BiggerPockets Money Podcast - 11: Financial Freedom in Less Than Five Years with Joel from FI 180

Episode Date: March 12, 2018

Joel and his wife were barreling down the wrong financial path - saving nothing and spending more than $100,000 every year. A freak car accident literally changed the direction of their lives by causing them to re-evaluate and decide on what was truly... Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money Show, show, show number 11. We were kind of in this place where we thought we were saving because we were doing the 401k match that our company was doing, which was, I think it was like 5% or somewhere around there, 5% or 6%. And so we said, oh, we're doing that. So we're being responsible. So let's just have fun with the rest of our money. And we didn't realize that what it was turning into was that we were creating a lifestyle that was really not very sustainable. And it was also. something where a lot of our friends were latching on to us because of that lifestyle. 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.

How's it going, everybody? I'm Scott Trench here with my co-host, Ms. Mindy Jensen. How you doing today, Mindy? Scott, I am having an awesome day. How are you doing today? I am doing fantastic. We just heard from one of the people I've been most excited to have on this podcast in Joel from Financial 180. And I think you and I both met Joel maybe mid-January of 2018 at a very nerdy, very awesome personal finance camp down in Florida. But I was so impressed with Joel because Joel is one of those people who came from a background of dual high income, high spending, and was unable to accumulate wealth. And I think there's a lot of listeners out there that may come from a similar

position where they've got that, you know, income of $70,000 or $80,000 a year or more. And then maybe two of them, and in a sense of two spouses are working, but yet still can't seem to get ahead. And we've had so many perspectives in the show like Sarah Wilson with her, you know, low income and ability to pay off debt. This really is an episode for that other end of the spectrum with the high income unable to get ahead. And I think they just have a really fantastic approach to how they were able to cut back on their expenses, build up hundreds of thousands of dollars in assets in four to five years, and finish out the journey to retirement. Yeah, his story is fantastic because it shows you that you can do this. Just because you haven't always been frugal doesn't mean you can't

start. And I think at one point he even says, if I can do this, anybody can do this. You know, They were spending six figures. They were spending more than $100,000 a year. That takes some effort. Yeah, it really is. I don't know how I would spend $10,000 a month. But a lot of people do that. And a lot of people are kind of stuck in that pattern.

And that's where I think Joel and his wife was until they did a financial 180. The name of their blog is FI-180. And we're able to transition out of that and begin to really accumulate a lot. Again, a lot of wealth, find meaning. and he really enjoys his day. He actually just retired from his job. After really aggressively starting the journey in about 2012, 2012, 2013, he just finished in November of 2017.

Yes. He's been retired for a few months. Yes. And what makes the story so great is that they were going full speed ahead in the opposite direction. They actually did a complete 180 starting from, I think he said they had about $10,000 in credit card debt. So not enormous, but definitely starting from a negative spot.

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slash BP money. I'm so excited to bring him in. Joel, welcome to the show. Hey, good to be here. Thanks for having me, guys. Thank you for coming on the show. So, Joel, you have an incredible story where you, it sounds like you kind of came from this position of very high spending and we're able to kind of reverse that. So can you just start from the very beginning and talk about what was life like a few years ago for you before you got interested in the concept of financial.

freedom. Yeah. So I guess the place to start would be 2007. So 2007, my wife and I, she was my girlfriend at the time. We just graduated from university. And we had our offer letters for our very first job. We didn't even have the job yet. We had our offer letters. And so we said, all right, we're adults now. The first thing we need to do is go buy a house. And so we went and we bought a house in 2007, which was not very good timing. We bought this house. We moved in. And we were, you know, kind of plain grown-up. So we said, okay, it's time to furnish this house. So we went and got about $10,000 worth of furniture on credit. And we just filled out this house. And we kind of started living this life where we never really had money before. We were college kids. And now we did. And we

kind of were like, man, we can do anything and everything. So we started just slowly increasing our lifestyle. And it was gradual at first, but it was, you know, we weren't good at cooking. So we started going out to eat once a day, twice a day. We started paying for all kinds of services for things. So this would be like food prep service, food delivery service. We'd have water service, alarm service, lawn service. It just started adding up and adding up. But I didn't think it was weird at the time, right? Because a lot of my coworkers did the same thing. And so it's just as gradual creeping up and up. And this continued over the years. And it got to a point where 2012 we actually spent in the six-figure range on stuff.

So over $100,000 spent in 2012 on stuff. And that was a bad, that was like the pinnacle of our spending where it just got a little bit out of control. 2012, the year that you got married by chance, or what year was that? So that was 2013, we got married. And that was a quite elaborate wedding. It was wonderful and don't get me wrong. I don't regret any of it. It was a beautiful day.

But we did things in such a way that were a bit extreme. So we got married at Disney World, which was awesome, but expensive. And everything was always new, over the top, new house, new cars, expensive wedding, expensive honeymoon. We just had this thing where we were just spending money because we could. And I think a little of it was we want to get, you know, what we thought was the most out of life. And so that's kind of where we were. We started to realize, though, through this time that something might be wrong, like we weren't really getting the fulfillment out of the stuff that maybe we were looking for.

We weren't finding the purpose that we were looking for. But it wasn't until 2013. I can't remember if it's 13 or 14, but my wife was in a very serious car accident. And that's kind of the catalyst. That was the awakening that kind of made us aware of a direction in our lives. Okay. So you just went through like 20 things I want to talk about. Yeah. Congratulations on hitting a six-figure spend. Yay for you. Did you throw a big party? Woo-hoo.

We didn't know at the time. We honestly didn't track our spending. We had no idea that that's what. It was years later that I realized that that's what we had spent that year. And it was like the jaw dropping and hitting the floor. Yeah. Yeah. I think I might have hit that a couple of times, but that was while I was doing these like major flips. And you know, you got to spend $100,000 at Home Depot. So what do you do for work? Because you're spending. spending six figures, I'm assuming you're making more than six figures or, you know, some sort of, like, are you going into debt for this? So I can dive into that.

My wife and I are software engineers, or at least that's what I did while I was employed. And we're not making West Coast style salaries. So we got our jobs right out of college. We were making about 50,000 each. And then that kind of climbed over the years towards right under the same. six-figure mark before I quit my job this past November, which I guess we'll get into soon. But that's kind of the spread. So we weren't necessarily going into a lot of debt. We were lucky about that. I think at our worst, we might have had maybe $10,000 of credit card debt. What we were just doing

was just spending everything that came in. 2012, we actually did have a negative savings rate. So that was our worst year. Did you ever consciously think about saving money? Oh, we should put some money away for the future or we should invest or was it just all spend, spend, spend. Because I was a young adult a thousand years ago and I also had friends who were young adults who wanted to go out to dinner and go to the bars and just go hang out and go to concerts. And I was living in Chicago at the time. We have like 27 sports teams. So you want to go see the team play. And it just adds up. But it's not like this conscious, how can I throw money out of my pockets fast enough? It's more like I just want to do what everybody else is doing. Yeah. So we were kind of. in this place where we thought we were saving because we were doing the 401k match that our company was doing, which was, I think it was like 5% or somewhere around there, 5% or 6%. And so we said, oh, we're doing that. So we're being responsible. So let's just have fun with the rest of our money. And we didn't realize that what it was turning into was that we were creating a lifestyle that was really not very sustainable. And it was also something where a lot of our friends were

latching on to us because of that lifestyle, which was a little unfortunate. So for example, we would be the type to tell people, yeah, come on, come on out downtown with us. We'll buy you a drink. We'll buy you a round or we'll, you know, we'll get the appetizers or we'll get this and that. And it got to the point where, yeah, the spending was just really, really not sustainable, really unsustainable. I wish I had a statistic for how many people actually invest in their 401K because while your story is not one that makes my heart saying, you're still invest. in your 401K, which is a lot more than a lot of people are doing. Yeah, and I tell a lot of people, like we were in a lot of ways we were very lucky. We did not come into our adult life with a lot of

debt. We both had prepaid college, thanks to our parents, which was really nice. So we weren't starting with large debt in student loans. I think the most debt we had, like I said, was that $10,000 in credit card, which was relatively easy for us to turn around. But it was just a matter of just every dollar that came in, went immediately right back out. We both had our vice. Mine was electronic stores. So I would go to Best Buy every Friday when I was feeling bored after work. And I'd come home with a new few hundred dollar Wi-Fi Gizmo. That was my thing. I was buying game systems. I didn't even have games for them. I just wanted them. You know, it's just this idea of all these gadgets. People would come to my house and just be like, oh my gosh, it's a Wi-Fi

crazy zone in there because I'd have 20 gadgets. I had the lights that would turn on and off with your cell phone and the thermostat and all that. the home automation stuff. And I just loved toys. I always had the newest phones. I always had the newest computers. That was kind of my area of spending. My wife's was what we call the Target black hole where you go to Target and then your money goes into a black hole and you don't know where it goes. And then at the end of the month, you're like, how did I spend $600 at Target? What was it on? And we wouldn't be able to really like pin down. Like, what did you buy? Oh, I don't know. It's just Target. You just go in and you just, you know, buying stuff.

Yeah, sorry. Your wife's not special with the Target Black Hole. That's everybody who walks in a target. I should qualify, though. She's not here to defend herself right now. But she was always the more moderate one through this financial 180. So back when I was super spendy, she was a little bit more well grounded. She was a little bit more moderate.

And even then on the flip side, when I became extreme saver pushing, you know, an 85% savings rate, she was the one to pull me back and say, this is. getting a little extreme. So she's very even keeled, which is a good thing to have in a relationship, somebody who's on both sides able to kind of keep a more steady footing. So I'm just the crazy one. Going through all this with, you know, during this period where you're spending over six figures and spending everything that you have, how are you feeling? Were you living the high life that everyone imagines or what you fulfilled? No, no, not at all. So actually, I didn't realize it at the time, but things were actually getting more stressful because of this unsustainable

lifestyle that we had created. So we had a work schedule called a 980 where you get every other Friday off of work. And so we were traveling every other Friday. But a lot of the travel wasn't, you know, international fun travel. These were weekend trips. And so we would travel to go see friends and family that didn't want to come visit us. And so there was one point where we flew to the West Coast to see a friend for a long weekend, flew back to the East Coast. And I remember getting out of the airport from a red eye and driving straight to work without going to sleep and just immediately getting to work like no sleep right off of a plane and just thinking to myself, this is crazy. What am I doing? So there was this kind of sense of we were trying to find fulfillment.

We thought that buying all these things and creating and having all these toys, going out to any restaurant we wanted all the time, being able to see any friend or family, you know, instantly just drop of a hat and go visit them. We thought that this was going to bring happiness, but it really wasn't. And we were kind of at this point in our lives. This was when I was getting close to 30 years old. And I was not really fulfilled. I was stressed out at work and not really finding a meaning, a purpose to it all. It was kind of just like you do this grind, you work hard, and then you get out and you have a few hours on the weekend.

So maybe play with the toys that you bought. And that was like the extent of it. And so it was almost like it was not fulfilling in any way, but we needed a push to kind of wake us up. And that didn't happen until my wife's car accident. So can you tell us about that car accident? And what happened with your mindsets and what actions did you take in the aftermath of it? Yeah. So a few months after we got married.

So it was around the same time that a friend actually pointed us to the Mr. Money Mustache blog. So I had been introduced to Pete's blog before the car accident happened. But it didn't really catch with me. I kind of read the blog. And I was like, this is interesting. But it just kind of was like, that's cool. You know, bookmarked.

Maybe I'll read that later. So then a few months later, my wife gets in this horrible car accident down in South Florida. She was visiting some family. And sheriff's officer ran a red light at full speed and did not have his sirens on and just completely teaboned her. And she was knocked out. The car was totaled. She luckily didn't have very serious injuries, just a few months of physical therapy,

but she was okay. You know, it wasn't anything too serious. But it just got to this point, though, where we started thinking to our. ourselves like, you know, it was such an awakening that moment. We were talking to each other the Monday after the accident. She's like, I need to go back to work, but I'm not ready to go back to work. Like, I'm not mentally in that place. And, you know, we started talking like, man, work stinks. You know, like, we just started talking like, you kind of have this realization. Wow, we are kind of slaves to the paycheck and slaves to the work schedule. And so during her few days

off that we had, I took some time off with her and we started reading that Mr. Money Mustash like together. And that's what we're going. when we kind of realized, like, wow, we could totally change the way that we're living our lives. And so that was kind of the awakening. There's a book Dominic Cortuccio wrote, The Design Your Life. And he talks about this concept of an awakening that is intentional and unintentional. And so for us, this was an unintentional awakening. It happened at a good time for us before we had dug ourselves in too deep.

And it just completely changed the way we thought about money. And so we knew within a week of that accident that we needed to change. things. And so the insurance company gave us a $10,000 check, which was the depreciated value of her car. Her car was more than twice that when she bought it new just a few years earlier. But we decided, instead of buying a second car, that we were going to try to be a one car household and put that money into Vanguard and kind of use that as the catalyst, you know, the $10,000 that's just enough to get in their admiral share, you know, VTSAX. And so we use that as like the catalyst to push us forward on what was a new lifestyle for us.

That investment doesn't seem to have worked out, huh? Worked well. I tell you, I'm super happy we made the change that we did. And it wasn't an easy 180. And as we'll probably discuss, like, it's slow and steady and gradual, but your happiness grows as your savings grow in the bank. It's really kind of crazy how that works. So what was your first step? You and your wife just, okay, we're going to be financially independent. So you got the check from the $10,000 check from the insurance company. What did you do after you deposited that in the VTSAX is the index fund from Vanguard, correct? The total U.S.

Yep. It's for people who don't know. So what did you do after that? So now you're a single car family. So at the time we lived, we still had a horrible commute, right? So our house was probably a 40 minute drive for more. So every morning we would read a Mr. Money Mustache article together out. out in the car on the drive to work, and we would talk about it and we would say, you know,

is this something we could improve in our lives? Is there an improvement that we could make? And we kind of eventually turned this into a game where every single month we would aim for at least one improvement in our expenses. And actually at first it was a little faster than that. At first it was like one a week because we had so much room for improvement. There was a lot of low hanging fruit. But eventually we got to a point, and I have a cool blog. post that goes into this in detail where each month we pick one thing and we would just kind of figure out how can we improve our expenses what can we get rid of in our spending what's something that we could cancel or something that we could reduce and so the first few were easy right so I had the

fastest internet possible I had like 500 megabits a second back when you know this was five years ago there's no need for this so I lowered it each month I would lower it one extra notch just to see if I noticed a difference. And gradually, I got to a point where I was down to, you know, the much cheaper plan where the, you know, I was paying a quarter of what I was paying before. And I was still happy with the performance of the internet. We could still watch our movies and whatever that we wanted to do on it. So we kind of took that approach to a lot of things. We canceled cable. We moved our cell phones over. We eventually got off of our data addiction where we were, you know, using a ton of cell phone data every month. And the biggest one, the one that took us the

longest was learning how to cook. So we actually had to get good at cooking food that we would enjoy. Right. So it's one thing to go spend a bunch of money on groceries and say, this is good. We're going to spend this instead of going out to eat. But if you don't like the food, you're going to end up still sneaking in, you know, meals, you know, going out to eat. So it's almost like this boot camp that we went through where it took a few months to actually enjoy one another's cooking and learn how to cook things that we liked to eat. It really, it really did. It took a while and, you know, something more complex than like a sandwich or a soup or something, you know, actual good meals.

And so that was an adventure we kind of went on together where we had to learn over time. What do we like? What do we not like? And how do we prevent food waste? Because you go buy a bunch of groceries and then you don't know how to efficiently make meals and you're throwing a bunch of it out if it goes bad in a week or two. And that was not quick. That was the better part of a year probably in turning the food situation around. So how did you turn your food situation around?

It sounds like neither of you cooked at all before. Very little. How did you eat as a kid? How did she eat as a kid? I come from a really frugal family. So my life experiences are different, but I grew up. I love to cook. So this is one that really I struggle with to understand,

but I know there's a lot of other people who hate to cook too. So how did you learn how to cook? So growing up, basically, my parents were frugal by necessity, not by choice. And my mom would cook every night of the week. We would go out to eat maybe once a month. And then maybe once a month we'd go to McDonald's for like a special breakfast or something. And that was the extent of it. So my mom cooked, my mom cooked all the time.

And she was a good cook. And I took that for granted growing up. You know, I just knew I'd get home from school. She'd say, Joel, go do your homework. And dinner would be ready, you know, six o'clock, be on the table. And, you know, I took that for granted. And then, you know, as an adult who just spent better part of six or seven years eating out twice a day, every day. It was quite a, like, awakening in that sense. Like, wow,

I can't cook. I don't know how to take care of myself. You start to realize you don't know how to take care of yourself. And everything that you were doing to get by was relying on your credit card. Oh, I need to go to dry cleaning because I can't do my laundry. So that's credit card. I don't know how to cook. So I need to go, you know, buy food. That's credit card. And so you slowly get better at it. I don't know about my wife. She kind of grew up with her grandma living in the house and her Grandma's a really good Southern cook. She cooks a lot of good Southern food. And so she probably had wonderful food growing up, I'm sure.

But neither one of us really knew that well how to cook. So it was something we had to learn together. And at the same time, while we were learning to cook, we also had to learn how to get good at buying groceries. So if you don't buy groceries right, you can spend a ton of money, you know, going through that. And so we finally figured out that the choice of grocery store made a huge difference. And we found an Aldi very close to where we live at our new house.

And Aldi changed everything. It was half the price from where we were going before, which was a grocery store called Publix. Aldi was half the price. Produce, just everything that you would need, all the necessities. It was like half off. It really made such a difference for us. So that kind of came in hand with, you know, there's the acquiring the food and then the preparing the food. And so we had to get good at both of those things. So how far did you go? How low were you able to get your spending after doing this? Yeah. So over the years, this didn't happen overnight. I think the year after the car accident, our spending dropped to maybe 65 or 70,000 from the six figure mark. The year after that, it dropped, I want to say, to the mid to upper 40s. And then the year after that, we hit the 30s in our

annual spend. And we've been in the 30s ever since. Our most aggressive. At one point, we had an 85% savings rate. That was our most aggressive. And it was a little too extreme, which my wife kind of had to pull me back from the edge because I was going crazy. I was like, okay, new rule. We're not going to go out using the car at all on weekends. Weekends are car free. And that sounds good if you live in a city. But, you know, our house was six miles away from anything that you could walk to. So that was basically just saying weekends are going to be a recluse. And that didn't work well. It wasn't a good strategy. And so I also at one point canceled the Netflix, which she was very unhappy about.

So I knew like, okay, that wasn't one that we can do. There was a few things where I got a lot of trouble for that one. There were a few things where we had to just try and see. So I think it's a good exercise to kind of push yourself like too far frugal and then back it off a little bit to kind of learn where your line is because it's different for everybody. So we did that with the gym. We canceled our gym memberships. And I'm still okay with that.

I have a really cool home gym that I've set up here. and I enjoy it. But my wife really missed the fitness classes and kind of the group atmosphere and the motivation she would get from being around other people at the gym. And so we added that spending back in maybe a year later once she realized that that was something that was really important. So once we backed away from that 85%, I think we got to a point where between 70 and 75 was comfortable for us. That's interesting. That's last week we had Liz from Frugal Woods on. And she said the same thing. Once they discovered this like amazing concept of financial independence, they cut out everything. They went bare bones and nothing. And then she's like, yeah, you know what? I need some things back in.

I need my seltzer water. I need my yoga classes. But she also turned it into a game. And I'm hearing this a lot with all of these stories that I hear is that we made it a game. We got the low hanging fruit. We made it. You know, there's a lot of really easy changes when you're coming from a position of more spendy that are easy to make that don't hurt so much. You think, oh, I need everything. But then you just look over, I don't need everything. And she said, you know, I'm going to make it a game. How can I get yoga so cheap?

How can I get yoga free? Oh, I'll just volunteer at the front desk. Have you guys done anything where you alter how you pay for things or how you acquire those things like trade or anything like that? Yeah. So we've been getting better at, you know, thrift shops. That was something that took us a while to discover like you don't need to buy brand new clothes. And we're still, you know, just underpants.

Getting into that. Yeah, yeah, underpants are good to get at retail. But we started getting into that. And then a lot of it was just, you know, figuring out like how to wait instead of that impulse of I need to buy this right now. So Liz talked about her 72 hour rule where she makes a list. She writes it down. She waits to see. So I find that waiting can give you the time to see, well, one, do you really want it? But then two, is there a better way to get it? Can you get it from a friend? And so recently, I wanted to get a new. computer monitor for my office. And you know, you can go to Best Buy and get one that's pretty decent for like 250 bucks, which doesn't seem like that much. But I said to myself, you know, I've got this cool thread on WhatsApp with like 10 of my friends that are like local in town. And so I just shouted out on that. I said, hey, does anybody actually have a monitor lying around their house that they're not using that maybe they want to get rid of or sell to me? And sure enough, my buddy had a really nice one, 1080P, super nice monitor. And I was like, what do you want for it? And he's like, I don't know, you know, 40 bucks. I was like, cool.

that sounds good. And so, you know, I was able to just take that extra little step, you know, instead of going through the normal routine, which would normally be, let me go to Best Buy and go swoon over all the shiny new stuff. Now I got to go to my friend's house, hang out with him, get the monitor, bring it back. And I didn't have all the extra packaging. I didn't have all the junk that you have to throw away that goes with it. And it was just a much better way. And you feel like it's getting another life, something that maybe he would have thrown out or something that was just sitting in a closet is now getting utilized. So, So that was one thing that we did.

We got creative, though. I mean, at one point, like you said, it is easy at the beginning when everything's low hanging fruit. But then when you get to the point where you've kind of optimized a lot, you start looking for little improvements. So at one point, you know, we got the low flow showerheads and installed those. And that's, you know, a savings of maybe three or four dollars a month. And we wrapped our hot water heater in a blanket and, you know, like little things like that,

like the little improvements that come later. But those can be fun too. And so it's kind of this continuous optimization is what we'd call it in the engineering world. You're never sitting still. You're always trying to optimize something, even if it's just a small gain in your expenses. So I always view the world through this lens of this pie chart of American household expenses. And, you know, of this pie chart, 33% is housing, 17% is transportation, 13% is food. And then one third, 33% is everything else.

Yeah. What I love about your story here is two of the things you'd discussed are one, your commute, you did not buy a second car and you turned that into a game, basically, where every day you'd read a Mr. Money mustache post or something interesting that would help you move towards your goal and then came up with solutions during that. So that's fantastic. And then with the food, you began to cook. And then you made smart, rational improvements one by one in the everything else category. To go back to this, though, I'd love to know kind of what happened with your housing situation. Did you make any changes there? Or was that one

thing that you didn't touch because you were able to make such improvements everywhere else. Yeah. So the house was one that I realized, you know, when you look at the pie chart and mint, the housing, the mortgage and everything else is always the biggest one. And then the transportation is also scaled up because of that 40 minute commute. So that's kind of like a has a multiple effect on it. So what we ended up doing, that house lost a ton of value in the 2007 market downturn. And so it got to the point where it was worth less than half of what we purchase. it forth. So we did not want to walk away from it, which we have friends and know people who have done that. We didn't feel right. It didn't sit well with us. And so we said, what else can we do?

When we realized we were done putting up with the 40-minute commute and we looked for, you know, some interesting opportunities. And one of the opportunities that came our way was we had a family member who wanted in on the low real estate prices in Florida to buy a retirement home, but they weren't ready to retire yet. And so they said, hey, if you guys house sit for us in this house that I want to buy to eventually retire into, I'll let you guys live there rent free. I mean, we would pay for the electricity and the utilities, but we would basically live rent free and house sit for a year or two. And so we took him up on this opportunity because we said, well, that's really cool. It's a little bit closer to work. And we're able to rent out our previous

property and then also live rent free in the new one. So that kind of gave us a little kickstart that allowed us to save a little bit more aggressively for the paying off of our mortgage on that first property. So I really wanted to pay off the mortgage on that first property because it was it was an 80-20 interest only 100% financing arm. And the, which is pretty much that's that's the worst that's the worst mortgage you can get. Now remember, we knew nothing. We knew nothing when we bought this in 2007. We were kids. We were kids and we had no money. I think we had $300 to our names at the time, but we had offer letters that we were waving. And that was good enough for underwriting back then. So we walked away from the closing of that house with an $8,000

incentive check from the builder, right? Because the builder was like, hey, we want you to have this house. So we walked away, no money down, no money in the bank, $8,000 in hand and a set of So that's kind of the state of things in 2007. Well, help with furniture. Yeah. Yeah. So that did help. Put that on a credit card.

That helped with the furniture. It did. Actually, no, I think we had borrowed some money from somebody else. That money was gone very quick. And so we didn't know. So that mortgage was. Yes. Yeah.

That was a really bad mortgage. That mortgage is bad. Yes. Five years of interest only. So no principal payments. going to that mortgage at all. So I knew I wanted to get rid of it. The interest rates were insane too,

because the 20% portion, I think, was 11% interest rate. And the 80% mortgage, I want to say, was like 7%, around 7% interest rate. And I just knew I wanted to get rid of this, right? And especially because at the time after the crash, you know, interest rates were super low. And it was like we were trapped. And so what we did was when we moved,

into this family member's house. We rented out a previous one. And it was a horrible rental, too. So forget the 1% rule. This thing was not cash flowing, even when the mortgage was paid off pretty much. Like it was a horrible, it had a high HOA.

It had a low rent. So I think we had a mortgage on it of 1,650 a month. And we were renting it for 850 a month. So it was just a horrible. But at least help. Yeah, if you weren't renting it out at all, you would be responsible for the entire 1650. And, you know, somebody seven years removed from that situation might be like, well,

that's terrible. Why would you do that? But when you were in 2007, eight, nine, it was really difficult. I mean, Florida took a huge hit. Yeah. We bought it for a little under 200. And at the bottom of the market, it was valued at 70. So to give you an idea of how far that fell.

No, but this is a really. key concept. So I, you know, you hadn't mentioned this before, so I wasn't sure if this was a big part of your strategy, but this is actually a major, major financial decision for you because you said $8.50 a month was what you're getting for rent, right? So regardless of what you otherwise owe, you're able to now live for free, you know, and you're getting an extra $850 per month. That's the equivalent of a $150,000 investment in terms of cash flow that you're able to generate and save on that. Because it's all before tax or, after tax, I'm sorry. It's just money that you're not spending. Right. And that did help us,

it helped us quite a bit. And what it did was we were basically trying to throw everything we could at that mortgage to get rid of that mortgage. And what it did was it allowed us to pay off that mortgage in under three years, which was really cool. It was something that we, looking back, we realized we stayed in that house a little too long because what should have happened is when this particular family member who I shall not name for it to keep the innocent innocent when they moved in to when they moved in with us, we should have moved out immediately. But what happened was I kind of got greedy and I said, this is a great thing. Let's see how long I can keep it going. And so this person moved in with us. They had a full house of furniture and we should have moved out, you know,

when they moved in. But we didn't. We tried to keep it going for another two years and we kind of lost our sanity a bit and potentially, you know, hurt the relationship with this family member. just because certain people have different lifestyles. This person was a retired person who had a very different lifestyle than ours at the time. And so we should have, looking back in hindsight, we should have left a little sooner. But we did. We got that mortgage paid off. And we very, very quickly found a new house much closer to work, which we live in now.

And we were able to actually, we moved in with a mortgage here on this new house in 2016. And then just last year, 2017, we sold, we finally sold that rental property and used it to pay off the mortgage here on this house that we're in now. So we're now actually, we've been for maybe six or seven months now completely debt-free, including mortgage, which was kind of a huge step for us. And it was, it felt really good to get to that point. Nice. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch.

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It wasn't 240. Oh, okay. I'm sorry. I misunderstood. So a little under 200. It was worth 70. What did you sell it for? What did you say two years ago?

Yeah, we sold it 2007, summer of 2007. We did not get back what we bought it for. We ended up selling for about 140, 145. But it was good enough for us. We actually had one of the things that led us to sell was we had. a tenant from hell is what I call it. And it was a really bad rental experience that happened just in the year before that. And we kind of knew we needed a break from real estate. And the fact that it went up to 140 took us to, it doubled from its low. And we said, all right, I'm okay.

It just also happened to be just enough to pay off the mortgage on the house that we're in. And so it was a psychological thing. We're like, all right, let's do this. Let's just clear it out, zero out the debt and see what it's like to just be completely debt-free for a little while. And so we did that. And it was really nice because then we could take this cash flow that previously went to mortgages and invest all of that every month, which was really nice. So we had a, our snowball grew by another mortgage in size, our savings snowball. So that was kind of cool.

But the wife, the wife is getting the itch again. She spends a lot of time on Zillow and on Trulia. And bigger pockets. Yes, and bigger pockets as well. But, you know, from a mapping perspective, just looking at the area, looking at what's nearby, what are the pricing norms, are there any good deals left that haven't been scooped up? And so she's getting the real estate at you again. I'm more of the passive guy. I really like the fact that Vanguard is never late on my dividend payments. I enjoy sitting back and relaxing. She's the more active. She really enjoys the hunt for the good property and kind of that kind of stuff. So I see ourselves. probably doing real estate again in the next few years. Personally, I'd like to wait until, you know, I think that a lot of the deals that were there a few years ago have dried up. But my wife's convinced there's still some good deals to be had if you're patient.

I really know the markets. So that's kind of her area of play right now. Well, I will agree with her. There are some good deals still out there. And when you are ready to rent properties again, I will send you a couple of different articles like how to rent your house, how to screen tenants because tenant screening can really help make that tenant from hell not be your tenant. It was crazy. And I mean, we even had a property manager at the time, which ideally

should have shielded us from some of this. But this guy was perpetually late on his payments. Now, he'd be in the in the maybe 25 day late category. So it didn't quite roll into the 30 day. And so we'd charge him a fee every month, an extra, you know, $100 late fee. And so he was paying. it. And so we were okay. But then it got to the point where he was 35 days late and then 40, you know, the next month be 40 days late. And so it got to this point where it was like this slippery slope. And we only 30 days in a month. Yeah. So we got to the slippery slope. And it was around Christmas time and I wanted to push forward. I said, we need to evict. And my, my property manager was like, oh, you never want to evict somebody on Christmas because it was around

Christmas time. I said, okay, we'll wait another month. Another month went by. The guy was pleading with us, oh, you know, I have more money coming in. But we knew something was fishy because every time we'd go to the property, he wouldn't want us to come inside. He wouldn't want us to go into the property. He'd be very secretive and, you know, close all the blinds and not let us see. And there was one point where I had to put up hurricane shutters for, you know, we had a hurricane in 2016. And he's like, oh, I'll take them, I'll put him up. I'll put him down. You guys don't need to worry about it. Well, long story short, he abandoned the place. We finally did get the eviction notice. We go and it was pretty trashed. It required a lot of cleanup. There was really gross stuff everywhere. He stole

a lot of the interior doors. He stole the air registers, the smoke detectors. It was very bizarre. I really have to this day not experienced anything like this. But it was a very long process, too. The whole thing from the time that he started begging and pleading until the time that we got him out was maybe four or five months. And then while the property was vacant, And then it took us another two to three months to sell it after that. So it was it was the better part of a year, the whole, you know, the whole process. And we were just tired and ready to take a break, especially from that property, which had a high HOA that was unsustainable. It was far, you know, it took us 45 minutes to get to it if we had to do anything to improve it. So, so I think the break was warranted. I think we learned a lot from that property. It was definitely a good learning experience, but it also was something that really taught us to, to be a lot. Be careful with what you spend your money on. If we had rented for a year, which is, I'll give my wife the credit, she kind of said out of college, we should rent for a year and learn the area because this is a new city.

And I was like, no, we need to buy a house. If we'd rented for a year, we would have bought, you know, we would have missed the downturn and bought in at the bottom. So it would have been night and day. But, you know, it was a great learning experience. We still were able to turn things around. So I just, I look at it as, you know, hindsight is 2020. and how can I use what I've learned going forward to my advantage.

Yeah, that's a good one. Yeah. You don't hear enough of these failure stories or horror stories through real estate. I've got a lot of them. I've got a lot of them, actually. That's one of the things my blog is around is about telling people all the ways that we've screwed up. You know, high spending, bad property choices, fancy, you know, new cars. We've made a lot of mistakes, but we tend to learn from them, which is cool as we go.

Yeah. Well, also. So transitioning a little bit here, can, before we transition kind of to your leaving the job, the workforce, can you talk to, can you talk a little bit about do you have any other investment strategies besides your, you know, paying off your mortgage and building up Vanguard index funds? Or is that pretty much the bulk of your investment portfolio? That is right now the bulk of it. We, we really are big into tax sheltered accounts. So 401k IRAs, HSAs are great. We, we, max those out every year. So we're really big on maxing all that out. And then currently the overflow goes into the vanguard, just a normal taxable brokerage. But that's the bulk now that we've divested from that rental property, we sold that rental property. So it's really just our investment portfolios and our paid off house that we have. That's basically our strategy right now is just having, you know, enough saved up to live passively. And yeah, that's the gist of it. Also. And then one more question before we get to the transition out of work. Why? You know, you don't mention very much

about your career during this time period. Did you feel like you were fairly optimized in the income front or were you just not really interested in finding ways to earn more versus spend less? Yeah, that's a great question because the math does work both ways, right? It's the same. If you can double your income, you're going to, you know, it's the same effect as cutting your expenses. You really can save a lot either way. The nice thing about focusing on on the expenses. One is you kind of get that triple value where every dollar that you reduce on the expenses also reduces what your expenses are going to be in FI, right? Because the main assumption is your spending is the same once you hit FI. And so that can help you lower your lifestyle a little bit

so that you can maybe reach five even sooner. But the other reason is I think you kind of hinted at it, we had pretty decent salaries. There was less room to optimize on the income front than there was on the expenses front. We had so much room for improvement on the expenses side. So we just didn't focus as much on the income. It's not to say we weren't gradually increasing. I did switch jobs in my search for purpose. I thought maybe switching to a different company would bring me some more happiness in my life. And, you know, it was short term. It did for a few months. But it also brought with it a nice 15% salary bump, which was nice. So I do, I do tell people, because a lot of people tend to stay with their same company for a lot of years in the engineering career. And so if you can jump

around every three or four years, it is good for your salary to do so. But we were at that point where if we wanted another big bump in the income side, we would have to probably move somewhere to a city where maybe the incomes are a little higher or take on some additional part-time work or side hustle. And that was kind of the problem is our jobs as we increased in engineering, they have levels. And so as you go up each level in engineering, you get more responsibility, which essentially equates to longer working hours. And so our work life balance, as we, you know, advanced in these companies, got worse and worse and worse. And you can see this. You can see this in ourselves. Our health was taking a sacrifice. We weren't focusing as much time on health and fitness. And, you know,

we didn't have as much time and as much free time to kind of enjoy each other. And so your stress levels go up, your health level goes down. And so it's kind of like if I were to try to chase the income side even more, it would have eaten into the little time that I already had. So I kind of was like, all right, I see a light at the end of the tunnel with the current plan of reducing expenses and assuming the regular cost of living adjustments on the income side. Let's just get there. Let's just pedal to the metal and see if we can get there without burning out. And it was close. It was. it was to the point where I was super stressed when I finally did pull away from the full-time job.

So did your job know about your blog? No, no. Did they know about your FI plans? No, so that was an interesting thing. I, towards the last year while I was there, I knew that I wanted to quit, but I didn't exactly know when. I didn't know when I was going to because there's kind of this thing where you could always stay a little longer, right? So it was like, if I stay until September. I'm going to get my 401k vesting, which is worth like another, you know, $15,000.

So I want to do that. And it's like, if I stay till October, I'll get my annual bonus. So that's good. That's another $5,000. Well, if I stay till November, I get, you know, and suddenly you're like, oh, well, if you stay till January, I could max out my front load my IRAs for the next year. And so there's just this never ending. And that's what I kind of learned is that it just didn't end.

And so I just knew I knew I needed to leave, but I didn't know when I was going to. And so my work situation was getting a little more stressful. and my coworkers really didn't know anything about my, they knew that I was kind of a frugal guy, but they didn't know about my blog. They didn't know. Maybe I had one or two friends who were kind of in the loop, maybe in the inside that knew,

but for the majority of them, they didn't know. And so when I finally did leave the story that I told everybody, which is true, I just told everybody that I needed a break. I didn't specify how long the break would be. I didn't specify, you know, what I was doing,

I didn't want to say I'm going to retire because that sounds weird. And a lot of people have a hard time understanding that for somebody in their early 30s to say that. But so what I did is I said, I needed a break. And everybody kind of knew I needed a break because it was super stressed out. And that was the story that I went with. And the response that I got from almost everybody was, man, I wish I could take a break. That seemed to be the universal response. And I wanted to say, like, you can.

You can, but, you know, I didn't want to open up the can of worms. But that was kind of what my story was as I was getting ready to leave. It was just that I needed a break. And I really did. I didn't realize until a few months after I left my job, how much residual stress was left over. And that followed me home and that actually stayed in my life months after I quit. So it was just wild. Well, can you talk about that?

What did your life look like before and after this transition? It hasn't been that long. has it? No. So I finally quit in November of 2017. So just a few months ago, three months and change now. And leading up to the point where I quit, I was very stressed. And my wife started to notice it even more than I did. And she would say, like, you are not a happy person right now. You know, you are not the fun person that I knew. And it was, you know, I was on a program that was very behind. It was behind for about a year, behind schedule, over cost, over budget, and behind schedule. And so everything was rushing, right? So it was just continual. Every day you were rushing,

no matter how much work you did or how good that work was, it wasn't enough because we were behind. And so I had tried to move to a different program. I had asked about getting more people on my program to help me, moving to different programs. And the way that it worked at this particular company is if a ship was going down in terms of a program, you had to stay on board with the ship and you had to do everything you could. And I could have switched to another company, but the problem is I knew that I only needed six months to a year more in my working career. And in the engineering world, you really don't want to sign on with a whole new company and do a whole new onboarding process when you know you're going to leave them in six months.

that's kind of frowned upon and because they're making an investment in you and I kind of live in a smaller town where the companies talk and so I didn't want to I didn't want to get blacklisted forever you know I didn't want to burn any bridges or anything and so I said okay I'm just going to fight this out I'm going to stay on this program I'm going to do the best I can but it got to a point where my wife and I think we were it was the end of October and we were going on a walk and I was just complaining and complaining and complaining it was a Sunday afternoon and she she she looked at me and she said, you should quit tomorrow. And she just was very specific. She's like, you should put in your two weeks notice tomorrow. And it was that so specific out of nowhere.

Because I was just ranting, you know, venting about work. And it was just so specific that I looked at and I said, I need to do this. Because it was almost like the Band-Aid, you know, where you just want to rip it off and not make a bit. And so it was just so surprising and so out of nowhere that she was so specific and said tomorrow that I couldn't play that game anymore of like what if this, what if that. I just knew like, yeah, I need to just do this tomorrow and get it over with. And so I did not know I was going to I was going to put in my two weeks notice until a few hours before I did it. And I didn't sleep a wink that night. I was so nervous, just not nervous because I thought like financially, it was more of just this idea that you're going to walk away from a very lucrative

career. And it was very nerve-wracking. But immediately, when I put in that, two weeks notice, just this weight just lifted off of my shoulders. And it was pretty amazing. When I finally did leave, they actually convinced me to stay on a little longer to help train up some new people and everything else. But they also finally offered to move me to another program and all of the things that I had asked for many times, which you have to be willing to call the bluff though. You can't go in there and threaten to leave without really meaning it. And so they were like, oh, we can give you a three-month sabbatical. And I looked at them and I said, I need more than three months.

I need some time off. And so when I left, it took a few months for me to realize that the stress from work was still with me. And the story that I gave in the presentation that you guys saw was that I was making the bed, I think in my guest room on a Tuesday. And like 10 o'clock in the morning, I had nowhere to be, nothing to do. And I was like stressing myself out rushing to get this bed made. And I'm like, I'm frustrated and I stopped.

And my heart rate is up. And I was like, what am I doing? Why am I rushing to make this bed? And so it was like I was behind schedule, you know, from work. It was like nothing I could do was fast enough. And so that's when I realized like, wow, I need to consciously just decompress and take a few months. And I had toyed with the idea of, you know, maybe I want to do some part time work from home or maybe I want to do, you know, a ramp down. do, you know, go to a reduced work week or something in the software engineering. And so my wife

kind of made this rule. And she's like, no, no work for you for six months. You really need to de-stress and come down. And so, and so I like your wife a lot. Yeah, I'm kind of glad she kind of set the rules for me. And she's been hinting now, like, oh, maybe you want to do something to, to make a little income on the side and this and that. And so my goal is to kind of do fun stuff, stuff that I enjoy and maybe make it profitable, do something that I enjoy. And it's not necessarily because I need the money, I think it's more of in the sense of I just like to feel like I'm doing something fun, something that brings enjoyment. My wife and I also tend to disagree on exactly what our fine number is. So my number that I'm basing our phi off of is a little bit under

$30,000 a year. And hers is a little closer to 35. And so we disagree because I say, look, we've been spending 30 these past few years. We're clearly at 30. And she's like, no, I want to be closer to 40 because I want to have, I want to have this ability to do more, have a more lavish lifestyle and, and, you know, go out to eat when I want to and this and that. And I said, well, you already do those things. And so we kind of go back and forth. So she enjoys her job, though, right now. And so she's kind of working that extra year or two. She wants to build the extra cushion on the, on the income side. And so I said to her, yeah, I mean, if you're, if you're enjoying what you do and, you know, and you like it, then, then I mean, that's, that's the ultimate goal, right, to find something that

you love and at the same time you get paid for it. That's pretty great. But I'm also, I'm also trying to convince her to like, if not quit, then at least reduce her work week and like have more time at home because I want to have more fun like with her like go do you know more things uh you know with her which is you know part of the fun so I'm slowly trying to to convince her sure well so I have a question you were a software engineer are you Ruby on Rails by any chance because we need a Ruby on Rails programmer and I've done a little bit with Ruby I've done a little bit with Ruby I it was not my focus I was a Java C C++ guy but okay you know it's not something that I couldn't learn pretty easily. I've used it, but it was more like collegiate level. So like college projects and stuff like

that. But yeah, I could totally be, uh, be interested in, in hearing more about this opportunity. Well, it, we, we are real estate focused. You'd have to start loving real estate again. I don't, I don't, I don't, there you go. We got you a new job. That's awesome. Well, should we move on to our famous four here? Yeah. Famous for the new famous for. The new famous Awesome. The Bigger Pocket's Money Show famous for. Yes. Okay.

Scott, I have to start this because you want to do number four. So, Joel, what is your favorite finance book? So this book was maybe more than just finance. It covered finance a little bit. But for me, the book that changed everything was your money or your life, Joe Dominguez and Vicky Robin. And the financial specific side of it maybe is a little out of date today, although I hear they are going to be releasing a new version of this book that's updated.

But the version that I read was talking about, like, you know, putting all your money in bonds at, you know, 10%. I was like, man, that sounds great if I could do that now. I love 10% bonds. It sounds wonderful. But I think overall the message of that book of equating your money and your hours in your life to like life energy, this kind of idea that you could either be doing your life here, you know, putting your energy in here or putting it into something that actually is meaningfully to you. And that really opened my eyes quite a bit. And it did have the whole concept right of the big picture concept of

you can get to a point where you find what enough is. And I think that's the key to a lot of the financial independence discussions is what is your enough. And it's different for everybody, for every family, where that enough line is. But that's the key of finding it because you can go way past that enough line, which is what we did, and still not necessarily be happy because your life energy is being used on stuff you don't want to, you don't want to use it on. So that book was very meaningful to the wife and I. That's a great book. Going right along with that, I mean, you mentioned so many mistakes that you've made with

money over the past couple of years. But what do you think was the single biggest one of those mistakes that you made? So it would have to be the house that we bought in 2007, the townhome. And I have a blog post about it where I actually run the numbers and see what this, I call it adventures in real estate. And so the adventure ended up costing us, we lost about $150,000 on that adventure. Wow. Even with the rental income recouping and even with the sale of the property and everything else, that includes total cost and interest, everything else. It was a $150,000 lesson.

Does that include the $8,000 you walked away with that closing? Yes, yes, actually. I had to think about it for a minute. I have all the line items on the blog post that shows like everything. And yes, yes, it does. So it was a very expensive. Yeah. We'll have to link to that post of the show notes here.

Yes. Yes. But as a real estate enthusiast, I would like to point out that this was at least in large part due to the timing. We did. Yeah, we had perfectly wrong timing. I mean, you couldn't have. Yeah, this should be a textbook case, right?

because you can't make it any worse if you try. And nobody in 2007 was like, I know next year's going to suck. So I'm going to buy a ton of real estate right now. Like it just kept going up. And before that, real estate didn't go down. Yeah, that was the popular opinion is that it's going to keep going, which, you know, I should have researched. But yeah.

Well, if you would have researched it, you would have seen that, yes, there's pockets of the country where real estate goes down. But for the most part, real estate does go up. up and always goes up and at worst it flattens off. So to have, you know, to do all this research, you would have bought the house anyway. Yeah. No, it was, it was wild. It was a roller coaster. But in spite of that, you are sitting here 10 years later, retired. Retired? Yes. Yes. Taking a break, whatever you want to call it. You're here. You made it in spite of that. That is phenomenal. And it should be a bit of hope and inspiration for people that are trying to repeat that. Even in the worst possible start, you can do this. Yeah. And a lot of people say,

well, you know, do you think it was, and I get this a lot, do you think it was the fact that you both were engineers that allowed you to accomplish this, you know? And I said, well, no, my household income never went above maybe $180,000 total. That was with the rental income coming in. And so if somebody were to do it at half the speed, if somebody were to do this with just one person working, they could potentially do the same thing, maybe in the eight to 10 year time frame instead of the five year time frame. But it's still doable. Even with these mistakes, it really is. I had a coworker that said, oh, you know, you guys can do this because you're making so much money. And I said, well, I said, well, look at X, Y, and Z. And I pointed to other

co-workers that both had two spouses both working. And I said, how come they're not doing it? You know, you can spend the money just as easily at any, at any stage. of income. You can spend all your money. And it just gets easier. You know, you find, luckily, we weren't actually in that, you know, once you get to the $250,000, $400,000 household income spot, because then your friends and peers are buying boats and they're buying golf club memberships and they're buying second houses, right? Your summer house and your winter house. There's always something that can eat your money if you don't save it. So I think it works across the whole spectrum. The savings rate, it just, it doesn't lie. That's a great quote. There's always something

that can eat your money. Okay. So what is your best piece of advice for people who are just starting out? Just discovered the concept of FI, just discovered, you know, just started working. What's your best piece of advice? So don't get overwhelmed. It's a lot of stuff to to take in and it can feel like you are really far away from the finish line. But what my wife and I did, we work together. We work together. as a team. We kind of made it a game. And we just, we broke it down into small, actionable pieces, one thing a month that we could improve, right? And sometimes we'd feel really aggressive and we say, well, let's do one thing every week. Let's find another thing to improve. But we, we broke it down into small pieces. And I think that's the key, because when you look at it as a whole, how do I

get from from here to there? It's really overwhelming. And a lot of people that hear our story say, well, wow, it sounds like you guys just turned it around overnight. And I mean, yeah, five years is a quick turnaround time, but it's still gradual. It still took us a year to learn how to cook. It still took us two years to get our savings rate even close to being above that 50% mark. So this was gradual. This was not something that happened overnight. And you kind of build this momentum with you as you go. And so I would say my best piece of advice would probably be take your time. It doesn't have to be overnight. Don't get overwhelmed and just start making small changes because they all add up. And that's the key here is everything adds up. Every little expense adds towards your

goal. And one thing I'll throw in here is this story that you've been telling this whole time, you track the numbers. You went back and did all the numbers. And there's actually three graphs, which I'd love to link to in the show notes in addition to if you have a blog post on it. But where we show, you know, you're spending going from over $100,000 to $80 to $60 to $30. and then there's a corresponding graph that shows the increase in net worth as that's been as that savings level declines. And then there's a third graph that shows your expenses, your investment income, and your target that you're trying to hit for your investment income. And so you just watch these three graphs kind of merge together fitting what you just kind of described is kind of really cool way to look at things. Yeah, it's very revealing watching the expenses just, you know, kind of slopes down at like this 40,

five degree angle and then you see the asset value do the same thing in it in the reverse. I mean, it's striking. It does speak for itself. The charts, I think I first showed them in the presentation that I gave at camp where I met you guys. I just published those charts for the first time, actually over on the Get Rich Slowly blog, over on JD's blog. He had me on as a guest post.

And so those charts are there actually right now. I haven't actually put them on my own blog yet. Awesome. We'll have to link to wherever they're available. Hot off the presses. Yeah, we'll link over there. One of the things, before Scott gets to his next question, we met Joel at Campify and he gave this amazing presentation and he's, he had this line that really stuck out.

What is the worst that could happen if you quit your job? Yeah. So the way I always tell people is that my worst case scenario is everybody else's everyday scenario, right? So going back to work, right? That's like the end of the world. Oh, no, sequence of return risk or, oh, no, you know, a big, you know, market downturn. Or, oh, no, it turns out we actually spend 40 a year instead of 30.

That's our real number. Like my worst case scenario is everybody else's every day scenario, which is going back to work. And that kind of ties perfectly to the other kind of mantra that I've been living by lately, which is when you are close to financial independence, every job is a high-paying job. because you've already got that giant fraction of your lifestyle covered. And so everything else is like this gravy. So I could do something fun if I go back to work, something low paying, something low stress as well. So I could be, I joke about being like a boat driver at Disney World or, you know, or I could be something, you know, I could make coffee at a local coffee shop.

And even if it's closer to minimum wage, it's still gravy. I can still max out a 401k with it. It means, you know, it's still a high paying, quote-unquote, job. And so if I ever do go back into full-time, I will never go back to full-time. If I ever go back to work, it would be something fun, something that I enjoyed, where I could work with people that I enjoy, and, you know, the money wouldn't necessarily be the deciding factor. But yeah, that's the worst-case scenario, which you shouldn't worry people so much. Because I know some people want that, they want that 100% certainty.

I want, you know, 4% rule is too conservative. I need 3% rule because I want 100% a 99% chance of success. And it's like, well, maybe you're working too many years. Like that's the reverse end of that risk, right? Is maybe you worked two or three more years than you needed to. And that's scarier to me, given what it was doing to my health and sanity. I'm very close to 100% certain that in an event of a market downturn, you're better off than your colleagues who have very little wealth.

Yes. It's a whole playing field level. It is level. You know, it goes down equally. So, exactly. So I have one more final four question here for you, which is what is your favorite joke to tell at parties? So, Scott, you and I have very similar senses of humor. Excellent.

Hold on. I want to turn off my microphone. I think you'll enjoy these. Mindy, I'm sorry, in advance. So this is one of my favorites. So did you hear that Walmart's given away all their dead batteries? No. Yeah, they're free of charge.

That's a very positive joke. I like it. All day, every day. A bonus one, Scott, for you. What's the best possible gift that you can receive? I don't know. What is it? It's a broken drum.

You just can't beat it. I love it. These are bad. My wife hates these jokes. I always knew these jokes. You call them, Mindy, I think you call them dad jokes. They're dad jokes. I always knew them as, so my friend growing up when we were teenagers, he had a stepdad

named Bill, and Bill would always say these jokes, and we call them Bill jokes. And so that's like how we know that where these are Bill jokes. And I just, I think they're great. Nobody can stand them but me. And Scott, too, sir. What has eight eyes, eight legs and eight arms? I don't know. What?

Eight Pirates. I just heard that one at the BP meetup we had last week. Someone came and visited and was like, I got to tell you a joke. Here it is. I was like, yes, I'm telling you that on the next podcast. So there it is. Do you remember who told you the jokes, guys? No, I'll have to go and look through my notes and remember.

I wanted to give them credit. I'm sorry, I'm not giving credit to whoever told me this. great joke. Okay, moving on. Joel, where can people find out more about you? Yeah, so I blog over on Financial 180 is the name of the blog. The website is Phi 180Fi180.com, so the numbers 180. And I also have a Facebook that you can link to from there. I have a Twitter and yeah, I try to keep in touch with people and there's a contact email on there. I really do read a lot of my email. that readers send in and everything. And I enjoy the community aspect of the blog a lot.

And so I encourage everybody, yeah, ask me questions, you know, shoot me emails with some of your sample scenarios with like your lifestyle. And I can help with, you know, ideas of how to improve things, how to shape costs, how to shake up your lifestyle around it to improve things. So I really enjoy the reader interaction. So I encourage everybody to come check out, check out the blog and hear more about all the horrible mistakes that we made along the way so that you can avoid them yourselves. Awesome.

Awesome. Well, thank you so much for your time for taking time out of your apparently not very busy day now that you're unemployed to talk to us. I really appreciate. I love your story. I love that line. I just, I can't say it enough. Your worst case scenario is everybody else's every single day.

So if this is an option, if somebody is interested in financial independence, go for it. because what's the worst that can happen? You have to get a job. You already have a job. It really should inspire people to kind of be bold, go for what they want to do. And it's really not anything to be afraid of. I know that there's a lot of fear around financial independence, particularly lately with a lot of talk of sequence of return risk and talk of, you know, doing something wrong. You know, mistakes happen. I make them all. I'll blog about them. I'll probably continue to make more. But you get through them and you just keep going. And that's part of the, that's part of the journey. It's part of the fun. I love it. This is, I love everything about what you've done and

how you talk about it and what you're going to do. Thank you so much. This is awesome. Thank you guys. It was a pleasure getting on here and getting to chat with you. Okay. Well, we don't want to keep you from your very busy day of doing making the bed. I do, I do have hobbies, right. I write music in my downtime. I do write and play music, which is fun. I write. I've got some ambitious goals for books down the way that I want to write. And so I'm having fun. I'm not just sitting around. I think the joke from camp is that I'm not just sitting around in my underwear playing video games. I am not doing that. Did you wear pants today? Yes, I'm wearing pants right now. And maybe that period, maybe that period of

of video games in the underwear was a week or two max. That was maximum. What came to do you like? I think it is actually. It's just have no care. And I think it can help recalibrate you to take on some new work ethic. Okay, Scott, shall we get out of here? Let's get out of here.

Okay, Joel, thank you so much. Thank you guys. So that was Joel from FI-180. Again, I was so excited going into it. and it lived up to all the expectations I had in my mind. It was just he covered every base of personal finance, income, spending, investing, and the transition out of paying work into the life that he's designing. There's a lot of talk and the mentality behind that.

I thought it was a fantastic show. What did you think, Mindy? I love that show. I love Joel's statement. I know I keep saying this over and over, but I love that. What's the worst thing that could happen? You have to go back to work. your worst case scenario is everybody else's everyday life.

So, yeah, if you're thinking about joining the FI community, if you're thinking about going down this path, start, start today, start tomorrow. Start today. Don't start tomorrow. Start today. Yeah, and if you listeners are interested in any of the references that we say to, please be sure to check out the show notes. You can find them on BiggerPockets.com and search for this,

the Bigger Pockets Money Show, show number 11. The quick link is biggerpockets.com slash money show 11. Ah, that's what I was looking for. Yes, thank you. And so there's some great resources there. I definitely encourage you to at least check out that link that's going to be on J.D. Roth's site for with those graphs, just showing what mathematically happened as a result of the story that Joel just told us. Definitely go check that out. And then I think for us, our homework next is going to be, let's do it.

Can we find a similar story to Joel, but with someone that was married and had kids at the same time? So Joel did this with a two-income, no-kids household. Can we find someone that's done a similar, had a similar approach and similar successes, maybe a similar turnaround, that has already had the kids? You know, that would be an awesome guest. So if you know anybody like that, please invite them to apply to be a guest on the show. We'd love to hear from them. Yes. And if you have questions about this particular episode or any other episodes, you can go into the forums.

There is a special BiggerPockets Money podcast forum where you can discuss each individual episode. So we'd love it if you could check us out over there too, biggerpockets.com slash forums. Awesome. And then we are still a new show. So we would really, really appreciate any ratings or reviews on iTunes or anywhere else that you are listening to this podcast. Those mean a lot, and we really do read them all. So we appreciate every single review. Yes.

Thank you. Scott, shall we head out of here so we can not play video games? Let's head out of here. This is a long show. So I thought it was a great one, though. Yeah, it was a long show. And thank you for sticking with us. So from episode 11 of The Bigger Pockets Money Show, this is Mindy Jensen, over and out.