BiggerPockets Money Podcast - 377: Mr. Money Mustache on Life After FI: The Truth About Retiring Early in Your 30s

Episode Date: January 23, 2023

Mr. Money Mustache is the internet’s poster child for early retirement. At age thirty, Pete Adeney was able to leave a lucrative job as a software engineer to focus on building a financially free life. He brought the FIRE movement to the mainstream by teaching others online how simple spending skills could allow them to quit their corporate jobs, keep more money while working less, and live a life centered around passion, not a paycheck. His popular blog has garnered millions of visits, as early versions of himself flock to the financially-freeing wisdom so rarely talked about in average American society. Pete has been retired for nearly twenty years now, meaning he’s been FIRE more than double the amount of time he spent in the working world. So, how does he spend his days? What keeps him going? Does he still have enough money?And how can someone repeat his system? Scott and Mindy spend this episode asking the “life after FI” questions, so you can know exactly what you’re getting into when you retire early. Pete’s answers shed light on often untouched topics that most of the money community can’t answer. We’ll go deep into planning for financial independence, developing “spending skills” that can bring early retirement decades sooner, and the right way to quit your job and wean off work. Pete also shows what the day in the life of an early retiree looks like and how today’s stock market crash has affected his portfolio. Want to retire early? Strap in—we’ve got the man who brought FI to the masses on today’s show! In This Episode We Cover Pete’s repeatable plan for FI and the simple steps that can lead to financial freedom Quitting your 9-5 and why leaving work all at once could be a big mistake Why most early retirees never touch their nest egg (and why you probably won't either) Whether or not early retirement truly lives up to the hype The 2022 stock market crash and how it’s affected Pete’s portfolio and investing mentality Stocks vs. bonds and why someone who’s chasing early retirement should choose one over the other And So Much More! Links from the Show Find an Investor-Friendly Real Estate Agent BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Mindy's Twitter Scott's Instagram 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 Mr. Money Mustache The Surprising (Scientific) Truth Behind What Makes You Successful Multpl.com Cfiresim calculator Early Retirement Extreme Click here to check the full show notes: https://www.biggerpockets.com/blog/money-377 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 where we interview Pete Adony from Mr. Money Mustache and talk about life after financial independence. Spending less money is not a deprivation. It's a skill. It's just like lifting more weight or being able to run further or whatever. So you don't say like, oh, you know, marathon runners, how do you cope with having to run 26 miles? These races, like, can't you run less? And it's the opposite. It's like, no, I'm good at running. So that's how much I choose to run. Well, when you get good at spending efficiently, you get more for your money, like more fun. You know, you might have a way to get your, you know, through connections or like Craigslist. Hello, hello, hello. My name is Mindy Jensen.

And with me, as always, is my unable to grow a real mustache co-host, Scott Trench. Ouch, Mindy. I think I'm going to stumble to come up with a good response to that one. Oh, that was good. Scott 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 freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or learn about what life after financial independence looks like. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Scott, we are bringing back Mr. Money Mustache. He joined us all the way back on episode number one. and we are going to talk to him today about what his life looks like after he reached financial independence and retired because I think there's not enough conversations surrounding this. There's all sorts of conversations talking about the journey to financial independence, but there's not a lot of people describing what it's like to be retired. Yeah, I think that's true. And, you know, it seems hard sometimes to find folks who are truly living the fire lifestyle. Even after all this time, all stuff we talked about with this, Mr. Money Mustache is one of the original folks to have accomplished this.

He's a pioneer with a slot leadership and he's a personal inspiration. So way back in 2013, 2014, when I was starting my career and journey, I was very heavily influenced by two websites, platforms, right? Mr. MoneyMustache.com and BiggerPockets.com. And so, you know, my philosophy still to this day is really a hybrid of those kind of two approaches to money, this kind of the skill of spending, as we'll discuss with Mr. Monomestash today. And then the concept of real estate investing. And that's a big part of my life in my portfolio. Highly encourage anyone and everyone to go to Mr. MoneyMustache.com. And there's a new 50 series boot camp email, email series you can sign up for it.

It's awesome. Or you can just start with the first post and start working your way through. There's only like maybe 100 or so, maybe 100 to 200 posts. And they're really a college level course in personal finance. Yeah, I had a great time talking with Pete today. And I think it's really fascinating to see how his plan for financial independence started off and how it ended up and how he approaches his journey to financial independence, his journey to enjoying his life now. I think it's a lot of fun. Before we bring in Pete,

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slash BP Money. And we're back. Today's guest is Pete Adony, also known as Mr. Money Mustache. He needs no introduction, but it's my show, so I'm going to do it anyway. Pete runs this tiny little blog that nobody's ever heard of, where he talks about spending money willy-nilly, which I think is so funny because he does it. He runs this ginormous blog called Mr. Money Mustache. He is kind of the reason that most people that I've ever met on the path to financial independence

have discovered financial independence. Pete, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Thank you. It's exciting to be back for my second guest appearance here. You're right, right. I should say welcome back to the Bigger Pockets Money podcast. We actually spoke with you a few episodes ago on episode number one. It's now, what did you say, Scott?

378 episodes later. So I'm glad you, I'm glad you could join us. Yeah. What have you been up to? Congrats on the huge success of this show. I'm a big fan myself. Oh, thank you. I've been up to the usual stuff, like building things, helping to manage and be the janitor at our shared headquarters facility, co-working space, and occasionally typing some shit into the computer as well. same as most years, I would say. Oh, and raising a boy, of course, that's the main job. Let's talk about a few years ago before you were financially independent, back when you were actually still working. Why did you start pursuing financial independence? Because I know so many people who started pursuing after reading a blog post on your blog, but clearly, that wasn't how you got started. Where did you start? for me, I think it was just being a quirky thinker, just like the standard engineer who doesn't really

notice or follow what other people are doing. So I just noticed like, whoa, this is way too much money they're paying me for a 22 year old or whatever. Like, what should a person do if they have extra money? So I just learned about investing and did the investing. And then I thought, well, what do you do if your investments are growing and they eventually end up being able to cover your living expenses? Well, of course, you'd want to quit your job then. So that was like the basic idea. But then the bigger thing is like at that age, we were looking towards having a family eventually, right? Like the end of your 20s and early 30s, like many people. And I didn't want to be a worker and try to split my time with like the intense job of being a dad. So that was an extra like

super boost to the motivation is having like to stay at home parents for a young kid at the time. Where did you turn to for information during that period? Because there was no Mr. Money Mustash blog to kind of inform the strategy. How did you figure all this stuff out? Yeah, I just, like, I didn't know about the concept of financial independence. And in fact, the whole idea of this 4% rule, I didn't make it up either. But I just read about it on other blogs and books like long after I'd already retired. So that was kind of secondary for me.

My primary source was just reading normal, investing books, you know, like stock market history and, you know, these old John Bogle books. talk about index funds and why they're better than individual stocks and things like that. So I used just go to the library and look in the investing section and just pick books based on their title because I was so interested in money. And this goes way back to when I was a little kid, I was interested even then. So it's pretty much just stumbling upon it. I didn't start writing about Intel after I was already retired for something like six years. And of course, that was 12 years ago as well. So I've actually been retired 18 years. So a lot of this is really a bizarre bit of ancient

history now. Okay. So let's look back into the way back machine. What was your plan for early retirement and how did it actually shake out? So the plan was to just enjoy unlimited weekends. And more or less, it did work out that way, except a few times when I stumbled into committing to projects that I should not have and then I temporarily had a job again. And then I realized that wasn't a good goal for retirement. And numbers-wise, since I didn't know about the 4% rule, we had this different concept of just thinking, okay, how about have the house paid off so there's no mortgage bill. And then an additional, I think the number was $600,000 of investments to generate the dividends

and capital gains to fund the rest of life, like the groceries and the fund and the travel and child-raising expenses. So what that works out to, if you now think about it through the lens of the 4% rule, it's like having really cheap housing plus an additional $24,000 a year of pretty reliable investment income. And remember, this is like $2,000. So you can kind of almost double that with today's post-inflation numbers. It's like having, you know, $40,000 to live off and on almost free house, which I think most people could still do today as long as they, you know, have control on a lot of their life. their life expenses. And, you know, one of the things that I, because obviously you're a huge

inspiration on my personal journey here, I kind of uncovered Mr. Money mustache and bigger pockets around the same time. But one of the things that really attracted me to your philosophy was also this concept of very simple, keeping your expenses low on that. And 24,000 at the time or even 40,000 today, I think would feel very low to some folks, perhaps even with, a paid off house. What would you say to those folks? And how did you kind of go about creating a life that was comfortable at really much less than that level of total spending? Yeah. Well, the thing is, I thought, I naively thought that I had a super, super fancy, huge lifestyle. Like, that wasn't cutting back. That was pretty much the most I could spend.

And the reason was because, like, we were a double income professional, a couple at the time, both engineers, right? Make a tons of money. So money wasn't the problem. Like if we wanted to spend more, we would have and then just set our annual spending needs higher, like $80,000 or whatever the number ended up being. So to me, that was like what, you know, the most you can imagine needing and then just cutting out the waste. So the way I encourage people to think about it is spending less money is not a deprivation. It's a skill. It's just like lifting more weight or being able to run further or whatever.

So you don't say like, oh, you know, marathon runners, how do you cope? with having to run 26 miles. These races, like, can't you run less? And it's the opposite. It's like, no, I'm good at running. So that's how much I choose to run. Well, when you get good at spending efficiently, you get more for your money, like more fun.

You know, you might have a way to get your, you know, through connections or like Craigslist. You can get like the same fridge that your friend might have to pay $3,000 for. You can just like snap your fingers and the same fridge appears in your kitchen for $1,000. Because you have more skill at spending. money on that particular thing. And the same applies for all these categories of life, like transportation and food. There's like usually a really inefficient way to do it. And then there's like a spectrum of efficiency. And it's not until you get really, really a hardcore that

things get difficult, at least probably because I have less skilled than some of these other early retirement authors like Jacob, the early retirement extreme guy to use the classic example. He's really, really skilled. So he can spend like, let's say $100 a week on groceries easily. whereas for me I have to spend $300. I mean, actually these numbers are too big. He could spend like $30 a week. I could do $100 a week and we'd both eat the same amount of nutrition and quality. He's just better at it than me.

So I encourage everybody to think about it like that because instead of thinking, oh, I don't want to shrink my lifestyle, I just tell them, no, you just have to grow your skills at learning how to buy stuff and how to meet your needs. Not even buy stuff, but it's like meeting your needs. And then the cost goes down. And that's actually more fun just because it's a more empowered way. You know, you don't just have to purchase everything from other people if you can source some of it from inside your own skill set. Let's look at how you left employment.

You didn't do the 4% rule, fine number that a lot of people are doing now. But you did at some point decide, I have enough money. I'm going to quit my job. What did that process look like? because there's, you know, the one more year syndrome. And I think that people who retire based on the 4% rule, I mean, I'm a huge fan of the 4% rule. We've talked to Bill Bangan on the show. He's, his numbers don't lie. I, of course, there's all past performance. It's not indicative of future gay, blah, blah, blah. But I think the 4% rule has some pretty solid foundation behind it. Yeah, it's pretty conservative. It's not like a best case scenario. It's, It's like a middle worst case scenario. So how did you leave your job?

Oh, well, I just sent an email saying that I would like this to be my final two weeks of work. Actually, I did a bit of a trial program. I started by going down to four days a week instead of five in my engineering job for the last year of my career. So that was an exchange for a 20% pay cut. And that was kind of nice because it was training wheels. like income was reduced and my leisure was increased by like 50% right because I had three day weekends and then I realized hey I really like this I'm ready to go to 100% after that and it also gave me an extra year that was my one more year syndrome as to like still saving a lot of money at 80%

salary but not quite as much but in exchange I got to start like the retirement a little bit earlier yeah I think this is like a real problem for folks in in kind of actually pulling the trigger. There's just like they add on to the pile and all that kind of stuff. And I was worried for a second there that I was just going to be like, well, I just said an email. But no, it sounds like even for you going through this, there was a one-year trial period and kind of some training wheels to easing into early retirement. Would you recommend that folks kind of follow that same path instead of just cutting all at once and going straight into full-time retirement, taking a year or six months or some period of time to ease into it if they're kind of on the bubble. Yeah, I mean, it's nice if you have

that option. It totally depends, of course, right? Like, if your job is super bad, you might need to just get out of it as soon as possible, or if you have, like, twins on the way and you want to build to spend time with these newborn babies, you know, don't, don't mess around with four days a week. But, but yeah, if you're uncertain about either the, what would I do with my time aspect or the, am I going to have enough money aspect, then it's certainly a nice thing. If you have a career that allows that kind of thing, then yeah, why not? When I think, you know, we've talked about the 4% rule in the personal finance community ad nauseum, right?

Like this has been really, really thoroughly debated here. But I find that in a practical sense, I meet very few retirees, early retirees who are truly living off of the 4% rule, specifically those who are actually selling off portions of their equities in their portfolios to actually fund early retirement. Most folks tend to have some sort of other ace in the whole. And I wonder if this is something you've experienced. And what I mean by that is they might have a large cash position. They might have rental property income. They might have a side business or part-time work that they do or something like that. Do you believe, is that consistent with the folks that you know in the space? There's very few people

who are actually selling down their portfolios. And if so, is there any takeaways from that for folks that are aspiring to early financial freedom? Yeah, well, got two separate things because the, I definitely know a couple people, you know, maybe 5% of the early retirees. It really varies because it depends on the personality type. Some people really just want to be retired and not do any more work. And those are the ones who choose to live off of their portfolio, you know, like dividends, you know, keeping some larger cash reserve and selling shares occasionally if the dividends

aren't enough. But maybe 90% of the early retirees that I've met, first of all, they're really young relative to conventional retirement age. And that means that they have a lot of energy and entrepreneurial ideas. So they'll still have income from things that they do because it's kind of hard not to make money if you're out there creating valuable things and interacting with people, like that's just how our money and society works. So, first of all, rental house, I mean, that's really the same as holding shares in a company. It's like you own an asset, and then it pays you dividends in the form of rent. And then sometimes you'll hire out the management entirely, so it's entirely passive. I like to encourage people to remember that there's no real

difference between a stock and a rental house other than a rental house requires more work sometimes, but they're both assets that pay you. And, yeah, in my own case, I guess, It really is varied. You know, I've ranged from living off of stock investments to losing a whole bunch of money, like wasting my retirement savings by starting a money losing house building business in like the mid-2000s. That was my biggest mistake of my life probably. Then you're recovering from that, getting rid of that company. And then back to no income and focusing on child raising and then starting a blog,

which was no income for a while. then I had a period of making lots of income, like, way more than I needed. And then now that's back down to a much lower number. So it's like kind of a roller coaster ride, and I think of it as independent of my actual retired status because, like, that nugget of the original savings has always just been there in the index funds, and sometimes it's shifted over to owning a house, you know, more or less or whatever, like paying off a mortgage. But in general, it was kind of just a psychological crutch.

And this is true for a lot of people. Like sometimes you don't even really need your retirement savings after you so-called retire. But it certainly helps people get the courage to quit their job. And there's no real harm in doing it. It's a nice safety margin that gives you the confidence to do the rest of stuff in your life. Okay. So what is your net worth now versus when you retired? You had that period of heavy income from the blog, which has gone down dramatically.

are you, do you have more money now than when you retired? Yeah, yeah, definitely. So there was like a period, initially 2005 retirement, and then house building company where we made a little bit of money initially, then lost a whole bunch because the housing market crash happened right then. And the stock investments also went down at the same time. So that would probably be like the worst period of my net worth, maybe in 2006. Then I chose to do a bit of extra work, and so did my wife at the time.

you know, to like kind of rebuild our savings. So in a way, we came out of retirement, but only in a very part-time way because we really wanted to stay devoted to parenting. And then, yeah, then there was a flat period and then the blog went up. And then I got, did some philanthropy because it was a lot more money than I needed. So the amount I gave away from the blog income is actually like much more than I spent, you know, more than 10 years or maybe even 20 years of my personal spending. But I didn't give it all away because I'm not that courageous. So I still have some of that nest egg stored. So the end of that crazy story is that I have like a few times higher net worth now than at the moment of retirement. And also we split,

you know, like Simi and I got a divorce a number of years ago. So we split our big nest egg pile. And so we were each financially independent at that point. And then so I still felt fine. But I think mine has grown a little bit since then just because of the natural earning more than I spend in the stock market has continued to go up as it does over time. So yeah, I'm more relaxed than ever. Don't really think about money, to be honest, like in my own context, because my spending, it never seems to go up all that much, no matter what, how much I feel like I'm splurging. So that's the real cool part about money in early retirement is it just lets you forget about money entirely and you focus on the other stuff in your life. Yeah, you have a metaphor buried in one of your

blog posts somewhere about, hey, money should be like clean, drinkable water from a tap. Like, yes, it's essential. But once you have enough of it, it ceases to be something that is a focal point in your life. And so I think that's a really healthy end goal for folks when thinking about their relationship with money. Right. And it can be hard because money, earning money and stashing is a bit of an addictive thing. Because people are like, you can never have too much money, right? So I'm just going to do a bit more, a bit more. And there is like, you know, some dopamine and rewards stuff going on that you can truly get addicted to. And it's okay in a way, as long as it's not hurting any other area of your life. But many people who are super wealthy, you know, they might

have $10 million of wealth, you know, all these properties and stuff, and they're still just trying to get one more investment property even they totally don't need it. They don't want it. They just want the money and they like the so-called game. But it's hiding a lot of other aspects of their life from them because they're pretending it's important and then thus they're neglecting other more important things like their relationships, maybe with their children or their loved ones or maybe it's their health, you know, like, oh, and I don't have time to work out because I'm managing my 100 rental properties. So that's a really big thing to watch out for. There's this concept of mindless accumulation and a really neat psychological study on it that I read somewhere where

humans are naturally prone to just piling up they don't need. It's a little bit like, if you have the clean tap water, just like, I'm going to pour myself a glass of water and another one, just in case, and another one. And like you fill up the countertops in your kitchen with clean glasses of drinkable water. And then you start filling up the floor and the tables, like, you know, never know. I might get thirsty later. This tap might stop working. So I'm just going to, and then they kind of wreck their lives just by filling it up with glasses of water. That's what happens if you're, you know, overly focused on money when you already have enough. So let's talk about, I mean, the end goal here is isn't the money, right?

isn't having that many glasses of water on the tables. It's having this lifestyle. So could you walk us through what your day-to-day life looked like in the months? In the immediate aftermath of retirement, what did it look like? And what does it look like today? Could you guys a glimpse into the day-to-day? I think the best way to imagine is it just looks like a weekend. Like it's always Saturday. And that can be bad for some people, because if you use your Saturday semi-destructively, like, oh, okay, work was so hard, so I'm going to just spend Saturday drinking beer and watching sports on TV. Then, you know, that's not something to aspire to. However, my weekends were always like just filled with work and projects. Like I would always be renovating my house or doing some

stuff, you know, like a trip to the mountains with friends or hiking or whatever. So it just lets you do more of that. And of course, in my case, the last 17 years almost have been pretty strongly defined by just raising our son, right? Because it takes a lot of work to raise a kid. So that has been the first activity. It's not like you're, you know, constantly just hovering over them the whole time. So there's a lot of free time to do projects. And so I've done all kinds of fun things since then. But it's nice to just have that as your, you know, your main thing when you're a parent just to be like, yeah, it doesn't take a lot of time, especially as they get older, but I like to be there for the key moments and be able to just say no to everything.

else if there's a key moment, like your kid is going to be in a concert and you got to help them be in, you know, just like the key moment of life or they need your help or you want to stay up late and read books with them. It's so nice for me. That was like by far the number one thing for retirement. And that job is almost over, you know, like he's actually in the next room here and he doesn't, he's doing his own thing all day. I'm doing my thing right here with you guys. So I got to figure out something else to do for the next stage of my life pretty soon, actually, because I'm not going to be a active parent for all much, that much longer. Awesome.

You know, in addition to the family activities there, have some of the other pastimes changed over the last couple of years, what were some of the maybe the focus is immediately after retiring? And what are some of those today? In addition to, of course, the number one job. This is definitely just me because everyone has their different preferences. And I happen to love, like my number one love in my free time is just construction, Stranger enough, like manual labor.

So I like building stuff, building new kitchens, renovating houses. And I've just done years and years of that with friends, like, you know, in my free time. So when we had a baby, it would be like during the naps. I would go over and just do two hours of construction in the neighborhood. And so because of that, my friends and I have renovated, I don't even know, maybe a dozen or more old houses right here in the neighborhood and built a couple from scratch, maybe a few. And so that's number one.

And then I got into writing, of course. So that's how that Mr. Money Mustache blog started to exist. And during the early years of it, like 2012 through maybe 2016 or 17, I worked on it quite a bit. So it was, you know, like a couple, maybe an hour or two per day on average. That's like having a really small job. Now I don't do that as much. I do more construction and probably should add some new activities.

I mean, we started this co-working space, of which Mindy is a co-owner. And that's been pretty nice as a side job too. Like it varies. Sometimes I'll work really hard on it, like especially when there's, oh, construction, I guess, related to the building. But we have great events there. And, you know, it's a great place to meet friends as well. And that's, yeah, that has been a really lucky decision that we stumbled into because it brings a lot to all of our lives. And hopefully to those of the members and the attendees as well. What advice would you give to somebody who's, who might be listening and saying, well, well, shoot, I don't, I spend my Saturdays drinking beer and watching football. And I did not spend my Saturdays renovating my kitchen or my friends' bathroom or anything like that. Would I even be productive in early retirement? How could I begin reframing that to be really confident that I'm going to have a wonderful early retirement instead of get into some really unhealthy pastimes if it's always Saturday? Yeah, it's tricky.

I mean, I probably should dig into more success and failure stories in that department because I can't really fully relate to what's going on in such a brain. but I do think that the longer you keep a job, the more likely that condition is to happen because a lot of times people will, you know, your brain is plastic and it changes the more you do something. So if you have the same job or a career

that just goes for decade after decade, by the time you get to my age, I'm 48, I could have potentially been working for 28 years or something. So my brain would have just like molded into the identity of, you know, I'd probably be like an engineering manager or something at this point, director of engineering. So like all I would be able to think about is design specs and teams and deadlines and goals and I would have poured so much into that. The rest of my brain with side entrance

interests might have kind of atrophy a little bit and I maybe really just would want to relax on the weekends because my job was so intense. So if you're in that situation, you have to like kind of wean yourself off the corporate world, like either stay in it forever, which is a valid choice if you enjoy it or like wean yourself and do less work and strike up new interests on the outside. You can only do, you can only figure it out by just trying things, I guess, right? And interviewing your friends, if you have successful friends who do have big interests outside of work, try that. But I think most people in that situation, they like the idea of being creative and solving problems. So that's why watching sports is not going to be a sustainable

program for most people because you're not creating anything. You're just consuming it. So find, you know, it could even be a side business or like could be a volunteer situation, but something where your brain is actually solving problems and with a bit of difficulty, it's more likely to be a path for a good retirement. I think that's a really important question, Scott, because people who are maybe not pursuing financial independence for the, they're not pursuing fire for the FI part, they're pursuing it for the RE part because they work for a horrible boss or they just hate their job or whatever. They are, oh, I can't wait to quit, but they don't really have any plans for quitting.

I think this is not just for early retirement. I think this is for any retirement. What is it death by retirement? You retire, and I don't remember what the statistic is off the top of my head, but like, such a high percentage of people who retire are dead within a year. Like traditional retirement, not early retirement. And the reason they are is because they have no plans. they sit around and watch TV because that's what they do on the weekend.

So I think it's a really valid point. Whatever you're doing on the weekends right now is what you're going to be doing when you retire. So if you don't like what you're doing on the weekends, like if you don't like that person, don't be that person. I think that was a great piece of advice, Pete. Yeah. And that dying shortly after retirement. And some people use that as an argument against early retirement because they're like,

you're just going to die. But I think that's incorrect. I think of it as more of a cautionary tale of retire while you're, are still young enough to come up with a healthy retirement. Because if you wait too long, then you've destroyed your brain and your body, and then there's nothing to retire, too. There's no life waiting for you there. So, yeah, think early and build your freedom while you still have this nice

active brain and body to enjoy. Because it is a lot more fun. It's a lot more varied. And it makes her life seem a lot longer, too. Like, I feel that I've, I retired more like a hundred years ago. You know, my career was somewhat monotonous because you're going, doing the same thing every day. But once that ended, I've just had so many crazy things happen. Just like one year is different from the next year.

And there's child raising years, pre-child raising, during, and now post. And it just gets longer and longer. Like, I feel that not only is it sort of like I'm living in some bizarre version of man heaven, like it seems improbable that life could actually be this good and prosperous. But it also feels like it's just really, really long. And if I were to die right now, find out I was dying, be like, well, at least I had a good 200-year lifespan with a lot of experiences. Like, that was totally worthwhile.

What a ride. So I think it helps me be more grateful for life and more appreciating of it. So is early retirement what you expected? Or is it different? Is it better? Is it work? I mean, I kind of think it's better than you expected. But how is it, how is it better than you expected? I think it's mainly better because the variety that I just mentioned, like, I thought it was just going to be leisure and, you know, projects and vacations and good child raising. And then that's about it. But the fact that you can always meet new people. And to be honest, like this writing situation, Mr. Money Mustache has been very helpful. for me, because I can be a bit of an introvert and retreat to my workshop a bit too much

and by being, like, forced out into the world to meet a whole bunch more people and going a lot more trips than I would have, and be exposed to a lot of new ideas that I wouldn't otherwise have seen. It's made my life more full. And of course, not everyone's going to become a blogger or whatever, podcaster, because that's just not everyone's interested in that. But it was my quitting of the regular job that allowed this to even happen. Like, I wouldn't even consider it's taking up writing, even though I've always enjoyed writing since I was a little kid, I would not have done it as a blog while I had a job at the same time, because that's just not my the way of work. I don't want to try doing two difficult things at the same time in my life.

So I needed that space created by the lack of career to feel like I had time to try my hand at writing. So I got really lucky there. How about relationships? I think a lot of American men, perhaps women as well, have a lot of trouble forming new friends after, let's call it high school college in the workforce. You, however, seem to have built a really strong community. Would you say that early retirement has aided in helping you form friendships in ways that wouldn't have been possible in the work world? Right. Like, let me explore new things that I wouldn't have otherwise had time to explore. So first, there was

friendships from, you know, college, university days. And then the next round of friends for a lot of people, including me, is through child raising, you become friends with all of the parents of your kids' friends, or like the other kids from the elementary school or whatever. And that's a great community year in our neighborhood. Like a lot of us are still friends, like the dads and the moms and the kids are all like still neighborhood parties all the time. And that's excellent. But to go beyond that, it's kind of nice to have something beyond. And one way to do it nowadays, I'm realizing is just we run a meetup group for fire people just on that website, meetup.com. And so that's a common interest. It's a bit of a quirky interest, but it brings out very

interesting and smart and fun people. So for me, that's been great source of community and everyone who's part of our meetup group, which has like 1,400 and something people now. I think it helps a lot of them too. So anyone who's looking to expand their own social circle, whether you're retired or not, I think using a service like Meetup, is probably a good idea because then you can broaden and find people with interests that aren't just like parenting or other things that you're thrown together by default. And you might have more in common with these people. And I think that's really like the spice of life for friendships is getting adult friends

that you really pick yourself, like you really enjoy spending time with them, rather than just, you know, having to be friends with the people who live closest to you. As good as that is, you know, it's good to have a bigger sense. search net if you have, you know, if you really want to spark, intellectual spark in your life, I think. So having more money and more free time, or at least a lack of money stress, I think, can be good for personal relationship because you're not pinching your friends or in case of married people, you're not pinching your spouse and trying to nag them about money or worrying about your debt, your shared debt. So in my case, we went through a divorce a number of

years ago, like five years ago. And some of the allegations that came through like blog comments were like, ah, this fire stuff doesn't work because you guys broke up because you were too cheap, which is funny that, you know, I could see how that line of thinking would happen, but it's actually the opposite, right? We had surplus of money for the whole time. And in a way, that was really, really good for parenting. It allows you to devote your time in parenting. It lets you not fight over money as a couple. And even, you know, if you do have to go through a divorce, it makes that whole process way less bad because you're not fighting over the scraps of, you know, and feeling defensive like, oh, if she takes the money, then I won't have it,

and we'll both be poor. We have to give up the house or we have car leases. Like, all that stuff is eliminated if you're better off financially and especially like if you're spending needs are lower. So that was a huge blessing in our case. You know, the relationship itself has, you know, has nothing to do with money or one of the money. Or one way or the other. It's just, you know, people, not everybody is compatible for an entire lifetime relationship and encourage people not to think about that in form of shame if that is what's happening to them too, because it's not, you know, our society likes to heap shame on people and make a sin to like to ever get a divorce. And I think that's not a healthy way to think about it.

So, you know, money didn't keep us together in our part, but it certainly made everything better, during and after the relationship and it's still better now. And I think the fact that we've become friends, really, really good co-parents and very cooperative friends is partly because there's no money worries around the whole situation. Makes sense. 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.

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Visit Northwest Registeredagent.com slash money-free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. You know, on another topic of personal relationships, you know, perhaps with previous friends, I think some folks may go through the journey to financial independence and, hey, if you want to do that, you're going to live somewhere. That's much cheaper. You're going to work on the skill of spending as you talked about it earlier and be a lot more, you know, get a lot more per dollar spent. You're going to over a year or two rack up perhaps tens of thousands of dollars on a median income. You invest that in properties. and that's unrelatable, right?

If two people, you know, perhaps it was unrelatable to some of your colleagues when you first started out working, right? They perhaps lived substantially different lifestyles than you on the same income. And they don't understand, why are you doing this? How is that going? I'm extrapolating here. That could have been different in your case, but that was true for me in some situations. And then all of a sudden it says, well, how did you come up with a hundred grand to buy a rental property two years later, which is also totally unrelatable. There's no way they can relate to kind of.

coming up with that kind of liquidity and they don't perhaps see those connections. So did you find that the path to FI had perhaps some impact in perhaps creating distance between previous friends in any cases? Or do you think that that's something that folks who are pursuing this go through to a certain extent? It definitely affects some people. And probably if you have a lower income, you might have to make more difficult choices. You know, like I can, if you're trying to become financially independent on like a target salary,

for example, working at Target, you might have to forego like all restaurant meals and like all car ownership or something, right? And it might make you very different from your friends. And then they might be like, oh, it beats no fun because all he ever does is stay home and eat beans and rice, right? I mean, there are some situations where that might be true, but it seems you get a little bit higher on either the income scale or like being willing to stretch out your savings a little bit. there's really almost no difference in the perceptible lifestyle. Like as an engineer, I still got to do all the stuff like the trips and the snowboarding and like had a nice bike and had a car and had a beautiful house.

And it was kind of funny because the stuff I stripped out was just, it was almost invisible. And so I was cutting up the waste, but not the fun. And that still allowed the lifestyle to be like $24,000 plus housing. And just as an example, you know, like I chose, when it was time to buy a house, I was like, okay, my job is here. Where's the closest house that I can afford? And I picked like pretty much almost the closest house. And because I worked in Boulder where it was really expensive, I had to be like just outside of the town eight miles away. Thankfully, still within biking distance, right? So that's my choice. Beautiful neighborhood. I got to bike to work. And then my

colleague who worked in the next, you know, the next cubicle over, he lived 23 miles away. He bought a house in a big suburb, and he's like, yeah, kind of like the views out there and it's quiet. And house was like roughly the same size as mine, but he had to drive. You know, he had to spend like $100,000 per decade on commuting that I did not have. And I got like hundreds and hundreds of hours of bicycling exercise over the same period of time. So like you take the starting points and then you fast forward 10 years.

The difference is like one person's body is wrecked. and they have like, they've destroyed three vehicles from driving so much and spent like hundreds of thousand dollars on, on the driving. And then the other person is, is more fit than when they started. They still have the house and they have more free time because they're not, you know, driving or having to buy as many cars and maintain them. So it's funny, like little choices like that and like what type of car you buy and, you know, what, what you do with your leisure time, it's like almost seems invisible at the time, but the butterfly fact of those decisions over a 10 and 20-year period becomes really huge. And that's why I try to, that's why I've had to write so

many blog articles, because you can't just have a single thing saying like, spend less money. You have to have, you know, if the people haven't thought of it themselves, it helps to share ideas of like, here's exactly how to get a vacation for less, or here's exactly how to get your transportation for less money. And I'm just happy to happen to be sort of like, I'm like a different version of Warren Buffett. I'm the Warren Buffett. I'm the Warren Buffett of frugality where it's just like like really fun for me and I can't help but do it regardless, you know, like, regardless of the money. It's just fun to figure out how to optimize stuff for me. Well, let's look at your cell phone. What kind of cell phone do you have? Yeah, that's a good question and it's pretty much the exact example.

So I have a Google pixel phone right here. And it's what number? What number? Oh, it's the 4A. It's going to be upgraded pretty soon. But this phone cost me a thing like, two. $220 something two years ago. It takes pictures exactly as good as the iPhone of that same era, which was $1,000 or something insane. And I'm using it on the Google 5 phone service, which is like $20 something a month. So normal people, like including people's teenage children, will have like the iPhone 13 Pro Max on a Verizon $100 a month plan. And I have a, I'm a professional photographer sort of, right? Like I have a platform where I make money for posting photographs and image and content. And even I have like a phone that costs five times less than a

teenager, but the photos are just as good. It's just weird that, um, that these decisions are not more widespread. Like Apple as a company, as smart as they are and as pretty as their products are, like they shouldn't even exist because they, they make these profits by charging five times more for the same quality, but people are attracted to the brand and they're like, oh, creative people use Apple stuff. So a good place to be business, but not a good thing to do as a consumer. But don't you feel that your credibility is completely destroyed by not showing up in text chats in the blue of Apple instead of the green of your Google Pixel?

Well, I like to do the opposite. I'm like, oh, so you're one of those iPhone people. I'm sorry to you. Haven't you heard of non-Apple phone? I am an Apple. I have an iPhone, so I'm a little embarrassed here after this one. But let's look at this. I know many people. I am an Apple shareholder, so I have benefited greatly from all of the people who go out and buy the new Apple phone as soon as it comes out. And what is it like, it used to be $500. I think they're like $1,000 or $1,200 for the phone. And that's the

phone that you're buying now at full price to replace the phone that you bought when it came out last year or 18 months ago at full price and you're on these higher per month choices. You were talking about these invisible decisions that you're making or almost invisible decisions that you're making. I have a Google Pixel 3 because I'm more frugal than you, Pete, apparently. Because I don't want to learn how to use a new phone. Part of my frugality is my lack of tech knowledge. But I have a phone that works fine.

Why do I need another phone? because they came out with a new phone is not a good enough reason. Now, my camera may not be top notch, but I'm also not taking a ton of pictures that I'm making money off of with my camera. And if I need to, my husband has a pixel 7 because he broke his camera or he broke his phone, so he had to get a new one. So there's opportunity to take, it still takes really great pictures. I mean, remember those, the first digital cameras that were like this big and took horrible

pictures. It still takes great pictures and I'm fine with it. It works for what I need. but I have a mint cell service that is $15 a month. So I'm not paying these huge dollars for my cell phone service, which I could easily afford, but why spend that much money when I don't have to? So it's these little things that I'm getting what I need at a smaller price.

It goes back to that comment you made about like refrigerators for $100. I need a refrigerator. So if you've got $100 refrigerator just coming out of your nose, Pete, let me know. But there's, you know, there's, my phone service is great. It's, I think it's on the Sprint Network. It works perfectly fine for me. It covers everything that I need.

So why would I pay $100 for a big brand name when I can pay $15 for mobile, which is a great service? It just, it doesn't make sense. But if you are unaware that it again, exists, then how do you know to go get it, which is kind of the whole reason we do this show. Yeah, that's the real point. If you want to summarize everything we talked about in the last few minutes, it's like a lot of people don't have that curiosity or the awareness of what the alternatives are. So someone would be like, oh, I rented a Chevrolet Tahoe for a ski trip once,

and it was nice. So then I bought one. And it's like $70,000. And like, it was nice because I was able to fit my suitcases in the back, not realizing like there's a hundred other cars that can fit the suitcase and use half as much gas and cost a quarter as much to purchase and have better performance than everything else. So like there's a lack of research and awareness in people. So it really helps if you have other five people, other frugal people, they make great friends because Mindy, if you met somebody who said like, gosh darn it, I wish my phone bill wasn't $200 a month. You're like, oh, well, guess what? It can be 15. And if they trusted you and respected your ideas, they would just do it. And then suddenly they're saving like $2,000 a year. And

that stuff is contagious just as much as the wasteful spending is contagious among friend groups. So what is, what I'm hearing here are there's community and there's the skill of spending are two kind of the big takeaways that I'm pulling from today. And where would someone go? But first of all, I believe that spending, the skill of spending is a process. You're not going to get good at this overnight. And there's a lot of decisions here and they impact your, they correlate directly with your life in a lot of cases.

I do think that there can be some event component to that. You could tomorrow go out and switch your phone plan and 15 other things about your spending patterns. But for most people, it may be more of a process. What's a good way to begin that process and really say, you know, the next 12 months, I'm going to up my game here. Do you have any tips that someone could take away for that?

Well, I have a self-serving one. You could go to Mr. MoneyMostache.com and find the link where you sign up for the boot camp email series where you'll just get like one email per week with sort of program, it'll program you to be a more efficient and wiser spender, because it just has the ideas for how to handle each category of life. You know, that or finance books on other blogs and finance books on how to optimize stuff, I really focus on spending more than other people.

Some people are like, just increase your income, which is fine, but it's the problem is it's easy to spend any amount of income. Like there's, there are people who make $10 million a year who manage to still be in debt. And, you know, NFL players who have an average salary of $2 million a year, roughly, they, 75% of them end up completely out of money as soon as they stop playing professionally, even though they could have been retired like every single year there's enough to retire on. So they could be retired like five times in a five-year football career. So it's easy to spend any amount of money, which is why you got to learn about your spending,

even more important than boosting your income. And then when you do boost your income, you get to keep that money because it won't just go up in flames. I just want to second the signing up for the boot camp emails. I read through all, I'm sure I missed one or two here, but I think essentially all of the post that you posted on the Mr. Money Mustache blog when I was kind of going down the rabbit hole of financial independence. And that's a great one. You can just start from the beginning and read all of them. But I think you've created a list of them in the order that you think is appropriate for for folks to consume. That could be very helpful. And if you already, if you haven't referred back to it, you can also go to Mr. Money Mustache.com and click on random, which is one of my favorite

things. And there's something, something interesting pops up every once in a while when you do that as well. But I think that's a great place to go and to start this. And you really, I think, have a great handle on, I love the way you phrased it developing the skill of spending. Yeah, thanks. I would also recommend Scott Trench's book set for life, which I'm sure has been mentioned on this podcast, at least incidentally, but I wanted to credit you because that book is, we were just rereading him with a friend who's actually a bit of a trench fan, and it's like super well written, especially considering it's like your first book or one of your first books. And I heard that you have a new edition coming out too. But that book is really cool because it does talk about the spending and encourages people to have some grit, you know, and not just be like, nah, I'm not willing to make any changes. He's like, do it. You'll be glad you did. And then, and then it also goes on to the technical stuff of how to invest in different things, including rental properties. And like, it's super cool to have a book that combined both, including the attitude. Like, I think most books don't have enough attitude, which means people aren't going to be

really realizing that you have to make some personal changes rather than just some spreadsheet changes. Yeah. Well, thank you. My, uh, my approach in Set for Life was definitely heavily inspired by Mr. Money Mustash and then meshing that together with a really real estate heavy approach, particularly the concept of a house hack in addition to trying to scale the income in some creative ways and taking control of that. But that's, I really appreciate that. That means a lot coming from you. Yeah, that's probably why I like it. It's like Mr. Money Mustache style. The only style I understand. But anyway, I was still thinking it's awesome and I hope it's still selling wealth. Okay, Pete, last question. How has the recent market downturn affected your

mental status with regards to your early retirement? Yeah. So what market downturn are you talking about? Do I need to look at the stock market this year? That's my exaggerating answer. Really, obviously, I know I do look at, you know, finance, really economist and everything. So I've prepared a few statistics for this answer just because it's kind of fun to put things in perspective. So a lot of people, especially in the news, they talk about the stock market is way down and like, no one's going to be able to retire now. But the truth of it is, the biggest measure of the U.S. stock index, which is the S&P 500, is down 20% in the past year.

Pretty much it started a year ago, and it's just gone mostly down. And it's kind of been flat for the last few months. So that's 20% down from one year ago. However, it's actually flat from where it was two years ago. So January 29, 2021, right? And then, so if you had just bought two years ago, at that time, we thought, wow, the stock market is so high. Like, I can't believe it. Is it ever going to go up again? Like, surely it's given us its next 10 years of gains up front, which is sort of true at the time. So if you had bought two years ago and held, you still would be up 4.5% now because those stocks would have been paying dividends this whole time. So that's actually pretty good. Now, if you go back to three, years ago to just before the COVID crash of 2020, so January 2020, from there to now, even after our current decline, the stocks have still returned about 9% annualized, including the dividends, which is actually really good. So even just going back three years, the stock market has been

exceptional. In other words, the current decline is a bump that you shouldn't have you noticed if you're a proper long-term investment. And then just to make it a little bit even more, amazing to think about the power of investing. If we go back 10 years to January, you know, late 2020, 2012 or January 2013, the stock market over that period of time has returned 13% per year compounding and annualized, including the dividends. You should always include the dividends. So in other words, anyone who started investing like early in my blogging career has done exceptionally well, their money has just exploded even after their current decline. And the super funny part is I remember writing in 2013, the stock market had made a pretty nice recovery from its 2009 super crash,

you know, from the great financial crisis. And even back then, you could dig into my articles right now and look at comments when I wrote about stock market investing in people like, it's a little expensive, I'm going to wait for the dip. You know, stocks are too rich for me. I'm holding cash or gold or something. And people will, always say that regardless of when the stock market, you know, whatever the level is, but it would be such a foolish thing to do that in 2013. And the reason is because not that stocks have become bubbly and inflated, it's just that for the most part, the earnings of the companies have grown a little bit each year. And the American economy is a pretty wonderful thing, despite all the

ridiculous stuff you read in the news. So, yeah, it's a better investment now than it was before. and if you are super, super fully retired and you have no other sources of income and you're living entirely off of like dividends and stock sales right now, then you're still fine. It'll just hurt a little bit more because you see like a tiny, tiny fraction more of your shares are getting sold each month to buy your groceries. And hey, if it makes you feel better, like maybe just postpone a couple of luxury purchases this year and delay them until the next time the stock market is at a record high,

and that's a way of stretching out your retirement savings even more. And it's also good mental discipline because we didn't really need those luxury purchases in the first place. So really it's no problem. But I am glad the market went down because it was overvalued by real math last year. It was getting painful to buy shares last year because they were so high on a price to earnings basis. Interesting. I think that is a great way to look at it. Yes, the stock market is down.

down for 2022. But, like, even just going back 10 years, did you say 13% per year? Yeah. That's, I feel good when I've got, you know, 10%. That's, that's even better. Yeah, it was an really good decade. And that's why even now, stocks are a bit more expensive than average. So, instead of thinking, they're too cheap now, when's it going to go back up? So I can really have the money that I deserve. It's better to think they were overpriced last. year, like way overpriced. Now there's slightly more than the average expensiveness because really what matters is the price to earnings ratio. That's the only thing that matters when you're buying company shares as a whole. And so they're

a little expensive now. It can either go down a little bit more and then it'll be a true bargain or it can stay flat and the company earnings are going to rise over time because the companies are competing with each other and getting more profitable and growing. Either way, in the long run, the stock prices will resume going back up. Hopefully, out of moderate and reasonable pace, so it doesn't create bubble-like speculative mentality like the whole Bitcoin craze where everything's built upon nothing. You don't want your stock market or your economy to be built upon speculation. It should be built upon earnings and productivity. I agree completely with your premise, but just to play a little bit of devil's advocate and push,

you know, someone listening might say, okay, I hear that, but you're also saying right now that you feel the market is overvalued. And you're still saying I should, I should dump all my excess, all my surplus dollars into stocks, even if things are still overvalued. They were really uncomfortably overvalued last year, but they still are today. Should I really still do that? How would you reassure someone maybe ask themselves that question? Yeah. Well, the thing is, you never know how long, I mean, there's no guarantee that the price to earnings ratio is going to resort, like, revert back to its 200-year-old historical average. One place I like to look at this is if you go to the website Multiple.com, like M-U-L-T-P-L-L-T-L-com, it has like a 200-year history of the stock market. And my favorite thing to look at is the Schiller-P-E-10 ratio, which is basically just a super smoothed-out version of, where is the current price of shares relative to the earnings of the companies over the last 10 years? So that way it smooths out like the business cycle of busts and booms. And it's cool because it helps you see if we're expensive or cheap. But it also helps you realize that like in the modern era,

stocks have been a little bit more than average because the average is like set from what happened in the 1800s and early 1900s. And it's like a little bit different time now. Money flows more freely. so you can't be super stubborn and say like I'm never going to buy stocks until they go back to the cheapness of 1929 because then you'll never get on to this train of like dividends and appreciation and growth. So the best thing you can do is not pretend that you're smarter than the market and then just buy in in little chunks. And if you want to be a little bit sneaky, you can look at these graphs and say, all right, it's overvalued now relative like to any other time. Like I was saying this a year ago. So if I am going to cash some out to buy another investment, like a house, you know, rental property or some other thing that I needed money for, it's a better time now than it would have been during the pit of a crash.

But I'm not going to try to be so sneaky as to say, like, I'm going to take it out and just hold it in cash and hope to buy in later at a cheaper price. Because that, like I said, with my 2013 blog post example, people are saying, yeah, 2013, don't buy stocks this year. they would have missed out on these 13% annual live gains, and they're never going to get, shares are never going to be back at 2013 prices in all of human history. So that person, that mentality tends to lose if you try to get too clever, which is why dollar cost averaging, just dumbing it down is, you know, pretty much, it's pretty much the best strategy you can get without being all knowing in, you know,

like predicting the future. One last question on this. Someone who is, so for example, right, I love what I do and here at Bigger Pockets. So my portfolio is essentially all an aggressive allocation. You know, I don't have any like 60-40 stock bond allocation with that. What would your advice be to somebody who is thinking about retiring, just retired, or maybe entering that year-long trial run of this in terms of moving, from a stock only to perhaps a more mixed bond allocation. Do you have any thoughts around that

or how to any thoughts about how you would handle that personally? Yeah, I'm also on your camp and not even because I'm basing it on future income. I think that when I look at these charts of like the expected survival rates of a stock versus bond portfolio, having 100% stocks usually ends up better like almost always. And there's maybe a couple of cases in history when bond yields were really high that would have been better to do the 60-4 thing. But right now, bond yield are low. They always seem to be low, which means you don't get much for your money investing in bonds, and there's not much chance for them to go up in the future. So in the modern era, I don't really see a problem with 100% stock portfolio. On paper, it will be more volatile,

but it doesn't really affect your, you know, 30-year survival rate of a retirement portfolio. when you run it in these simulators, like one of my favorite sims called C fire sim, letter C, and then fire sim. You should try it for yourself if you don't believe what I'm saying. Basically, adding bonds kind of just lowers the overall return. It makes it a bit more stable, but it doesn't make your portfolio survive longer if you're trying to retire off a chunk of money. Because overall, the increased returns of shares more than makes up for that stability of bonds. So anyway, I'm 100% stock person as well. And a nice way to do to balance it a little bit is if you choose to own your house mortgage free when you're retiring, pay off your mortgage, that's like a bond that pays a guaranteed rate equal to your mortgage interest. And it lowers the cash flow you need forever. And it also puts less demand on your stock portfolio forever. So that's one way to, you know, to think of balancing your retirement in a different way. as opposed to saying like, well, I'm going to pay off my 4% mortgage and buy a bond that pays 3%.

Like, that's a bad tradeoff. You might as well just take the 4% return on your mortgage. Plus, you have this nice psychological reassurance of like, I own this house and they can't take it away from me and I don't need thousands of month of cash flow to stay in my house. So that's one way to make things feel more relaxed at retirement. Is there a rate environment where that would change some of your sentiments on this? Yeah, I think, like, I can't do the calculation in my head, but if the interest rates that you can get on like long-term bonds reach a certain percentage, you know, like five or more percent, some number like that, then you can plug the same numbers into a future retirement calculator and suddenly you realize, oh, yeah, that's going to be a higher return than having a pure stock portfolio. So it's kind of just basic math.

and there's a book, if people want to get into this, if they're techy, mathematic investment-oriented people, there's a book called Towards Rational Asset Allocation. I think it might be like Bertrand Malkiel, the investment writer. That thing does analyze all that stuff quantitatively, and you can see it in what situations is better to branch out from a pure stock allocation. and it basically boils down to higher, you know, the better the bonds are, the more it is worthwhile adding them into your portfolio. Awesome. Something to watch if rates continue, if do in fact continue to rise over the next year or two. Maybe there's an inflection point coming, but for you, not yet. Super simple, straightforward.

I mean, to be honest, we're probably, we have probably already passed an inflection point where some bonds will make your portfolio be better than pure stocks. Like, if you were to do it today, but I don't really worry about these numbers because, I'm past that tap water stage of, you know, I don't really want to think about and tweak my money situation that much. I better focus on things I enjoy doing with my time instead. Makes perfect sense. Pete, this has been so much fun chatting with you. I really appreciate you sharing your life after five journey because I think that there's not enough people talking about what happens after you retire.

And it's nice to hear a story about everything is kind of going the way that you planned. If it didn't go exactly the way you planned, it's still worked out okay. And that's really, I think, encouraging for people who are like, ooh, what happens after the fact?

So thank you so much for your time today. I really enjoyed talking to you. Yeah. It's my pleasure. I can't wait to be back another 300 episodes or so. Maybe we'll have you back sooner. Yeah,

maybe a little sooner than 377 more episodes. But yeah, well, we really appreciate it. And your wisdom, again, was obviously just life-changing for me the perspective with all that. And it has been for hundreds of thousands, maybe millions of other people who have come across your stuff.

And so I think that leaving the takeaways for folks of honing that skill of spending and then kind of just thinking through that life that you want after retirement, I mean, those are just important things to, those are the essence of what I think your message here and what people need to prioritize in their lives. Yeah, I hope so. Okay, Pete, we will talk to you soon. I'm going to talk to soon. All right.

That was Pete Adony, also known as Mr. Money Mustache. Scott, what did you think of that episode? I think it's always just a privilege to learn from Pete, Mr. Money Mustash, and really kind to get, you know, just immerse yourself in his perspective on things. He's got a really healthy perspective on an outlook on managing money and life. And I think that a lot of folks, you know, certainly me, you know, aspired to aspire to a lifestyle, like that. And I think that he's really built something special here. And I think it's really telling that he's a builder. And that's what he likes to do. And he likes to do on his own terms all day,

every day, exactly the way he wants. And he makes the most of that and really tries to build a great life for himself. And I think that's something that you have to ask yourself a hard question about. Is that going to be you? And how do you get to that point so that there is something even better to retire to than the current situation that you have maybe at work? And I think that's a, that's an interesting question for perhaps some folks. I completely agree. I really thought that that was a powerful example of how, you know, if you spend 28 years as an engineering manager, your brain gets wired to become a great engineering manager with that. And I think that that was really, I think that was really, it's a really interesting mind that he has to be able to envision that

alternate parallel reality and then speak that that bluntly about like, hey, that, that would be one one place that I could get to. And there's a training process here. And it's, it's, it's intentional. It takes years to become the kind of future person that you want to be and to design a life that allows you to optimize for that every single day. That is so key, Scott. Figure out who you want to be, how you want to be spending your time, and then design your life to allow you to do that. And the way you get this is to get finance out of the way. Get your money situation settled, get your finances, figured out, get money out of the way so you can lead you. best life. Scott, let's recap some of these resources that Pete mentioned today. First was

C-FireSim.com, the calculator to help you understand how much money you're going to need in retirement and how your finances are going to work in retirement. You go to this calculation and it was written by a programmer, a software developer, and you just type in your numbers and you type in what type of portfolio you have, equities, bonds, gold, cash, et cetera, adjustments for things like Social Security. And you hit run simulation and you get this simulation of your retirement. It's really, really fascinating. And you can throw all sorts of different numbers in there.

It's a really fascinating calculator. Yeah. We also talked about multiple.com, which is M-U-L-T-P-L-L-com. which you can go to to get just a very quick view at the, at price to index ratios for the S&P 500 and the stock market in general sense. I also want to call it early retirement extreme. I think Pete or Mr. Mousernerner Moustache would say that if his blog is a college course on early retirement and financial freedom, that early retirement extreme perhaps is the Ph.D.

level of program where they take it to a whole other level and have that skill and really go into that skill of spending very effectively. So that's another interesting resource. Of course, we have Mr. Money Mustache.com. And then lastly, I want to talk about we, you know, you mentioned this concept of community and surrounding yourself with folks that are kind of like-minded. And there are moustachians in practice, Facebook groups, that you can join. There are Mr. Money Mustache meetups around that might be going on your local area. There might be Choose FI or Financial Independence Meetups. Of course, we have the Bigger Pockets Money Facebook group, which we're particularly fond of.

But immersing yourself in these communities, starting a meetup of your own, if there isn't one locally, or attending that might help you meet some other folks that are in it together in your local area that you can go and discuss these situations with. There's also the Bigger Pockets forums and the Mr. Money Money Months. mustache forums where you can go and discuss this and get advice, ask questions, you know, hey, what are people using for their cell phone plans? Or I feel like I'm stuck here and don't have any good solutions to solve this problem with my spending. Anybody have a good advice. And you will get responses from folks who have really been perfecting this craft for years or long periods of time. In fact, that's the favorite question folks have to answer in the Bigger Pockets Money Facebook group are questions around spending or like real

life spending or investing scenarios. And if you are facing a bunch of financial issues that you want to solve or you just want to have your finances reviewed, you can apply to be on the Finance Friday episode of this podcast. Go to biggerpockets.com slash finance review to apply to be on the show. Yeah. And by the way, like if you have a problem, that makes, you know, that you, that you, that you, that you feel like you need help with for your money, that makes it better, not worse, to come on the Finance Friday show, right? You know, no one wants to hear about someone who's got a perfect financial situation, right? And we're not helping those folks.

We want to help folks that have issues that are unpacked or complex issues or those types of things. So please, please do it for you to apply. Our goal is to help you and help you work through those problems and get to the next level. Awesome. Scott. Should we get out of here? Let's do it.

That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench, and I am Mindy Jensen saying keep that cash money mustache. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at YouTube.com slash Bigger Pockets Money. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kaylin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big of Big thank you to the Bigger Pockets team for making this show possible.