BiggerPockets Money Podcast - 557: Buying at the Peak, Surviving a Crash, and STILL Being Able to Quit at 38

Episode Date: August 23, 2024

Have you ever made a poor financial decision? You’re not alone! But can a bad blunder disqualify you from FIRE? Today’s guest made a huge investment at the worst possible time, a move that had consequences a decade later. Despite this, he was still able to reach early retirement in just fifteen years! Welcome back to the BiggerPockets Money podcast! Ryan Connell had a picture-perfect start to his financial independence journey—saving money at a young age and living well below his means. But then 2007 arrived, and Ryan made the “worst financial decision” of his life. He bought a house just weeks before the housing market began its historic collapse. But a move that could have derailed his quest for FIRE proved to be a minor setback because Ryan was still able to retire at the age of thirty-eight! In this episode, you’ll learn why you should treat real estate as less of a “sure thing” and more like the stock market. Ryan discusses his current portfolio, which consists of 100% index funds, and what led him to pivot from real estate investing entirely. He even gives us a peek into the average day as an early retiree and shares why he has never had a FIRE number! In This Episode We Cover How Ryan rebounded from his “worst financial decision” to reach FIRE at thirty-eight Real estate versus stocks and why you don’t need properties to retire early Why time in the market is still more important than timing the market Whether you can reach financial independence without stress and sacrifice How to enjoy retirement with less productivity and more “negative time” 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 BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Apply to Be a Guest on The Money Show Podcast Talent Search! Find an Investor-Friendly Agent in Your Area Find Investor-Friendly Lenders BiggerPockets Money Group Check Out Ryan’s Camp FI Talk Buy the Book “Rich Dad Poor Dad" See Mindy and Scott at BPCON2024 in Cancun! BiggerPockets Real Estate 955: BiggerNews: Real Estate vs. Stocks, the Ultimate Wealth-Building Debate 00:00 Intro 02:02 Buying a House...in 2007 09:42 Digging His Way Out 18:46 Ryan’s Journey to FIRE 28:25 Saving TOO Much? 35:00 Life After Early Retirement 40:49 Find Freedom Faster! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-557 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

Ryan Connell unintentionally started his fight journey after graduating college by keeping his top three expenses really, really low, which allowed him to retire from his job in 15 years at the age of 38. On today's episode, we're going to hear a story that will make you believe that reaching financial independence is still possible. Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy Jensen. And with me, as always, is my money savvy co-host, Scott Trench. Mindy for that fire intro. Really appreciate it. Bigger Pockets has a goal of creating one million million million financially independent folks like Ryan. You're 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 how terrible your investing timing and luck really is in the first couple of years of your journey. Today we're going to discuss how a investment even at the peak in 2007 and an all-in bet on your first house that just goes terribly wrong, can't derail your financial journey if you don't let it. How you can adjust your investing strategies on the way to FI and completely reset even 10 years into your journey. And the concept of negative time and what it's like to be financially independent and just live life on a Tuesday. Live life on a Tuesday. I love that. We're going to hear Ryan's really super exciting Tuesday plans. And I'm really super excited for him because there's exactly what I want.

They're exactly what everybody wants. It's freedom. He can do whatever he wants. So he's choosing freedom. This segment is sponsored by Bam Capital, your path to generational wealth with premier real estate investment opportunities. See why over 1,000 investors have invested with Bam Capital at biggerpockets.com slash bam. That's biggerpockets.com slash BAM.

Now let's get into the show. Ryan, welcome to the Bigger Pockets Money podcast. I am so excited to talk to you today. And I'm so excited to be here, Mindy. Ryan, let's really just jump right into your story. Can you tell us how long you've been investing? So mentally, the first time I felt like I was investing was probably in fourth grade. I got my first passbook savings account where you go and it's a little, you can't even get them anymore.

It's like a passport for investing and you would bring them to the bank and they would click through the machine and it would tell you got an extra two cents in interest this month. And it was really exciting. then from there I got into CDs in high school. I got into money market accounts in college. I bought my first home a month after I graduated from college or a few weeks after I graduated from college and then got my first investment property one year after I got my degree. So I was kind of on the fast track of focusing on things a little bit. Wow, that's awesome. So what year was college graduation?

It was 07 for I got an M-Eng. So MNG is a great thing for people in engineering. It's one year. You get like two years of experience credit for it. So it's a little hack that you can do at the end of your four-year time. Well, for those who aren't familiar, 2007 was the best time ever to graduate from college, right? Into a super awesome job market, a super awesome real estate market. How did that go?

You bought your house right after graduating from college. Now, you said you were an engineer, so that you may have been hedged a little. bit. But what happened to you in 2007, 2008? So in 2007, I got a great job, got numerous job offers. The job market was strong for engineers when I came out. I went to a really good college, which helped me, I think, in some ways making that transition. I also was really into real estate. I was into Kiyosaki's investing mindset and all the rich dad, poor dad type things. And when I graduated, I was able to buy a house when I was unemployed from when I had been working in coffee, to when I started my job. And all I had was a letter of promise of employment. And they let me

buy a house because I hadn't made any real significant money. I was a first time home buyer with no income. So I qualified for support for buying a first time home. So I got a 100% loan to value mortgage with no income. It was one of those ninja loans you always hear about. And then there was a seller concession. So I got about $2,000. So when I bought my first home, I walked away from the closing with a check in my pocket for $2,000 as opposed to most people having to pay for their first home when they go to the closing. And in general, based on what you alluded to, that was the worst financial decision I ever made so far. I have so much anxiety listening to you say this. Like, seriously, if you could feel my heart, you'd be like, maybe you need to take a pill.

Yeah, this is absolutely terrifying. So, because we know how it ends. And, you know, it's sad that some people are pursuing versions of this today here in 2024 in certain situations. But let's go into this. Where did you buy it? How did it go? Why did this end up being the worst decision of your life? So I bought it in the suburbs outside of Baltimore. What suburb? Glenn Bernie was the town. Awesome. I grew up right nearby there. Okay. So I bought it in 2007. It was I think two or three weeks after I graduated from college and paid $212,000 for it. And then that was in June, beginning of June. In July, Bear Stearns imploded. And that was the start. I looked it up in Wikipedia. So literally within a few weeks, the entire crash had initiated and was starting

its way through the system. And when I bought, the general trend was up, up, up, up, up, up, you better get on the train now. You better get on the train now. It's going to be higher next year, that's a similar thing that we've been hearing the past few years from people. So you always need to be wary when you're hearing that because eventually it will roll over and you'll be the person who bought at the top of the market potentially. And it just went down and down and down. And here I am making starting wage or like a starting engineer's kind of salary. And I'm underwater. So one of things people don't realize with real estate is that it's all about leverage. That's where most of the income generation kind of gets amplified. And it's great if the market's

going up. If the market goes down, I was like negative infinity return on investment, right? Because I got paid to buy the house. And here I am holding something. It's like a year later, I've, I've made enough money to sort of like sell the house if I wanted to. I could pay the difference and sell the house. But the house is going down faster than I can basically bring in money in my job. And so it's this huge stall and this huge drag on getting started in a financial sense. So housing doesn't always go up and it doesn't always recover quickly. I sold that house 10 years later for 145,000. So it went from 212 down to 145 over 10 years.

So housing isn't guaranteed to go up. It's always kind of a trigger for me when I hear people that have that kind of thinking. You need to think about real estate similar to stocks and bonds and understand the risk. It is slower in the way that it moves, but there is risk there. 10 years later, and this is not even the first time I've heard that. I know lots of people who bought houses 2006, 2007, you know, as it's going up, they bought it at the peak or almost at the peak. And then years later, decades later, they're still not back up to that 2006 peak, which seems so strange given the spring 2020 run up. But yeah, there are people who have lost lots of money in the real estate market.

And that is, it's heartbreaking because, like, you need a place to live. You could always just live there. Well, how long are you going to live there until it goes back up? That doesn't mean just because you can live there that, and I'm sure I have said those exact words, but it doesn't mean that the value is there or that you're going to ever be able to make your money back. Yep. And it's not just the value of the house.

When I bought it, I thought, well, I'm going to have a roommate. And that will help me pay the price of the mortgage and all that. And my first roommate, I think I made about $1,200 a month from them, which covered maybe two-thirds of the mortgage payment that I had to make, or at least half of the mortgage payment that I had to make. When I left that house probably about seven years later, because I rented it for a little bit before I sold it, I could only get maybe $600 a month for a roommate. So not only did the value of the home go down, but the value of the rental market went down dramatically too. So if you buy a house on the rental side, and it's like, well, even if it goes down, I can float, that's not guaranteed either. you might not be able to rent it or if you want a house hack, you might not be able to house hack the way you thought you were going to make it flow. You really have to understand

it being a position where if you're going to take on the leverage financially, you can handle what the negative effects of that leverage are. Yeah. And who knows what's going to happen in the single family housing market on a go forward basis if we're going to see a decline in values, stagnation, growth, if interest rates come down for all this. But this is absolutely a risk at all times in the real estate market. And I'll call out that in the commercial market and multifamily, we're seeing a very similar vibe to what you just described here going on over the since 2021.

We know that this was not, this did not completely derail your fire journey because we know you retired from your job in about six years. What, you know, but you start in pretty bad position, right? You have a good job from a good school. Did you have student loan debt at this point in time? I had student loan debt that was held with family. So they were just charging me 0% interest. But I had a strong desire to pay it off and remove that lien from my life.

So you had some student loan debt, a very favorable interest rate. You had the house. How did you dig yourself out of this and begin the march, the study march towards fire that we know you achieved in just a couple of years here, despite this headwind? So despite this headwind, some of the things that I did was I continued to make sure that I always had a roommate that helped me pay off my primary. And then I continued saving money. So prior to buying my first home, I thought I was going to need a large down payment. So I put a lot of money in from high school when I was doing side jobs in college. I always had an internship where I was doing jobs when I was in college, actually on campus.

And so a year later, after things started to come down a little bit and it was more of a buyer's market, I was able to buy my first investment property. And that investment property did a little bit better. It kind of like broke even because 2008 still isn't great. You're still rolling over in terms of what the market. are doing. That was up in Jersey where I grew up. And that one cash flowed positively and was able to keep things flowing and start generating a little bit of cash. And just kept it going. I think it was another three years later. I got my second investment property and then found fire a few years after

that and started switching things to stop. Okay. So let's go through this thing. So a year later, you said you had a roommate paying $1,200 for that first year. Yeah. And what was your mortgage payment on that first property? I think it was about $1,000. 1800 to 2000. Okay. So they're covering a good chunk of the mortgage here, but you're probably showing at least 1,000 to 1,200 between utilities, maintenance, all that kind of stuff to live. So that's pretty light, you know, even in 2007, 2008, from an expense standpoint. You have a good income, but not a great income. You're an energy level engineer at this point, I imagine. And you decide to buy more real estate. So can you walk us through the mental state there when you just bought

at the peak? Did you realize that your house was losing a lot of value? and you still went into real estate? Or how did you make that decision psychologically in the face of what is a really tough market at that point? It's a really tough market at that point. And a lot of it was it goes back to the education that I received. I was reading things in Kiyosaki's world. And it's a very strong like get in there, play the numbers, start 10 businesses because nine of them are going to fail, keep going, keep going kind of mindset that I got from reading a lot of that material.

And so to me, getting into the market was more important than trying to. to say time the market or wait for the crash to cool off. I also saw a change. I've been waiting, I've been watching this for a few years and it was constantly a seller's market, which is not great if you want to get into investing. And finally, it's like, oh, it's my opportunity to get in. I also had family that invested in real estate who were then mentors for me back where I grew up that were helping me find deals and find things that work out well and would cash flow properly. So when something came up that was at the right price point and cash flowed and it was time to get this money out the sidelines I was all in, I also grew up in a family that didn't trust the stock market. So I was fighting some of those money psychology things that were happening.

And then the last thing that we might talk about a little bit later more is I was really focused on investments that I could control. So I wanted to get in on things like real estate where I could add sweat equity. I could modify a property in some way. I could do something that would increase the value or purchase something that I could really make a difference that I would have a difficult time doing in a stock market environment. Stay tuned for more on how Ryan adjusted his portfolio after a quick break. 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

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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, 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 jump back in.

Okay, I think that's really smart. You had people in your life who had real estate so they could help mentor you. But then you mentioned adjusting to stocks, even though people, people in your life were not stock fans. Why did you adjust your strategy instead of just continuing down the path with real estate? So there's a couple things that come into play there. And I think the overarching one for me is not, people might listen to this story and think like, oh, he had a bad time in real estate. So he exited and pulled the shoot and got out of real estate. But what it really comes down to for me is that there's control and there's freedom and it kind of exists along a spectrum. And if you want a lot of control in your investments, say like in real estate,

then you have to give up a lot of freedom and you always have to be there sort of managing a business and it's not as passive as a lot of the stuff I was reading back then would suggest it was. Whereas on the index fund side of the house, you have things that provide a tremendous amount of freedom because you can just ignore them for decades at a time and they love it. And you have to give up all control to do that. You have to be willing to say, I'm not going to be able to influence what I'm investing in because it's an index. I'm not going to be able to influence what the companies do. I'm not going to be able to add value or sweat equity or anything. I'm just going to let it ride. And as I evolved in my career, I realized that as an engineer in the career trajectory that

I was on, I didn't have energy at the end of my day to do real estate. It wasn't really an option for me. I wanted to do it, but it wasn't happening. And so that was part of the problem. My Investment world was up in Jersey about five hours away from where I was living. That was part of the problem. And I was an executor of an estate. And I dealt with somebody's end of life challenges as the executor of their estate. And that was a really, really eye-opening moment. I think that there are a lot of people who are doing a lot of hands-on investing who haven't thought about what happens if something happens to them. They haven't thought about their spouse. They haven't maybe thought about their kids. If you built a real estate empire with 20 doors or 30 doors and you have a spouse that

has zero interest in real estate and something happens to you, what happens to that spouse? I'll tell you what happens that they call them motivated sellers and that's who you're potentially buying the houses from to begin with. And they're going to lose a huge part of their portfolio and not know how to run all the pieces. It's really challenging. So when I see people like Carl and Mindy that are both interested in it and it works, that's great. But I also saw a lot of pressure that I was putting on family members by having this interest. And by moving to stocks, I was able to not only acquire more freedom for myself, but more freedom for them and be in a situation where I felt like it would be resilient to something happening to me. Okay.

That is brilliant. You're not thinking about next week or next decade. You're thinking about way into the future and your partner. Were you married at the time? At the time that I decided to transition out, I was married. Okay. So you're thinking about how your investments are going to affect your family. And like after you're gone, that's brilliant.

I haven't really thought about that. I've got a little bit of real estate and a lot of stocks. And I haven't really thought about what happens when both of us are gone. I love that you're thinking so far ahead. Yeah. I think that's a great point. And I think what's interesting is that you made this decision in like 2009, 2010, to switch over to stocks. Is that right? No. So I discovered FI in 2016 and I made the decision to switch over

in maybe 2017 and had sold all my properties by 2019. Got it. Okay. If you're a student of history, you know that I now have the worst timing in real estate possible. I love it because I think your timing and a lot of these things has been absolutely awful and you still fired. Everything boomed in the last couple of years. I don't know if that's real growth or inflation or whatever, but I love the fact that you didn't have good timing at all in your portfolio and you still fired. And so that brings me to my other question here is, you know, I think you're a very wise investor. We're going to learn a lot from you on this podcast. But it wasn't your investing that drove the FI, I don't think, right?

It was something else. It was this gap between income and expenses, perhaps. Could you talk about that a little bit or what it was that allowed you fundamentally to achieve FI in six years? So two things. One, as I said in my opening, I was interested in investment. in a very young age. So anything, any positive decision I could have made was amplified. We talked about some of the negative decisions I made being amplified, but a lot of positive decisions got amplified too. Digging into that, did you have a net worth that was considerable outside of this

house by the time you graduated college? When I graduated college, I think I had like 20 grand. Okay. So you're, you say you invested early in life, you invested early in life after graduating from college, which amplified your success. Yes. I lived well below the means of my peer. and even when we got married, we're probably saving 60 to 80% of our income per year once we realized what FI was doing for us. We were naturally saving quite a bit. And then once we realized how the math works and that freedom was possible a lot earlier than people are used to thinking about in life, we were saving in the 60 to 80% range per year. And that's what just drove us straight off the cliff. Okay, great. So let's fast forward to 2016. What is your position? look like and what changes about the way you approach things to make that the beginning of your journey to fire as you consider it? So now we're renting and we're living in a place that works for

both of our jobs. We've gotten married and we have three rental properties and she and I are making good money and putting a lot of that money aside every year. And now I start digging into fire and seeing how passive index fund investing makes sense from a mathematical sense. and from a historical analysis perspective and how it can provide effectively steady income from a very unsteady investment. And all of the tax benefits that come from going that avenue. I learned all about the real estate tax benefits. And I was taking all this after tax money and then trying to set it aside to invest in the real estate.

And now I saw opportunities, especially as people that were high earners, to take advantage of tax benefits more strongly on the career side of things and the stock side of things. So we just started doing everything that we could to take advantage of that and then started dialing our spending down and down and down and exploring what was good and what was not good. Did you have to convince your partner to join you on this Phi journey? So I had to convince my partner to join me on the Phi journey and we're still figuring out what enough looks like for us. I think that people evolve over their time in the world, and I have a talk on this on YouTube

on the Camp Five channel. And so that's also part of the mix as people evolve, enough changes and the fine number changes. Ah, the phi number changes. This is interesting because the people that I have spoken with about their fine number based on the 4% rule is pretty solid. This is my number, and they don't take into any consideration that it might change. change. How has your FI number changed as you've gone through the journey? So one of the things that's interesting is a lot of people in life in FI are very similar in the way that they view money and the way that they save money. And my relationship is different and that my

wife and I, we value different things. And so we've been spending the last about eight years exploring spending more on something, spending less on some things. Does it work for us? Does it align with our values? Is this a good optimal set point? And we've had wildly different spending over the years based on trying to explore all those different avenues. And so we're still, every year we get a little closer to understanding what it is that we value. And we keep finding new things that we value. But it's one of those things where the fine number moves a lot depending on what you want. And we don't have kids that hasn't been in the cards for us, unfortunately, but that's another wild card that can get put into the number.

And it's interesting living a life where you're fire, but you don't, if somebody said, like, on the spot, what's your fire number? I wouldn't be able to tell you right now what my fire number is. I just know financially that the income that we have coming in from all the different sources makes sense for where we're at. And it supports my lifestyle and we feel great about it. But we also acknowledge that maybe that lifestyle changes in the future. And it's okay because life's a journey.

Well, let's talk about freedom here as well because I have found, again, you're a rule breaker in my experience. So if we talk to a lot of people in the financial independence world, and I can say that I've met almost nobody. I've met nobody that cleanly fits the bill of a 4% rule investor that is only in stocks index funds and has no other assets. outside of, you know, no emergency reserve, no side projects, no side hustle income, and feels free. Every single person who has retired with a stock portfolio has not done so at the 4% rule. They have all gone way past it, 3%, 2% rule portfolios, huge cash positions, ACEs in the whole like side hustles, small businesses, they stay working, they do all those types of things. So while I completely get the argument for a passive stock index fund, I have yet to

meet that person who has actually done it at that level. Are you that person? Do you have the 4% rule portfolio and nothing else? And it's truly a 4% rule that allows you to have that freedom. Or is there some other component to your portfolio that enables you to feel free? I would say there's other components, but it's not the level that you're thinking of. So I looked at the numbers in December of 2021 and then and then committing to fire in July of 2022. And the market went down quite a bit in that time frame. And then we don't know exactly what enough looks like for us necessarily. We don't have it locked down.

It isn't like we have 20 or 30 percent more than we could ever dream of needing. So that's not the issue. But there's a lot that we have that are assets that support us. A huge one is my wife doesn't want to retire yet. She really loves her career and she does it part time on the side. So there's some income that comes in that sort of makes things float and work. And we talked about that. Carl calls this Wi-Fi.

Mindy knows all about it. And I was hung up about it because I wanted us to fight together so that it was equal and we would have the freedom together. And she saw what I was going through and how hard it was for me to continue working. and just sat me down one day and says, I want you to do this. I want you to make this change in your life and make the leap. And so we have that. And I'm an amazing house hubby. She'll tell you, like, I cook, I clean, I do all the things.

She's got a personal snowboard trainer whenever she wants a personal snowboard trainer. And she really supports me a tremendous amount in that she's continuing to generate a small amount of income. but she works maybe 30 hours a week for six months a year kind of thing. So she has a tremendous amount of freedom to go adventure with me and do things. But until she has accomplished the goals she set for herself in her career, she doesn't want to walk away from that. And it gives us the freedom to continue the conversation about what does enough look like for us. But in terms of our portfolio, we're in that like 100% equity kind of thing.

When I run all the numbers and we are so young, I pulled the plug when I was 30, and I'm 40 now. And when you look out 50, 60 years in the future, it's really hard to disagree with stocks in the way that they grow over time. So we are that we are that couple that you're looking for in terms of what the investment portfolio looks like. And I can tell you, say in 2020 when we had the crash in I think March it was around COVID and it dropped tremendously and then kind of went right back up again.

We were like eating popcorn and watching it and just like, this is kind of fascinating. Like, look at this crazy event. And my confidence in math coming from an engineering background made it so that that wasn't a crazy, like, scary thing for us. We just rode right through it. And my wife understands and believes in me enough with the way I look at the numbers that it's easy for her to do things too and not freak out about having a portfolio like that. So you said several things that I want to circle back to. But I want to ask, does your wife ever for lack of a better word, resent you not working? Or does she understand that she could quit and she just chooses to continue working? Yeah, I think a lot of people, this is a question on their mind,

because it feels like an unfair situation. And in the year or so leading up to me, actually, point in the plug, and especially in the last few months, she kept making it clear to me that her biggest fear was that I wouldn't do it, that I would chicken. out and do one more year syndrome and I wouldn't make the leap because she could see living with me how much and how badly I wanted to to make the leap into fire. And as somebody who could live a really, really frugal life and wanted to pull those kind of levers to make it happen sooner, that could also put stress on our relationship. And so in her mind, this is the best way to solve a problem. She gets to continue in the career that she's excited about. I get to have the

freedom that I want. And so to her continuing to work makes more of those things possible. This really mirrors Carl and my story as well because he had a job that just crushed his soul. And I'm putting words in your mouth, but I can hear you weren't very happy at your job. And he was miserable at his job. And then I got this job. And we worked, we both worked for a year. And I was like, somebody has to quit and it's not going to be me. You hate your job. I love my job. We don't work well as a two working parent household. So somebody's got to go and it's going to be you. And he did finally quit and it has been just this huge lift off his shoulders. And then I still get to talk about real estate and money all the time. So I'm super happy. And I'm much nicer to be

around. She'll tell you that I'm a much nicer person to be around and you probably got the same experience from Carl. Yes, exactly. So people talk about lifestyle creep and that you could just adjust your living standard back if she left is really cool. Did you ever feel like you were saving too much? Yeah. So there were times when we had to explore and see. So as I mentioned, a lot of people have similar kind of saving mindsets when you hear a lot of the examples or you read the books and the couple talks about, oh, we just both save. That isn't always true in the world. There are people that are spenders and savers. And so the probability that both of you are one or the other isn't necessarily 100%. And for us, we had to explore different things. Some of the things that we tried

along the way that didn't work as well for us, we went down to one car for a few years. And we tried and explored that. And from an engineering perspective, we don't really need more than one car. We were both working really close to where we live and we don't do a lot of things that required us to be at the same time. But it created enough, enough friction in the relationship and this problem to constantly renegotiate, like, who has the car when? That it wasn't worth it for us. And so spending the extra money on the second car, even if it sits there, one car is always kind of sitting there at all times, was worth it. Another one we tried was a smaller, we've moved to some smaller places. we had a one bedroom with a den for a while or a loft and it didn't provide privacy to the second

bedroom but we don't get a lot of visitors so it seemed like an efficient way to save several hundred dollars a month and that didn't pan out that great because it made it even harder for people to visit and we want to make it as easy as possible for people to visit us you know we've done a number of things over the years and we found things that we really liked and we've slowly dialed in what we want and this is a huge hack in my opinion a lot of of people talk about buying their house and getting started early. But renting when you're trying to figure out what enough looks like in housing and trying out different things for yourself or for your family is a huge way to rapidly figure out what is the right amount of spending and the right

amount of benefit from your housing. I love it. I think that renting is often a better decision than buying unless you're sure you're going to be living in a place for at least seven, if not 10 plus years. And that number may be higher now with the higher interest rate environment. But if I zoom out, you know, kind of listening to your story, which is just awesome here, I see a story of a 15-year journey to financial independence that really accelerated with intentionality starting in 2017 that has been grounded the entire time in frugality, relatively high-income generation, and a grind to accumulate over much. of that time period. Again, getting a little bit more intentional with the FI component starting in 2017,

in 2017 here. And I also think, you know, I think about, okay, that's the flow. That's how wealth flowed into the situation. The investing returns probably weren't that great over this, but that hustle is what really got you to this point. And what I'm really interested in right now, to wrap up and conclude our conversation over the next few minutes, is the psychology around your current portfolio allocation. Because I think, and I want to challenge you here and you tell me if I'm wrong, but I think that it's because your wife still works, that you feel comfortable with this 100% stock's highly aggressive portfolio allocation.

And that I wonder, I would challenge it, if she stopped tomorrow, would you feel comfortable with 100% stock allocation or would something change? Another income stream need to be developed, a larger cash position, all different type of investment, more bonds, whatever. So how close am I dissecting where we are today? And is that actually a challenge that you deal with if she stopped working? It's not. I'm really comfortable with 100% stocks. The ride hasn't, we haven't lost any sleepless nights and all the time that we've been invested in stocks. So a lot of people talk about that. They want something to smooth out the ride. They use bonds or you use income. Either way, it's kind of like having a guaranteed income to do it. But

that isn't something that has been a challenge for us. So I don't know if it's our risk tolerance or if it's just, you know, we believe in the numbers or what it is. But that has been an easy decision for us. When I started in fire, I did all this analysis and had money distributed in certain percentages to emerging markets and bonds and kind of like had a portfolio in that sense.

And over time, I've just said, just put it all basically to VTSAX as the JL Collins kind of view of the world and let it ride and just acknowledge that. The part that probably gives me some sanity is not the fact that my wife is working. It's the fact that we're 40 years old. We have so much time in our lives

and so much capability right now that if something bad happened, we could figure it out. There's like that the future self is what I'm believing in to make me have confidence to sort of swing for the fences on the equity side of that. of the world. It's not the income so much from my wife. One other component to that question would be the relative size of the current portfolio to your spending. Is it more than the 4% rule right now in a practical sense? We're probably around the 4% rule because I don't personally prescribe

exactly to the 4% rule. I think 3.5% is actually, even though I'm risk tolerant, I think 3.5% is actually a more accurate number when you're looking in 50, 60 years into the future. And you have to leave a little bit there to pay taxes along the way too. So I like to run my numbers with three and a quarter percent in order to account for those two things. And at three and a quarter percent, or I think somewhere in like the 80, 90 percent of spending covered sort of number, it has been changing a lot recently and for the better. Maybe it'll stay there. Maybe it won't. But that gives you an idea of how much we're relying on the income in order to sort of float the other pieces. But when you're still relying on some income, you have to generate enough in the investments to cover it long terms.

We have to take this one final break, but more from Ryan and his financial journey right after this. 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,

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ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data. And all services are handled in-house because privacy by default is their pledge to all customers. Visit Northwest Registeredagent.com slash money-free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free. Welcome back to the show. Now that you've been retired for, is it a year or is it two years? Two years. Two years. How is life after retirement different than what you thought it was going to be? I think one of the biggest differences, there's a book that some people in the community have talked about called the molecule of more that breaks down the effects of dopamine versus actual enjoyment. And when I dreamt about being retired, I had all these dreams and aspirations like, I'm going to go climb all the 14ers and I'm going to go do all these big amazing things.

And when I actually got the time freedom, it was these negative time moments in my life that I really valued the most. It was the ability to wake up in the morning and have nothing on my calendar, nothing on my to-do list, and a completely free day to decide what is it I want to do today? How am I going to live my life? And it might just be a walk in the neighborhood and then maybe spending some time with friends because I got a random call. And that was an amazing day. Those are some of like the best days. So actually enjoying life is a lot less glamorous than you want to believe from the internet. And you can have an amazing life with like very simple, very simple things in your day.

I love that. So what are your plans today or lack of plans today? What will today look like? I don't even ask the right question because I'm, you know, 40 hours of meetings mindset right now. What does what does Tuesday look like for you? So I had this podcast scheduled, so you ruined the spontaneity of my day, putting something on my calendar. So today's actually really interesting. Last week, a close family member of mine ended up in the hospital and they've been there for the past week.

And they're doing great, but they won't let them go home because the numbers are bad. And so I've been very focused on that over the past few days. And so today is very focused on getting myself ready because I've been offering with the free time I had in my life to just go on out there and help my family. And they finally said a day or two ago that, yeah, come on out and help us because this person is amazing. They do lots of stuff for lots of people and everybody's struggling to backfill the whole. So right now, I'm doing whatever I can think of to help my wife because I'm probably going to be gone for the next week or two visiting my family. And I'm excited about being able to go there and have that freedom to do that and not have to worry about where it works at or if my work will let me disappear in short notice or if I have enough vacation saved up, I can just go do it. I just need to buy a ticket. I already got the ticket and go. I can't believe you didn't say any video games. Like that would be, you know, half of the day there for me. So in my talk, I talk about killing your defrag demons and how you can fill up a lot of your time with things like that that give you flow and are almost gamified in a lot of ways. And I actually, when I found fire in 2016, I quit video games because I realized that almost all the free time and energy that I had, a lot of times would go and get poured into that.

And I didn't want that to become my full-time life when I fired. So that was one of the first big changes that happened. How about your health? Has that improved since you fired? It's improved dramatically. So not only was I really struggled. the way that Mindy was talking about Carl struggling. So she guessed correctly.

But I actually was having a lot of health issues related to stress based on the job environment that I was in. And it was really bad probably around 2015, 2016. I can relate to a lot of the stressors that you just discussed there. And my job. I love the job. I don't want to, you know, but like it is a crazy grind every day dealing with a tremendous amount of people and stakeholders across a ton of different ever-changing

landscape of problems here. Same but different situations there. And it's awesome to hear about the healing power of two years of just unwinding from that and having that ability to do nothing, to have a day that has no calendar events on it and kind of just make it your own. So, but the price of getting to that point, I guess that that's the next question I'd ask. is was there a way to get here to where you are without going through that pain? Or is that the price of admission, do you think? It's not the price of admission. People don't have to go through the pain that I was going through in my work environment

to achieve fire. That's not necessary at all from what I've seen. And I know people that don't seem to work much at all and they seem to make good money. They just are willing to leave when the situation isn't working for them. And I was very loyal. And so for people who are very loyal, I think this is sort of a lot of what the narrative becomes. But for people who are not loyal, then they can find a different path. The other thing that's really fascinating with stress is when I got into that last six months,

and I knew that I was leaving, and I knew that I didn't have to stay anymore, the stress started coming off then. Yeah, there was all the stuff that was happening, but it was like somebody had opened the door to the prison, and I was still in the cage, but the door was open. And you know what, now that the door's open and I can see outside, it's not as bad to be in this cage as it used to be. And that's part of why I think people get towards that end of their fire journey and decide to wait another year or another two years is that once you don't have to be at work and you have the freedom to leave, that in and of its way can relieve enough of the stress that you don't necessarily feel like you need to leave. Thank you for this wonderful discussion here and the

philosophy, sharing your story, the emotional side of things, the day-to-day life that you have now as an early retiree, the wonderful opportunity is that gives you, is there anything else you want to leave us with before we close out? I think I just want to go back to impermanence one more time. A lot of people, when they think about fire, they're thinking about it as sort of a singular event. And for them, it's all about what's my number, what is enough, and then I'm done for the rest of my life. And there's even this whole internet judgment world. It's seems. about people not wanting them to ever change that plan in the future, which is unfortunate because people change. If you think back 20 years of who you, to who you were back then,

you're a lot different today than you were back then. And I'm hoping that fire will continue to evolve to acknowledge this impermanence in our lives and let people find their way. And things like slow-fying, baristify and coast-fi or doing that for people. But what is the freedom you want? What is the happiness you want? What is the lifestyle design that you want? How do you get there today in the near term. And don't feel like once you've made the jump or made the leap, you can't change or you have to follow the plan exactly to be a proof point that the plan is feasible and 4% works. I like what you're saying. And you're absolutely right. I love that perspective. Thank you for sharing that. And I love this whole story. Retirement is absolutely attainable.

Wi-Fi is attainable when you both agree that she wants to work and he doesn't. We haven't come up the cutesy one for when he's working and she's not. Maybe we'll figure that one out later. But my husband's not going back to work, so it's not going to be me figuring it out. Ryan, is there any place online that people can find you? No, and I kind of love that about my life. Perfect. Well then, Ryan, let me say thank you so much for your time today. I will give people a place to find you online. The Camp Fi YouTube channel. If you go in there, to videos and you select by most popular, Ryan is the first video because his video is so flip-flopping amazing. So if you have not watched this video, go to YouTube.com slash

campfire and check it out. It is a fantastic video that covers all manner of things that we did not get to during this chat with Ryan. But Ryan, I know we're going to have you back. All right. Scotch, we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. Of course, he is the Scott. Trench and I am Mindy Jensen saying farewell Snowbell. Bigger Pockets Money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Knudson, copywriting by Calico Content. Post production by Exodus Media and Chris Micken.

Thanks for listening.