BiggerPockets Money Podcast - 504: Early Retirement at 36 by Doing What EVERY Entrepreneur Should

Episode Date: February 20, 2024

If you want to reach early retirement, especially in your thirties, you’ll need to take some big risks. Today’s guest turned down what would have been a dream salary to many people, choosing to work for himself while making close to a third as much as a job would have paid him. He put in the time and sweat, making just enough money to survive for over a decade, living as frugally as he could so he could roll everything back into his business. Then, overnight, he became a multimillionaire. And guess what? You can, too. One day, at the age of thirty-four, Jeremy Schneider found himself $2,000,000 richer than he had been the day before. He had successfully sold a company he’d been building for a decade, making him, his family, and his employees wealthy in the process. Then, he did what every burnt-out founder does: travel the world, play volleyball and video games, and get some much-needed rest. But soon after, he decided to return to work, focusing on something much more important. In this episode, Jeremy gives a masterclass on the right way to build your business, how to sell it for millions more than you were originally offered, and exactly what you should do with the money afterward to STAY financially free. In This Episode We Cover How to reach early retirement in your thirties by building (and selling) a business When it makes sense to take a paycheck vs. bet on yourself  How companies are bought and sold and the negotiations behind closed doors The MASSIVE amount of taxes Jeremy had to pay after selling his business What Jeremy did with his $2,000,000 payday that set him up for life And So Much More! Links from the Show BiggerPockets Money Facebook Group Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums Finance Review Guest Onboarding Join BiggerPockets for FREE Mindy on BiggerPockets Scott on BiggePockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Money Moment Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders Past Episodes Mentioned in Today’s Show: Michael Kitces A Purple Mom Life Insurance (Joe Saul-Sehy) Whole Life Insurance (The White Coat Investor) Lump Sum vs Dollar Cost Average Calculator Grab the Book “Die with Zero” Click here to check the full show notes: https://www.biggerpockets.com/blog/money-504   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

Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen. And with me, as always, is my wearing his CEO hat today, co-host, Scott Trench. Thanks, Mindy, great to be here and I always appreciate you bringing such a positive attitude. We're 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. Scott, on today's episode, we are speaking with Jeremy Schneider from Personal Finance Club. about how he was able to retire early at the age of 36.

Yeah, we usually talk to W-2 income earners, and the traditional story is save up, spend less, spend less, earn more, invest, create, and gradually move toward financial independence. But Jeremy's story of entrepreneurship is a story of attaining entrepreneurship all at once in one big moment and very different, very fun, very interesting look into the different dynamics of it. And I hope that you're, you know, as you listen to this episode, you're going to think about the parallel journey that happens from a W-2 path versus a entrepreneurial one.

So stay listening because we're going to dive deep into the sale of his company, the emotive experience around it, and peel back the onion, peel back the curtain into the process behind selling a business after a 10-year entrepreneurial journey. Today we are talking with Jeremy Schneider from Personal Finance Club. Jeremy, welcome to the Bigger Pockets Money podcast. I am so excited to talk to you today. Thank you. Hi, Mindy.

Nice to see you guys. Jeremy, you're an unemployed bum at the end. age of 36. Let's talk about that. I mean, I was an unemployed bomb at 36, not an unemployed at 43. Oh, okay. So let's talk about how you became unemployed at 36, or as we like to say here, financially independent. Sure. I mean, you know, my story is I was offered a job at Microsoft as I was graduate in college. I had a degree in computer science and I turned it down. And yeah, I know. It was more money than I ever had seen in my life, of course, because I was like a broke college student. Instead, decide to start a company.

I had no idea what I was doing. I literally was Googling how to start company. I didn't even know, like, do you fill out a form? Do you just shout out your window that you're starting a company? I literally had no clue, like even the semantics of it, much less the difficult stuff like getting clients and growing revenue and things like that. But, you know, the first few years were rough. I think my first full year in business, I made $14,000, like top line revenue and then take away expenses.

It wasn't enough to even afford to eat. And so I was living on credit cards for a couple of years. I racked up about $12,000 in credit card debt living extremely frugally, like, you know, pinching pennies at the grocery store just to make ends meet. But it started, you know, kept going better. Eventually, I was able to pay off the credit card debt, start hiring people. I had a team of seven. And then I sold the company at the age of 34 for just over $5 million.

Oh, okay. So that was a better bet. I was going to ask you, was there any time during that first year that you were like, wow, I should have gone and worked for Bill? I mean, constantly, you know, I think anyone who's an entrepreneur, if you are and you don't know that everyone else feels this way, then I'll tell you right now. I think everyone who's an entrepreneur feels the emotional roller coaster, constant, what's I called imposter syndrome.

You know, it would, you know, there's definitely days and weeks and months where I just was like, all right, this is a massive mistake. I'm a failure. I'm bad at life.

But then, you know, the phone rings and someone's interested, and you start multiplying numbers together and you're like, ooh, wait a minute, I might be a billionaire here. And then, you know,

so it's, it's both. But yeah, there's definitely times where I regretted going off on my own. So are you comfortable sharing like revenue and profitability of the company? as it grew and at the time of exit?

Absolutely. I think that there's too much like shame and secrecy around money. And so kind of one of my own personal traits is I just have super transparent. I like I love sharing all of stuff. But yeah, we're a tech company. Strangely is actually in the rental housing advertising space. I know on the bigger pockets forum, there's lots of mention of my company. The company is called Rent Links, which is a apartment advertising syndication service

where you can post an apartment for rent on one website and have it automatically syndicate to like 50 different websites. That said, I recently got an email that they're shutting it down now eight years after they acquired it. Is that eight years? Yeah. So if you're hoping to use rent links and listening to this, you're out of luck. But that's what it was.

It was a software company. And the year that we sold, our top line revenue was just under a million dollars, about, I think it was like $975,000. And our profit of that 975 was about $25,000. So we basically were spending all our money. We'd never taken any funding. We were bootstrapped. And so we were basically just hiring as we could afford.

So there's a number that's really important when you talk about businesses and valuing them and understanding profitability. And it's called seller discretionary earnings, which includes the profit plus the pay of the owner and operator of it. Could you share what maybe that number, what your estimate of that number would be? for that final year? Very little because my take-home salary was $36,000 a year. I was the lowest paid employee at my company.

And so, you know, when you talk about that type of business valuation, it's generally not used in the tech world as much because we, you know, the acquiring company was more interested in growth potential and strategic advantage and the value of the technology. They weren't really looking for a, you know, just a business. business they could collect profits from, right? The $25,000 of profit plus my $36,000 salary, whatever that equals $61,000 or something, not very much money. Well, the reason I'm asking is because I think what's so fascinating about your story is that, you know, a parallel universe, you go and join Microsoft, right? And you probably earn big bucks after 10 years. And, you know, I'm just trying to like, I think that's kind of like

one of the things I'd love to learn as we kind of dive into this journey is like, okay, how much farther ahead did you get from starting a company here, surely far ahead from it. And what was the experience like around that? Because I think that's what a lot of people, I think that's like an interest that I, at least I have in stories like yours is just parallel world where you could have got that career Microsoft probably come out at this, at 34, 35 with two to three million dollars in net worth, potentially if you'd invested and saved up. But not quite here. And I'm, I don't know, what's your reaction to that thesis? I mean, no, I've done that thought experiment many times. And, And I think my initial offer back in 2003 was like $90,000 or something like that.

But yeah, you project climbing the corporate ladder at Microsoft and RSU stock options, whatever it is. There's so many unknowns. Like would I have moved to Redmond and bought a million dollar house and started buying speedboats or something because I hated my life? Or could I have lived dramatically under my, below my means and saved 80% of my salary? And, you know, when I did the back nap and math, I was better off starting a company and selling it. But also, like, I exited as a founder and sold it for millions of dollars. And so that's, you know, not typical. But also, it's a relatively small acquisition as far as tech companies got like $5 million.

Obviously, a massive amount of money to me, but it's not like a billion or something. Up next is a break. But when we're back, Jeremy will tell us about what he did with the millions of dollars he received from selling his company. 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 Pock. 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 and simple. Use the code pockets at monarch.com for half off your first year. That's 50% off at

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Audible has been indispensable for me over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money. And we're back. Before the break, we spoke to Jeremy about starting and selling his business and retiring at the age of 36. Next, we'll be hearing from Jeremy if early retirement is all it's cracked up to be. Well, so if you're in $61,000, I assume in the peak profitability year, were you able to accumulate and save money from a personal financial perspective during the time you're building your company or what did that look like from a personal financial standpoint

pre-exit? I always personally didn't really count the businesses money towards my personal life. I was trying to do what everyone else was, like live below my means and invest. And so I was always the lowest paid employee at my company. I was using the company's revenue to hire employees to grow with the business not to basically enrich myself, looking for a bigger exit one day. And so yeah, I took home $36,000 a year. And I spent about 30 or 31,000 a year. And with the other 5,000 or so, I put it into a Roth IRA. I mean, the first couple years, that wasn't true. I was like living on a, you know, credit card. The third year, I was basically break even. And then kind of like years four through 12 or whatever,

that's why I was doing. And so my net worth at the time, at age 34, you know, 10 seconds before a wire hit my bank account was about $100,000 or so. So I had no debt. I bought a Ford Explorer Sport Explorer Sport for $3,000 in cash, a 99 Ford Explorer that I drove, you know, when I was negotiating this multi-million dollar acquisition, I was driving my 99 Ford Explorer that I was, you know, had been driving for the last six or seven years or whatever. And yeah, and I was just trying to build wealth the old-fashioned way by living below my means and buying and holding, you know, index funds. Awesome.

This is so fascinating to me. So, okay, so we've built this business. We've sold it. We have a wire for $5 million. Let's talk taxes here. How did taxes work on the sale of a company in terms of setting somebody up for, you know, financial freedom? So a few years, an important piece of information here is a few years into the business. Actually, my mom joined the company.

She bought 30% of the company for what we called the book value, which was basically just replacing the cash in the checking account. And so she gave me $1,500 and got 30% of the company. And so the day we sold, my mom and I together owned 100% of the company. me 70%, she 30%, and we basically had a phantom stock deal with our five employees, that they were going to payday too. So my share was about $3 million. My mom's share was about $1.5 million. And then the other, you know, 500,000 was employees and then a little bit in legal fees and stuff.

So my $3 million, I live in the great state of California, which doesn't distinguish between income and capital gains tax, which frankly, I think politically is the right thing to do, but when it affects you poorly, it's not so great. And so I, you know, I wrote a big honking check to the government about 300, about a million bucks that year. So 300 some thousand to state of California and 600,000 some to California or to the federal government. And, you know, if you're listening to this podcast and these numbers are just like mind boggling to you, They were to me too. I literally, you know, I was a week earlier, I was pacing the halls of the, or the aisles of the grocery store trying to, you know, look for something that's 10% less money, you know.

But then, yeah, on that day, I wrote like a $650,000 check to the fellow government and mailed it in, literally a check and I mailed it in. And then they wrote me a letter back, a very sternly worded letter that said, what are you doing? You can't send us a check this big. like you have to like go through the you know the EFTPS system you have to send it electronically yada yada yeah and they're like we cashed it but you know next time I was like I was like I didn't know I always just remember a check that's why I thought you're like you're the government you deal with checks so I thought so yeah they they cash the check by the way but they they weren't they were still sent me a sternly worded letter people who send me checks for 600,000 dollars do not get a

sternly worded letter from me I will say thank you exactly Try it, Jeremy. Send me a check for $600,000. I'll send you a big thank you. And Jeremy, I just want to, I want to call out here how special it is that you're answering all these questions that are so blunt, so direct and so big, and with such a massive financial situation, this is going to help a lot of people. And I think open a window into the realities of this world. One of my reactions, maybe other people listening are feeling the same thing is, oh, you sold a company for $5 million and you walked away with $2 million. That's actually way less than I would have anticipated in there. And there's like a whole bunch of things. It's a huge

out of cup. It's awesome with all that. But there's like so many things that I think are running through people's minds that are transitioning about entrepreneurship because of your story. And I think you're the real, you're the real deal with what an entrepreneur goes through and a huge success story in this. And I think there's tons of misconceptions around this. One of those that I think you just highlighted that I really look to dive into is the day before close, I'm looking, or the week before, I'm looking at the grocery store and trying to save 10 cents on a can of beans over here. what was the process like to sell the company? How long did that take?

And what was your kind of mindset in the weeks leading up to, you know, going from 100,000 and 10 years to millions of dollars in the bank? What was that like emotively? Well, Scott, I would like to actually compliment you because very few people ask me these questions. And I love talking about it. And I think that just there's so much, you know, secrecy around money for whatever reason. people are afraid to even ask the questions.

And I love talking about just for the exact reason you said, everyone has this like, you know, whatever they saw on TV or in pulp culture, the ideas of like what sign companies like are private jets and champagne. And like, you know, that's not real. That's like Instagram fiction or whatever. And so I love that you're asking point of questions. And someone listening to this might be able to like hear one real true experience. Yeah, I mean, it started with a negotiation.

I drove up to their office in Santa Barbara. We sold to a company called Epfolio, which I'm sure you guys have heard of as a property management software company who's doing extremely well these days. And on the agenda was a, you know, they were basically introduced me to all the like, you know, different departments at their company. And then at the end of the day, they had this agenda item, which is negotiate sale of the company and negotiate price. And I'd gotten advice from other people. I'd like call a few friends who I knew who had been through something like this. And they said, don't negotiate in person, have a business broker. I chose to ignore that advice and negotiate in person because I thought that these people

were operating in good faith. I still think so. You know, to make it a kind of longer story, kind of short, he put up a PowerPoint on the screen that basically was going through what they liked and didn't like it about a company, trying to lower expectations, I think. And when I say R is like me and my mom and the CEO of the company in the conference room. And then on the screen, he basically said, we were prepared to offer you $3 million. And, you know, when we drove up to Santa Barbara, we basically had a discussion, like,

what's our number? And we decided two million was our number. Like any, a dollar or less, one nine, nine, nine, nine, nine. We would walk away and be happy. But like six million was like the number that we thought would be like a good price. We'd be really happy with. And, you know, offers weren't exactly flowing in. And like I said, I was, I was pretty broken.

So even turning down one nine, nine, nine seems kind of crazy. But, you know, we basically, in the next five minutes, we went back and forth and landed on five million. And I was like, all right. And then what came after that was, I think almost four months of due diligence. That was like in November. And the deal didn't close until April 1st of 2015. And they, you know, they pushed it off for some like accounting financial reasons or whatever.

But during that time, I was like kind of losing sleep. Like literally I was like, you know, because we were basically now preparing to be sold, you know, putting the company on hold. You know, we're still doing business. But like, you know, certainly my focus and my team's focus was on selling the company. And if it fell through, you know, we would have spent a lot of money on lawyers and, you know, it would be rough. So I was losing sleep. But then one day, you know, there's an Excel sheet, like an exhaust file that had everyone's name on it and like their bank. account numbers and like, you know, Jeremy, three million, Amanda, my mom, 1.5 million,

each of our employees, like 150,000 or whatever they were getting each. And then like our law firm. And that was like the wire, you know, there's all, there's a million legal documents. So like this is the one that like, that like matter to me. Like this is where the money is going to actually go. And so then like on that day, I actually have a video of myself videoing my checking account and clicking refresh because I had learned because I had done. Because I had on a wire like a week earlier to like clear some of the cash out of the account because they're supposed to be a cash free deal. And so I learned they send you an email when you get a wire. And so I, so I knew I was going to get this email. So like in anticipation, I opened

my bank account like around the hour they're supposed to do it and just had the screen up waiting for that email. The email came through. I started the video camera. I literally clicked refresh. And so I have the moment where, and I've actually shared it, it's public at this point where it went from like 100,000 my lifetime net worth with that Roth IRA to like 2.1 million. So what did you do with that $2 million? You had, it was $3 million because you had the taxes or whatever. And then did you invest any of that?

Did you, were, were you working for the company? Like, did you have the, you have to stay on for a year afterwards kind of clause in the contract? Yeah, not all $3 million came to me on that day. I think more, but like $2 million did, or maybe two point something. And then I say point something like I'm, you know, whatever, a few hundred thousand dollars between friends, right? And then I think there was like an $800,000 retention bonus that came six months later that they, that they were also trying to do for accounting reasons, trying to move some of the

expense to a different quarter or whatever. Other than that retention bonus, I had no employment contract. Usually with small businesses like mine that get acquired, they basically require that the founders stay on or the key executives or whatever stay on for usually three years. It's pretty typical from my understanding. With me, I think they didn't, you know, they had a previous acquisition. This is kind of getting into like not my transparency, but their transparency. But they thought they were better lead with a carrot than a stick basically based on a bad

experience, I think. And so they're like, if he wants to leave, let him leave. Otherwise, we'll just, you know, treat him well as long as he wants to be there. And so I ended up working for the company for two more. years and then left on really good terms still you know still love at folio like you know really appreciate that they gave us a bunch of money my brother now eight years later my brother was used to work for me he was an engineer or software engineer worked for me he still works for epfolio as well as like probably like my two best employees so like at folio is still treated my team really well and then yeah with my money

I spent that that interim period where I we had shaken hands on this five million dollar number but the wire hand come through yet. You know, you're paying yourself $36,000 a year pre-acquisition. Did that base salary continue? Uh, continue? Actually, I got a really healthy raise. I think my post-s salary, my post-acquisition salary was $150,000. So, you know, like, it wasn't like giving me half a million dollars, but definitely was like, it was crazy money to me. Like, like ignoring the $2 million dollars in my bank account now, um, like the paychecks I was getting every two weeks or while, like I wasn't spending, or spending like a quarter of them or something, you know. So that's the next piece. You go from having $100,000 and, you know, a $3,000 car and, you know,

all this stuff. And now you all of a sudden you have a huge pile of money in the bank. What, what do you do spending wise? Do you, do immediately buy a, like, how does that work? What's the thought process? And how did you end up doing? Yeah. To answer Mindy's question that I didn't quite get to is like, did I invest any of it? During that due diligence period where I knew the we had shaken hands on the purchase price, but we hadn't yet gone the wire. I basically was doing all these thought experiments about what I was going to do with the money, how I was going to spend it. I was like, should I go buy a Lamborghini or something? And then I was like, where would I park it? I would look like a do-bag driving around a Lamborghini. It would feel so stupid. It's like so inauthent,

so inauthentic to me. And so I kind of like got out. Some of the spend, like the itch to spend it kind of got out of my system. But I also was reading about investing. I started reading every book on personal finance and investing I could find. And I realized like, oh, all these books actually say the same thing. It's all pretty simple. It's like, you know, spend less than you make, invest early and often, buying old index funds, minimize fees. And so, yeah, you know, like, you know, a couple days after the acquisition, I sat down at my fidelity account and I bought $2 million worth of index funds, like on a single day, you know, is another very wild experience where I was like trying to save 10 cents at a grocery store a week ago, and now I'm clicking

purchase on like a million dollars worth of total stock market index fund. And to this day, I've held it. And, you know, spoiler, like my net worth at that moment was like $2 million or so. And today, I just actually, this past month with our nice stock market lately, just crossed $5 million. And so broad strokes, that's been my financial journey since then as I've just basically held those index funds and now I have $5 million. That's unbelievable.

So like you're you literally just put, you did exactly what is supposed to, what what you're supposed to do, right? What all the math says you're supposed to do. And you just did it and didn't even sounds like think twice about it. It didn't touch it for 10 years. Like I wonder how many entrepreneurs actually follow through with doing, following the textbook there. And you've been really well rewarded from that. That's like, it's like, it's remarkable. Despite that, despite that, despite that that's like, oh, yeah, that's technically what should happen.

So congratulations. That's awesome. Yeah. There's a few more mistakes in there. Like, for sure, the lion's share of my money, that's true. But I also made a few more mistakes in there. But I definitely have avoided the pitfalls of like burning all my money or making really big, dangerous gambles or timing the market or, you know, changing strategies, things like that.

Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your taxed refund can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier.

It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving. not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves 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 Monarch.com for half off your first year. That's 50% off at Monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates

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or exploring investment banking solutions, with Desjardin business, it's all under one roof. So join the more than 400,000 Canadian entrepreneurs who already count on us and contact Desjardin today. We'd love to talk, business. So we kind of previewed the conversation here by calling you an unemployed bum. When do we get to unemployed bum and what happens from there? Well, now he's working there for two years. I want to, before we go to there, I want to know about the dollar cost averaging that he didn't do, it sounds like, when he bought $2 million worth of index funds. Because the internet, the personal finance community says that you need to dollar cost average. And you just dumped all $2 million into the index funds?

Yeah, I don't know if I could do that. That's a great question. I don't think mentally I could have handled what you just what you did even though it's the right thing to do. That's why I'm like, I'm like in awe of how you handled everything. No, literally I think I mean, you know, now we haven't really gone to, but now I basically do my, my passion project, which is teaching people about personal finance and investing. And I post all stuff very transparently. And I like, found my receipts. I was like, yep, there it is.

There's like a million dollars worth of index fund purchases in a day, you know, two million a day or whatever it was. Because there's a few different ETFs I bought. But you know, the answer is now, knowing what I know now, dollar cost averaging or lump sum, they're pretty close. Statistically, lump sum is better. 70% of the time, you're more likely putting the money in as soon as you get it because the market's usually going up. That's why I read at the time.

And I'm a computer programmer and a math guy and I understand, you know, numbers decently well. And I just did it, you know, because I, like you said, Scott, I just think it's the math. mathematical correct thing to do. And so that's what I did. But admittedly, now talking to like a zillion people about personal finance, like that's not necessarily right for everyone. You know, I think there's a calmness to dollar cost averaging where if you do put in your $2 million and then the market drops 30% on the next day, you know, you don't have to spend the rest of your life asking, you know, how much my day I waste there? If you were just putting in, you know, 10% a month for 10 months or something or whatever it is, you'd have a little bit more peace about that, I think.

I'll just chime, dollar cost averaging is the concept of if, you know, instead of Jeremy putting $2 million in a lump sum, it would have been him putting in, let's call it, 50 grand a month for, you know, two or three years into the market to make sure, you know, and the reason someone might do that is because they're terrified of putting all the money in at the top of the market and having it go down at that point. That would defray that risk. Statistically, it's better to put it all in at once, but the dollar cost averaging might help people who come into situations like what Jeremy, came into maybe sleep a little bit better at night about the approach you're taken. Well, I think the dollar cost averaging in this specific situation, if he's putting $50,000 in every month for two years, he's not putting his money in the stock market the whole thing for two years. What if you have two years of growth? What is that statement? More money has been lost by people trying to time the market than by people who have been in the market and it's going up and down? Yeah, I think he did exactly the right thing. I just think, you know, you're like, hey, that's what's supposed to happen. That's what you did. It's, it's like, it's so simple. It's so obvious, but it's also probably so rare.

And not only, Jeremy, are you correct to do it, but Michael Kitsis said that you should do it like that as well. Lump Summit all the way in there. Episode 120, you can hear Michael say this because he's so smart too. I've actually since built a dollar cost averaging calculator looking at every single month of the stock market going back to like as early as S&P 500 data goes back in like the late 1800s and saying, you know, what would be the difference if you did over 12 months or 24 months or whatever? And basically the end result is if you dollar cost average, all you're really doing is instead of getting today's price of the market, you're getting the average price of the market over that period of time. And generally the market goes up. So if you take the average price from now

until two years from now, it's going to be generally higher than the average price or than the price from today. And you're not, you know, you're not kind of doing anything magical about, like, you know, really buying low and selling higher and anything like that. You're just getting the average price. So I'm like, well, I guess I'd rather have today's price than two years from our price. Okay. Let's let's talk about how you became unemployed bum. You leave the company at good terms. What, what happens at that point? Do you just stop work and, you know, beach bum? You know, at that point, what is the day-to-day like when we hit? Essentially, yes, I put in my, you know, my net worth over those two years had grown to, I think, around three million.

Just there's a couple good years of the stock market plus my salary and all that. And I, you know, was realizing that while the growth of my investments is making more than my salary, why do I need to be working anymore? And I think if you'd asked me back then, I didn't even know what fire was, like financial independence retire early. I was just more like back of the napkining my own situation. So after two years, I put on my notice. And I didn't like hate the job or anything, but I was like, I can probably do better at something else and someone else can better, you know, because I was no longer an entrepreneur where I was just like a middle manager at this company.

You know, someone else can take over my job. And so yeah, I quit my job. And then I think three days later, I was on a plane to Venice. And I coached beach volleyball in Italy for two months because there's this like beach volleyball player. And there's like this beach volleyball camp out there in ports southern California, beach volleyball players. I've had friends who've done this. I'm like, well, I can never do that because I, like, I'm building a company and don't have two months to go be a beach bum. But then I literally did.

So I went to Italy and then I went to Australia for a month and a half. Bored one day at home when I came back. I saw an advertisement for StarCraft 2 and how it was now free and it used to be 50 bucks. And even though I had $3 million in the bank, I was like, oh, I can save 50 bucks. And so I installed StarCraft 2 and I got hopelessly addicted and played video games for a year, just StarCraft 2. and I basically just did what I thought you were supposed to do, like be on vacation, work out, travel, play video games, every day is a weekend. And, you know, for sure, that's fun for a while.

There's like, you're 34 at this time? I was 36 now. I sold the company at 34, retired at 36 or became unemployed at 36, however, whatever I want to call it. My unemployment bump period basically lasted about a year. And, yeah, I, yeah, is traveling. I went to Mexico, you know, where there was like, you know, in a camper van with like no services. I was, I don't know, just trying to be a bodybuilder and, you know, eat protein and work out twice a day.

Just, you know, like all the stuff that like you just suddenly have time for. But, you know, after a year of that, I don't know, it got boring and I didn't really want my life story to be, you know, I had a big win when I was 34. and then I was like a waste of life for the next, you know, 50 years or whatever. And my own, my own, my own like enjoyment of life, I think was less because there was no goal. I think a lot of goal or a lot of joy in life comes from working, you know, making progress towards something, working towards a goal, building something. I personally like building things. And so, yeah, they say the reward for financial independence is an existential crisis.

The book, Die with Zero makes some good points, which is. you know, the goal of money isn't to be 80 and have the most money in your bank account as you roll into the grave. It's to, you know, maximize your life value. And so, for sure, at 36, I was still pretty young. But, you know, I kind of tried to do the backpack around, you know, hostiles thing. And like, I felt pretty old for that, to be honest, you know, and so I, you know, even though I had a big win relatively young, I think we all need to be remembering to jump on these temporal opportunities to to live life to the fullest when it happens. Because if you want to go skydiving,

this is probably the year because it's probably not going to be when you're 80, right? So even though I had a young win, I still think living your life in your 20s and 30s, that's a good idea. Well, Jeremy, can you tell us when people can find out more about you?

My Instagram is where I do most of my personal finance education at Personal Finance Club. Thank you so much for sharing your story. This was truly fascinating, wonderful, unique, but not, you know, not, like probably there's a lot of entrepreneurs who have gone through,

which you've done even though it's a smaller percentage of the population. And it's a wonderful glimpse into another way to achieve financial independence. Thank you for sharing the ins and out so transparently. And the beach bum days, too. You know, how good you get in StarCraft, by the way? I think I was like low platinum. Like, you know, I was like any 12 year old in South Korea would annihilate me. but you know I could probably hang with the other 37 year olds or whatever awesome thanks for sharing

that really appreciate it and hope to chat again soon thanks so much guys this was a blast Scott that was so much fun listening to Jeremy really dive deep into how you sell a company that you own that was really fascinating and I loved your take on how I loved your questions that you were asking him because you've got this business mind that I just don't have and that was really a lot of fun to hear Jeremy share those stories. Yeah, it's, you know, as a, as a CEO who has, you know, been through various investments with, with bigger pockets, for example, I've had a glimpse into this window. I've never been the entrepreneur who founded a business, of course, with that. But it's just fascinating to get a peek into what it's like on the other side, right? Like,

you know, from a, I'm a W-2 guy. You're, you know, you've worked out long career. Carl worked long career. It's, it's different, right? It's not what you expect it. It's not like the richest pile up overnight and he's earning hundreds of thousands of dollars. He earned very little, right? Almost basically, maybe below a living wage for what people consider maybe in California for many of those years. And then at a huge pile right at the end of the rainbow, but not quite as big as the whole valuation of his business. After taxes, you know, we're there. And so it's just so fascinating to get an insight into that huge outcome for him, of course, maybe not quite as big as you would think for, from an entrepreneur when you're on the outside looking in at an entrepreneurial

old journey and think about a $5 million business sale. Yep. That was quite eye-opening and I was so thankful that he was able to share it. Sometimes there's non-disclosure clauses attached to these sales and sometimes the entrepreneur just doesn't want to share. So I was really thankful for Jeremy to be open with us. That was a lot of fun. Rare treat to get an insight into this world here. Should we get out of here, Scott? Yeah. Oh, and one more thing. It sounds like Jeremy, you know, probably should have moved out of California for a few weeks. At that point. Just kidding. Follow the laws in wherever you're living when you go through all these things.

Yeah. But yeah, let's get out of here with that. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Indy Jensen, shouting out the Morrow Bay Skateboard Museum by saying, later, skater. 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 BiggerPockets 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 thank you to the Bigger Pockets team for making this show possible.