We interviewed Rebecca Herbst earlier in the year about financial independence, improving financial literacy and effective giving. Rebecca is an early retiree and now spends her time working on her project to improve financial literacy, Yield & Spread, where 100% of the profits go to charity via The Life You Can Save. Rebecca is also on the board of directors for EA Salt Lake City.
Learn more about Yield & Spread
Luke Freeman:
G'Day folks, and welcome back to Giving What We Can, where we explore how to use our resources to do the most good. Today I'm speaking with Rebecca Herbst from Yield & Spread, a not-for-profit personal finance course for beginning investors where all proceeds go to charity. After 10 years working in commercial real estate, she reached financial independence at age 32 and formally left the traditional corporate world. She's a believer in financial literacy for everyone that investing and financial planning are key to our own financial wellbeing and unlock the superpowers that enable us to do more good in the world. Rebecca is an early retiree and part of both the financial independence and effective altruism movements. And finally, I'm proud to say that Rebecca is also a member of Giving What We Can. Rebecca, welcome.
Rebecca Herbst:
Thank you. I'm glad to be here.
Luke Freeman:
To start off with, it'd be great if you can tell our listeners a little bit about your story, how you ended up retired early, discovered effective giving, and now why you're spending your time doing financial education.
Rebecca Herbst:
I'll start with the financial independence story. Like you mentioned, I worked in the real estate industry for over a decade as like a researcher and a city's economist of sort. And I really liked the contents of my job. I loved exploring new cities and why people wanted to live there and why investments were going there and all the like. But the constraints of the job, the operational structure of the job was tough. Sometimes it would be long hours or rather challenging clients with specific needs. And often I felt like the passion for the job had some sort of conflict with what the reality of doing the everyday job was like. I knew deep down that maybe something wasn't totally right, but it didn't seem like moving industries or moving jobs was the answer. It was more just about how we live our everyday 9:00 to 5:00 sort of lives if you have that structure.
I didn't learn about financial independence or the concept that you can save up enough money and invest that money to live off your investments comfortably until I met my now partner, Joe, and he introduced me to this movement, which its fundamentals are being not just frugal, but spending thoughtfully on things that are important to you and investing thoughtfully as well, and then building a life that's important to you. I didn't realize how close I was to reaching financial independence until I met Joe and I realized I was actually a couple years away. Most people discovered this concept and they may be 20 years off or 30 years off from actually reaching a comfortable retirement date, but I was maybe only three to four to five years away from that. I quickly approached and I started preparing for the future.
And around that time when I learned about financial independence, I had also begun actively meditating, which was helping me think a little bit more about others and loving kindness to other people and not just necessarily that my emotions are the most important emotions in the world, and that they're often fleeting. Then also I learned about effective altruism in this timeframe too. And I was introduced to it actually through the FI community via Mr. Money Mustache, who is one of the original pioneers of the movement. And he recommends the book, The Life You Could Save. I read it and immediately thought this concept, donating effectively, that it's our moral obligation to do that was a no-brainer and it made sense almost immediately and kicked into gears some major life changes.
Luke Freeman:
And before we get into things, what's it been like being retired early?
Rebecca Herbst:
There's this book called 10% Happier by Dan Harris and he talks about how meditation doesn't completely change his life, but it makes him about 10% happier. I would say that's sort of similar for financial independence. Maybe I'll give it 20% happier. It's pretty good, right? I wake up and I decide what I want to do every day and what's important to me and how I want to spend my time, and that's extremely freeing. At the same time, it's also a unique level of pressure. There's no one to blame when you have a bad day or, "Oh, my boss made me do this" or, "My commute stunk." I'm really the arbiter of my own ship. Sometimes I feel like I should be doing a lot or being super productive, but on the whole opportunity to be able to plan and fully live your life in a way that you want to is pretty amazing.
Luke Freeman:
Yeah, and many people see retirement for however old they are when they retire as the next chapter. And with that chapter, you've been focusing and one of your projects is on the financial education Yield & Spread. Can you tell us a little bit more about that?
Rebecca Herbst:
Financial literacy is really important to me and there are a lot of resources out there ranging in quality and type and structure. When I first went on my financial independence journey and my friends and family saw the types of changes and shifts that I was making, they were excited by it and pretty open welcoming to these concepts and wanted in. I started suggesting books or podcasts or blogs that were really awesome and resourceful. But most of the time the feedback was, "Can you just sort of teach this to me quickly because I need to be on my way to do all these important things I have to do?" From that birthed this extremely condensed learn to invest course that is rooted in the same investing principles that are commonly used in the financial independence community. Mostly the Boglehead strategy, which was created by Vanguard's founder.
However, it's not super focused on being frugal and budgeting and all the kind of tougher stuff that comes to the financial independence side. It's really focused on how to build wealth with what you have. Now that, or that course used to be live, it still is, but now there's an online self-paced version in which you can take the course. It's about six plus hours of content. Currently it's really all about growing your wealth, learning how to take care of yourself, investing thoughtfully in a low risk manner. And in the future I really want to be growing Yield & Spread to talk more about donation strategies and a lot of the similar ideas that we talk about in the EA community. Then of course, one of the most important things that I should point out about Yield & Spread is that all profits go to effective charities via The Life You Can Save. It's my way of saying, "Hey, I want to give back some of my time in a way that I know how to do and can do thoughtfully" while also raising funds accordingly.
Luke Freeman:
Speaking of which, what are some of the commonalities that you've seen between the financial independence and effective altruism movements?
Rebecca Herbst:
If anyone is part of either one of these communities right away will notice that they are people who are optimizers. People in the financial independence community are investing their money in the most thoughtful, most optimized ways possible. They're not wasting a cent. They're also spending their money in ways that are maximizing their quality of life and forgetting the rest. The effective altruism community's the same. When people are setting aside a portion of their money towards good causes, they are focusing on causes that are most impactful and effective. Financial independence is like the mirror to oneself where you're looking at how to help yourself in the most effective way. And effective altruism is the opposite. It's turning that mirror around and showing that towards others.
Luke Freeman:
The thing I've noticed is that it's come both in FIRE and effective altruism is encouraging people to be more mindful about their decisions, especially in relation to thinking about what they value. And one thing that's come across both of them is things like how you're spending money. Can you maybe talk a little bit more to that? We've spoken about that in the past.
Rebecca Herbst:
Sure. When I think about how I spend my money on myself, I think about the things that generate either the most value for me and that might come in the form of joy and contentment, physical and mental health and wellbeing or my community or family and friends that I care about. I think about leaning into those experiences and not necessarily being frugal on those, really spending on those with intent and then forgetting the rest. For example, if I buy a shirt that needs dry cleaning, maybe I really like that shirt and I like the way it looks on me, but that commitment to dry cleaning it for the rest of time is not exactly valuable.
I have the ability to take a step back and say, "Okay, that's not the shirt for me." Whereas in the effective altruism community when we are doing this thoughtful thing to set money aside and give to others, spending time to think about not only what's important to us, but what's the most impactful thing that we can do, that's critical to being a successful sort of member of the effective altruism community. I think of these things in the same way because donating to effective causes does bring me joy. I feel like it does bring me personal health and wellbeing as well. I am personally benefiting from that experience while also giving others and doing something more meaningful than maybe just buying that shirt that needs to be dry cleaned.
Luke Freeman:
I'm going to have some questions now about money, which is something I'm sure you talk about every day with Yield & Spread or the days that you work on it. What are some of the biggest common mistakes you see people making with their money?
Rebecca Herbst:
Well, the biggest mistake is really not doing anything with their money. I think many of us who come out of school and are looking for a job are taught to look for a quality job, work hard, and maybe do your best to get salary increases along the way and earn money. But we're often not given the tools to learn how to build wealth in other ways such as forms of passive income, whether that's investing in the open stock market or bond market, or whether that's businesses that generate you passive income. The idea that as you grow wealth, you can earn wealth without having to actively work for it, is this foreign concept to many people. I would say the biggest mistake that most people make is, and I wouldn't even say mistake because it's usually simply access to what this world is like of passive income, but that comes in the form of really not doing anything outside of working their everyday jobs.
That's the biggest mistake I would say that most people make. The next mistake is that people often listen to others and gather advice from others without actually looking at the research or the science behind it. They might have a friend or a cousin or a colleague who appears very wealthy and successful and follows their lead, but as we know, appearances aren't always everything. We become products of our environment that we're in, where we are following those that seem successful rather than taking a step back and thinking about what does success really mean to me? Instead of taking the time to think about how much money do I actually need to live a happy and healthy life, we look at the people around us and think about how much money they have and then we determine that's what we want.
Luke Freeman:
You mentioned in our event that we did, The Personal Finance For Generous People, the example of buying a car and not just the cost of the car but the type of car and the associated ongoing costs and the stress that that increased costs also can bring. Yeah, that's something that people are find that ongoing costs and the cost of a certain appearances as well can be quite something, that keeping up with the Joneses in a sense.
Rebecca Herbst:
Right, and some of those things are sometimes a little more obvious like the car, right? Someone drives a fancy car or someone drives a car with the missing hubcap, but sometimes they're actually smaller things that we don't even realize. For example, when my fiance proposed to me, we used my great-grandmother's ring and she's a survivor of the Holocaust and it was her ring from before the war. I could theoretically insure that ring, and it's actually in this scheme of things, not too much money to insure a piece of jewelry, but what would the insurance be for, right? The insurance would be to replace something. And that actually is irreplaceable to me. If I were to lose that, I wouldn't actually replace it with something. Had I not really thought about that, I might have just been like, "Oh, I have a ring, I need insurance now. This is what I do." But taking a slight step back to think about what that really means actually in turn helps me value that peace and that gift for my great-grandmother even more. And also I'm not spending money in ways that aren't meaningful to me.
Luke Freeman:
We often think about what we might cut back on if we're thinking about finance, but what is something that you think people should be spending more money on?
Rebecca Herbst:
Anything that I think relates to health and wellbeing. It could be paying for a gym membership or a Peloton membership if that means something that helps you get up and take care of your physical health and wellbeing. It could mean hiring a babysitter, so it gives you extra time to do something that you love and you care about personally. Then of course, I think for those people in the financial position who are able to do so, setting money aside, and we could talk about that a little bit more, to create regular donations or to fuel regular donations either on a regular, consistent basis and what that means looks different for people.
Luke Freeman:
In our previous event, you went through a few different standard budgeting methods you'd recommend for people. I'd love it if you could just give a quick take of the different ways that people might approach managing their money, and particularly for people who are trying to not spend too much effort on this. I have been the victim of trying to reconcile every transaction and that is not a way to live.
Rebecca Herbst:
My favorite budgeting method is actually the I don't budget at all method. I think actually some people are surprised to find out that I don't ... I do budget, but it's not something I consistently think about. But obviously that's something to work towards, that comes out of building habits over a consistent period of time. If you've never, ever budgeted before, if this is something you've never thought about before, the first thing that you'll want to know is your ins and outs. Most people, if you ask them how much money do you save each year or what's your savings rate? Most people can't really answer that question with a real number. They might say a range or something like that, but they don't actually really know after taxes, what do they put in their pockets each year unless they are really focused on it.
The first step to budgeting is simply having a way of knowing how much you actually spend versus how much you earn. You can use resources like Personal Capital or Intuit's Mint that will upload all of your credit card information and checking and savings account information and it will determine how much you're spending each year. Or you can simply just go into your bank's website and download that information and you could even say download the last three months and then approximate for the full year by multiplying that by four. I think the first step to budgeting is what do you actually spend? Then that's kind of the mathy side behind it. There's other math formats too, like the 50, 30, 20 budget where 50% goes to necessities, 30% goes to wants, 20% goes to savings. That's extremely popular, but I don't feel is really rooted in very much, it's not rooted on what do you need?
It's just saying 50% goes to necessities, but what if you make $30,000 a year versus $200,000 a year? Those things really change versus it being rooted in where do I live? What are my interests? Do I support my family members? What's my donation strategy? I have to say that I think that 50, 30, 20 budget isn't ideal. There's also the envelope system. I think a lot of people think of this, they set a spending limit for each expense category. Say it's groceries or entertainment or healthcare and then they only use money for that purchase. A lot of people find success with that. Some people find it stressful because it could feel very constrained. I think if you were to use that type of system, you would want some flexibility to be able to evolve it over time based on what your values are.
There's also the pay yourself first method. First you just simply decide how much you want to set aside for your savings and investment goals and then just use the rest for expenses. This is a very goal-oriented way of budgeting. If your goals are, "I'd like to have a down payment for a house, I want to pay for my kids' college and I want to donate 2% of my income every year to effective causes," those are your goals, right? Then in addition to that, you're thinking about, "Okay, I want to save 50% and I want to invest 20%, what's left over?" In that method you're thinking a little bit more about what is important to you and why you want to deliver on those things. In all those strategies for me, and there was an exercise that Joe and I did separately as a couple sitting down and thinking about what are the 10 most things that are important to you that you would want to spend your every day doing?
Not like I want to take a trip to the Maldives, which sounds really wonderful and sounds lovely, but more if I have to spend my day doing things that I love, what do those look like? And maybe that's eating chocolate and having a nice glass of wine and being with my parents and taking care of my child. And then thinking about, okay, well what are the financial things that I actually need to do to support those goals? Then I say forget the rest because that's how you end up spending in a way that's meaningful to you. And this process for me changes and evolves each year, but that's okay because I know my ins and outs, I know how much money's coming in and I know how much is leaving.
When I say all this, I probably make it seem really easy. I don't think that changing the way we spend money or budgeting is an easy thing to do for many people, especially because how we learned about money has really driven us to who we are today. But if you can surround yourself with people that are emulating those behaviors that you want to exhibit and learn from them, I think it's much easier to be in that environment and to easily soak all those strategies in if you're around other people that are behaving similarly.
Luke Freeman:
The method that I've found has worked pretty well for me and my wife over the years is just a living allowance. Just everyday expenses that are somewhat fungible. Choosing to spend on a taxi, a nice meal out or a new book or something like that. All of those expenses, groceries, transportation, all that just comes from an amount that we get into our account each week and donations come out pretax, investments and savings and mortgage payments are kind of in an account that we just don't see and it's out of sight, out of mind. All we ever really interact with is an allowance.
Rebecca Herbst:
And how do you feel that about that allowance amount? How did you come up with that number in the first place, Luke?
Luke Freeman:
We finessed it over the years. Yeah, and it's something we revisit. Also things, inflation, things do get more expensive. Certain lifestyle things change. You have a commute and then you work from home and things change. We kind of have a rough spending categories that kind of summarize what we have been spending on. And I used to reconcile this and I'm very glad I don't now. My bank app doesn't automatically, roughly puts things into categories and you're like, "Okay, does this seem like a reasonable amount? Okay, let's keep it at this or let's bring it up or down." But yeah, it does keep it relatively easy just to know, "Okay, do I have money? Okay, I'll spend it" and then have a short term savers. I'm going to not spend a little bit for a while because I want to get new climbing shoes or something.
Rebecca Herbst:
Right, right. Yeah. I think you hit the nail on the head, right? Because you're combining awareness with the concept of flexibility. Knowing what's happening within your portfolio and knowing that life changes, preferences change and shift. And I think just simply being aware is a huge first step. And you also mentioned this concept of grit, right? I'm saving up for the next few weeks so I can buy these climbing shoes. The reality is a little bit of grit is always sort of necessary to make big life changes, but there are a bunch of small changes that we can do that don't impact us greatly such as maybe switching grocery stores from the really high cost grocery store that's a half mile away to an extremely low cost grocery store that's a mile away. Just pushing yourself a little bit more out of that comfort zone to make that change can actually save you hundreds or thousands of dollars each year.
Luke Freeman:
The funny thing is both of us have worked in marketing in the past and you manage just such extraordinarily large budgets sometimes and then even when we bought a house and had a ... You're getting all these legal fees and all these things and you're just like the deciding not to spend money on a coffee or something like that just feels so insignificant, even though over time that actually makes a big difference, a lot of our everyday decisions. Having that, okay, when I look at my bank account, that's my anchor, not a large marketing budget, organizational budget or when you have a purchasing a house or something like that.
Rebecca Herbst:
The coffee example is actually a good one. There's a lot of raging memes about coffees and the financial independence community. Like me not buying coffee isn't going to bring me out of poverty, which is often right, true, for in a lot of instances. But when I think about coffee as this example, I don't know what the cost of a cup is right now in Australia, but here in Utah it's about ... It's actually much cheaper, which is nice compared to some of the other places I lived. And yes, I live in Utah now, which I haven't shared yet.
It's about $3 a cup of coffee. If I did have that every single day of the week, it really would add up. Now if I do have a cup of coffee, I actually go out for it maybe once a week and I just really enjoy that cup of coffee. I relish the coffee and I go to a fancy place and I get a delicious cappuccino or whatever I'm feeling for that day versus trying to maybe make ends meet and buying lower quality coffee and having it in my home and it's not as sexy and yummy. There are ways that we can take these mundane experiences and make them really special.
Luke Freeman:
Even just things back to mindfulness, if you've ever done the exercise of just really focusing on what you're eating and really just noticing all of the flavors and the texture and stuff like that. They can be very small things about the way that we engage with our experiences that can really change how those experiences feel and the quality of them.
Rebecca Herbst:
And I think that's so true for multiple forms of consumption. Coffee, food, the things we buy. It's so true.
Luke Freeman:
How much of what you teach people applies universally across the world versus is quite location dependent? Because that's something I can see comes up a lot.
Rebecca Herbst:
In a perfect world, I would love for the teachings in Yield & Spread to be globally applicable on so many fronts. The principles of being more frugal and saving and investing to build wealth are generally widespread principles that are applicable across countries. To fully optimize how you invest, and that includes what you invest in and taking advantage of your in country's investment and tax structures, such as tax advantaged accounts that give you perks for using them or local pension systems and the like. It then requires really the hard stuff, the hard stuff that sort of scares us to navigate does become quite local. I would say it's like 40/60.
40% of the teachings are global in nature, how to begin thinking about investing, how to think about wealth in different ways, how to build a financial plan, but the meat of it, the kind of harder stuff, the detail-oriented bits are very US focused because of course that's what I know and it's the nitty gritty things that will really sort of make that difference over time. I would love a world in which there was a Yield & Spread Australia or a Yield & Spread Germany, and really about half the teachings need to be updated and rooted in that local country's tax and investment system.
Luke Freeman:
Now turning to looking at doing good with our money for others, what are the top financial tips you have for people related to giving?
Rebecca Herbst:
US focus or globally focused, I'll say two things. The first is start. I think habits are real and uphill habit formation can be friction filled at first, but after a while, like you said, you don't even notice when you create these buckets, they just sort of happen. I think just simply starting to give on a more regular and consistent basis and using programs like Giving What We Can that help pave the way and have a lot of educational materials on how to do that, I think take all of our questions out of it because they're giving us the answer. I think starting now is a good first step. With that said, there's all these optimized ways of giving and I'll specifically speak for the US here. For example, if you are a high income individual who's looking to make significant donations, your options are donating on a regular and consistent basis, say I'm donating 10% each year, but your other options could be say contributing a larger amount to say a donor advised fund in one given tax year and then giving an amount that's above and beyond the US standard deduction.
In that manner you're consolidating your donations all at one time and also getting a tax benefit from that because you're giving a large amount. That's one thing that high income individuals do here in the US. Another option could be say if you are trying to control the effective tax bracket that you're in, you could choose to donate stocks or bonds to those charities that accept those. That's actually the strategy that me and my partner Joe take because we don't earn a significant income anymore because we are early retirees. Instead of selling stocks and bonds just to then go around and turn it and sell it and be taxed on those, instead we donate those stocks and bonds directly to effective charities. That's another form. Then obviously just donating a portion of your income on a more consistent and regular basis is very real and a very strong option and really creates good habits.
There are lots of tools. One more that I should probably mention is you can donate from tax advantaged accounts like your individual retirement account here in the US and you won't face the same taxes that you would if you donated directly from your regular income that's coming in. There are lots of ways to optimize, right? Because if you're already in the effective altruism community and you're already thinking about the most money that you can contribute to effective organizations, why not do that a little bit more effectively by avoiding taxes? And I don't say that in a bad way, I say in a healthy way, in a way that we're allowed to do it legally and that's very appropriate for our tax system.
Luke Freeman:
What are your thoughts between the trade-offs between donating and saving?
Rebecca Herbst:
When I have built donating into my financial plan, it really ... Like the way that you would treat it from building a plan for your own retirement and your own security is donating is really another expense. It's just an expense that is important to you and highly impactful. Anything that you spend money on, whether it's $5 on the cup of coffee or $5 on the jewelry insurance or five hours ... Or $5, excuse me, to charity, is a trade off to saving. And by the way, when I say saving, I also mean investing. You're saving it and investing so that you're building wealth.
These things are, I guess it is a way to look at it as a trade off or an opportunity cost, right? But if you're building it into your regular plan and it's an amount that is financially doable for you and comfortable for you, realistically it doesn't change your quality of life very much. It's just a habit you're creating. It's like money that you're spending on a gym membership or on your groceries. Obviously finding that sweet spot that's right for you is important. But I try not to look at it as a trade off and a sacrifice even though I recognize that it can be.
Luke Freeman:
Sometimes when people thinking about ethical uses of their money or that they're driven by social impact and then it might go, "Okay, well one thing I can do is give to charity. Another thing I could do is try and pull some lever ethically speaking with the things that I'm spending money on," such as trying to have different investments or trying to buy things that might be say fair trade or other things that come to mind to people when they're thinking of ethics, whether it's just branding or not and things like that. What do you think about people trying to involve ethics in their spending outside of charity such as their investments or items they purchase?
Rebecca Herbst:
I'll take the Doing Good Better classic examples, right? That a lot of things that come our way are unfortunately greenwashed, and I think many of us know that buying an organically locally sourced t-shirt or investing in many ESG funds can be potentially have an impact but also often can be greenwashed. For me, having taken the Stanford Effective Altruism course and having read a number of the books in the effective altruism community that we all know like Doing Good Better, The Life You Can Save, The Precipice, so on and so forth, that this science is there for me to just donate to effective charities. With that said, I personally do focus on what I consume. For example, I buy cage free eggs and dairy vetted by Cornucopia.org and everything has to have four stars or higher for me to eat it. I'm not quite vegan yet, but vegetarian.
I am eating eggs and dairy and because I still am eating those things, I try to be very thoughtful in terms of what I'm consuming, but I don't think of say buying those eggs instead of donating to charity. It's an and situation versus an or situation for me. I am passionate about how we spend our dollars and I think certain books, I'll mention one like Tanja Hester's new book, Wallet Activism, which is quite interesting in terms of how we spend our dollars, where we bank, where we invest and their impact. It doesn't quite have an EA spin, but some of the guidelines that are provided in that book I think are helpful to make an impact in a way that doesn't really affect our quality of lives so much.
But at the end of the day, my core focus still very much so is philanthropy and donating to effective charities. And because I make such a big commitment to that, I have a little less energy to be maybe focused on which t-shirt and I'm buying or things like that. But we could try to do as much as we can help, but we understandably can't do everything all the time.
Luke Freeman:
I think it may have been a Vox Conversations podcast, I can't remember, but recently had someone who was from BlackRock who was responsible for their kind of sustainable, ethical investments and just how much trouble that he had actually trying to achieve that and that it still seems to be quite an unsolved problem. Sanjay Joshi on the Effective Altruism Forum has also written about this, but also trying to think, "Okay, well maybe this is something that we can solve," but at the moment it's certainly unfortunately not nearly as impactful as we might hope. At the moment to some extent I have had some ones that have worked out quite nicely from a financial perspective, but I don't know how much impact they're having.
And also another resource I saw recently was ASAP Science did a pretty good video a few weeks ago on greenwashing and how a lot of the time there are, unless it's like a certification of some kind where they're actually having to go audit things, a lot of the time there is branding involved. But you mentioned a couple of good examples there, things that we know affect lives and in the case of free range eggs versus cage eggs, while there can be some uncertainty, generally speaking, if it's certified to be the case, that does make a big difference on the quality of life for the hens and things like that can be really much more impactful than the difference in cost to you. Yeah, it's an interesting space to look at.
Rebecca Herbst:
Yeah, I also saw Sanjay, I've seen him speak before on ESG funds and its impact. I found his talk to be really interesting at one of the EA Global events. One of the things that does get brought up a lot in my class is students tend to ask a lot about ESG fund investing, which is kind of the industry's first attempt at making investing in a thoughtful way more easily accessible. I do get this question a lot and in my course I talk about investing in index bonds that are low cost and have low fees because when you have fees it eats away at your compound growth over time. Some students expressed investing in ESG funds that have fees of say 0.6% or 0.8% and depending on how much money you have invested over 30 years, you could be seeing fees of tens of thousands of dollars going to these firms or even hundreds of thousands of dollars or a million dollars subject to how much you have invested, right?
I think the question then becomes, okay, well if I waited 30 years and took that a million dollars in fees and put it towards effective causes, is that more powerful than passively investing in ESG funds? I don't want to say that I have the full answer here because I haven't done the full research, but my gut tells me that making active contributions towards making change is impactful versus sort of passively trying to make change is maybe a little bit less impactful.
I think that the jury's still out on ESG funds or things of the like, but am very excited more by the opportunity of maybe actively investing in high impact opportunities, whether it's being angel investor in a startup that we think is going to make a big difference or simply funding another opportunity that we think is high impact, which is a bit more of an active approach to investing. I don't have all the answers here because I simply don't have the budget to be doing something that great or that big right now, but I'm certainly very interested in what something looks like there where it's a little bit less greenwashed and more informed and more active based.
Luke Freeman:
To finish up, I have a couple of questions around where people might go next. To start with, I'd love to know what resources have been influential to you or that you'd recommend when it comes to thinking about money in general.
Rebecca Herbst:
I'm a book person. I love podcasts too, but sometimes I need to start from the beginning so I don't feel like I'm just catching up on things if I don't know about a subject already. There's a couple of financial independence books that I like. The first is Playing With FIRE by Scott Riecken, which is a really easy and simple read about a family who learns about FIRE and changes their life course. I like the Frugalwoods by Elizabeth Thames. That's also a similar story written from a woman's perspective. Your Money or Your Life by Vicki Robins is like the original thought processee here in financial independence. It is thick, but I think she is an amazing thinker and truly genuine and really also gives back a lot of her time, money, and energy to her community and just the world. Her book is really fantastic.
Then of course the blog by Mr. Money Mustache, which is how really me and my partner learned about financial independence and he is also a major advocate for effective altruism. I would recommend those resources if you're just learning about financial independence and you want to grow your knowledge and learn more. Of course, if you're interested in ... And you're based here in the US and you're interested in simply learning to invest today with all those same principles, you can take the Yield & Spread course at YieldAndSpread.com. Those are the major resources that I would recommend from a financial independence standpoint. Then the one EA resource I'd love to highlight, which I mentioned both earlier, is I love learning about different concepts through people and primary resources. When I get engaged actively and directly in the EA community, that's what I learned the most. Either attending EAG events or your local EA networks.
Then I also really enjoyed the Stanford Effective Altruism Fellowship and they have multiple levels to that where you can start in a beginner's mode and then learn more. Then otherwise I continue to keep up to speed with the newsletters from Giving What We Can and One For The World, and GiveWell, and I also am part of the EA Slack community, so I'm often getting a lot of tidbits from there as well. If you're not part of any of those Slack groups, Luke, you probably know them, there's a lot of them, right? Better than me. I get a lot of information from people in there.
Luke Freeman:
Just to finish up, what would you like our listeners to do after hearing this conversation?
Rebecca Herbst:
I think that if this is the first time that you're hearing about financial independence and you're quite interested in this concept of early retirement as well, I think Luke, you've used the full acronym earlier, FIRE, Financial Independence, Retire Early. I like to just call it financial independence because I don't think you have to do the early retirement thing unless you want to and unless that's a priority for you. But what I would say to everyone is there is a world in which you can prioritize yourself and build a life that is meaningful and comfortable and lovely while also giving back. If you're in a position where you are kind of racking your brain on how you're going to make this all work, how are you going to donate 10% of your income while also working at a nonprofit and trying to do good by this world and make a difference, but you feel maybe burnt out or that you could go into the burnout phase?
There are ways to really set yourself up for success while also building a foundation for others. And actually another resource that I really love is The Fioneers, which is another blog and they talk a lot about how to integrate lifestyle design into the decisions we make. I think you can with a little bit of work and also creativity to think about how to spend your days in a way that's important to you while also helping others. Check out the financial independence movement if you haven't yet. And if you do know about it, please make sure to just lay the foundation to your financial plan and have security in knowing that time is on your side and if you invest, you might not be there today and it might be hard to see, but the power of compounding growth will help you and ultimately bring you out into success in the future.
Luke Freeman:
Well, thank you again so much for your time. I always enjoy our chats and I think it was a lot of useful resources, especially at the end there to people who want to follow up. I do recommend people in the US in particular to check out Rebecca's course with Yield & Spread. The proceeds are donated to The Life You Can Save, an excellent organization doing a lot of good. Thanks for joining us today.
Rebecca Herbst:
Thanks Luke. I'm always happy to speak with you.