BiggerPockets Money Podcast - 415: Finance Friday: How to Achieve Your “Dream Life” Decades Before Retirement

Episode Date: May 26, 2023

Retirement is always some far-off goal. When you’re older and much more wealthy, you can live the golden years of your life without a care in the world. The problem? None of us know how much time we have left, how healthy we’ll be as we age, and whether or not these years are the best we’ll ever get. So, why wait to retire in your sixties when it’s possible to retire in your twenties, thirties, forties, or fifties? If you had the choice to live your ideal life NOW, wouldn’t you choose to do so? On this Finance Friday episode, we talk to Sara, who had a recent wake-up call about waiting for retirement. While on a casual run, Sara suffered sudden cardiac arrest, prompting her to be put into a medically-induced coma. Without any signs of something like this happening, Sara started to ask whether or not she was living her life to the best of her ability and if waiting for retirement age was worth the risk. With six figures in student debt from her husband but solid salaries to support their low-cost-of-living lifestyle, Sara wants to know how she can transition to part-time work while still saving and investing for early retirement. Thanks to smart decisions Sara has made, she’s in a phenomenal position to take her foot off the gas, but how can she do so without sacrificing her future? In This Episode We Cover Student loans and whether to pay off debt or invest for early retirement Switching from full-time work to part-time hours while keeping benefits and saving your sanity Planning your “ideal life” and why waiting until traditional retirement age could be a big mistake Cash reserves and how much you should have when planning to leave a full-time salary Building your investment plan based on what you (and your partner) really want out of life And So Much More! Links from the Show BiggerPockets Money Facebook Group BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott's Instagram Grab Scott’s Book, “Set for Life” Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Listen to The “On The Market” Podcast: Spotify, Apple Podcasts, BiggerPockets Money Moment Scott Trench’s Step-by-Step Guide to Building Your Perfect, 1-Page Investment Plan How to Retire Early (From Someone Who Did at Age 27) Should You Pay Off Debt or Invest? Click here to check the full show notes: https://www.biggerpockets.com/blog/money-415 Interested in learning more about today's sponsors or becoming a BiggerPockets partner yourself? Email us: [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, Finance Friday edition, where we interview Sarah and talk about big debt with big future income. Hello, hello, hello. My name is Mindy Jensen. And with me as always is my non-physician co-host, Scott Trench. Thank you, Mindy. Great to be here with my non-urgent but caring co-host, Mindy Jensen. 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 and assets like real estate, start your own business, or model out the next 10 years of cash flows with an unusual financial position will help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams. Scott, that was interesting. You said unusual financial position. I think that their future financial position will be unusual in that they do have the potential to make high income, our guests today. However, I think that their current financial position is also rather unusual because they are spending like they don't have any money. And I think that's fantastic. Absolutely. I love talking to Sarah today.

I think that what's Sarah is a physician's assistant and her husband is a student, medical student. He's going to become a doctor. These are folks, they're going to have a very, very high income in a couple of years. And what is remarkable about them is that they spend so little of that. They're so conservative what they're spending, which gives them all the options in the world and makes financial planning, right, the strategizing super luxurious. They can really do so many things because of that situation. And look, I hear people poo-pooing, oh, they aren't.

our huge income, of course it's easy. Well, yes, we talk about every money story here on Bigger Pockets Money, and these folks are going to have a very high income. And again, what's remarkable about them is that they keep their spending low. And let's maximize the freedom and the life opportunity that comes with a good situation like this, which, by the way, is earned from getting good grades and working hard your entire upbringing, being an elite student and then getting into medical school and completing a residency, consuming a lot of debt, so on and so forth, doing the same thing to a similar degree if you're going to become a physician's assistant. So this is an earned privilege, and we're excited to chat with them and talk about the

wonderful opportunities they've got. Yeah, you don't accidentally become a doctor. You become a doctor on purpose through a lot of hard work. All right, Scott, the contents of this podcast are informational in nature and are not legal or tax advice, and neither Scott nor I nor Baker Pockets is engaged in the provision of legal tax or any other advice. You should seek your own advice from professional advisors, including lawyers and accountants, regarding the legal, tax, and financial implications of any financial decision you contemplate.

All right, before we bring her in, let's talk about our money moment, Scott. This is the money hack tip or trick that we share with our listeners to help them on their financial journey. Today's money moment is, are you finding that you're not driving as much as you used to? Look into dropping the mileage on your car insurance policy. It could save you over $100 a month. Do you have a money moment for us? Send it to Money Moment at BiggerPockets.com. Tax season is one of the only times all year

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At this point, I've logged over 229 audio book 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 as its breadth. Beyond audiobooks, you also get Audible Originals,

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Sarah, welcome to the Bigger Poggins Money podcast. I'm so excited to talk to you today. Thank you. I'm really excited to be here. I've been listening show for a while and just excited to kind of go through it all, get your guys input on everything. Thank you for listening. Let's jump into your money snapshot. I'm showing a salary of $6,600 a month with expenses that total about $3,300, which to me says we don't really need to dive into those. Mortgage of $1,500. I don't see anything. Groceries, my big trigger, groceries, $500 a month.

I think you're doing great on expenses. $6,600 coming in, $3,300 going out, plus an additional additional 300 in guilt-free spending, which I love. I am learning to embrace guilt-free spending. You're still saving half your income, almost half your income. That is clearly not where we're going to spend our time. Investments, you have a grand total of approximately $225,000. How old are you? 29. 29 with a net worth of 200, well, not a net worth. Investments totaling $225,000. You're doing Okay. Emergency funds total $16,000. You are saving an additional $8333 a month for six months for Europe trips. We're going to talk about that. But the big story is the $500,000 in debt that you have. But let's dive into that a little bit. I see $140,000 in your husband's student loans, which we already mentioned, and $358,000 in a mortgage. I'm not seeing credit card debt. I'm not seeing anything like crazy, except the student loans, which we'll talk about it a bit. Your mortgage interest rate is 2.75%. So, and you need a place to live.

I don't consider mortgage to be crazy. 2.75, I wouldn't pay a dime extra on that particular mortgage. So it looks like you're in a fairly good position. What are you doing here? Well, I guess for me, I have a few questions today. But as someone who I've traditionally never had any debt up until buying our home and then with my husband's medical school, that's something I'm not super comfortable with. So I guess learning kind of how to navigate that. But I've listened to the show and enough personal finance enough to know that our interest rates are pretty solid. So I guess I'm torn in how to kind of go about paying that back, you know, and in timeline-wise. I have a lot of other interests outside of health care.

So ultimately I too would like to kind of be able to buy myself back some time through wealth, you know, and neither work part time. So I have time to do other things or, you know, move on from there. So yeah, I guess my main thing is probably discussing the debt pay down. But then also I did have some unique, I guess, health circumstances that I don't know if we'll get into or not later. But I basically have been very aggressive in saving for retirement too up until buying our home. But I understand all of us are only here for a certain amount of time and not all of us, you know, know, we're not guaranteed making it to extra retirement age or whatever that may be. So I would like to kind of discuss two maybe options for how to be mindful for saving retirement, but still utilize some of our money and wealth now. Okay. Well, let's look at your money story and your medical story. Yeah. So I guess to start, I'll kind of back up with my money story.

So like you said, 29 years old, I'm working as a physician assistant. I alluded to it already, but I have a lot of other interests outside of healthcare. I don't plan to leave that anytime soon, but I do a sports podcast and I also am working on developing an app for entrepreneurs. I have a pretty strong money background thanks to my parents. My dad is a CPA. He's kind of taught me everything in terms of my personal finance. So I was lucky enough to come out of undergrad and graduate school without any debt.

So like I said, I don't want to have any experience with that previously. In 2020, I suffered an unwitness cardiac arrest while I was out for a run. I was found in a snowbank. I had no previous medical conditions or anything. I was healthy. I was a distance runner in college. I went out for a normal run at 6.30 in the morning and woke up a few days later in the ICU coming out of a coma, a medically induced coma. So that kind of changed my perspective on life, obviously, is something like that does and, you know, shows you how fragile life really can be.

So it's kind of what's shaped me in terms of I struggle with the personal finance from my age standpoint to be super aggressive in saving. you know max out my 401k my IRA and such but I also understand you know how fragile like I said life is and that time is not guaranteed for all of us so I don't want to you know be scraping pennies together you know for future like funds that we might not even be able to use so ultimately like I said that's really why I want my wealth to be able to allow myself and my family time to do what we want when we want buy back some time and flexibility um and get a balance of you know saving for that retirement but then also potentially utilizing some of it now and kind of getting a delicate, you know, good bounce there.

Thank you for sharing that. Wow. That is really scary. I don't wake up called everyone here. What does doing what you want and living the life that your of your dreams look like? What is a perfect day for Sarah? Yeah. So like I said, I have a lot of interest.

I think ultimately what I've kind of narrowed it down to would be working in health care part-time at about like 10 to 15 hours a week. doing my sports podcast, kind of being able to do what I want when I want. So I like doing my sports podcast. I'm working on this app on the side, being able to go out and garden and hike and do whatever I want. Ultimately work on my own schedule, you know, be my own boss and not have to, you know, ask anyone for time off and things like that is the ultimate long term goal.

What is, you're working full time right now earning 150K. You're saving half your income. What would it look like to, is your husband share this vision as well? is what's what's what's his goal so his goal is the same but his timeline is different he was a physical therapist actually and worked in that field for many years and not many years like three years before going back to medical school um he just completed third year so he'll have one more year after schooling and then a residency for three to four years depending upon the specialty and then that's when the real career starts so he is looking at least another 10 years i would say of you know solid full-time work

but ultimately he as well would like to do something that allows for flexibility on your own time, whether it's consulting, you know, where you're not working, your traditional only 50 hours a week in medicine, where nights, weekends, and you have no control kind of over that sort of thing. Okay, that makes sense. Yeah. I think, I think, look, if you're going to go and take out 140 grand in medical school debt, you're probably going to want to be a doctor full time for at least a few years following that, you'd hope, right? Otherwise, we'll get all that trouble. So that makes sense. It's probably five, ten, at least five to ten years in that profession. And do you have any idea what the income will be, including

residency? How long will residency last? What will what is the expected income once that finishes? Yeah. So residency can be anywhere from three to four years and it's about 65,000. It varies on the program and where you're located, which you won't know. You won't know until like match day next year. So it's about 65,000. And you get up to about 75,000 by the end of that three year per year. But once you're an actual practicing physician depending on the specialty, expectation would be anywhere from 300 to 500,000, depending upon if it was something procedure based first in the hospital setting. Okay, let's talk about these student loans. This seems to be a big weight, as it sort of should be. But we were chatting before the show, and I know something that

everybody else doesn't know. What is the interest rate on your husband's student loans? So it will just be 1% for the entire duration of the loan because it's a part of a scholarship to work in primary care or internal medicine. And how long does he have to work in internal medicine in order to get that 1% loan. There is no duration. So as long as he goes into a, completes a residency in that, then that suffices. And Scott, what do you say about paying off debt early versus not paying off debt early? What's your interest breakdown there?

I think if it's below three, four, five percent, you don't pay it off really, right? I mean, maybe five percent. You start paying it off really. Hey, Scott. What are high yield savings accounts paying right now? I want to put a couple of, yeah, a couple of caveats on that, right? If you were saying you made $65,000 a year and this is the debt here, and from a household income perspective, maybe we're attacking the problem in a different way.

We don't, you know, maybe we don't, we have to figure out a way around the boogeyman. But this is $140,000 in student loan debt that is securing an income stream most likely, between $300 and $500,000 a year for 30 years. So this is a very good investment, essentially, right? That's the asset that is backing this debt. And I see no need to pay it off early in any sense, if that's where you're getting at, Mindy. Well, that's what I'm getting at a little bit.

So we are not Sarah and we are not going to be paying off. We're not Oprah either. We're going to pay off your interest rate, Your student loans, yay! That's going to be Scott. But we're not here to pay off your loans or to tell you what to do and you have to be able to sleep at night. And if having $140,000 in student loan debt at 1% at 10% at whatever gives you anxiety and doesn't allow you to sleep, then that's not for us to say, don't pay it down. What I would like to share with you, you is a different point of view. Right now, high yield savings accounts are paying three, four,

five percent interest depending on where you are and how much your deposits are. If I were in your shoes rather than aggressively giving money to the loan company, I would be making as small of payments as possible to the loan company. And this goes for the student loans and the mortgage. and then putting all of the money that I would otherwise be aggressively paying into a high yield savings account because then you've got $140,000 and you could choose to pay it off. You know what? I just want this loan to be done. I don't want to have this debt anymore.

Boom, now I'm out. But you don't have to pay it off. And then you have the money still available should you find a rental property. that you want to buy, or your car breaks down and you need a new car, or then you want to go to Europe for a month, or you want to buy back your life and you decide, hey, I'd rather have this $140,000 out on student loans at 1% than work 40 hours a week. So it gives you more flexibility. Plus, you're actually earning money on this because you're only paying 1% while you're earning two, three, four percent on the money that's like the delta that you're putting into the

other account. The same goes for the mortgage when you've got a 2.75 percent. The high yield savings account is still paying more than the interest that you're paying in your mortgage. Again, I'm not going to pay your mortgage for you. So you're the one who has to make this decision. But that's something to think about. I didn't think of it from that point of view. I guess I think, you know, that I could let the money sit and accrue at something at three, four, or five percent. and then still take that at some point if I felt like I wanted to get rid of that and just pay that lump sum, rather than just traditionally thinking like make extra payments and things like that. So I like that option for sure. So that's, you know, that's a conversation to have with your spouse to see if he likes that too, because maybe you never pay this off or, you know, you pay it off in 100 years or whatever at 1% making tiny little payments and that's cool too. So just something to think about. You said you were creating an app for entrepreneurs. Are you? writing the app or are you hiring that up? So I'm creating an app with my friend's husband,

who is an engineer, and we're actually using a no code website. So he's creating it all online. So we didn't have to hire. I have not spent a dime on this yet. We actually are almost ready for the beta launch. We've been able to do it entirely through there. Yes. So it's very cool. I think it's Adalo is the website that he's using for the no code. I'm doing all the marketing and the prep and social media and everything like that. But yeah, it's called Work Your Way. It's basically actually I was thinking about getting into real estate. I've been, you know, adding it to my, thinking about adding it to my portfolio for quite some time.

And one day in the shower, I was like, okay, why am I taking forever to pull the trigger on this? And I realized it was because I just was intimidated by the fact I didn't want to be involved in any property management. Like, I didn't want to be responding to plumbing issues at 2 a.m. But I didn't know how to go about vetting out a good property management team or, you know, building people around me. So basically the app is essentially able to connect entrepreneurial,

like-minded individuals who are either ID owners, providers or skill or services, and it's a feed-based system where it matches you with what you're looking for. So if you're an investor, looking to invest in a company, you know, property management services, all of that. So it's a one-stop shop. I figured I like to just be able to go quickly on my phone and search for what I'm looking for. So this is an app where you basically can sign up into any of those categories and be matched with, you know, what you're looking for. Awesome. So, I mean, on the surface right now, my observation is like, You don't really have a financial problem here. You've got, you're spending half of what you earn. You've got a great mortgage on your property. What's your, what's the home value? $480,000 about is what it's asked me. Okay. So you got about 25, 20, 25% equity, maybe a little bit more in the property. You've got a great investment thing. You're spending half of what you earn. Your husband's going to graduate in a year from now. And you're going to double your income or not double your income. You're going to add another $65,000 at that point in time.

And then three years from then, you'll be generating $300 to $500,000 per year. So like right now, you have lots of good options in your current state. I think the goal, as I understand it, is how rapidly can you transition from your current situation to one in which you're realizing your ideal day. And your ideal day, as you articulated it to us, is part-time work as a physician's assistant with the meat of your time being spent on entrepreneurial activities like this app. Is that correct? Yes.

Yep. Exactly. So I think the only thing holding you back from doing that right now, like, if we wanted to be like, if you wanted to wait at all, you'd wait a year for the residency to begin. And the residency will cover all of your living expenses and still allow you likely to make the payments on this student loan debt alone. Like that single income will work. So it's however much you want to work on there would all be gravy that you could save.

And then the app construction is still an asset. You're still like my ideal day is building an asset that will go here. So I'm not seeing too much of a problem here. One thing that I think would be maybe more helpful in that is if you just allocated a bit more to cash and less to investments for a period of time. Like if you had, if your emergency fund, if your cash vision was 50 grand, I think you'd probably be looking at the world very differently in terms of your work. So, and that would be super achievable for you in a, within a 12 month period, for example, you could really out reallocate to it now if you really wanted to. What are you, what are you kind of struggling with? Or what's your reaction to what I'd just said.

Yeah. No, I think that makes sense. I guess my biggest hesitation was always thinking about like the nervousness of cutting down my income with this impending debt, you know, coming. into play soon because it's not having to make the payments right now. But I guess when you put it that way, I did honestly just recently discover the high yield savings accounts. My previous savings account was paying me nothing in interest. So I am more comfortable now keeping more money in that and I've been utilizing one with a higher interest rate. So I'm looking to kind of build that emergency fund a little bit more rather than feeling guilty about wasting my money

in there, quote unquote, I guess. So yeah, I think that is also definitely very reasonable. I I guess the like me, another thing I would be struggling with them too would be, it's another card into play. But what are your thoughts in terms of like, should you continue to max out our retirement accounts? You know, at what point are it? Does the benefit always, you know, outweigh, I guess not the risk, but tying up the cash, you know, in terms of both of us continue to max out our retirement accounts? Or if we ever want to access those funds early, just going to like an employer match or things like that. I mean, you guys are currently doing great and you're about to be in the top 1% of annual income orders in this country.

So the question is really for the next three years, do we want to contribute to the retirement accounts or do we want more flexibility? That's what you're struggling with, I think, fundamentally. Yeah. And I think that, look, like, what's the right answer there? It depends on what you want. If you said Scott and Mindy, I would like to have the largest possible pile of net worth at 65 years old.

we would tell you max out your retirement accounts, invest aggressively in real estate, and go to town there, right? If you're saying I want to live exactly the lifestyle that I want to live next year because I had this wake-up call that has changed my perception, we'll tell you, build up a cash position and go do it. Because your position can, you could cut your hours in half, probably make, you can make half what you're making right now, and still cover your expenses.

You're actually being a lower tax, a little bit lower tax, bracket so you wouldn't even feel the hit quite as much. And then your husband will start making 65 a year after that. And look, this is predicated on your husband following through with the, hey, I got a doctor. I get a doctor. I'm going to be a doctor full time for, you know, a decade or so, right? That seems pretty reasonable coming out of med school. So if that happens, then like, like game over. Your formula, you win there. That's a, that's three million to five million dollars over 10 years in cash accumulation, even at a 50% tax bracket, you're going to accumulate $1.5 to $2.5 million in cash, after-tax spendable cash. And you spend $33,000 a year. So as long as that doesn't go nuts,

that's the whole game there. And then your work is whatever you want it to be. And that's a wonderful situation that you've created. And you're successful in your own rate with this, but you can do exactly what you want to do tomorrow in the situation. Well, I want to ask if you have sat down and written out your ideal life, like the two of you with a glass of wine and no TV and no pagers and no studying. What does our ideal life look like? What does it cost? Where does it happen? How is medicine involved in this life? Does your, like, when does it start? Does your ideal life start as soon as he graduates from medical school? Does it start after? residency, does it start after he's been a full-time doctor for 10 years? Is it going to be in the U.S.? Is it going to be traveling all over the world? Is it going to be $25,000 a year because you're in Southeast Asia, which is way less expensive? Or is it going to be $150,000 a year because you're living on the coast of California? 150 is not going to get you anything on the coast

of California. But, you know, what does your ideal life look like? And, you know, writing it out, having this conversation. And it's not just a 20-minute conversation and you've, like, hammered out the rest of your life. But, you know, start with the timeline. How long do you want to work as a doctor, sweetheart, darling, husband of mine? Maybe he wants to work as a doctor for a while. Maybe he gets into it and he's like, wow, this is not what I thought it was going to be. Let's speed that up, you know, but having, keeping the open conversation is really, really, really important. 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 tax 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 Pockes. 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 the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code Pockets at

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I don't have like a set like bucket list of stream, but I have like a list of places we want to travel to and like we're big sports fans. So I want to hit like all major like Super Bowl, all the major sporting events and stuff like that. But that's pretty much the extent of it really from there. But that would be a good thing to formulate, you know, just to plan. But definitely that I think is one of the bigger things for me and one of the like driving factors would help me realize that I would like to at least be my own boss in some capacity or not be restricted to, you know, however much time off my job gives me is having the ability to just travel or go do things when we want when we don't want. Like with my current job, I have patient schedule. with every single day. So, like, me having to call out is, like, really frowned upon. So I can't take my time off

unless I'm planning it far in advance. And even so, I'm so restricted to a certain amount for the job. And that's something that, like with my life services and everything, I think I've realized I don't want that forever just because I want to be able to do things, you know, like I said, when we want, when we're like, hey, we want to go pick up and go to March Madness Final Four this weekend or something. You know, we can go and not have to worry about our work schedules and things like that. So let's walk through. Where is your, do you, do you know where your husband's going to get his residency? No.

Well, so he has to apply in this upcoming fall. And you rank places. So he will be ranking where we live presently. So we're hoping not to move currently. Because we know then we have to move south of the house and everything like that. I think there's a good chance he will be staying, we'll be staying in the Northeast and he'll be able to get the local hospital. But it is up to a ranking base system. So you don't know for sure until.

that day, below the day of math, that they do match day. Okay. Well, if he gets a residency nearby where you currently live, the game becomes very easy. If that housing cost doesn't change, then that projection model looks great. We got a really fun math there. And this is going to be like you have all the options in the world because of the great choices that both of you guys have made leading up to this point and obvious incredible competency to become a physician's assistant and physician.

Right. So this is a, uh, a great situation there. It's about maximizing flexibility from that point. And so we think, okay, probably not a good time right now to be spending 10 grand on Super Bowl tickets. But in three years, there's no reason that would be even irresponsible at that point. Because again, the household income, like if you tomorrow drop to halftime, right, to half time, you'd make $75,000 per year, which is plenty more than you spend, right? That you'd still be accumulating $2,000 a month at that point. this would not be addressing the student loans, which will start needing to be paid.

But again, that will only start presumably needing to get paid once husband begins working, right, as a physician. Yeah. And you still can cover the payments with $65,000 in income from at that point. So that's $100 in, what, $140,000, $60,000 plus $75 at that point, if we went to that. There would be no reason that would be irresponsible in any sense of the word as soon as that happens. you could do it today, and it would still be responsible in your position. How much do you want to work? Does halftime sound like the right amount?

Yeah, I think it's a matter, anywhere from 10 to like, I guess I'm 40 hours or now, so 10 to 20 or so from there. And I don't even know if that's forever. I'm just burnt out, I think, from working through the COVID pandemic, that I do feel like I am leaning towards sooner rather than later for part time. And again, though, I might, you know, in a few years, be like, hey, I miss this. because I love what I do. It's just, you know, I think the burnout is a component of it. So I don't even know if that's forever, but I think I would like a step back from anywhere from like 10 to 20 hours, you know, in the interim for a couple of years. And is there a reason why you wouldn't do that next week?

No, I guess. I guess not really. I always in my mind, I guess felt like I needed to wait it until he graduated. So we had like a second income. But when you put it mathematically like that, we're, you know, cutting the numbers down. And I mean, I love my job. But there's also. also other opportunities out there to where you can make more per hour doing per diem stuff and things like that. So I don't even know how much the income would shift to going down hours if I found something like that if I chose to. But yeah, so I guess there's really no reason. It was just more like I said, kind of a matter of fact that I had this debt that I would be accumulating and looming that I wasn't really sure if it was right to do something like that with that on the horizon. But now I'm seeing that that necessarily doesn't have to be paid down immediately. And I think I could be more comfortable with that knowing that the 1% interest rate really is so very low. And over time, who knows,

like I was telling Mindy before the show, sometimes depending upon where you work in the hospital, they actually pay off your student loan. So there's a possibility we might not even have to absorb the entire medical school debt, depending upon where you work, there's student loan forgiveness there. Yeah, I mean, you guys are a great team here. Like, you've clearly cash flowed the family during this period and continued to build wealth over this period. While an investment's being made in your husband's income stream. Once that starts being paid, I think it's very fair to say, mentally allocate, hey, that, you know, husband's income stream is going to be responsible for covering expenses and then paying off this debt here. And like, you're not even going to be like,

you know, retiring or anything. You're going to be working part time and working on an app that could be a huge contributor to your financial position. So I see no reason why for my seat, that's not feasible, again, starting immediately next week. I think that the decision, if you're nervous about that and you talk it over and you look through some things will become easier if you begin allocating a bigger percentage of your savings that you have right now to cash. I think if you had $25, $50,000 in cash, that would be very, that would make this feel much better about cutting back on some hours because you'd still see things grow and you'd still have a big pile to fall back on if things went badly. And like Mindy's point, there's no sense

in paying off the debt when you get earned 4%. in your ally savings account, right, or your money market account. So I think that's right. I think you stick it there. That's the best investment you can make because you're going to use it to pursue entrepreneurial ventures, not which could be a much better return on assets financially. And it's what you want to do, right? That's the specific of the goal that you set out for us at the beginning of this.

Do you have the opportunity to do part-time, temporary work? have you pursued that at all looked into that? I haven't like pursued it per se or anything because I actually I love what I do. I work out of private practice I've been at since I've been a PA and I like working there. So I think my first choice would be to stay here part time. But yes, I do. I mean, I get emails all the time for like part time. They're locums, tenems positions where I'd be going to hospitals and things like that.

And they're really high, you know, they're much higher paying than my current salary per hour there. So that is always an option too from there. But to me, it's the matter of getting used to going into like a new clinic or a hospital for three months at a time and learning new electronic medical record and all the nuances of it that go into it. I don't know how much I would enjoy doing something like that. Okay. So it's like a three month commitment. It varies. Some will be three months. Some will be six. Some will be nine or like they have the ability to go full time. But yes. And then there's also per diem position. So I could work out like an urgent care or something, you know, hourly and just pick up shifts as I wanted. And again, those. tend to be higher paying, but there's no benefits or anything like that. And that is something that I should mention, actually, I can't believe I didn't say this earlier, is that right now, obviously, with my husband's in school, he's doing his own benefits through the school. So with my current job, like my health care and everything is paid for in full. So that is something that I would have to

take on if I went below a certain number of hours, which I honestly have not looked too much into the cost of that. But from what I know, it's relatively expensive, I need to have good health care, obviously given my medical history. So I like having the highest plan paid for me. And that's a big asset, you know, to have with my current employment full time. So your employer will likely be able to keep you on their health care plan if you work more than 32 hours a week. That's at least how it works here in Colorado. So below 32 hours a week, we can no longer offer full-time benefits to our employees. So that might be a potential first stepping stone is to say, hey, I'd like to drop down to 32 hours a week and see my pay cut, you know, as a percentage accordingly there and

stay on benefits, that might be a way to dip your toe in to how this feels. And then once your husband begins a residency, most likely that that employer will allow you to join that benefits program and switch over. So that might be one way to bridge the gap for the next year. Another point that I wanted to make was maybe you go to that urgent care and And check it out. You take a month of shifts or a month of Saturdays or I'm assuming that med school comes with a lot of studying and maybe your husband isn't around as much as you would like him to be. So you can use that to your advantage to test it out. Oh, I really like working at this urgent care. This would actually be kind of cool to reduce my hours at my full-time job and then take one shift a week or two shifts a month or something.

to add the money back in without the time. And then once your husband gets insurance that you can become a part of, then you drop your hours even more at your full-time position while taking another shift at the one that pays so much per diem. That could be a way to stay in medicine, because I know you have to keep your skills up, stay in medicine without staying full-time in medicine. And just like any part-time job that you're starting, you know, or side hustle or, you know, side, yeah, side hustle, you start off while you still have a full-time job. Because if you don't like it, then you could just stop doing that.

You know, you go to the urgent care. You're like, wow, everybody here's nuts. I'm not doing this anymore. I'm just going to go back to my full-time thing. At least now you know. Yeah. I think that's a good idea. I think the biggest thing I have to figure out one of the reasons I would like to leave, like, or would

see myself leaving healthcare would be I don't want to work weekends or like after hours or nights or anything like that. So a lot of these positions that come with like their per DM work and stuff, obviously they're looking to fill those shifts because no one else wants them either from there. So I think it'd be just a matter of finding one that bounces from there because even, yes, my husband is studying all the time. But I like using that time for like my app and other things right now outside of that. So but it's definitely something to consider adding and just seeing how it goes and supplementing any income for now for the next year. Okay, so I see some homework assignments for the two of you.

First of all, sit down and have a conversation about what your dream life looks like and when it's going to happen, where it's going to take place. And start dreaming. Start filling out a bucket list. Have a Sarah-only bucket list. Have a husband bucket list and have a together bucket list because you don't have to do everything together. But if there's like you both want to climb the pyramids in Giza, then go do that together. But if he has no interest and you want to do that, like go do that.

But start planning for the things that you want to see. See what your bucket list looks like. Maybe your bucket list is like, we can knock everything off in one year. Okay, then what are you going to do? You know, look at your, prepare to live until you're 100, but plan to, gosh, this is so morbid. Plan to not live to 100, but like prepare to live to 100. And then, okay, there's 27 trips we want to take. If we take two a year, let's do 28 trips because that's easier. We take two a year. That's 14 years.

I think 14 years is a reasonable amount of time. So we're going to take a trip in the spring and a trip in the fall, unless it's a thing that you have to do in the summer or the winter. And then back that out and start filling up your calendar and then see how that feels. I think that's a great idea. No, definitely. I've started my own personal list, but I think it'd be good to add to it and, you know, kind of get a group of us going so we can actually start planning things from there.

Yeah. Have you listened to episode 362 where Scott and I sit down and talk about his one-page investment philosophy? Yes. Okay. Have you filled out your one? one-page investment philosophy. I do have one on my computer. I did not write it exactly on your form, but I like using, I did it in my Google sheet that I keep all my finances in there. So it was in one

place. Whatever works for you is the best plan. So did your husband contribute to that? Probably not. He's been in, so I'm, we, he's been in medical school about an hour and a half from where our house is right now for the past year, like year for rotation. So he was not here when I did it. But I could have him help me contribute to it for sure. I would give him some homework to listen to that episode, show him the document, and then show him Scott's document, and then show him your document. Hey, this is what I came up with. What do you think? Because he's so busy with medical school, having the already filled out document can be a lot easier for him to digest. Oh, you know, I like most of this, but I'd like to switch this one thing. I think that is a great next step, a great next step. A great next step. homework assignment, work on your bucket list, work on your ideal life, and work on your investment philosophy. If your investment philosophy shakes out that you need to be investing $100,000 a year, it's going to be totally doable on your salary and with your spending habits already. And if it shakes

out that you only need to be investing $50,000 a year, then you have more options currently. Yeah. You keep your expenses the way they are and you model out in addition to the great things and you said, you just model out the cash flows that your family is going to produce over the next five to 10 years, you're going to be looking at a staggering sum of money. It's going to be incredible. If you invest a million to a million two of that, which is super doable just from the current income streams that you're making part half time plus husband's income, I think that'll be a very freeing exercise for you guys.

And you'd be like, okay, great, we're going to invest a million and a half of this. That's going to become, you know, two and a half to three million by the end of the next decade, um, uh, an additional wealth beyond what I've, we've currently got. Um, and that gives us 800 to a million to spend on lifestyle. We spend $33,000 a year. So that's 300 grand. So I have 500 grand to spend on fun and goodies, um, over the next 10 years. That's a lot, right?

You can travel to, um, the pyramids. You, you could do the pyramids. You can do a trip, uh, a, uh, a three weeks. weeks in France after flying, you know, first class, and you can do the Super Bowl each year on, on that, on that, that amount. If you're able to keep your, your baseline expenses somewhere in the ballpark of where you've got them here. And that doesn't include upside from the entrepreneurial endeavors that you'll be undertaking. And that's at a $300,000 assessment there. So on, on income. That's that counting 10 years of after residency. But, you know, it could be much higher than that. And so I think if you guys do that exercise, a lot will be clear. And you'll, you'll, I think that, uh, your vision for your life probably needs to expand a little bit in that time horizon. It might be, it might be too small at this point in time, uh, would be my, my guess. I think that's a great idea. I'm like a huge

numbers person, love seeing everything out right in front of me. So I think having that further, like going all the way through future income scenarios and stuff and seeing. how that plays out will help me feel better too about seeing that there and feeling comfortable, you know, and cutting my hours or having the day or whatever it may be, I think seeing it visually helps. And if you test out cutting back your hours and you hate it, you don't like the income, you don't like, you feel like, oh, I have all this time and nothing to do, you can probably go back. I mean, I don't know a lot of physicians, physicians offices that are like, no, we're good. we don't need any more help.

No, there is definitely demand there. So that is nice. And that's why I traditionally kept the emergency fund out just like three months, just because having a job where it's relatively easy and God forbid anything happened. But yeah, the demand for the work is definitely there if needed. But by the way, this entire good problem is a result of the low spending baseline that you and your husband have created. Right.

So, you know, yes, you're about to earn a huge family income over the next couple of of years because one of you is going to be a doctor and the other's a physician's assistant, right? But the real winning that you guys are doing here is the low expenses. There's a lot of people out there that are in your income and age bracket who would come into this, who would not be spending the way that you do, who would be spending two or three times as much counting on that future income as part of the projection model there. So as long as you don't get carried away with that and let the goalposts on the baseline move too much, you're going to have so many good options and you can, I think, realize the dream that you laid out to us next week, if you so chose.

Well, Sarah, thank you so much for coming on the Bigger Pockets Money podcast. We hope that this helped reframe some things and really refreshing to see an awesome, strong financial position and a lot of great options for you. So wish you the best. And thank you so much for listening and for coming on today. Of course, thank you so much for having me and I can't wait to do all the homework that you gave me. And I'm excited for everything. And thank you for your time.

Thank you, Sarah. And we'll talk to you soon. All right, Scott, that was Sarah. And that was a really fun episode. I really am excited for the possibilities that they have ahead of them. And I am excited for Sarah and her husband to sit down and truly explore what their ideal life looks like, where it's going to happen, how much it's going to happen, how much it's. going to cost, when it's going to start. And then once, like you give this advice over and over again, start out and work backwards. So start at the end. When is this going to happen? Great.

How do we get from here to there? Well, in five years, that's going to happen. In three years, it's going to happen. I think that Sarah being a self-professed numbers nerd is going to be able to figure this all out and have a really great life. Yeah. And you know, look, there's no certainties and anything that you're planning out in the future. But in terms of other folks that we talk to here, being a physician's assistant and a doctor is about as predictable of a high income and lifetime of work and labor opportunities as you're going to get. Sarah's stated goal was how do I maximize my life enjoyment right now and hear the things I want to do? And she can do that right away, essentially, without penalty.

And there's probably a lot of a large number of people who could do that. if they were able to keep their expenses as low as Sarah and her husband. The advice that she asked for was not, how do I maximize my net worth over the next 30 years? Or how do I obtain a portfolio that produces cash flowing assets such that I don't have to work at all in the shortest period of time? If that were the goals and there hadn't been this existential life crisis event that had impacted her, we'd have been given a different path, right? We would have said, okay, how do we apply this? Let's think about real estate. Let's think about assets that we can put in place. But right now, if the goal is to maximize enjoyment of the next 10 years and still build a large, a very reasonable financial position, they just model out the cash flows for the next 10 years. And they're going to have plenty left over. They allocate certain amount for investment and the rest for consumption. And they're going to have a great time over that period. Again, assuming that, you know, you want to become a doctor to be a doctor for at least a decade, which I think is a very fair assumption. We didn't talk to the husband, though.

Oh, yeah, I think that's, I think that's great, Scott. Spot on. Should we get out of here? Let's do it. That stitches up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying, farewell, Snowbell. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Kailen Bennett, editing by Exodus Media, copyrighting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.