BiggerPockets Money Podcast - 323: Coast FI: The Calculated Way to Retire Early WITHOUT Giving Up What You Love w/Jessica from The Fioneers

Episode Date: August 1, 2022

Coast FI is an interesting concept. Unfortunately, to much of Mindy’s surprise, “coast FI” doesn’t mean having enough money to live by the coast. But, just like living down by the beach, the��coast FI lifestyle is far more enjoyable than most. We constantly hear from online personal finance bloggers about how you need to save as much as you can, eat at home every night, and never take a vacation. While this does allow you to hit financial independence faster, it makes the journey a highly stressful one at worst and a barely bearable one at best. What about a different way to reach financial independence? What about still eating out and taking trips, all while working to retire early? This is the path that Jessica from The Fioneers has chosen to take. She and her husband learned about the financial independence movement while they were making just $30,000 per year combined. As their income grew, so did their savings rate. But, Jessica realized that the stress of climbing the corporate ladder wasn’t worth it when she ended up taking a six-month mental health break from her work. Jessica never ended up going back to work, but she did start working for herself. Now, she’s on the path to coast FI, or as she also likes to call it, “slow FI.” She still takes trips and lives comfortably, but she does so with full autonomy of her time and a plan to retire in her early 50s. She is living proof that you don’t need to burn yourself out to hit financial freedom, and you definitely don’t need to do so just to reach retirement. In This Episode We Cover Coast FI explained and how it’s a far more enjoyable alternative to standard financial independence Saving and investing even while making a below-median income salary  Resisting lifestyle creep and how to use pay raises to increase your net worth The danger of going “too fast to FI” and how retiring too early can be a detriment Part-time jobs, side hustles, and other ways that you can make more apart from your W2 Spending money to “escape” and how quitting a stressful job could save you more money And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Mindy's Twitter Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Subscribe to The “On The Market” YouTube Channel Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Check Out Mindy’s 2022 Live Spending Tracker and Budget David on BiggerPockets David’s Site From Military to Millionaire Change Your Money Mindset, Change Your Life with Vicki Robin Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast show number 323, where we interview just from the pioneers and talk about Coast Phi and designing not only your post-financial independence life, but also your life along the journey. You don't need to stay in your toxic job for another 10 years just to like get to this point of eternal bliss, right? Because it's not, it's not actually going to turn out that way. Right. And so I needed to hear those messages to say, okay. I can do this, but I can take a different path that focuses on both getting to financial independence and financial freedom in the long term and designing my life. Hello, hello, hello. My name is Mindy Jensen.

And with me, as always, is my stunningly bearded co-host, David Perret. It's coming in nice, isn't it? It is. It's really filling out. Almost as good as mine. Kind of like the little gray patches in here like I'm old. David and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial independence is obtainable for everyone, no matter when or where you are starting. Yeah, whether you want to retire early and travel the world, go on to make big time investments in assets like real estate or start your own business, will help you reach your financial goals and get money out of the way so that you can launch yourself towards your dreams.

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. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your

laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in Eel. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at Monarch. dark.com code pockets. I love Matt, said no one ever.

Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes. But somehow every small business owner ends up doing it. Your dreams of creating, selling, and growing get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without

you doing the heavy lifting. You can set aside money for business goals, control spending with virtual cards, and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Found makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's F-O-U-N-D dot com. Found is a financial technology company, not a bank.

Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business. owners who have streamlined their finances with Foun. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles.

Lately, I've been listening to Bigger Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful is its breadth. Beyond audiobooks, you also get Audible Originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free

30-day trial at audible.com slash BP Money. David, I am so excited to talk to Jess today because she has a different perspective. We've never really featured Coast FI on our show, and I really like what she has to say about it. The Coast FI ideal is not this just hard and fast, furious. How do I get to financial independence as fast as possible? It's more enjoying the journey along the way. And I think that I wish I would have read this, heard about this.

before we started our path to financial independence, my husband and I. Yeah, I think it's a good way to try to find some balance, right, throughout a financial journey, right? Because a lot of people try to either compress it as quickly as humanly possible and they, they, you know, hate themselves for all the years they're doing it or they don't do it at all. And they get to retirement and go, oh, crap, hopefully my kids have money to support me. So I like the, I like the middle ground there. I think it's good. I think a little balance is good in life. I do like the balance.

It's a balanced approach to financial independence. That's a great way to phrase it. Joining us today is Jess from the pioneers. Jess lives in a van down by the river, hoping someday to be unemployed. Well, Mindy, that's not exactly true because I do hope to do work that I love forever. So I don't ever actually plan to retire early. And I don't quite live in a van down by the river. I do have a van that lives in my driveway that I take out for,

short and long trips over the course of the year. Okay, so I'm super excited to talk to Jess today because we're going to hit a lot of things. We're going to talk about Coast Fi versus SlowFi and camper van life. We're going to talk about the journey to financial independence, not just the end. And we're going to do all of these things today with Jess from the pioneers. So Jess, welcome to the Bigger Pockets Money podcast. Thanks so much for having me. So let's jump right into it. Let's Start with CoastFi versus SlowFi. What's the difference? So CoastFi is a specific number where based on your age and your spending, here is the amount

of money that you need saved and invested so that you can not add any more money to your retirement accounts, but it will grow, right, to provide you with a comfortable traditional retirement at the age that you choose, 60, 65, or earlier. So basically once you reach Coast Financial Independence, this means you could scale back and only cover your actual costs of living with active income. So that gives people a lot of freedom and flexibility to be able to do work that they enjoy more and to do less of it. So it's kind of like instead of like a lot of people like their fire, right, so their number, let's say their number is $40,000 a year. and at the 4% save withdrawal rate, they're like, hey, I need to have a million dollars saved by, you know, the time I'm 30 so that I can retire. And you're saying, well, if the million

dollars is your goal, then maybe by the time you're 30 or by the time you're 25, if you had 250 saved, you could look at the math and go, by the time I hit retirement, that'll be a million, so now I can enjoy life. Yeah. So I actually have a Coast Phi calculator that I just pulled up. And so for someone who spends $40,000 a year, their larger fine number eventually is $1 million. At the age of 30, they would only need $181,000 invested toward their retirement, which is still a lot of money, but nowhere near the $1 million that they would eventually need to have.

And so giving it time to grow in the market really can benefit people. And that's assuming you're not putting any more money into the accounts. I would The frugal investor saver in me Would like to encourage you to continue to put money in those accounts Although maybe not at quite the same Pace that you were before I love a good 401K match

And I love a Roth IRA Max And listen to the nerds that we are here I love HSA maxing for all the things that You know life can throw at you But I like this idea too where, you know, if you're just learning about financial independence, I say this all the time and people make fun of me and that's okay because it's my show. I can say what I want. But personal finance is personal and you don't have to do it my way.

You can do it Jess's way or David's way or you can combine all of our ways and do it your own way. If your name's Bob and you're listening, you can do it Bob's way. You know, it can be your own, you know, choose your own adventure. Remember those books? You can choose your own adventure. And, you know, as long as you get there, it's really just getting people thinking about their money because we've all seen those studies where, you know, 40% of Americans can't pay for a new tire on their car. They can't, you know, float a $400 emergency or a $1,000 emergency.

And that's just sad. That gives me, like, breathing problems when I hear about that. Yeah. I definitely agree with you on the Coast FI front that many people would benefit from continuing. to save at least some. I just think once you get to that point of CoastFi, you have so many more options, right? So I think of it as like there's three main options. One is you can continue to save at a high rate and now you know that every dollar you save and invest is going toward an early retirement. It's no longer going toward a traditional retirement. The second option is

scale back completely, right, and only cover your actual costs. So if you only spend $40,000 to $50,000 a year, you could only generate $40,000 to $50,000 a year. And if you come from a higher income earning profession, you could do that doing consulting work or, you know, doing contract work for your former employer or working part-time, you know, that kind of thing. Or, and this is what I'm doing, the third option is saying, I've reached CoastFi and I'm going to use that to give me a feeling of freedom to start making significant life changes. Right. So for me, that gave me the feeling of freedom to take a six-month career break in 2018 to deal with a mental health challenge. It gave me the feeling of freedom that when I went back to work, I decided to go back to work three days a week.

And when I had an opportunity to increase my hours, I decided not to because I loved the, like the super chill schedule that I had. And then it gave me an opportunity to start a business. And then that business then allowed me to be able to quit that part-time job. Right. And so it enabled me to do all of these things. and we're still saving, right? We're not saving at the same rate that we were previously around like the 50 to 60% mark.

But it also enabled us to say we're going to only save 20% this year because we're buying and building out this camper van. Right. And so we got to choose also to spend quite a bit more money for a short period of time as well. You just gave me a whole bunch of things I want to unpack. So let's rewind to 2010, 2012, 2013 and talk about where you were saving at. Well, actually, let's let you decide where we start. When did you discover financial independence? So I actually didn't discover financial independence until about 2017.

But my husband knew all about financial independence from like 2010 onward. And every year we would sit down with our anti-budget and he would say, let's just say 5% more. Like, let's just, you know, every year. But it wasn't until 2017 that he gave me your money or your life in like a book swap. We each gave each other a book to read. Just, you know, he was saying, I just want you to understand. and my perspective. And then from there, I was in it.

Yeah, that's a great book. That's a wonderful book. And it's not even about financial independence. It's just about trading your time for money. Okay, so your husband knew about this. And so you were savers. We were savers. Yeah.

So, yeah, if we go back to like the early 2010s, the 2015, so we had just graduated from college in the middle of the recession and started out with extremely low incomes. So he worked part-time at university. I did a year of AmeriCorps where I made $11,000 a year before taxes. And we lived in northern New Jersey, so right outside New York City. So we had a combined income of like less than $30,000. And we were just, you know, we had to have our finances. on point because it was out of necessity, right? And so, and we had a commitment, I think,

and I think it came from our upbringing that, like, we were going to do everything we could not to go into debt. Like, that wasn't a thing that seemed like an option for us. And so that was our, like, our introduction to finances generally. And so when my husband learned about financial independence. He was like, oh, well, this isn't really for us. We make too low of incomes. We work in nonprofits. But some of the ideas resonated. And so when we did start to grow our careers and make a little bit more money, you know, he was like, okay, now we can save a little bit, right? We can save, you know, now that we're past subsistence, right? We're able to, you know, It's funny, I have a budget back from like 2011 or 2012 or something where he like earmarked all the entire race to go towards savings and investments.

And I was like, no, we're not doing that. We're like, we do nothing. Like we spend no money right now. Like we are going to like get a better apartment. We are going to like and not have to go to the laundry mat, something that has a washer and dryer. and like we're going to go out to dinner once a month, you know. And so we definitely had that push and pull of like, I want to spend more, I want to spend more and have like a better life and him wanting to just save every penny of it.

And so, but then over time our income did increase. And so, but we had a really solid foundation and not a ton of lifestyle inflation because in those early years, we, you know, had to really cut those expenses quite a bit. So obviously, like, there's a benefit to the fact that in 2010, like, the market's seen a great run-up. So even if you'd only contributed a little bit to investing, you know, you've done pretty well with it. But everybody listening right now is going, how in the world did they save any money on $30,000 a year in one of the more expensive places in the nation, right? Like, that's, that's bonkers to me. So I'm curious. We didn't. So to be clear.

That year we didn't. Okay, okay. I was like, man, what percentage were you got? Even like 5% at that point would be impressive. No, we at that point, we were just trying to be in the black, right? Like we, like that, that was our goal at that point in time was just not go into debt with the income that we had. It took us increasing our income to be able to start saving and investing.

But then that's when my husband then would see, oh, we'd take like a pay increase and he would, you know, make the new budget and earmark all of it towards saving and investing. And so that was, you know, the situation. So down, you know, so two to three years in when we were starting to make a little bit more. I would definitely be on your side. Like, nah, man, we are going to go eat a cheeseburger this month. So 75% is going to the budget. Yeah. And we did eventually get to a good place where we were able, you know, where we were spending more and improving our quality of life and saving more, right? But, you know, at that time,

we were saving, you know, 10%, and then maybe it increased to 15%, and then 20%, you know, and then by 2016, I don't remember the numbers exactly. There's a, We have a chart of it on our website, but by like 2015, 2016, we were saving maybe 33% of our income, then like 45, then 50, right? And so we were able to continually increase that over time as we increased our income. Anything over 10% is, I mean, you know, impressive, right? Anybody listening to this who's thinking like, oh, I can't save 50, 60%, like, okay, first off, they built into that. And second, like, if you're saving more than 10%, I mean, that's most people don't do that, right? Most people don't even do like 10% tith, right?

Like, they're like, you know, I'm super religious and I don't do that because I can't afford to, right? Like, I hear that. And so, you know, saving 10%, you know, richest man in Babylon or whatever, like, that's enough. If you, if you're consistent with that, that can be enough. But definitely the more you crank that up, the faster. things go. So what sort of income are we talking about in 2015, 2016, and where are you living? Are you still in northern New Jersey? We actually moved to Boston, Massachusetts, in late 2013. The cheaper place. It was actually more expensive. And I'm trying to think around that time,

Neither of us was making six figures, salaries, but combined we were in the six figures at that point. Okay, so there's much more room here to breathe. Okay. Yes, yes. And then saving, I don't want to belittle what you're doing, but saving 33% when you're making $30,000 living in New Jersey is like, okay, we got to get tips on that. So where were you investing this money when you were saving 33% and 50%? And I agree with David. I think that we don't do enough of celebrating.

Yay, Jess. That's amazing. Saving. I mean, honestly, I'm going to go further than David and say saving anything is fantastic because so many people in America are like, oh, I'll do that next year. I'll do that next year. And next year never comes. I mean, next year always comes, but the I'll do it next year part never comes.

So saving 33% is fantastic. when this isn't really what people are talking about. And saving 50% is even better than saving 33%. Yeah. So we were saving it and investing it mainly in our employer retirement plans. So our 403Bs or 401Ks depending on where we were at any given time and into Roth IRAs at the time. I don't think, you know, we worked up to being able to max those plans out. But it took years, right, to be able to get to that point, especially since we, you know, started and spent most of our careers, both of us, my husband and I, in nonprofit organizations.

Yeah, that's kind of what I was talking with Mindy before we recorded. She mentioned Coast Fai and I was like, never heard of that. what's that? And she gave me the like super quick rundown. I was like, oh, okay, I kind of tell service members a very similar thing. It's like, look, when you first join the military, if you can max out your TSP, right, and that's not an easy thing. But if you can, that's our 401K. But even if you can't max it out, if you can, like, just contribute the most you possibly can. And if you do that for three or four years, then, you know, I'm not to say that that means when you're 65, you'll never have to work again because it'll be enough.

right, and you should continue to invest at least the matching contribution. But if you do that for those first three or four years, I'm a big real estate guy. You can't really invest in real estate your first few years for various reasons, right? Not having a housing allowance, probably stationed overseas, whatever. Well, then you've done that for three or four years. Now you've got a safety net that allows you to take a few larger risks because you know that you're not going to fall flat on your face. And so that's kind of what I like about this is like, you're like the matching, like employer like tax advantage matching contributions. Like people, to use the hipster word, the cool kid word, right?

People sleep on matching contributions because they're like, oh, well, yeah, it's only 5%. Yeah, but that's a guarantee. Like if you put 5% in and you get a 5% match, that is a instant guaranteed 100% return on investment and essentially a pay raise that you're missing out on if you don't take it. Like, yeah, yeah. And I love the whole tax advantage thing. So I like it. Let's move to 2017 where you got Vicky Robbins. your money or your life. And what book did you give your husband? Do you remember? Oh, goodness. I am like

ashamed to say this, but I was like in my super, like, I'm going to climb the corporate ladder, like period of my life. And so I gave him lean in. And now I feel, and now I'm like, I hate that book. Like that book, like ruined my mental health. But luckily, he, gave me your money of your life, which, you know, helped me get out of that brain space. I was waiting on you to be like, I gave him the book, Do Yourself a Favor and Love Your Wife Or something like. Like, babe, our marriage is terrible. And he's like, uh, finances. But that's, that's equally as funny. I almost guessed lean in. Yeah. Why? I don't know, because it's kind of the opposite of Vicky. Mindy's telepathic. And I'm telepathic. Um, okay.

Did you read the book right away? I did. Yeah. Okay. I read it right away. And when I first read it, I was like, oh, like this is kind of funny. I don't know about this. And then I got further into it.

And I was like, wait, people actually do this. Like, there's math behind the fact that, like, you could get to a point where you don't need to work anymore. I think I had just always assumed, like, you find a job that you hopefully don't hate and you do it for 40 years. And maybe just maybe you'll have enough that you can retire someday. Right. And I never really knew that, like, there was a number and there was math behind it. And so I started to see that and understand that. And then when it got to the point in the book where she was talking about, like, well, what would you do if you didn't

need to work for a living. And that question was really tough for me because I had invested so much time and energy and brain space into my career up to that point that I couldn't answer it. Like I didn't even know what I like to do anymore. I didn't know who I was. And so from there, I sort of went through, I don't know, this period of self-discovery to say, like, well, what would I do? What do I actually enjoy? What would I want to do if this whole work thing, like, didn't have to be part of my life? And what did you come up with? Yeah. So it was interesting. I came up with that I would want to do like some kind of creative, have some sort of of creative outlet, so I thought maybe that would be writing. So I ended up starting my blog later. I thought about doing like some kind of career coaching since my career had been in human resources up to that point and thought that it would be like fun to like help people in that way. I thought about like volunteering on political campaigns, traveling the world,

taking photographs, right? There was a bunch of of different ideas that came up for me over the course of like a six-month period of time before I felt like I was ready to say, okay, I can commit and like I want to move forward with this FI thing. And a lot of those things are coming, you know, to reality in my life now long before FI, which is really exciting to see. just said something that I think is really important to highlight. You said this came up over the course of about a six month time. I think that when people discover financial independence, they're like, okay, I want it now. Well, yeah, don't we all? I want to win the lottery too.

Or, oh, I need to, you know, I'm unhappy with my life. I want to change now. Well, that's when you are going to jump from the frying pan into the fire. Like, don't expect instant change. change. Like you didn't get into the position that you're in right now, most likely, you didn't get there overnight. Like your corporate unhappiness, let's call it, didn't happen overnight. You graduated from high school, from college, you started your job, like, I'm sure, full of excitement and, oh, this is going to be great. And I'm going to change the world because you were a nonprofit. So I'm assuming that you were like, I'm going to change the world. And then you get there like, oh, that's how it is. And then you're, I'm going to do something different and I'm going to and I'm going to.

And all of a sudden you're like, wow, this life is really not as like exciting as I thought it was going to be. I was, I was really expecting you can do anything you want and you can be anything and it's going to be great. And adulthood kind of isn't the best thing ever. Like it's better than the alternative. I mean, I would love to continue to get older and older and older. But it's, you know, your life is what you make of it.

And working for the man. is how do I say this? Not really making the most of it. So let's get this stuff figured out ahead of time. But you're not going to figure it all out in one day. We just talked to Doc G about his new book, which was, I mean, he made me cry when I was talking to him because I'm like, this is, you're asking these questions that I can't answer right now. And I need to answer them because I'm. I've been thinking about a lot of things lately and what, you know, what am I going to do,

you know, 10 years down the road? What am I going to, how am I going to set myself up now to be there? And this is really heavy, Doc D. He's like, yeah, it wasn't supposed to be light fare. I'm like, you need a disclaimer on the front of the book. But it's like over the course of a six month time you got there. I love that. It's not an. It. And I would also say that the process is ongoing, too, right? It took me sort of six months to, like, figure out here some of the things that maybe I would want to do and try out, right? And then it took another year to actually, like, get out of the toxic jobs, start actually trying things out, get into a job that was much better that gave me more freedom and flexibility to do some more

of the things that I wanted. And it's then it continued to evolve over time. And I think, you know, like there's this big vision and there's the, like I have a set of things that it's like, these are the things that I, like the pillars. Like these are the things in my life that are the most important to me. But those things look different in different phases of life as I get closer and closer to figuring out what ideal really looks and feels like in this moment. Yeah, I like that. It's easy to get lost in the journey to building wealth and then look up one day and

go, oh, crap, right? Like a lot of people, a lot of times, right? And a lot of people seem to let things suffer. So, you know, what's, what's it all for? Right. Like, if you hit 45 and you're like, woohoo, I can retire, but I have like, my relationships trash, my health is gone, and I have no friends. Like, that's not the retirement you envisioned.

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. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one

dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in Edle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code Pockts at Monarch.com for half off your first year.

That's 50% off at Monarch.com code Pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites. Indeed's sponsored jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking.

And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking about. to you, 23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit

to get your job's more visibility at Indeed.com slash bigger pockets. Just go to Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need. When you want more, start your business with Northwest registered agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Northwest makes life easy for business owners.

They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data, and all services are handled in-house, because privacy by default is their pledge to all customers. Visit Northwest Registeredagent.com slash money-free and start building something amazing.

Get more with Northwest Registered Agent at Northwest Registered Agent at Northwest Registered Agent.com slash money-free. Where are my gloves? Come on, heat. Any day now? Winter is hard, but your groceries don't have to be. This winter, stay warm.

Tap the banner to order your groceries online at voila.ca. Enjoy in-store prices without leaving your home. You'll find the same regular prices online as in-store. Many promotions are available both in-store and online, though some may vary. Yeah, my husband wrote an article for his blog called Death March to FI, and I've mentioned it a few times on the show before, but we had this epiphany just like you. Wait, I don't have to work until I'm 65. I can become financially independent and quit my job. Great, I'm going to do that and just focus.

We focused on that and we stomped down that path and we got there. And then he didn't quit because he wasn't sure because even though it's just a math number. and the 4% rule says you can do it, we got to our five number and we're like, he said, I was like, yeah, you can quit now. And he said, well, maybe one more year. He did one more year. And he's now been retired for five years. And like the day after he quit, he's like, oh, I should have done this years ago.

And his, actually his article that he wrote about that was one of the things that inspired us to take a different path. So I think we were getting into the fire movement. I'd say if it's been five years, that's probably right around the time that he wrote that article. I think it was like 2016 or something, 2016, 2017, that he wrote that. And when I first learned about FI, I then was starting to see all of the, like, OG fire bloggers

and content creators start talking about how they went too fast. and they went sort of like too hard and like the death march to FI and like mad fientist was talking about that and J.D. Roth was talking about how reaching FI didn't fix all of his problems and, you know, all of that. And so I actually needed to hear those messages from people to say like you don't need to go all in on this. You don't need to stay in your toxic job for another 10 years just to like get to this point of eternal bliss, right? Because it's not actually going to turn out that way. Right. And so I needed to hear those messages to say, okay, I can do this, but I can take a different path that focuses on both getting to financial independence and financial freedom in the long term

and designing my life along the way so that it matters less, whether. I reach FI really quickly. I think that our journey could have been significantly better without being significantly longer. We had this goal. And because when we started this, nobody was talking about the journey. It was always the end result. So I love that you took that.

I want to tell him. Did you tell him that? that his okay I want to make sure that he knows that that article helped shape your path because yeah I mean that article is not fun to read it's it's kind of

depressing to read I'll link to it in the show notes so everybody can read this horrible all I mean he's like lamenting this journey and it's really he was really kind of sad about it when he stopped to think about it and he wrote like it's not a happy lighthearted article

You know what's funny about that? So I mentioned that this is something like so, well, Mindy, you've heard me and Alex talk about it, right? Like, well, I achieved, you know, whatever. And now what, right? Like I was talking to someone just yesterday about this because I had Mike McCarthy on my podcast. We kind of talked similar, you know, like once you get to a point and you're like, holy crap, I let all these other things go. It's, I always said it's akin to like when service members get stationed on Hawaii. right? They get stationed there for two years, three years. And a lot of them don't like it because they're like essentially trapped on this island and things are expensive. And, you know, if they're not a big beach person, like what else? And I was like, yeah, every time I heard someone complain about that. It's like, dude, just shh. Like there is not a single person stuck in Missouri or Arkansas or Utah who cares to hear you be like, oh, I got stationed in Hawaii. This is terrible. And it's kind of like the same. It's like this unspoken thing because it's like,

I achieved complete and total financial freedom. I'm a millionaire. I'm, you know, all these buzzwords, whatever. And it's not as great as I thought. Like everybody who hasn't achieved that yet is just going to be like,

oh, that sounds so terrible that you don't have to work anymore. And so, uh, it's, it's cool to hear that he went through with that because it, it doesn't get talked about enough. And it's a very real problem where people reach financial independence and go,

I don't have a hobby. I'm, you know, you know, whatever, right? Like, whatever that thing is. Like, they, somewhere along the way, they stopped enjoying life. And then it's not like this light switch where you're like, now I can enjoy life again. Like, it's, it's a lot harder than you think to, like, once the money problem solved, you realize there's a lot bigger problems out there. And it's, uh, it's an interesting conundering that's hard to say publicly because nobody cares. Mindy, you said something a second ago that I

want to follow up on. You said, I think we could have made a bunch of changes on our journey to make it better that wouldn't have increased the timeline. And I think that's something that I have experienced and that I see so often among people who are taking a slower, happier path to five, right? So for example, for me, so I took that six-month career break and then I went back to work part-time. And we assumed, right, so I have an article on the website that I wrote that like the assumption was this was going to add two to three years to our five timeline right for to make this decision but it was worth it because I'm buying some of my time back now right and one year later come to find out our savings rate was exactly the same

because it had actually just reduced the stress and anxiety that was causing us to overspend in the first place on things like convenience escape you know like we were able to to make more of our own food at home. Like we didn't get takeout as much. We didn't have to buy the super expensive, like pre-made stuff at the grocery store. Or we didn't feel like, oh, I'm going to take this expensive vacation because I deserve it.

I'm going to check for the travel deals because now I have an extra 20 minutes to like sign up for a new credit card or something like that, right? And so we started, when we looked back, at it, we realized we were saving like $1,500 a month or not spending $1,500 a month on things that would fall into the buckets of convenience and escape. And so our fine number didn't change at all. So it was like, okay, well, I guess we can just like keep going on the path and like making the changes, right? And so once we realized that, it was like, okay, so there's no need for me to try to

work more and increase my hours at my job. And then I started thinking about, okay, people who reach financial independence, they often still do work, right? They often do work that they love and they often still get paid for it, right? Somehow, some way, right? And, you know, it seems like the majority of people, especially if they're, you know, people who are, you know, people who are I'm ambitious enough to reach financial independence, maybe they need a period of time to de-stress and, you know, get through the burnout and all of that. But after a while, it's like, okay, great. Now I'm ready to like do something, like some sort of creative thing, right? And so I saw that amongst people who had reached by, right? And so I was asking myself, how can I then,

how can I figure out what is the work that I would love to do? after reaching financial independence, like all of these people are doing. But can I figure out if there's a way to generate income doing that work so that I could just transition to doing that long before five so that I don't have to wait the 10 years just to make more money and then oversay for retirement. And so it was the lessons that I learned from Carl and from so many other folks in the space that made me say, okay, let me then use this extra time and energy I have now to figure out the business that I would want to start, even if I didn't need to generate any money doing it.

So what was your financial position before you took your six, let's call it a six months sabbatical? Before you took your six months sabbatical, what was your financial position in terms of your coast fine number? Yeah, good. So I didn't know about Coast FI at that time. I don't think we were quite there yet. I think we were close. But definitely had a good amount of emergency savings that allowed me to be able to say like, okay, I'm, you know, just not doing this anymore. And in terms of your husband's income, what percentage of that were you spending? Yeah. So we, so collectively, our incomes were at that time, about the same. And we were saving about 50%, and so total, right, of combined. And so we then during that period, we're spending close to 100% of his income. And then I did receive a short-term disability insurance because it was a mental health crisis issue. And so, yeah, So I received 60% of my salary, so we were actually able to save that portion once it actually came in because it took, you know, months and months for them to actually approve it and pay it. Wait, insurance wasn't immediate?

Shocking. And did that insurance, was that for an entire six months when it eventually came in? Or was it for a shorter period? It was for five of the six months. For five? Okay. Yeah. Okay.

I don't know how that insurance works. So that's good. There was a bit of a cushion, but even if there wasn't, you could have quit that job. Yes. Now, I called it a sabbatical. Did you ever go back to them or did you completely cease employment with them? Yeah, I completely ceased employment with them. When you took your sabbatical, did you have a plan to take six months off or were you just going to stop working until you?

you had recovered. Yeah. So actually, I did not have a plan at all. It was so I actually talk a lot about mental health on, on my blog, but I actually just started having severe anxiety and panic attacks and just could not go to work and assumed it would be like a couple days, then a couple weeks, and then it turned into about a six-month period of time, and then decided to not return to that employer afterward. Okay, but you started off with the idea that you would go back. Yes. I also like that you mentioned the piece about being able to start a business that you would like to and enjoy without, like, it having to make money right away. I just want to hone in on that because there's this, I always jokingly call it the BMW phase below minimum wage.

And like, everybody I know who started the business for the most part hasn't made money in the first little while, right? People assume, and I mean, don't give me wrong. There are ways you can franchise, you can buy into a business, you can do whatever. But if you're building something from scratch, especially something like a blog where there's a content piece, like you're going to be paying to build that for the first little bit, right? Like, I don't think I saw a month out of red for the first 18 months. And then it was, you know, kind of mediocre for the next six.

It wasn't until like two years, two and a half years in that I was like, hey, I'm getting paid to do this and I enjoy it. And so I think it's, you know, like that's the best time, right? When you can say, hey, I can afford to do this from a time perspective and a money standpoint. Like, it's not going to break the bank for me to put some work into this thing. And if it works great and if it doesn't work, it's not going to put me on my butt. But I just wanted to, I thought that was, we kind of grazed over it. But I was like, there's a lot of business or entrepreneur or side hustle minded people on here who probably should at least hear like, this is why that cushion's nice. Because you can afford to take a little bit of risk without it being the risk of ruin.

Right. And I actually really loved and would highly recommend if it's possible for people to start a business while they're working part time and have a stable income. because I did feel like that allowed me to make decisions in the business of like, that were like long-term strategic, is this what I really want to be doing kind of decisions, rather than the short-term, what's going to make me money immediately, kind of choices, right?

And so for me, I think that actually helped me to grow the business more quickly to a point that I was able to become, become an entrepreneur and quit the part-time job because I had that long-term perspective and was able to say like, am I running this in a business, this business in a way that feels like how I would want it to feel if I was fine, right? And I would not have been able to approach it in that way. And I don't think I would be enjoying it as much as I currently do. if I did not have the cushion to be able to approach it that way.

So you started your digital marketing business while working part-time for another business, not competing businesses, correct? No, I was working part-time for a nonprofit organization. I just want to throw that out there. If you are already a digital marketer, don't start a digital marketing side business. Your boss may find out. your boss will find out and then we'll get very angry with you. So what did that look like starting your own business? Yeah. So actually I, so I worked with a nonprofit organization and I actually

started my blog in 2018. And so my work has historically, like my career background has been in human resources and organizational development and training and adult learning and and that sort of thing. And so when I transitioned my blog into a business, I decided to do lifestyle and career coaching. So using all of those skills that I had built to run group programs focused on helping people design lives that they truly love that they wouldn't want to retire from. So like all of these things that we've been talking about on the podcast, so bringing people, you know, in a group context with a supportive. community through a lifestyle design process to figure out what is it that I want?

Like, how can I then dream even bigger and then start to experiment and sort of take steps toward those things that I want, right? And continue that cycle. How long did it take you to get your business up and running before you felt comfortable quitting your job completely? Yeah. So it was about nine months. So it happened actually a lot more quickly than I expected. I was, you know, sort of thinking when I started the business, I was like, well, maybe this will generate me a little bit of income that'll let me like semi-retire in like three to five years or something, right? So that was my initial plan with it. And then realized like, oh, no, I can make like real money doing this. And so I was to a place where I was to a place where I was.

was replacing my income from my part-time job. So although I wanted it, I wanted it to be like, it could cover our full expenses before quitting. It didn't get there, but there were like a few frustrations at work. And I was like, it's replacing my income. I don't need to put up with the BS at work anymore.

And so it definitely gave me the freedom to leave. And I would say several months earlier than I was even expecting to after I had figured out, wow, this is a viable, you know, this is a viable career option now. And how many hours were you working at the job versus how many hours are you working now at your own company? Yeah. So at the time, I was working 24 hours a week in commuting. So I was on site.

with like a half hour commute each way. So I was working three days a week. And then I was working on my business the other days a week, sometimes in the evening, sometimes the weekends. You know, I would imagine I was putting in like 20 hours a week into it. And now I now work like 25 to 30 hours a week total just on my business. So I haven't actually like. I have a lot of free time, which I absolutely love.

That's part of a building a business that I would want to, like that sort of is the vision of what it would be even if I didn't need to work for income, right? It's can I, and I think that's the question that I'm asking myself is, can I run this business as if I'm financially independent? and still generate the income that I need. And I think that's what I'm talking about, going back to your comment, Mindy, about how people could make changes

and still work toward financial independence in a similar time frame. I see people making changes like this, like transitioning to self-employment or going freelance or going part-time or, you know, different options. and oftentimes it doesn't change their timelines all that much because they make a little bit more money than they expected or they spend less money than expected. Right. And so I think people can make shifts a lot earlier in their path to FI. And I think that's what I want to use my experience to help more people understand because it seems like

in the FI movement, sometimes we don't realize that we can use our freedom along the way. Absolutely. I think there's not enough people talking about the journey can be enjoyable. And I love the tip to start a business. If that's something that you want to do, post-Fi, start it pre-fi and start it while you're still working and generating income because then you're not relying on just this one thing. You could, I don't know if you know this, you were working like 40 hours a week, 45 hours a week. You could work 45 hours a week now and make even more money. You said you have all this free time.

I could if I wanted to. If you wanted to. So what does your future look like? And in terms of your Coast FI number, where are you right now? Yeah. So we have reached Coast Finance. independence. If we were to scale back completely and not add another dollar to our retirement accounts, we would be on track to retire early in our 50s. Yeah. So we are a little bit past

that Coast-Fi milestone. Okay. And to full financial independence, we're 42% of the way there. Oh, nice. Okay. Yeah. But in it, so then in the in the future, So I think that's a great question because we're still, you know, in some ways figuring that out. So my husband is still working in his full-time job. He actually really enjoys it and I'm like ready, ready for him to be done. So it's good right now, right, that he's doing that because we just had a couple high spending years where we bought our camper van and we paid to build it out and like do all of those things. So because of those things are savings rate.

for last year and this year are going to be around 20%, which was down from like the 50 to 60%, the few years before. And so for us, my, what are, the, the path that we're thinking of now is, though, if we can scale back the work that we're doing to cover our costs and save, you know, 10 to 20% a year, that would allow us still to retire sometime in our mid-40s. And so that's the plan, right? So we're not, we could, right?

There could be certain years where we only cover our actual costs or where we use some of the money from our emergency funds, depending on if we want to do less work that year and that kind of thing. But I do expect that, like, we enjoy saving. Like, we kind of get a rush from being able to save. I imagine like most people who are pursuing fI do. It's like kind of like a little addiction. And so it's hard to completely scale back.

And I don't expect that we will scale back completely that will likely continue. And then my husband will quit his job, hopefully, within the next couple of years. He knows right now that he's doing it because he wants to, not because he has to. So I think it sort of changes the perspective too for him. And he'll join me doing some kind of entrepreneurial type work and will be, you know, fully location independent traveling around to the country in our camper van. The crazy part about all this, like you mentioned that if you guys just scaled back and stopped right now, you'd probably be able to retire at 50.

And, you know, people joke about compound interest being the eighth wonder of the world. but like to put in perspective, what you're actually saying is that you've doubled your FI number if you stayed until 60, right? Because over that from 50 to 60, compounding, even at just a normal 7% interest, like that, whatever you've got in that account would have doubled, right? So to be able to say, well, yeah, if we keep going a little bit 10 or 20%, you know, we'll reach it by 40, like, okay, well, now you're talking four times what you need at retirement. So it's like the math is there that says, if you wanted to, you could never say, save another dollar and 50, but if you save 10 or 20% going forward, like, that's still a hefty amount of savings and you don't necessarily need it, which is a great spot to be in financially because it gives you peace, which ultimately like financial independence, if you ask me, my definition is to do what I want, when I want, how I want. Nobody else can dictate whatever that is. And so you, you know, congratulations. That's, I mean, you guys have done awesome. Okay, I have one last question before we get to the famous for.

Famous for. That's the other show. We don't have a song for this one. We should make one up. Yeah, it should be, anyway. In terms of annual spending, what amount of income does your business generate right now? I would say it close to covers it. So I would say my business income could cover about 75.

percent of our annual spending right now. However, if my husband quits, we will have much higher costs because of health insurance. Oh, good point. And so am I counting for that in, you know, needing to generate more, you know, a higher, higher amount for future spending. Yeah, but that's 75% on, I know you mentioned you've kind of designed it around five. How many hours a week do you think you're putting in on that. Oh, like 25. Yeah. See, that's awesome. That's a great spot to be. Okay, Jess, this has been such a fun episode. I really appreciate your time, but we're not done. We still have our famous four. Okay. What is your favorite finance book? So I actually recently read Caching Out by Julian and Kirsten from Rich and Regular.

It was the absolute best argument for Fire that I have ever read. And I'm not even like for the retire early piece of it. It was an incredible book. It was incredibly inspiring. And I think is going to reach a lot of new people that Fire hasn't reached previously. That is awesome. I have a copy. It is next on my list of books to read.

I'm super excited. All right. What was your biggest money mistake? Let's see. I would say, the biggest money mistake that I made was not being involved in my finances with my spouse in my 20s. So I had no interest in being involved. I didn't want to think about money. I had, you know, some limiting beliefs about how, you know, having money, like, makes you a bad person, like that kind of thing to work through. And so as a result, I didn't realize, like, how much money we had or what it meant. And so got to a place that my job ruined my mental health, even though I probably could have quit or scaled back and used the cushion that I had built

earlier but didn't realize that that was an option. What is your best piece of advice for people who are just starting out? So my advice for people just starting out would be to save as much as you can early within reason, right? So you don't need to, you know, get. an increase in salary above $30,000 a year and put 100% of it into your 401K, right? You can do 75. You can inflate your lifestyle a little bit. Just focus on inflating your lifestyle on the things that really will add significant value to your life and then bank the rest of that raise. Because if you can reach Coast Financial Independence by 30, right? By, you know, saving.

maybe less than 200,000, that's going to give you so much more freedom and flexibility for, you know, the next 70 years of your life. What's your favorite joke to tell at parties? So I actually recently burst into my husband's home office earlier today to tell him that I saw a video with Jennifer Lopez that she did on TikTok that said adulthood is the worst hood to live in. I agree. Adalting.

Oh, she's right. That's the second jab at adulthood we've made on the show. Well, Peter Pan at heart. Oh, I had a Van Life joke ready. I'm going to tell it anyway. What are Van Lifers favorite music bands? Van Halen and Camper Van Beethoven. Okay, Jess, where can people

find out more about you. People can find me on my website. It's the pioneers.com. And then I'm on the socials, so Twitter and Instagram at the pioneers. And then for people who are interested in lifestyle design and, you know, living intentional and designing your life along the path to financial independence, I run a Facebook group called Slowfi enthusiasts. And you can find that at the pioneers.com. FB for Facebook. Awesome. And I assume because you invented the word

pioneers, you are the pioneers everywhere, which is awesome. Just like the mad scientist. He's like, I made this word up, so nobody else has it. Yes, we did make that word up. That's a great word. We were sitting around trying to come up with a name for our blog. And all these clever people, and we're like, oh, 1,500 days. Okay, Jess, thank you so much for your time today, and we'll talk to you soon.

Thanks so much for having me. All right. That was Jess from the pioneers. David, what did you think of the show? It was a great show. I think we, you know, I think Coast Fies everything that we thought it would be, wanted it to be. And I think she's got a good head on our shoulders. And I like the fact that they're already living a much more relaxed lifestyle than a lot of people their age, right? Like, they're already able to take the foot off the gas a little bit, knowing that their future is secure and be able to stop and smell the roses along the way. I think that's a very beneficial way to live life. I really wish that I had heard about Coast Fi many, many years ago. I have peripherally heard about Coast Phi. We have reached Financial Independence about five years ago before they started throwing all of these different Phi terms around.

And Coast Phi seems like something that is kind of beneficial. It's like the best of all worlds. You're still reaching financial independence. You're still enjoying your life while you're doing it. You're setting yourself, your future self up for success. But your current self is also still having a good time. It's just, when I first heard the term coastfi, I thought it was having enough money to live on the coast.

Yeah. So like super fat fire. Yeah, yeah. I was like, oh, no. No, it's, it's, you're coasting to financial independence. And you, the, the concept that you are going to just stop contributing after you've hit a certain number is, honestly, I think is kind of false. I think if you have, you have the ambition enough to contribute to your 401K and contribute

to your retirement accounts and your post-tax investment accounts, once you get to this coast, fire number, I really don't see a lot of people stopping completely and then just being like, I'm just going to spend every time I have now. I think they'll continue to, at the very least, get the match, do the Roth IRA contributions and maxing that out. Do the HSAs, if that's something that's available to them. You know, they'll just continue on with that part of it because that's just kind of what you do. And it doesn't, you know, if you're already used to it, it doesn't really make a big dent a lot of times to just continue on. Yeah, at that point, you're really only contributing to either shorten the timeline to retirement

or to live a more luxurious lifestyle in retirement or, or I guess, ultimately, to pass more on when you depart, you know, the earth. So, but it makes it really easy to scale back significantly and enjoy your present life, but every little bit that you help is just a bonus because you already got the numbers down. money out of the way so you can lead your best life. Yeah, absolutely. Okay, should we get out of here? We should. From episode 323 of the Bigger Pockets Money podcast, he is David Perrae, and I am Mindy Jensen saying catch you on the rebound.