isn't about vacation logistics. Penny and Rebecca provide insights on 529 ABLE plans and special needs trusts, while Brad breaks down his Profit and Loss Statement as a framework for calculating savings rates. The conversation shifts between protecting government benefits for family members with disabilities and finding consistent methods to track financial progress—two sides of intentional financial planning. Key Topics Discussed 529 ABLE Plans and Special Needs Trusts [00:08:00] 529 ABLE plans allow individuals with disabilities to save for necessary expenses without losing government benefits like Medicaid Special Needs Trusts manage assets for beneficiaries while preserving eligibility for state assistance programs Research local resources to establish these financial vehicles Savings Rate Calculations [00:33:00] Different approaches: gross total compensation versus after-tax income Consistent tracking year-over-year reveals actual financial habits Brad's framework: anything that increases net worth counts as savings Timestamps & Chapter Markers [00:00:00] Feedback on 529 ABLE and Trusts [00:01:00] Family Vacations and Experiences [00:08:00] Understanding Special Needs Financial Planning [00:33:00] Savings Rate Calculations Key Quotes "Discover the 529 ABLE and Special Needs Trust for financial planning." [00:08:11] "Planning is crucial; losses can be catastrophic." [00:08:26] "To be an expert in something, you have to experience it." [00:21:14] "Anything that increases my net worth, I count as savings." [00:57:09] "Track your savings rate throughout the year to avoid scrambling." [00:53:00] Related Resources The Simple Path to Wealth by JL Collins

Transcript

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0:00.0	And today's episode, Penny and Rebecca share some specific feedback with us with regards to 529 able plans and setting up a special needs trust.
0:07.5	Then we get a chance to roll out Brad's Barrett Profit and Lost statement, a useful tool when calculating your savings rate.
0:14.6	Welcome to the Ultimate CrowdSource personal financial. This is your Friday Roundup.
0:19.1	Your listening to Choose Applied Radio.
0:23.1	The blueprint for financial independence lives here.
0:30.0	If you're looking to unlock the secrets to financial independence and early retirement, you're in the right place.
0:42.5	Stay tuned and join a community of like-minded people who are getting all financial needs and taking control of their lives in the pursuit of financial independence.
0:51.5	Choose FI, your home for financial independence online.
1:01.0	So much to talk about. And our first Friday Roundup of 2019, man, it's going to take some time to get used to saying that it's unbelievable.
1:13.0	And to help me with this, I have my co-host Brad here with me today. How you doing, buddy?
1:16.0	Hey, Jonathan, I'm doing quite well. Happy New Year and welcome back to the US.
1:20.0	Yeah, no kidding. So as you kind of were referencing, I was with my family for the last 20 days, which I should point out as a significant number because in past years,
1:29.0	it was the total amount of time that I would get in my annual vacation or paid time off.
1:35.0	That was the annual amount of time that I had allotted. And I for both sick time and vacation time.
1:40.0	And I certainly wasn't allowed to take it all together. But this year, for the first time ever, I was able to take 20 days and spend it with my wife's family in Zimbabwe.
1:48.0	We had a truly African Christmas. It was just amazing. And I'm back. It took a, this is the one downside of Brad.
1:55.0	It was a 28 hours into end navigating the airport system with a 19 month old.
2:03.0	Oh, man, did the little guy sleep at all?
2:07.0	Oh, it was so, like he did his best. I'll give him credit. He was not the worst person there. But that was a very low bar.
2:14.0	And it was horrible. There's just no getting around it. I've never felt so drained after getting off the flight.
2:21.0	We were on Ethiopian airlines and to their credit, it is a wonderful airline. They did a fantastic job. It was very happy with the service.
2:28.0	But 28 hours into end with a 19 month old, not a fun experience.
	...

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