BiggerPockets Money Podcast - 1: The Surprising (Scientific) Truth Behind What Makes You Successful with Mr. Money Mustache

Episode Date: January 1, 2018

On this first episode of the BiggerPockets Money Podcast, we speak with Mr. Money Mustache (AKA Pete) about what truly makes you a happy person. (Hint! It isn't money, and it isn't material possessions.) We'll talk about shifting your mindset to pursue financial freedom, how to live for free, tips for living a frugal life, and how to surround yourself with like-minded people. Since this is BiggerPockets, real estate comes up, too.  Don't miss this inspiring episode with one of the founders of the Financial Independence movement! Learn more about your ad choices. Visit megaphone.fm/adchoices

What's going on, everybody? This is the bigger pocket. Oh, wait a second. I screwed it up. This is not the Bigger Pockets podcast, is it? No, it isn't. Oh, this is a new podcast. This is a new podcast. I think it's about personal finance. Oh, here, let me go ahead and restart this whole thing. This is our show, Scott. Welcome to Bigger Pockets Money. Show number one. It's time for a new American dream, one that doesn't involve working in a cubicle for 40 years, barely scraping by. whether you're looking to get your financial house in order, invest the money you already have,

or discover new paths for wealth creation, you're in the right place. This show is for anyone who has money or wants more. This is the Bigger Pockets Money Podcast. I'm Scott Trench here with my co-host, Miss Mindy Jensen. How you doing, Mindy? I'm doing really great, Scott. I'm so excited to launch this new podcast. It's about money, like you said.

It's for people who have money or people who want to have more of it. what do we introduce ourselves for the listeners who don't know who we are? Awesome. Well, I'm Scott Trench. I'm a VP here at BP, BP at BiggerPockets, and I'm the author of Set for Life. I've achieved a modest level of financial independence at the age of 26, and I'm looking forward to sharing what I've learned on that journey and also continuing to learn from our awesome guests so I can continue to increase my wealth and passive cash flow. My name is Mindy Jensen, and I'm the community manager at Bigger Pockets. I have already reached financial independence. and now I work because I want to, not because I have to. But I am also looking forward to learning more from our awesome guests so I can continue to grow my wealth. Awesome.

And who is our guest for this very first ever episode? Oh, we have a really, really awesome first guest. His name is Pete, and he goes by the moniker Mr. Money Mustache. Maybe you've heard of him? I think I might have heard of him once or twice. Or he might have changed my whole life. In the very first time, I even discovered the concept of financial independence. This guy is the real deal.

He is, you know, maybe I don't know if this is the term he likes to use, but I like to think of him as the godfather of the whole movement of financial independence. He's the first guy that I, that really started making sense for me and getting things clicking. And I'm just so grateful to have him as the first guest on the show. You know, it's funny that you say he's the godfather. He actually, reading his blog, changed. the course of my life. And that sounds kind of cheesy, but it's actually 100% true. We were going down,

we meeting my husband and I were going down the same old path that most people go down. We did have a high level of savings, but we weren't on this financial independence journey. And then one day my husband had a really awful day at work. And he's banging out on his computer. How do I quit my job early? I can't take this. And this website comes up. Mr. Money. mustache. Here's how I quit my job at age 32. And Carl said, Carl said, this is a bunch of crap. This guy is a big, fat liar. And then he starts reading through and not only does Pete say he does this stuff, he actually shows you with mathematical proof, which you can't lie with math. He shows you how he did it. And it's just an amazing blog. And it's not only has it changed my life,

but it's changed a lot of other people's lives too, like yours. Yes, and I am so excited, I'm sure you are too, to be able to help continue spreading what he, you know, his ideas and his concepts through this podcast. I'm just so excited to talk to him and learn from him again here in person. You could say we. I'm so excited too. He's such a nice guy. He's so inspirational, just listening to him. I think it's really interesting. It's not about the money with him. It's about the quality of life. And he is living the life he wants to live. He does. he wants, when he wants, because he's not tied down to a job anymore. Absolutely. And that's what it's all about. It's not about the money. It's about what that

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30-day trial at audible.com slash BP money. Yes. Okay, so nobody's here listening to us. They want to hear Pete. Let's bring him in. Well, welcome, Pete. Thanks so much for taking the time out of your day to talk to us. We're looking very much forward to hearing an introduction to financial freedom from perhaps

one of the great masters in this space and one of the guiter of a lot of people's journeys in this financial frame space. Yeah, the blog that launched a thousand blogs. Oh, is that my new slogan? Excellent. Yes. I just said it to you.

Cool. I think I've heard that before. Maybe a thousand is a low number. Huh. Sure, I'll take it. Well, yeah, thanks for the invitation and for coming all the way to Longmont. I know that Scott came up from Denver. Mindy's the neighbor of mine, so she's not quite as impressive for her dedication.

Wow. Thanks, Pete. So I remember reading your blog for the first time. I was probably two or three months into my career at a Fortune 500 company. And I looked around and I was like, this is it. I'll be here for the next 40 years. And if I'm really good, I'll be in that corner office where my vice president is. And I'll be there in 20 or 30 years if things go really well.

That's not the life I want. And I began looking for alternatives. And I came across a number of different blogs. But then I found yours. And yours is really the one that gave me a real hope and action plan and mindset to get me going on that journey. And I think that's one of the reasons why I'm so excited to have you on the show here for the very first episode here. Can you kind of share your philosophy on life and financial freedom and kind of how you had your journey got started on that? That's a fairly broad question.

It might take a few hours. Keep it pretty simple. First of all, I think that's cool that you stumbled across a blog early in the career and you'd already got this fear, this scary thought, like, oh shit, is this going to be a 40-year thing of me sitting in this office? Because that's pretty far forward thinking. I didn't even think that far ahead when I was a young career worker. I just thought, awesome. I have a magnetic card that lets me into this fancy building. This is way bad.

All this air conditioning in here, too. I'm so lucky. So I was really, I came from a background of like not very fancy lifestyle and really junky job. So I always appreciated things each step of the way. every time I got a race. But at a point, there came to be a certain point, because of this low income, not low income,

but low spending, upbringing that my parents taught me through that I couldn't really think of anything else to buy. It wouldn't seem completely preposterous. So then I just didn't spend that surplus money, and then that's how that built up. And I thought, well, if it's building up, what else can you do with money? And I realized buying freedom is a perfectly possible thing to do

when you do the math. So I did that, not even knowing it, was a thing. It was back in the early 2000s. And then after retiring from software work, I realized that not many people were doing it. So I started a blog explaining why this is a logical path and it's not as difficult as people think. And that's been going on now, writing about it for an additional seven years. And now I've reached the ultimate height of the career of being on the bigger pocket second podcast. So I had the good fortune of learning from you immediately to start my career and not having to kind of figure out this whole process and come up with my own, you know, my own plan necessarily to get the first savings set up.

When did you kind of get the idea of financial independence? When did it shift from, oh, I'm just going to continue to live a frugal, stay in lifestyle without spending too much money to, I'm going to achieve financial freedom and make my moves in that direction. How did that kind of come about? Yeah, I had a similar path, although I was a little bit, I'm a couple of years old than Scott. but my husband came home he was working from home he came downstairs once he's like I can't

do this anymore I have this high stress job and I'm gonna just I can't do this for the next 30 years and he looked up online how do I retire early and this blog pops out Mr. Money Mustache and at first he was like oh this guy's full of crap there's wrong there's

he's selling something this is yeah this is total fake news whatever he was like and but then he continued reading which was nice and he's He's like, well, math doesn't lie. You showed the math. Look, here's what you can do.

We were inspired to do this early retirement through Mr. Money Mustache and this guy who showed you the math. But you are Mr. Money Mustache. How did you come up with this idea? I mean, it's like, I realize you didn't invent it, but you kind of did. I mean, there's three of, I don't want to say. You're talking about financial independence? The financial independence. I mean, early retirement, before we read this blog.

in 2012, early retirement was 62. Oh yeah, right. I remember there was a Canadian company that had like Freedom 55 as its thing and everyone's like 55 that's un- That's un-hermed.

That's so young but you're right. I mean, it's not really a new idea. There's actually like if you look way back to the richest man in Babylon that old parable book even that talks about financial independence and more recently in the 1993 book, Your Money or Your Life

which is about to come up with a new 2018 version right now, that was kind of credited as bringing a lot of these ideas back into modern society. It's always been a totally feasible thing. It's just that we get it programmed out of us by the marketing machine and the fake hardship machine. Everybody wants to tell us that life is hard and that we need all these products and our self-esteem depends on it. But the basic math has been on the individual side. ever since we became a rich society, which is like the amount you get paid

is way more than the amount you need to have a happy life, as long as you're not totally wasting it all on bull-h-like cars and stuff like that. So when you talk about, you know, one of the big things I think of your philosophy is this concept of hardship and how work and doing it yourself and being in control of every aspect of your life is the key to being happy. Can you talk about, have you always embraced that? Was that something you've developed or grown throughout the years?

Or is that, you should speak to that philosophy a little bit? Yeah, that's something I stumbled across gradually because as a little kid, I was pretty fearful and I didn't really like hard situations. So I wanted things to be easy. But as I got older, I just kind of gradually realized that I was happier when I achieved things and when I did more difficult things. And then I started having role models like the typical masculine role models, like, you know, action heroes and Arnold Schwarzenegger movies and stuff.

And I was kind of inspired by this idea of like the badass, competent person, man in my case. I was really interested in. So I just started emulating these people and I realized, man, this is way more fun than being wimpy and cowering at home. And then it just kept leading to more and more, like the more you do it, if it keeps working for you, why don't you keep doing it? So that led to things like wanting to know how to do stuff, like how to build. a house or how to maintain your bike or how to enjoy crappy weather and realize it's not crappy after all. And just through luck, those things also happen to cost a lot less money. So you end up with a

huge surplus of money and then you can retire early. So it all goes together. Like this stuff that makes you feel good, it makes you feel good about yourself, helps cure your anxiety and worry less and have a lot more money. It's all a great package. So that's what the blog is. that I write is about. Yeah, and I found the same to be true in my life. Every time I adopt a new, you know, every time I'm like, oh, this is the easy way I can go buy some Chinese food for dinner tonight. You know, I feel sick afterwards. It's completely different than going through the process of making something for myself or biking to work is, you know, even when it's cold outside, is just such a more refreshing way to start the day. You know, and it's this concept, it happens

to cost less. It's just a better way to go about your day-to-day life. It's just a better way to go about your your day-to-day life. It's more practical. It makes you stronger and tougher, and it happens to cost less as well. And I think that you kind of become a superhero in your own right along the lines of these guys with kind of the actions you've taken here. So can we go, let's suppose that I'm a median income earner with very little saved up. And I'm just kind of starting out on the path to financial independence. I want to become tough. I want to adopt these things step by step and build my financial fortress and really take control. What are some of the first things that I should be doing along the path to that journey. I think a really good thing is overlooked, especially in news

stories about personal finances, understand what you're doing with your money right now, because if you're more than 18 years old and you don't have any money to your name, something is happening. Like, where did your money go? You've blown it on something. So you need to start tracking that, like down to at least the $10 level, preferably the $1 level. And that's really easy to do these days just like add up your credit card statements don't spend cash or if you do spend cash do it meticulously so nothing goes vaporizes into the air and so you have you need to have a category list by the end of the first week of like i spent this much on beer this much on restaurants this much on car stuff and after you have about two months of that information you're going to have

a great picture of where your money's going and then you can start consulting people who are better at it than you, who spend less money than you, and see where are you spending too much. Most of those categories can get almost to zero when you get good at managing money and finding ways. Like, for example, it's possible to live for free if you, for example, have a duplex and rent out half of it, and then you live in the other half and you do a lot of your own renovations. That's one example of where your housing category can be zero. In fact, I think Scott does that, right, with your personal life right now? Yeah, I'm a big fan of that, And I've done that for the last couple of years, and it's really been a huge boost to, you know,

eliminate rent and housing expense entirely. So that's been a big one for me for sure. Yeah, right. And actually, Scott, has a book that I read a while ago that kind of shows that he's doing all this stuff correctly, eliminate most of his car expenses by finding a way to live close to work and biking there and eliminating any restaurant expenses that you don't want by knowing how to buy food at a grocery store. And in all of this, you always pursue. the win-win. Like, for example, you don't want to be homeless in order to get zero-dollar housing. You want to do some kind of smart hack where you have awesome housing that's zero dollars. And you don't want to not have a job in order to not have to drive to work. You want to find a way to

get your home and your work close enough together that you don't have to drive to work. So you're getting in shape while you go to work. So mustachianism, which is what I call my philosophy, is always about the win-win. You never compromise and do stuff that sucks just get more money, you always want to try to find a way to win in both sides of it. Okay, where were you in 1997 when I could have really, really, really used this information? Thank you very much. I was, I had a job in the Chicago area. I lived on the far west side suburbs, and my job was in the north suburbs, and it would take me 55, 65, 75 minutes every single day, one way to get to work and back. And I wasn't making huge dollars. And, oh, I can't

afford to live up here. Well, really, I couldn't afford to not live up there. I spent so much money on gas and, you know, car wear and tear. And it didn't occur to me that just spending a little bit more on my housing would have been a lot better because I wasn't looking at the big picture. So thanks for not being around in 1997. Oh, you're welcome. It's funny because in that year, I was having that same battle because in 1997, I was in Ottawa, Canada, like a new graduate in engineering. And to save money on housing, I teamed up with a bunch of friends to share like cool big rental houses instead of everybody getting small junky apartments. But the other guys that I was sharing with, they all wanted to be close to downtown where all the bars were and stuff so they could stumble home. But that was

a ridiculous commute across the trafficy city to get to the high tech area where we all had jobs at the same company. So I was always telling them like, well, guys, I'm not even shopping downtown. I'm going to get us a house near work because we go to work every day, but we don't go to the bars every day. And if we do, we're not going to have that job anymore. So we should live close to work. And there was a big battle between me and these guys. And we end up compromising and living in the middle. So at least I could bike to work.

But their default was to live like, you know, 20 miles from work and then just have this shi, like snowbound commute. So I'll chime here with my experience, which is almost exactly the same. I worked, my work was down south of Denver. And I lived close by work. And my buddies all live downtown. And the tradeoff was, okay, I'll stay at your place on the weekends. but I'll bring a case or two of beer.

And that was my tax that I had to pay. And I netted hundreds or thousands of dollars over and above what I would have had to spend to live in the downtown area near the bars. And I think that that's a very easy way to get around the situation is just, yeah, your day-to-day life is what you have to take care of first. And your fund, you can fit around that, even if you pay a little bit more for that recreation,

just the fact that your overall position is so optimized has such a huge impact on your ability to, accumulate wealth and live a happier lifestyle on the most important days. Yeah, and that's the other thing is I find people, young people are, I sound like an old man now, but they're always too focused on like nightlife and stuff, even when they're graduated from school and there's more important stuff to be done. Like if you're going to bother having a job at all, you should put your energy into being good at it.

And that means you're not going to, you can't go out drinking on weekdays. you have to like go to bed early, eat salads, lift weights, go to the office early, work hard, make friends with everybody, be an awesome worker, and then like occasionally go partying on the weekends. That should work has to be your primary focus in your 20s if you want to make a ton of money at it. And that's actually just as happy because if you are, you know, doing a half-frizzed job at work and then going to bars, you're going to feel terrible about your work performance and you'll feel terrible at work. So you think you're

happier because you're like, yay, I'm drunk, I'm picking up people, but your overall life is not as satisfying because your soul is not, you know, you're not actually being a productive person. Again, where were you in 1997 when I could have really used this information? Thanks, Pete.

I love this because the whole point is that you're getting, it's improving all of the areas of your life. You're not, oh, it's not like, oh, I moved closer to work and I sacrificed having fun you know, downtown with my buddies on the weeknights. You know, it was, oh, I moved closer to work, and I had way more time in my day because

I wasn't stuck in a 40 to 50 minute commute each way to and from the office. And I was able to save money. You know, and I had more free time to pursue my interests. And, you know, if you're like me and you're able to kind of invest yourself in some work that you love, you eventually may find work that you love. And that's the whole point. That's one of the advantages of financial freedom, for me at least, is being able to work job that I love with my best energies and in close proximity and synergy with my lifestyle.

And that is what I think you've built for yourself as well in the end. Is that fair? Yeah. Like I still really like working and we're sitting in one of my places of work right now in downtown Longmont. And I would not give this up. I mean, I would not give up working for anything even though I don't need to work for money because work is the real core of satisfactions. Humans are made to work and achieve things, but it has to be the right things. You can't be doing endless tasks for your boss that you don't like creating a product you don't like. That's why people think they don't like work. If you find the work that's right for you, you'll want to do it and you'll need to do it in order to be happy.

I've had some soul-sucking bosses, and I had a job that I enjoyed the work for. I really hated the person I was working. is a strong word, but I think it's really perfect in this situation. Yeah. And so when I had my first child, I became a stay-at-home mom. It was always my intention to be a stay-at-home mom. I didn't want to have a child and then go right back to work. And we planned that.

I was fortunate to be able to do that. But then, you know, after the youngest one got to school age, I'm like, well, what am I going to do with my time now? And I found this job that I don't have to work. My husband is retired in air quotes. You can't see that because it's awesome. but he's retired in that he doesn't work a nine to five job anymore but he still works every day he's taught teaching himself a new programming language so he can write a new website that's going to be

really awesome I hope but I mean even if it's not he's doing something that he really enjoys and I am doing something I really enjoy I can't believe I get to work in bigger pockets and I couldn't have done this if I had to work for money well I don't like this I make decent wage. Let's talk about that after. It sounds like at the end of the day, because of your position of financial independence, because you've done all these things correctly and taking control of your life and you take the right way, not the easy way with what you do, that you were able to spend your days exactly as you wish doing hard work and creating beautiful things.

Like this room we're sitting in right now was a dilapidated building just a few months ago. and you've turned it into a really awesome facility and are constantly improving it where we have, there's many people happily working, or are also either are they financially independent here or are they working towards it for the most part? I don't know. It depends on, I mean, that's not one of the rules for joining my co-working space. I don't do your financial tech. Yeah, I happen to know there's, it's kind of a mixture of people who are already retired in my

parlance and people who have regular jobs, they enjoy working remotely and other people who have their own companies and they like working from home and sometimes coming down here. So, yeah, it's a mixture of a social club and a coffee shop and a working place. So one of the things that comes into play after you've kind of adopted this mindset, you're accumulating wealth, you're bettering yourself, you're living a healthy lifestyle, you understand the merits of financial freedom is investing. Can you give us some of your overall thoughts on how you might have approached investing as you were moving towards the first phase of financial freedom and maybe how you picture it now

several years in? I did stock investing myself, so I just used to read stock investing books as a kid or as a young adult, and I learned about index funds being the best form of stock investing on average, so that's what I did. I did a little bit of real estate as well in the sense of buying a junkie house for the first place that I lived and renovating that over five years and then turning it to rental and then buying another junkie house. So it was a mixture of things. And with this being bigger pockets, real estate is often on people's minds. And I think that's a great way. Like, if you have the skills and energy to do real estate for your investing instead of stock investing, you can make, I think, more money on average for your invested capital because you're multiplying

it by your own skill level. You certainly have more control over the investment. You choose the tenant if you're doing a rental, you choose the fixing, the finishes if you're fixing it up. I like real estate more, but the stock market has also been, you know, in the last few years, it's just been on such a tear. Yeah, which makes real estate better in comparison now because the stocks are more expensive now relative to, for example, real estate in cheap areas of the country, which is where you'd be looking as a landlord. And yeah, it really depends on your personal taste.

So if you want to be truly retired and not have to think about money and you hate managing, people, then real estate's not such a good idea. Yes, it's not, it's difficult to get a truly, truly, truly, truly passive real estate investment. Yeah. Whereas the stock market, you really have no control over it. So you don't have any active management. You just put your money in the stock market or in the index fund or whatever and you just kind of hope.

Yeah, and it just creates money. You own index funds and you get checks. That's all that you need to know. Just electronic deposits, not even checks. so it's even easier than checks. And why would you invest in real estate if you thought you weren't going to be able to sustain at least a little bit higher return than the stock market because of all that effort? So that is definitely something to consider it for people that are thinking about real estate versus

a more passive thing like stocks. Yeah. In terms of a particular real estate investment, would you mind telling us a little bit of the details about this particular property, maybe what you paid for it and what you've put into it and what it generates now? Yeah, sure. This one we didn't even think of as a real estate investment because it was more of a community project, which also is, that's just a fancy way of saying fun hanging out with

people. So we, we got this building, happened to go up on Craigslist with no pictures, just because it was like a really strange condition that it was up for sale under. And my wife saw that just the day it got posted, so we phoned immediately. So the guy was asking $230,000 dollars, yeah, for this downtown property. It's across the street from a $23 million property that was recently built. Of course, they're on a bigger piece of land, but this is a pretty good chunk here. I think this particular location is in the path of progress. Yeah. And I don't mean like this is a dump right now, but it's slightly north of downtown Longmont,

like two streets north of downtown Longmont, like the heart of downtown Longmont. Although that heart moved kind of when they put the $23 million mecca across the street. So suddenly we're across the street from the most expensive building downtown. Sure, there's like some nicer historic buildings if you walk south two blocks or three blocks. But yeah, you're right. If you go north more from here, then it rapidly degrades to like pawn shops and car dealerships and stuff. Yes. So we're kind of marking the northern frontier now, but that's going to just keep going up even more.

I can't believe this is only 230,000. Yeah. So it was terrible building, though. It was, everything was junk that when none of the windows and doors worked, there's like three dumpsters of debris. filling up the whole property in the backyard. So definitely you have to knock some dollars off from that. But even so, I would say the normal market value might have been maybe $3.50 in its condition. And then we did a quick, like quick and kind of cool fix-up of everything with multiple people.

We bought the building with three friends, wife and two other friends. So we had a larger staff than I'm usually working with, which helped speed it up. And I had friends, hired some friends too. So now it's a lot nicer than what it was before. And now, to get into your point about the business side of it, this side that we're sitting on right now is a retail shop and two studios for the artists who make the stuff to sell in the retail shop, the wife and her friend.

And then my side is a co-working space, and it has its membership-based. So right now, for example, we have a little over 60 members. I set the price super low because I'm trying to run it, trying to run it on a non-greedy basis. So it brings in $3,000 a month right now. And my side of the building is I spent a total of 150 on it. If you take my half of the purchase, plus the money that I spent on fixing it up. So it's like a 20% annual return on investment so far.

Although there's a bit of work, I have to come down here and drink beer and talk to people to manage it. That's fantastic. And it seems to me that Pete, you really enjoy doing doing the, work to fix these buildings up and make them beautiful. So is there a little bit of a reward in the intrinsically in the work itself for you? Oh, yeah. It was all intrinsic reward. Like I bought this because I like fixing things up, not because I wanted to make $3,000 a

month, which isn't really very exciting to me. The part I'm excited about is transforming the building, coming up with ideas and meeting people who live nearby, and it's worked out really well. Like, everybody who joined the co-working space is all these amazing, cool, local people that I never would have met. They came out of the woodwork when they found out there's a place where we all get to hang around together and do work together. When we first moved to Longmont, four years ago, we were looking for something similar to that because Carl was working from home and Daphne was still at home and she's a very loud child. And there were times that he was like,

I can't get any work done because she's just so loud. And, you know, when it's snowing outside, you can't really go someplace. I guess you go to the library. But we looked at a lot of co-working spaces and they're just, well, there aren't any co-working spaces. There were not in Longmont at the time. We're looking for apartments to rent or like work apartments, offices. And I think $300 a month was the cheapest we could find. You have to get like a cubicle somewhere. Yeah, and that price is not worth it.

It could be. I mean, that's still only 10 bucks a day, but I still see your point. I mean, this is way cooler and it's $50 and there's a gym in the back. Yeah, this is a really cool space. And looking around trying to think, how would I do. describe this, it's very funky. Yeah, like rustic, exposed brick, lots of random materials

from different generations of the house, some crumbling plaster here and there, and then some fancy fixtures here and there as well. I still can't believe you paid $230,000 in place. For those of you not in the know, Longmont is experiencing quite the surge in real estate prices, and you can't buy anything in Longmont for $230,000.

No, like in this neighborhood, so this downtown is the most expensive. neighborhood. So the housing starts around like the low 400s and that's for kind of a granny shack, you know, that'll need a lot of work than this house. Yeah, and that would be a lot smaller too. Like this building is 2400 square feet indoors and it's on an 8,000 square foot lot. So it's got a lot of potential and we've only activated some of its potential now. I'm hoping it turns into like a crazy utopian hippie compound eventually. Like a high walled thing with like, you know, Who knows what going on in the back.

But this is the point. This is why it's so important to work towards achieving your goals because then you can, towards your financial freedom, because then you can do these kinds of things. This is a passion project. The fact that you love it so much enables you to get a really good deal to do the work really cheaply, to run a really great business,

and to do it exactly the way that you want in a new and creative way. And that's going to be very difficult to replicate for the guy who's just trying to make a quick buck. and he's not really approaching this from a position of foundationally got everything else in order first. And it's also not easy. The fact that this is hard work that's really making a meaningful difference in the people's lives that are, you know, that are your customers and in a way that you enjoy is really the whole key to this puzzle, I think. Like, I would argue that this was probably a very risky venture for someone that was using leverage and was doing this solely for an investment. return. Or somebody who's doing it as a job. Like if you had this and this is your sole job,

you would have to make money at it. Whereas when you come from a position of, well, if it doesn't work, then I'll just figure something else out. That makes it more fun. There's no stress on, oh, I've got to get this done. I'm under deadline. I have to get the whole thing finished by tomorrow because that's when it opens. Yeah, I agree. The only way to work is to get to the point where you don't need to work, and then the work gets much better, as I like to say, when you don't need the money. And then it also makes you question yourself because someone says, oh, do you want to do this other project?

And you have to ask, well, would I do it for free? Because there's no point doing work for money if you don't need money. So if you get to that stage quickly in your life, then suddenly you're doing all this work that's so fun that you'd be willing to do it for free. And then you're still going to make money from it. So it's like this double, amazing fun win. And then, but with this surplus money, you're like, wow, I can be able to be. extra generous because I didn't even need it in the first place, which reinforces the value of

business because people say like, wow, I notice he's not trying to screw me at all. So I'm going to give him even more business. It's an amazing virtuous cycle. It starts with limiting your own personal wimpiness and greed. And I think you have a blog post in this topic. I think it's called first retire, then get rich. And is that kind of what you're speaking to in that post a little bit? yeah it's kind of an interesting strategy where if you can make your needs efficient and get a lot of skills so it doesn't take a lot of money to keep yourself going then you can quit the job that you don't like which i call retiring and then you can do work that you do like because in my rules you're never allowed to stop working you always have to stay energetic do awesome things you know at least every

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I think with the word retirement is always funny because it conjures up these images of just kind of lounging around and, you know, maybe some beaches and that kind of thing. But I've found that I've met remarkably few people that have achieved financial freedom that then go on to just kind of relax on it. It's always this, oh, now I'm actually going to hustle way more and do in exactly the way I want because I'm passionate about that project. It's really, you know, financial freedom, it seems like, is kind of the, the beginning of this whole next phase, I guess.

Yeah, it is if you do it right. I mean, if you keep the edge of greed and you always just want more stuff, you know, like the bottomless pit of personal jets and yachts where like even $100 million, you're still not even getting started, then you never get that feeling of freedom because you're like, oh, I'm still working for the jet. I'm still working for the yacht. You can never get everything you want in life. That's not the same as feeling like, oh, no, I'm way more than I ever.

ever need. And so, so I'm not, I'm not chasing after that money. So I would like to point out that you seem to be a kind of a happy person. You're just, you're not worried about, you don't have stressed, you're not worried about, you know, oh, how am I going to do this? How am I going to pay for that? And I have also met a lot of people that are, I don't like the word retired because it does conjure up this lazy or old or, you know, well, you're going to have to start liking it, because that's my brand. And I'm trying to redefine retired because I don't want anybody, young or old, to think of it as stopping working. I want everybody to remain engaged because you've probably read these statistics where we'll die shortly after retiring because they wrecked their creative ability by working too long in a soulless job.

So anyway, hopefully I can teach you to like the word retired later because it's also financially independent is way too many syllables. That is true. It is way too many syllables. but it's, well, let's make up a new word for a new phrase. How about this? Retired. I already did. It's retired.

That's awesome. But you know, you meet people who have a job that they hate and they're unhappy. You spend an enormous amount of your awakened hours at a job you hate. All these people that I know, I encounter a lot of people who are like, well, what am I going to do when I am retired? What am I going to do when I don't have a job anymore? What am I going to do? You know, I have to give up so much to get that. You don't have to give up so much to get that.

What did you give up? Having brand-name designer jeans, you're not a brand-name designer gene kind of guy. So you're not giving up things that don't, that matter to you. Yeah, and that stuff shouldn't really matter to anybody. It's just a matter of training. It sounds like you gave up some unhealthy food, and you gave up sedentary commute to work in a vehicle. That's true. I had to give up 100 pounds of obese body fat in order to,

you know, ride my bike. Not that I had that to begin with, but I gave up the opportunity to be a larger man by not being sedentary all the time. One other thing I want to point out about the lifestyle, it seems you lead, is that you're also involved in politics in the local community. Is that correct?

Well, not exactly politics, but yeah, trying to get the city to find itself a bit more efficiently. You know, we've been going to town council meetings and sending letters and things like that. So I'm not a politician, but I have suggestions for how to run. run the place a little bit better. Mostly centered around, not turning the whole thing into a damned highway and parking lot. So making it more people friendly and making it more pedestrian

and bike friendly. How do you feel about people that don't have very good mufflers on their cars? I think those trucks need to be confiscated and recycled and the person needs to lose their license for life. I agree. Yes. We were walking over here, we passed a truck passed up with, I don't know, no muffler or holes drilled in the muffler or something that was the loudest. truck and he stunk too. Yeah. I'm totally on board with getting rid of him. And Pete just described him a little bit more politely

than he might have at the time. That's true. But that's just a thing that people don't realize. We take the cars for granted and we're like, yeah, that's just how you get around. But if you change your perspective and realize what's really going on, you've realized they wreck everything. Like cars wreck everything. They wreck cities.

They wreck your wallet. Your finances. They wreck your family. They kill you. They make you fat. They cost 10 times more to make paths on roads for than the alternative of putting stuff closer together and having bikes and walking and stuff the cars just wrecked everything so that's one of my side passions is just getting rid of this ridiculous car delusion that we're running in this country because it's it's just a waste so is there a moral component to this this journey that you'd have you have as well well i would say i feel that efficiency

is a moral thing you know when you when you're wasting anything then that's a bit immoral because As a species, like the only thing that we have going for us is these great, powerful brains. And the only reason we took over the planet is because we were efficient originally. Like, we know how to stretch a resource and make new materials do new things that they didn't do before and make more food out of less land and everything. And that's what made us rich. But it's also what makes, that's what makes nowadays the top people in that system rich. And then everybody else leads this crappy slave life because they're inefficient with their.

with their resources so you can just have a lot more fun and be a lot wealthier by being efficient. So that's the extent of the morality. Other than by creating pollution and everything, you're really stepping on a lot of people's, especially poor people and people in other countries. You're stepping on their lives a lot if you're polluting. So that's another moral issue for why you shouldn't be inefficient. Obviously go check out Mr. Money Mustache.com. That blog's fantastic.

I like to hit the random button and kind of peruse old article. on there. But do you have any articles from your own blog that you think that we should start with? Oh yeah, right. Well, I have a start here button and that gets you started

and that links you to a bunch of other articles. But if you want to just get the more like, I think people benefit from repetition in their training. So you can go, if you want to read my blog,

you can go to the complete list of all articles and just start reading from the first one and clicking next, next, next. Even better. Nowadays, there's an Android app that some readers develop

that's super, super, super slick. And if you have an Android phone, you download this free app, and it grabs all the articles in a really nice format, and then it keeps track of which ones you've read, and you can read on your phone, nicely formatted and everything. So that's the easiest way. It's like a book.

It's like a handheld book with 500 articles now that you can read through. Not all of them are going to be useful, because some of them are just like, you know, here's a phone service that was interesting in 2012, but most of them are I tried to make useful permanently and just skip anything that's not relevant. I think it's a really good point about repetition too. When I was starting out doing this, you know, it was odd.

It was no one else was doing it. You know, none of my colleagues were doing it. None of my friends were doing it. The thing that helped, though, was because I was reading your site constantly and saw other personal finance blogs, the people that I was associating with in my head or the people that I was reading, the voices in my head were all saying, hey, here's how to do this. Here's the correct way to do it.

And it didn't feel so odd, you know, when I'm making a change, like beginning to work, when it's constantly reinforced by what I'm reading. for example, on your platform. That can be a huge boost. You really have to kind of read at least for a few minutes or otherwise absorb information about this process for a few minutes a day. So it doesn't just seem so unusual to you.

It will begin to seem normal and the correct way to go about things, which I think we all believe it is. So you have a forum on your blog, right, where people can talk and ask questions and chat. That's true, yeah. It's a separate section. What is that that is? Forum.forum.com.

It runs on a different server, but it's still part of the mustachian online world. And yeah, it's pretty neat. I don't even use it very much myself, but I'm really happy that people do. It's just a place where probably millions of people, there's like 40,000 registered users, and then millions of people read what these registered users are conversing, and anybody can join, of course, are free. And they just ask each other questions. questions about more detailed stuff than what I might have covered on the blog.

Like, hi, I have this 401k plan and here's the details. What would you do in this situation? Or are they just joke around? Sometimes there's like a dating subpage on there. There's like whatever financial independence seeking outdoorsy, smart people would like to talk about. That's what happens on the forum. You know, I think it's really important to have conversations with other people like this because it's difficult to find people like this in real life.

you're the frugal freak. You're the one that, you know, oh, you're the cheap person in your group of friends or, you know, and connecting with other people to see, hey, I'm not the only person doing this. That's been one of the best parts of our journey is meeting other people. And, you know, you meet them online. You talk to them for a while.

You meet them in person. You're like, wow, I have a lot in common. And it's not just all conversations about money, but it makes it a lot easier to have a conversation about something else when you're not trying to get around this giant consumer conversation that people seem to have. You know, oh, what kind of car do you drive? What does it matter? Yeah, yeah, that's true.

And just the activities you plan, you know, like if you have standard American consumer or friends, and then you're like, let's go to the park. And they'll like, okay, I'll grab my giant SUV and we can drive two blocks to the park. And then we can bring six garbage bags full of disposable plastic plates and eat a bunch of McDonald's. And yeah, so just the activities are different when you have. So much different. But not any less fun because you're still interacting with people that you enjoy. You just aren't going to a restaurant and dropping $50 on a meal that you're not going to remember tomorrow.

Right. Or you might do that, but it's just not the only thing you do. You know, you might also go for hikes with your friends or, you know, today, the three of us met at my house. I was raking leaves and then we walked downtown and then recorded a podcast that everybody makes money. money off. So, like, that's an example of fun, you know, fun product, fun ways for people to bond that is not spending money. Yeah. Another part of this is when you join these groups or like the forum, you know, the Mr. Money Mustache forums, is that how you referred to them? Yeah. You know, you can ask questions to those groups and get forum-based feedback that can help you make the

best choices about something. For example, I actually am a member of that community. I haven't posted too many times, maybe like four or five times. I remember posting a question. I said, hey, I bought a 2014 Toyota Corolla, brand new car, right as I was discovering Mr. Money Mustache. So this is my big financial mistake and I financed it. And so I said, hey, it's been, you know, after a year or so, I kind of ignored it. And I go in and I say, hey, I've owned this car for a year or two. And what should I do? Should I sell it?

Should I get a new car? Should I buy an older one? And I got crowdsourced feedback. And I think the community was evenly split on that one. There are some people who are like, sell it immediately, you know, but other people are like, oh, you're 2% loan. and you could probably keep it, and you've already suffers some depreciation. But having that feedback allowed me to make my choice of just keeping it

and resolving not to make a future mistake like that again. But that's the kind of stuff that you talk to your friends and family. They're going to be like, are you crazy? You have a Toyota Corolla. That's an economy car. That's not a bad choice. But then when you go into this community, you kind of get that perspective that is more aligned with the way that we all think. Yeah, right.

And a lot of families will give you the opposite perspective. They're like, you're supposed to be a successful man. You can't be seen in a carola. You need something more befitting of your status. It's three years old, almost four years old. You need an SDD, Scott. I feel like my car is like the height of luxury. I've got the screen when I back up, and it tells me if there's something behind me.

I've got, you know, Bluetooth sound system. It's pretty fancy. So, yeah, I don't see how anyone... It has four doors and a steering wheel, a seatbelt that works. That's true. Which I can't say for all of my past vehicles. You know, it's funny, I'm almost like a little embarrassed about by new Corolla for it being too nice. It doesn't, you know, it doesn't represent, like, how I would make choices now.

It's kind of the way that things go along. How you make choices now is not who you were when you bought the car. So I think that having the feedback from the forums be evenly split is also just as helpful as, you know, if everybody had said, oh, you need to sell that car that makes an easy decision. you can tell now that it wasn't such a horrible decision if everybody's evenly split on, should you keep it or should you sell? Yeah. And I got another question here.

Do you think that your friends and the people you associate with begin to change as you go down this journey towards financial freedom and make the choices that you've made? Yeah, like there's two ways in which I hear that they change for people. And one way you find yourself attracted to new crowds, you know, like maybe less consumer crowds or more in line with the kind of stuff we talk. about today, what to do in your free time, but also friends strongly influence each other. So in my area, I feel without pushing it on them, a lot of my friends have become more interested in financial independence and just living lives that aren't overly flashy.

So I have several friends that are probably like multi-millionaires in net worth, but they, you know, you would never tell that from anything they do. They have normal old cars. they have do their own work you know if a sewer pipe clogs they'll rent the machine and clear it out rick your own leaves yes that's not a DIY project that I will ever DIY again okay you don't have for the readers for the listeners everything is a DIY project you should try at least once because otherwise you're just being fearful and then you make a decision afterwards and say okay now I know how much it costs I know how it feels to do with myself what's my choice and if you can

afford Java sort of stuff. You can absolutely do it. A lot of it has to do with what you can afford to. But anyway, friends change over time and they influence each other. So if you are a positive, confident person and they see you're having success with the way of living, then they're going to start copying you. And then you've got a happy little tribe that's all helping each other. I will say that my sister has said to me just recently, I see how you and your husband are living and now I have changed the way that I buy things and I may still buy something but I think about it first whereas before she was like I wipe my ass with a hundred dollar bill I don't care I'm like what what no you can't just not care I guess you can but then you don't get as much out

of life if you just spend money all the time anyway she's she's like yeah I was at that target the other day and I didn't buy shoes because I thought what would Mindy do. Like, I'm so proud of you. That really made me feel good that I was able to influence her. Yeah, it's a good start. People should hear your voice virtually on their shoulders and then want to follow it. Yes. Would Mindy approve of this purchase? Ask yourself the next time you're going to buy something. So how do, one more question here, how do I convince my friends and family to be, or what's a good approach to get them to come kind of jump on the bandwagon? I know that what I was doing this, I think I came across as very annoying to many of my friends, maybe my brother, some folks like that.

Is there a good way to approach this that is maybe less intrusive and so that I can convince these people that I care about that this is a worthwhile goal and that they should join me on the... Yeah, it's a common beginner mistake to try to preach to people. And people, it's a lot more confrontational to give somebody advice, especially if they didn't ask for it. So, strangely enough, you usually have to let it go with the people in your life. especially ones where the emotional relationship might be a little bit tense, like siblings or in-laws or whatever.

Instead, the best you can do is just live the way you want to live and be confident about it and try to show the prosperity and the success of your approach. And then it's up to them if they want to copy you and not everybody will. And like I have some people in my life that are completely soiling their own financial undergarments even after knowing how we live. Can I steal that phrase? Yeah. People like still racking up debt on huge salaries and not biking places and just buying impulse purchases even though they see debt and they know who I am and they know I have this blog and I'm like, that's fine. You know, never push it in these people's faces because it's not going to help and it'll just hurt your relationship. And maybe they're still happy with their lives.

That's totally fine. The important part is you and anybody who chooses to be inspired. So the best you can do is by making it look good. So you don't want to be, you know, be conscious of your impression on other people and try to make it look good. You don't want to look cheap or deprived or whatever. That's a really good answer to that question. I've had that question a lot too. And because once you discover it, you're like, oh, I want to tell everybody about this awesome new thing.

But everybody's like, I don't want to hear it. Right. But they do want to be inspired. like they do want what you have. If you have a good life, they want what you have. So if you want to inspire other people, make sure you demonstrate that it gives them what they want. Everybody wants to be physically fit, for example.

Make sure you are if you want them to be like you. Everybody wants to be, to have friends. Make sure it's obvious that you have friends. Everyone wants a house that looks nice inside and out. Make sure your house looks nice inside and out. If you want your friends to copy you and they want to have a busy life, they want to be popular, they want to have a high social status. You have to demonstrate.

all these things if you want anybody to want your life. That's a fantastic answer. That's a really great answer. Marketing. I came from a marketing thing. My dad had an advertising agency. Well, do you have anything else you want to add as it pertains? Remember, the listeners are going to be folks that are working toward financial freedom,

often from a standing start with little to no assets, maybe less than 100K. Any other final parting tips that we want to share with those folks? I think this has been incredibly inspiring. in terms of what to do here? I think you can just start kind of small, like start every day with a list that you've written the night before. So right now you're probably looking at crap on your phone before you go to bed. Instead, shut your phone off and write a list of what you want out of your next day.

So that way that's what you wake up to. And then when you wake up, your phone is not there in the bedside table. This list is there instead. And then make sure that list includes one difficult thing. and one outdoors thing. And I think that's a good enough, you know, that's a habit that will get you to continue more habits

that start improving your life. Something difficult, something outdoors, and then other than that, just keep reading, keep reading and figuring out how to run things more efficiently. Awesome. Yeah, I think being outdoors is definitely a big contributor to happiness that I didn't really get enough of, I think, prior to at least the modest change for me

was biking to work. I'm just having that little bit, of time outside, I think, is really, like, a big boost to your average office worker as well. So I think that's a really good point. They do. So everyone is so sedentary, and they get outside so little. I'm just shocked. Like, that has to be multiplied by about 10 for the average person before they're even starting to be reasonable. So that's why I always tell people to start with that. Like, start by parking your car a mile from work. If you're stuck with a car commute right now, you're going to fix that.

That's not acceptable. But for now, just park a mile from work. If you can't do that, park a mile from your house, like leave your car at the grocery store, wherever you're allowed to park it, and then walk briskly home after work. So at least you're getting that little 15 minutes of breathing in. That's one example of how like a suburban, crappy life can be immediately boosted without having to buy anything. That's a really great point. We have terrible parking at work, and I'm always one of the first people in, but I could park a mile away and walk to work. I don't, I'm only in the office a couple of days a week, but. Yeah, just scout it out. find there might be a neighborhood where there's unlimited parking if you have a radius that big

maybe there's a park with a parking lot public park those are usually great places to leave your car and yeah yeah that's a great tip i think it's a great tip and i'll add to that one of one thing you can do also is you can put a one of these cheap bike racks on the back of your car it works even like a sedan like mine and i found that very useful when i bike somewhere and then for every reason i have to leave leave it there and then transport the car or whatever that'll just encourage you to bike more where you can, even if you then have to go pick it back up later. Just kind of getting started on that, I think, is

a huge boost. Ooh, I could drive halfway to work and then bike the rest of the way. I do want to bike there one day. Yeah, you can use the electric carl's super electric bike and then get there almost as fast as the race car. I have one of those.

If anyone wants to hear about the electric bike, I could talk about that. It's actually an article on Mr. Money Mustache, I think, right? Yeah. Written by Carl on how to make a kick-ass electric bike that goes as fast as a car for the price of almost a normal bike. Yeah, this was my big treat to myself this year.

So it's pretty awesome. You feel like you're flying on this thing. Always wear your helmet. Awesome. Well, should we wrap up and do our final closing questions? Oh, do you have those by any chance? Investing book? Yeah, we have favorite.

When we skip the closing questions? for now. Yeah, I've got one more question for you then. What is your favorite joke to tell it parties? Oh, geez, that's a ridiculous question. I don't have a stash of regular jokes. I only operate on fresh jokes. Depending on the context. So you're a big pun guy? No, I don't think puns are a really good source. I'm more of a preposterous exaggeration-based

humor person. I see. But it has to be done spontaneously. You can't just be like, hey, Pete, can you give us some of your preposterous exaggeration now? It's so funny. Well, I believe we are in a soap shop, so we might as well make a clean break. With that, I move on. Thank you so much for taking the time to talk about this.

It's always great to hear your thoughts on every subject around based on financial freedom. So thank you. Thanks, man. That's great here. Thank you, Pete. So this was an awesome show. So this was, it was kind of surreal almost talking to one of my, I guess, heroes, someone who's really changed by whole life, the whole way I think about life through his words on his blog. He changed the way that I approached my finances in all of my life.

And, you know, I've been reading his stuff for years. It was so great to meet him face to face and just chat with him for over almost an hour about personal finance, his philosophy. And then, of course, we got, we were fortunate enough to hang out with him for most of the day, actually. Yeah, that was a really, really, really fun day. Yeah, Pete, the personal finance hero. Yeah, that's, he's a superhero. He's a superhero. His superpowers are teaching people how to break free of the chains of their job.

And I, you know, it was funny because not, I mean, not that it was ever in doubt, but this guy, really, he lives out everything that he says. He lives in his house that he constructed from scratch. which faces a beautiful park. You know, we walked into town where he has this building that he's been, you know, rehabbing and has installed a co-working space and a kind of like a soap shop, a craft shop for his, which he splits, I think he splits the building with his wife and a partner, and they've got the shop there. They host events there.

I mean, it's just incredible. He works with his hands every day and does exactly what he wants. Yes. And to sit and talk with him, He is really just constrained financially. Okay, constrained is not the right word. He doesn't blow money on stupid crap. No.

And he, like, that's just not his desire. And it's really interesting with the success of his blog, he doesn't have to just spend, I think he says, $25,000 a year, but he still does. That's just, I don't want anything, so I don't spend any money on things that I don't want. Yeah, and the big pickup I got from him was it's not necessarily the money.

It's optimization and happiness in general. It's how can he do something more efficiently? And I think that he gets a real pleasure out of doing things very efficiently, as he should. And that's something that I get a lot of pleasure out of. He was talking about how he's able to get a lot of the construction materials for this project for free. It's almost like a game to him. Like, how little money can I spend? It's kind of fun to spend some time with him and just watch him.

Yeah, it's pretty amazing. Well, regardless, huge thanks to Pete, Mr. Buddy Moustache, for being our first guest on our first show. Very, very special, very, very awesome to get to hear from you and hear your philosophy. So thank you very much. And now, my selfishly, we are a new show. This is episode number one. And we currently have zero ratings and reviews on iTunes. So if you enjoyed the show, please, please go to iTunes and leave us a rating and a review and tell people about it. share the show so that we can continue to bring you really amazing guests. Awesome. For episode number one of the Bigger Pockets Money Show, this is Mindy Jensen, over and out.