BiggerPockets Money Podcast - 555: Retiring Early Before 30 and Why You DON'T Need Millions for FIRE

Episode Date: August 16, 2024

This might be the fastest path to FIRE we’ve ever seen. In just two years, Emily and James were able to retire early and travel the world full-time. They didn’t have a trust fund, some huge inheritance, or a winning lottery ticket. But they did make some serious sacrifices, cutting almost everything unnecessary out of their lives to retire early and quit the jobs they were itching to get out of. How’d they do it? After realizing they were throwing away every cent they made, James stumbled upon a popular personal finance blog. He devoured it that day at work and came home a changed man. The AC temperature was going up, the restaurant expenses were going down, and he was deadset on achieving financial freedom. His wife, Emily, needed some convincing. But, with time, they both became locked in on FIRE. They moved to a cheaper house, rode bikes to work, and rarely ate out anymore. Just two years after discovering FIRE, they achieved it, and they did it without millions of dollars in the bank. And here’s the thing: you might be able to do it, too, IF you’re willing to put in the work. How much money are they living on? How did they cut their expenses so significantly? And how do you convince your partner or spouse to follow you on the path to financial independence? Emily and James are showing you how in today’s episode! 00:00 Intro 01:21 Poverty to Overspending 06:12 Convincing Your Spouse on FI 09:09 0% to 85% Savings Rate 16:30 Buying $50K Rentals 23:29 Retiring on $31K/Year 29:40 The Secret to FIRE 32:43 Are They Still Retired? 34:36 Advice for Finding FIRE 36:24 Connect with James and Emily! 37:19 Use These FIRE Tips Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-555 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [e-mail] Learn more about your ad choices. Visit megaphone.fm/adchoices

James and Emily were able to retire less than two years after they started saving for early retirement at the ages of 27 and 28. Now they travel the world. And if any of this sounds amazing to you, keep listening to hear how they did it. Hello, hello, hello. And welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen. And with me, as always, is my amazing co-host, Scott Trench. Thanks, Mindy.

Great to be here with you. You're my Super Dupor Trooper co-host today here on Bigger Pockets Money. Baker Pockets has a goal of creating one million millionaires. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting, or maybe it's attainable for you even before you hit millionaire status. Listen on to find out how. Today, we are going to discuss how to get your partner on board for financial independence.

And I'm going to suggest maybe you spend a little bit more than the 30 seconds that James did. We're also going to talk about how you're going to talk about how you're going to can cut down your expenses to help you reach financial independence and what your fine numbers should be when investing in real estate. This segment is sponsored by Bam Capital, your path to generational wealth with premier real estate opportunities. See why over 1,000 investors have invested with Bam Capital at biggerpockets.com slash bam. That's biggerpockets.com slash BAM.

Without further ado, James and Emily, welcome to the Bigger Pockets Money podcast. I am so excited to talk to you today. Thanks. We're excited to be here. We are. Thank you. James and Emily, we want to get a bit of a financial snapshot before we jump into your story. So can you give us a bit of information what life was like growing up financially speaking?

And I'm going to go with James first. So yeah, financially speaking, it was, I would say difficult growing up. So I am a CODA. That means I'm a child of deaf adults. And my parents divorced when I was young. and my dad passed away when I was 12. And so my mom worked third shift at Walmart to raise me and my two sisters. And so it was not, I don't want to say it was common, but it wasn't uncommon for, you know,

our cars to be repossessed. We had our utilities cut off multiple times. And so, like, it's funny looking back on it as an adult. I can see, you know, that this wasn't normal. But at the time, you don't know that that's not normal. You know, like people don't typically set up camp in their living room, right? And so we would get out the tent and like get candles and stuff together. But in retrospect, it's because we didn't have utilities on.

And so there was actually a couple of years where we had a leak under the slab of our house. And we didn't have the money to have it fixed. So anybody in the family that needed to use water for whatever reason would have to walk out to the street where the utility, you know, cut on was. And would have to cut the water on if we needed to shower, you know, brush our teeth, wash dishes, use the toilet, anything. And so, but we always had to remember to cut it off because if we didn't, we didn't have enough money for the bill. And so that was like, that was a few years of existence in the, in the, uh, in the, uh, Lowry household. So how did that translate to your, you know, money story in high school and in college years?

And you was just a little snapshot about how that parlayed into kind of adulthood. Sure. Um, so it, I mean, it definitely created a chip on my shoulder. The problem was I actually probably aired the other way. I overspent money because I thought that like, I'm, going to show that I have money and I didn't have any money to be clear. And so every dollar that was coming in would be spent on, you know, a phone or a car or whatever, you know, going on these, like, lavish dates and then I would be at home like not eating anything for days because, you know,

I had spent all my money. And so because of that, I think that living frugally came naturally to me because of growing up so poor. And then it just becomes, you know, we live this way because we don't have any money, it turns into we live this way so that we can't have money. And that, like, was a really, like, important, like, mindset shift that I had towards, I guess, our financial independence journey. When did your mindset shift? You're in high school and you're spending every dime that comes in on lavish high school dates. What, at what point did you change the spendy ways?

That is a, yeah, that's a good question. So it was a lot after high school, actually. Emily and I were already married and we were pretty much living hand to mouth. And I mean, it wasn't as dire as it was when I was growing up, but we definitely didn't have any like finances to speak of. And so I actually found out about Mr. Money Mustache and just this concept of like I can choose to live, you know, in this manner. And it's like against the de grain. It's against the norm. And that really like resonates with me. And so because of that, that's kind of.

of what put us on the financial independence path. So I went from, you know, zero to 100. I did not, like, air into it at all. There was no dipping my toe in. And so I went from really piss poor habits to really good habits, I think. How about you, Emily? What did your upbringing with money look like? So I grew up as a, like, my dad was the sole provider. And they tried to, my parents tried to instill, you know, good budgeting habits. They follow Dave Ramsey. And, you know, we always had our like little banks that we tithed and that we saved and all that kind of stuff. They always, you know, like wanted me to have like at least $100 in my savings account, which earned my checking account, which sounds, you know, wild that like, but that was just like the

threshold. They're like, you know, if you ever dip back into it, make sure that you, you know, refill it up. And then in college, I kind of went off the deep end. And then, and then, you, and just like just started spending and spending and spending, even though like I knew that I had to pay for school. And so, I don't know, I just feel like once I got my degree and got like a big girl job, I guess, I would have the money to just like get everything that I wanted, basically. And that kind of led to whenever we got married, not saving anything and going shopping and just spending money frivolously.

What was your inflection point? Did you come to find Mr. Money Mustache together? Did one of you find it and tell the other? Did you have an agreement to stop spending and start saving? Or was it more of a difficult conversation? It was a little more difficult than that. So I found Mr. Money Mustache and I did it as poorly as one could pose this to their spouse. And you also tried to send me articles. Yeah, yeah, yeah, exactly. And I just. His writing doesn't reason. resonate with everybody and that's okay, you know. But yeah, so I found Mr. Money Mustache. The face punch is not a very good cajoling way. Who would have thought, you know, that that doesn't work for everybody? So yeah, I found out about Mr. Money Mustache at work. That day, I went home and I, you know, lowered our air conditioning. It was in the middle of summer so that we weren't using as much air conditioning. I changed the hot water heater. Like I was doing like the smallest thing to like move the needle. And she came home and like, like, I've already done half of these things. And I'm like, hey, I found out about this website. We can quit our jobs if you listen to me.

You know, and like it wasn't, it wasn't like quite as, you know, chauvinistic as that. But, you know, it was like, hey, like, there's this information here. If like this works, you know, if you hop on board, then we can do this pretty quickly. So what was the temperature of the room and the temperature of Emily's response to this conversation. The room was pretty warm. The response was pretty cold, I'll tell you. Wow, what a surprise. I can't believe that approach didn't work, James.

I don't know why. You know, I had planned it out, mapped it out for about 30 seconds in my head, and it did not work out the way I hoped. So it turns out that that's not the way to do it. Emily, what was it that he said or did or showed you that started to change you? that started to change your mind. For like whenever a new idea is, you know, presented to me, I feel like I need to hear different sides to it.

And so when James told me that I didn't have to obviously work forever, which I mean, that was, you know, what he said to begin with, you know, in five years you can quit your job because I hated my job. And, and then it was also like him doing like actions. And he was showing me that he was changing based on his action. So he was riding his bike to work, even though it was kind of sketching, going down like main roads. And, you know, packing his lunch, just little things that showed me that he was, you know, making an effort. And I don't know, just actions speak a lot of than words.

We're speaking to James and Emily about their money story. But it's time for a quick ad break. When we're back, James and Emily will tell us how they cut their expenses in. half to hit financial independence. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch.

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Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Liener 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, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30 day trial at audible.com slash BP money. Welcome back to the Bigger Pockets Money podcast. Let's hear about some financial details.

How much were you making when you started this journey? How much were you spending? How did that change over time? Especially on the spending front. How much were able to lower it down too? So combined, we were making just under $100,000 when we first got married. And we were, we had essentially a 0% savings rate. There were like, we, we have texts back and forth to each other saying like, hey, the mortgage is coming out in a few days and we don't have enough money in that account.

Like, we need to move some money around. And then, you know, it was the same text the next month. And so it was, it was a pretty and like we're not making any contributions to 401ks or anything like that at the time. So like we genuinely had a 0% savings rate. The good news is we weren't actually actively in like debt and consumer debt at least. We did not have student loans and we did not have any debt other than our condo that we lived in at the time. Okay. So you're not in a high tax bracket at that point. So you're essentially, you're essentially spending like 80K, it sounds like on your life more or less at that point in time. What were you able to drive it to over that over the next little bit? And was it a process or like did it happen overnight was in an event or was it a process where it happened gradually after a couple of big breakthroughs? are big moves that you made.

I would say that it was gradual for sure. For sure. And so some of it was, you know, you make a couple of choices and then that makes the next choices easier. And so we looked at our spending. And once I got Emily on board, you know, living by example and doing things and, you know, she actually probably out like frugaled me. And so it became, okay, let's sit down and look at what we're spending our money on and

how can we game this? Like, how can we lower this in any way, shape, or form? From our cell phone bill to our cable that we were paying for. to the internet that we had on our on our phones on in the house of everything and then it turned into okay can we get cheaper cars can and if we're doing all these things why don't we move from the condo that we're in into a much cheaper condo that has the same essentially the same like footprint but we get to save so much more money so we we jumped from I mean at at at our lowest we were at you know zero percent saving rate and at our highest we were at like an 85 percent savings rate

That's awesome. So, so how long did it take you to get to the condo decision, the housing decision, and what was the impact of that one decision in helping you move from 80 to 35,000 expenses? I felt like the decision took a couple of months, because I, I think we're still quick. That's really quick. Like, she's like, it took a couple of months. We moved from one home to another. The condo that we had bought. So the, the condo that we were in was, um like 150,000 and then the other condo that we bought was I think we bought it for 43. Yeah. $43,000. Yeah, yeah, exactly. In what year?

Yeah, this is in 2016, 2015, 2016. Yeah. And so the $160,000 condo like sounds cheap now. But at the time like we could have bought a three bed, two bath house in a decent neighborhood for that. And so we were like, oh, let's live the downtown life, you know, live above some bars and restaurants and stuff. stuff like that. And then when we jumped, we jumped from a one-bed, one-bed, one-bath condo to a one-bed, one-bath condo for, you know, a third of the price. And the HOA was a fraction of the price as well. And you guys are based in Huntsville, Alabama, right? That's correct, yeah. And this is,

this is one of the markets that has, you know, the whole country has transformed, but this is probably one of the more explosively transforming markets in the United States in the last 10 years, right? The last eight years in particular around that. What would, what would a condo go for nowadays in Huntsville of both of those ilks that we just discussed. Yes. So the $43,000 condo you could probably get for $125 to $150, I would say. And the more expensive condo in the nicer area, I think they're going for like $260, so almost $100,000 jump. Okay, awesome. So these are not, this is a low cost of living area, no bones about it, even today with the changes that have happened around it. But even inside of that, you were able to find huge potential for this. And so what was the difference in

your monthly payment or how do that translate in terms of your annual spending getting you from 75 to 35? So yeah, our condo that we had, the initial one, our fancy condo, the HOA and the mortgage combined were $1,500 a month. And when we transitioned to the much cheaper condo, our mortgage was $3.23. And our HOA was like not even $100. I think it's a lot. the time. So we went from $1,500 to, you know, under five. So, you know, our living expenses just right there and one third of what they were before. And I bet you could set the thermostat to fairly cool and still come out ahead in terms of your HVAC costs, right? Exactly. Yeah. But being around, being in an HOA, being in a condo, you're actually insulated very well on all sides.

So still no air conditioning there. Okay. So we've got that. What were the other biggest chunks here. Was it transportation? And I think about, you know, average American spending, it's housing, transportation, and food. Was it those three for you guys? Or was there another major category that really got us another big chunk of that $40,000 drop off in expenses? There was food. Yeah, there was definitely food. Yeah. Because I felt like we cut that at least in half. Yeah, yeah. If not more. Yeah. Based on like grocery shopping and stuff like that. Pretty much if Aldi didn't carry it, we couldn't afford it. That was the idea. Right. And so we only shopped exclusively at Aldi.

essentially for everything. And that definitely lowered our expenses a lot. We ate out so much less because we were at one point, you know, living in the condo above restaurants. We would just pop down and go eat every weekend with friends. Every weekend night. It would be a Friday night, Saturday night, you know, brunch on Sundays. And, you know, that stuff adds up.

So on top of that, we now, even now, but especially then, we wouldn't eat out if it wasn't just the two of us. Like the two of us, we would just eat at home. and we would go out for, you know, birthdays or, you know, events and stuff like that. But it just became if the only thing that you have in common with your friends is going and spending money in the same place, then you actually don't have that much in common, you know, so, so that helped. That's a great quote.

I think a lot of people can take that to heart. And what do you think that was the impact of the change there in your approach to how you eat and hang out? That's a great question. I think that we probably were spending, you know, a couple grand a month on food. And some of that was just food waste. some of that was going out to eat, you know, a lot of times, like, we would buy things and then not eat it. And so we essentially eliminated food waste. Like, we would take everything to go if

we needed to. I was like, you know, just having like a smorgasbord of meals for lunch at work. And so I think that we probably got it to under, I mean, we were definitely under $500. I think that we were in the 300 range for a month. Okay. So this was even bigger than the housing decision. Between these two things, we're getting 80% of this drop off and 40K in spending. If it was thousands a month and even 2,000, and you're dropping to 500 a month. I mean, that's the next 15, 20k of this. So what did you do with all of this money that you started saving? So we decided to focus almost exclusively on real estate. I don't want to say exclusively because we were still maxing out Emily's 401k at her job. She got a better match than I did. Mine was a discretionary

match, which I didn't really trust too much. And we were maxing out both of our IRAs. And then any dollar after that, any dollar after that went into real estate. What kind of real estate? And were you staying in this $43,000 a condo market? Because that's, that's a little, I'm a little jealous. We were. Yeah. So we bought anything that we could afford at the time. And so part of that was we were just starting out. You know, we're scraping by. And we at the time, too, we didn't understand like creative financing or anything like that. So we were just going down to the bank, putting down 20% or 25% on multifamily homes. And, and we, at the time, too, we didn't understand, like, creative financing or anything like that. So we were just going down 20% or 25% on multifamily homes. And. And. And. And and, you know, just groveling at the bank like everybody else. And so the harder part was finding mortgage companies that would give you a mortgage for a property under $50,000. Because we've bought that condo. We bought a duplex for 50, another duplex for 50, and then another duplex for 47. So it was a very cheap market at the time.

And what are these properties renting out for? Now or then. I mean, then they were still already hitting the 1% rule and then some. They were 2% rule, essentially. Right? So a $50,000 duplex, you could rent one side for $500, essentially. Wow. Okay. And what year was this? This was in, that was 2018. Yeah. Yeah. Wasn't the market supposed to crash in 2018, Scott? I think it did. Oh, wait. Oh, wait. No, it didn't. So you accumulated how many, so, so, okay, so we're getting a pretty clear picture of this. You're accumulating 40K-ish a year from your income.

And does your income change dramatically over this period of time or does it remain relatively steady around that kind of 90-ish grand mark? A little bit. We both kind of jumped around. Yeah, I maybe got a six grand raise in that time period. And then by the, like, the most that I made was 72. Yeah. And so it wasn't like that much of a jump.

Right, right. So I think like all in by the time like I got a promotion, she got a, you know, raise and stuff like that. We were making around 120 grand a year by the time we quit our jobs. And how did the portfolio, so it was just straight up 25% down accumulation on rental properties at Huntsville, Alabama, that cash flowed and slowly snowballed over what time period we're talking about? Is this a couple years? Yeah, we bought our first rental in December of 20, I guess no, sorry. The first like. Rental, yeah, true rental property, mid-2017. And we quit our jobs in 2019, September 2019. So two years.

Scott, 50% or 25% down on a $50,000 condo is still only $12,500. I'm sorry, a $50,000 duplex. So $12,500, and they're renting it for $1,000 in one year, you've got your whole down payment back. I'm sorry, one year and one half of one month, you've got your whole down payment back to do it again. That kind of market situation is pretty incredible here for it. Do you think it's still, like, do you think if you're starting today, you would still be able to accomplish, like, do that? What would you, would you have done something fairly similar to get there if you were starting over here in 2024?

Absolutely. So part of it was we bought the cheapest property we could find. And then we renovated it ourselves to make it look nicer on the inside, right? It was a condo, but we painted cabinets. We, you know, pulled down wallpaper, stuff like that. So those, some sweat equity involved. And then it turned into, okay, well, we had this clear goal of, let's buy 10 properties in five years, right? So two properties a year.

Well, when you have a clear goal set, you have to look at every property that comes on the market, essentially, right? And especially at the prices that they were coming on at. So we had a house with a mother-in-law apartment under contract for $83,000, I think, $86,000. And we were planning on renting out both of those and staying in the condo that we were in. the time. And in the process of us closing, we found the two other duplexes for 50,000. But we didn't have enough money like cash on hand. We didn't have the 12,500 that you've, you know, told us about Mindy there, times two, so 25 grand essentially, right? We didn't have that in cash on hand to buy all of these properties with 20% down or 25 for the multifamilies. So we ended up doing a house

hack, we lived in the mother-in-law apartment and lowered our down payment on that one to 5% so that we had enough cash to buy the other two properties. And so we went from having one condo that we lived in to having seven doors in a month. Well, on top of the duplex. Oh, we did have a duplex. I'm sorry. So we did have a duplex. So we had three doors. So we went from three doors to 10 doors. Yes. Yes. And you levered at like two to one from your income to mortgage ratio. in the process here. So not even counting the rental income from these properties. So, I mean, like what a responsible, relatively speaking, play that you're making here as well in the context of that is not even high, it's not even really high leverage, but anyone's reckoning on that.

So that's incredible. Just like a noob question here, because I have, I have not bought a $50,000 property. Is it difficult to get a loan, especially a low down payment loan for one of these properties. How did you facilitate that? It is. Yes. So we had to shop around quite a bit to find a mortgage broker that could find someone that would work with us because there are a lot of fixed costs on mortgages and at a $50,000 property purchase price. They're not going to make their money back on some of these costs. And so ironically, Capital One at one point offered mortgages. And I think they went as low as 40 because we got a $43,000 mortgage on that. And that was actually not counting our down payment. So it was probably like $35,000. And then once we found a company that

would do it, we just went back to them over and over again, you know, for these cheaper properties. Are these 30-year fixed rate, Danny Mae insured mortgages, like normal stuff? Are they particularly expensive to take out? Do you have a lot of points on them? No, they, but they, at that point, we already had a higher interest rate. That was before the, you know, historic lows that we had. So, but in talking in today's terms, it's still a good rate. I think we were paying between five to five and a half percent on most of those. Who cares? It's $43,000. Exactly, exactly.

I mean, your mortgage payment's like $1.50. And you're renting it out for $1,000. I guess this problem I'm asking about doesn't really apply here in 2024. Stay with us. We're taking a real quick break. When we're back, we're going to find out what life is like after financial independence for James and Emily. 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 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 fast?

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Get more with Northwest Registered Agent at Northwest Registered Agent at Northwest Register agent.com slash money free. Thanks for sticking with us. Let's jump back into the show. Okay. So what did your cash flow and net worth situation look like when you chose to retire two years later in 2019? And what does your portfolio look like today here?

Okay. That's a great question. So you can tell what our numbers were. Okay. So when we left our jobs in 2019, we had nine long-term rentals. and one short term. And our cash flow was just over 31,000. Awesome.

I will say we did have a like healthy, I would say healthy cash savings so that we could like dip into that if we needed to because this was all a trial run. Like we're going to quit our jobs and live off of real estate. We don't know if it's going to work or not. So we had, you know, Brad, I think a little over 100 grand saved up

to give us, you know, a runway. And that to us was like, you know, three or four years of living expenses. Awesome. Not many people are comfortable leaving work on a $31,000 a year income cash flow from the rental property portfolio. The $100K in cash helps. But did you also have stocks or something?

Maybe like a coast-fi concept in the 401. You mentioned that you had contributed to 401Ks in those types of things. Yeah, we did. So there was enough in the 401K that like we were essentially coast-fi. And so if we quit contributing, you know, by the time we reached a certain age. But that doesn't help us if we have to go back to work in a year or two. But part of it was we dipped our toe in the water. So we both took leave of absences from work.

And so that gave us, you know, also a little runway outside of our cash to say, okay, if like if this, you know, it's the bed in a year, then we can go back, you know. And my leave of absence was only a month. So if we didn't make it a month, there was a huge miscalculation. All right. So we've got 31,000 a year. What did you retire to? And how did that number fund it?

I think that we retired to travel. And that was like a big. So we moved abroad. And we, so it was about like eight months, I guess, that we were abroad. And so that money funded us to travel and go experience things that we wouldn't have been able to have. we've been at our nine to five jobs. There is a caveat to this. There is a caveat. So we traveled abroad. We moved to Cyprus, which is where Emily's parents or dad is from and her grandparents still live there. And so we actually moved into a mother-in-law apartment that they had. And we were renovating yet while we

were living there. So that was like our rent payment essentially to them was us fixing up this apartment. And so we were living rent-free then. And then we did house sitting and stuff like that to travel around Europe continuing to live for free in other locations. That's a valid way to do it. You didn't just happen upon this. I mean, that would have had to take some planning to do, but that is something that allows you to travel and still live at 31,000. I don't really see that much different than the person who has saved up a ton of credit

card points and are using those credit card points at hotels and airlines and things like that. So part of that was, you know, like COVID happened. And that's why she said eight months because we were in Europe and, you know, Emily has her Cypriot citizenship, but I don't. And so it turned into, okay, how long can we stay here before he gets kicked out? And so we actually had a repatriation flight back to the U.S. This is when all the airlines were closed, all the airports were closed. We were, I think, one of two flights into London Heathrow that day. And people were walking around in hazmat suits.

It was really weird. And so all of a sudden, being the nomadic travelers wasn't quite as trendy as it can be on Instagram. And so that was our catalyst to come back to the states. And I think you might have asked this like 10 minutes ago, but you're asking about our portfolio now and how that looks. And so on our return back to the states, we decided to focus a little bit more on short-term rentals. And so we've converted a few and bought a few. And so now we have more short-term rentals. So we also have more cash flows.

So we got to loosen the purse strings on that 30 grand budget a little bit. So before we quit to, we had converted one of our long-term rentals to a short-term rental with the idea that whenever we come back home, we could stay there and stay with all of our things for free, basically. And when we move back after, like whenever COVID happened, we kind of like use that as like, you know, there was a long-term tenant that was moving out. And so we moved into there and decided to convert that to a short-term rental. Right.

Awesome. So one of you guys is an engineer because this is a very clear engineering plan, right, of how to as rapidly as possible attain financial. Which one is it? So I'm the engineer, but the brains behind all of the, well, I feel like it's a team. It is a team effort. Awesome. So, so, look, I mean, this is a very, a very cool way to approach FI, right? I mean, 31K a year, you know, I don't think. most people would be that comfortable with. You sounds like you weren't that comfortable with it. That's why you had a 100K in cash stockpiled around it and ran a test before moving forward the rest of it. But you clearly said, we're going to go after FI. We're not going to go deep into these careers here. We're going to play. And we're going to figure out how to do that in stages and whatever with this. And it seems to have worked out really well. It seems like you

were able to do this test, come back, build short term rentals, and continue to pile on and builds your net worth, even as you have not had a traditional career played, as I called it, the last couple of years. Is that generally right? Yeah, that's pretty accurate. So, yeah, we would spend a couple of months, you know, working on a short-term rental and then we would travel the rest of the year, you know, whether that's in Mexico or back to Europe, you know, we snowbird in Florida. And so, like, yeah, that's essentially what we do now. Why do you think this is so hard. Why do you, why do you think it was so easy for you guys, but most people find the concept of FI so hard? What is it about the approach that you've taken or the way that you think about this?

That makes it so easy. I think, I think there are like multiple facets to it, I think. But one of those would be we didn't care about like judgment. We didn't care about like what people thought. You know, we went from living in a fancy condo to living in a really crappy condo. And then not crappy, it was fine, but you know, not as nice as the first one. And then we downgraded our cars. And, you know, people in our families thought that we were like struggling financially. And ironically, we were doing the best we had ever done in our lives. But from the outside looking in, they thought, they are struggling. And I don't know what they thought if I had a gambling problem. I have no clue. Like, drug problem, I don't know what they thought, like where they thought

the money was going. But so I think that, you know, ignoring what you think other people think about you because you're not you're not all important and so i think that you know doing that helps a lot that is a huge superpower if you can just get over what everybody else what you think everybody else thinks of you you can do all of these things what does dave ramsis say live like no one else now so you can live like no one else later you move from the nice condo to the not so nice condo and then now you own how many rental units do you own now so we have 17 doors now 17 doors allows you to not have to work every single day and you can go travel and snowboarded Florida, which is I think is funny because doesn't Alabama touch Florida? Yeah, it does. Yeah, yeah. But we're in North Alabama.

It snows there a couple times a year. Oh, really? I didn't know that. Yeah, yeah. The other thing that I think is really awesome about the way you approach FI, which I think I would have a hard time wrapping my head around, especially, you know, with a family and those types of things, you know, a little one here, is I think there's a mentality of just in time for both of you guys, which is like, we have a enough for what we need to do next. We're going to enjoy ourselves and it will work out in the next layer for all of this, which I think is the right way to mathematically go about life, to maximize for happiness. If you're to engineer it, that's the right way to do it, right? It's to, hey, why would you stockpile wealth for another eight years if you knew you could

make these things work? But most people, I think, would struggle to take that test year because of the disruption that put into their career and those other types of things. Again, like, What, like, am I hitting something on the head there around this like just in time concept? Do you have a way that you describe it? I think that we haven't really like described it that way. But I mean, that's pretty accurate to say that for us, it was, you know, let's quit now. And if we have to go back and get jobs, we have to go back and get jobs. You know what I mean?

And so for, I mean, I know that everybody says that, you know, like our worst case scenario is everybody else's like everyday life. But for us, I mean, it really kind of was that. Like, let's test it out, see if it works. And if it doesn't, like, we can go back. And it wasn't like she loved her job. It wasn't like, I mean, I didn't dislike my job. I enjoyed it. But at the same time, that wasn't, it didn't bring me fulfillment or anything like that.

So you've said that you could always go back to jobs if you needed to. Do you consider yourself to be fully retired? I would say it depends on when you ask. So had you asked me that this time last year, I would have said 100%. We are fully retired. And, you know, I work an hour, maybe two hours a week on real estate managing it. But if I wanted to, I could offload that into a property manager as well. Now I wouldn't say that because we just bought a six unit apartment and have converted that.

And like, it's going to be essentially a boutique hotel. And so I'm renovating it all myself, essentially. And Emily's, you know, helping with all the furnishings and like the concept of what's going on in the apartments themselves. And so the past few months have not felt retired. But at the same time, I get to not go and work on that. And I get to go to Kilimanjaro and then we're going to Europe right after that. So I'm going to say that you are retired, even though you have a current project, you're not a sit still kind of guy.

You're not a let me just read for nine hours a day for a month. You are an active person. I would say you've got ants in the pants. Would you, Emily, would you say that that is a correct characteristic? of James? I think so because there are like times that he's like, oh, let's get this project and like do this or, you know, there's something that he has seen in the past and he's like, oh, it's for sale now. Let's, let's do this and like, you know, make it this whole thing. And I have to kind of bring him down sometimes. So looking at where you are and where you've been, would you say you chose

the right time to retire? I think so. Yeah, definitely. Yeah. Had we quit earlier, we wouldn't have had the security that we have. Of the, you know, rentals that we had, had we quit later, again, I don't think that we would have quit because of COVID. Emily, as the one who sort of had to be convinced as opposed to the one who discovered it, do you miss your job? Not at all. Now, I do, like, miss some of the people that I used to work with.

But people, the people are completely different from, you know, the work. Like, I can see them outside of work. And, you know, we, you know, the, like, I still have some friends from work. and we hardly ever talk about work. So. Okay. That's really interesting. You miss the people. How many people are, you know, oh, I would really, my whole life is wrapped up into my job.

You can still go have lunch with your friends at your old job while being retired. Like that's your reason for not pursuing financial independence is that you like your job because you like all the people that you're working with. And that's, I mean, that's fine. I'm being super, super judgy there. But also, like, look at the life that they get to do. Like, you can do whatever you want. You chose to buy this little boutique hotel, but you didn't have to.

You chose to, I mean, you're going to go choose to climb Mount Kilimanjaro. You've got all these options now, including the option to continue working if you love your job. So that's what I'm doing right now. My husband and I are financially independent, but I continue to work because this is my job. Like, how hard is this, right? The other idea of it is that, like, work is more fun when you don't have to do it, right? Like, I'm sure you enjoy your job a lot more. Like, the stress rolls off your shoulders because you don't have to sit there and take it.

You know, if you wanted to quit, you could. And that is like, that in and of itself is powerful. You never have to quit, but you can quit. And so that, like, helps you deal with the day-to-day stuff a little easier. That is such a good point. I love it. All right. Emily, where can people find you online?

We are on Instagram at rethink the rat race, and we have a website, and it's rethink the ratrace.com. Awesome. James and Emily, thank you so much for your time today. I think that this is an excellent example of how you can find financial freedom with a little bit of stocks and a whole lot of real estate. And that's kind of what we do here at biggerpockets.com. To my listeners, we have a website.

Every once in a while, I will have somebody come up to me and be like, I didn't know you had a website. There's a website. It's biggerpockets.com. And we share all sorts of ways that you can get started investing in real estate. We have a forum where you can ask just about any question you can think of. We have a blog. We have multiple podcasts.

And we are here to help you repeat James and Emily's story. So James and Emily, thank you so much for sharing with my listeners today. And I will talk to you soon. Thanks. And enjoy Kilimanjaro. Yeah, thanks. That was James and Emily. And I absolutely love their story.

I want to highlight a couple. of things. First, James discovered financial independence and then pitched it to Emily in the worst way possible. But after his initial terrible pitch, he started to lead by example. So if your spouse is not on board right now, look at how you're presenting this idea. They went from a savings rate of 0% to 80%. That's fantastic. That's not how you have to do it. Going from 0 to 1 is better than 0 to 0. or negative. And I really like that they were on board when they were together when they were at that 80% savings rate.

James said something very interesting near the beginning of the show. I'm not sure if you caught this. If the only thing you have in common with your friends is going out and spending money, you really don't have that much in common. That kind of hit me hard. I can remember some friends in my past life where that was kind of the only thing we had in common. And that doesn't align with my values.

So really look at your friendships and see what you really have in common. Another thing that Emily said was, I trust James. I love that. Trust is so important in your FI journey. And, you know, that is something I cannot underline enough. And finally, James wraps it up with work is more fun when you don't have to do it. I'm going to leave you right there because I can't say anything better than that. All right.

up this episode of the Bigger Pockets Money podcast. I am Mindy Jensen and before he left, he was the Scott Trench, but you know, sometimes CEO duty calls. So we are saying, I am saying, on behalf of Scott, see you later, Alligator. Don't worry, he'll be back next week. Bigger Pockets Money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Knutson, copyrighting by Calico content. Post production by Exodus Media and Chris McKin. Thanks for listening.