BiggerPockets Money Podcast - 561: What Happens if High Expenses Extinguish Your FIRE?

Episode Date: September 6, 2024

You did it; you achieved FIRE! After over a decade of hard work, you’ve reached financial independence and can retire early. You’re making more money than you spend from passive income, work-optional, and life is good. But your dreams are starting to change. Maybe you want to spend more on experiences, build your dream house, or move to a higher-cost-of-living area. Now, your expenses are starting to creep up, and your FIRE is about to burn out. What do you do, and is it wrong to return to work? Caitlin Muldoon has had to ask herself these questions. After grinding for fifteen years, she finally reached her FIRE goal—$10,000 per month in passive income. In her current lifestyle, she’s saving money every month, but as she moves into her dream house and expenses start to rise, her passive income may not be enough. Does this mean that Caitlin is no longer financially independent?  Today, Caitlin is sharing her full FIRE story with us. How she went from one house hack and a HELOC to a six-figure generating real estate portfolio, the struggles she had with leaving her job, realizing that her expenses would jump after her husband quit, and why retiring early isn’t always the end goal. Support today’s show sponsor, BAM Capital, your path to generational wealth with premier real estate investment opportunities!  In This Episode We Cover What to do if rising living expenses are about to extinguish your FIRE Turning your primary residence into a passive income-generating portfolio by using HELOCs How intentionally saving money can massively propel your wealth and get you to FIRE much sooner Why you DON’T need to quit your job, even after you reach your FIRE number Advice for anyone who wants to build a rental property portfolio with today’s high interest rates 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 BiggerPockets Forums Market Finder Rising Femme Wealth See Mindy and Scott at BPCON2024 in Cancun! Do You Know Your FIRE Number? Here’s What That Means 00:00 intro 01:56 Starting Salary and First Home 04:01 Rental Investing and Finding FIRE 07:13 Thoughts of Quitting 08:05 Real Estate Portfolio Timeline 13:58 Savings Rate and Reinvesting 15:47 Using HELOC to Buy Rentals 20:31 Achieving FIRE, But... 24:07 Rising Lifestyle Expenses? 31:55 Advice for FIRE 36:32 Connect with Caitlin! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-561 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

If you think you've achieved financial independence and have left your W-2, but then your lifestyle and expenses change, does that mean that you've really fired? We're going to find out in today's episode. Hello, hello, hello, and welcome to the Bigger Pockets Money podcast. My name is Mindy. And with me, as always, is my still working his W-2 because he likes it, co-hosts Scott Trench. Oh, dang, Mindy, I would come up with a fun pun for that type of intro, but it's just too taxing. to come up with one on that particular item there. All right, today we're going to discuss how Caitlin built, I think, a fairly traditional portfolio in real estate, very aggressive, very smart approach.

We're going to dive into those details for sure and walk through. But the story kind of hinges around buying a lot of real estate in 2016, 2017, 2018, having a great run, making smart decisions, a lot of things that maybe a lot of bigger pockets folks did in the 20 teens. But then we're going to talk about how she fired and, 2021, unfired, shortly thereafter, moved her family to a high cost of living area, and are we still fire? How do we think about a portfolio that got there, that got the job done in the last couple of years when we want more today? And I think it's a really interesting philosophical

discussion. And I think today's episode is going to go through all the things, the very beginning of the journey, the grind, the buildup, the achievement of fire, and the burning question that I think a lot of people have as they're pursuing fires. Will it be enough? What happens if I want more? What happens if my expenses go up? So really fantastic guest today. You're going to love it. All right. Today's show is going to be sponsored by Bam Capital, your path to generational wealth with premier real estate opportunities. See why over 1,000 investors have invested with Bamcapital at BiggerPockets.com slash bam. That's biggerpockets.com slash BAM. All right, everybody, we have a special offer for BP money listeners because we'd love to meet as many of you as possible at the Bigger Pockets Conference.

So for $1,500, you and a guest can attend the 2024 conference in Cancun, Mexico, this October, at the all-inclusive five-star resort of Moon Palace. That's three all-inclusive nights, October 6th, 7th, and 8th, and full conference access for you and a guest. And the ticket also comes with a one-hour private call with me and or Mindy before or after the event. This call can be about anything you want, including a for entertainment purposes only, of course, private finance Friday. This offer is first come first serve and will be given to the first 10 BP money listeners. To receive the offer, please email our events director, Alex, at conference at biggerpockets.com. And let her know you heard about the offer on BP money. Now let's get into the show. Caitlin, thanks so much for joining us today.

Well, Mindy and Scott, I've learned from both of you since early on in my real estate investing career. So it just feels great to be here. Oh, I love to hear that. Well, let's go back to the beginning. What did your life look like before you discovered real estate? What was your career and what was your financial situation? Yeah, early on in my career, I had an entry-level job. I was working at a tech consulting company. And I, you know, for a 23-year-old, I was making 40K a year, which was certainly not bad, but certainly it was an entry-level salary for back in 2007. And I was in a good position.

I had a couple of things going for me. One was that I had no student debt. So that put me in a great financial position. And number two is that I had really good savings from work that I had done in college. So by the time that I had graduated and eventually got a job, I had a good steady paycheck and I also had a pretty decent amount of savings. And those were two motivators for me, I think, to push on with what was my front and center financial goal at the time, which was to buy a home. So I eventually practiced some house hacking even before I knew what house hacking was. This was in 2008 when I was in the thick of my home buying process.

So the economy wasn't great. And I had a lot of people telling me you should not be buying a home. What if you lose your job and you're not going to pay your mortgage? Little did I know. I mean, that decision to buy a home back when I was in my 20s really just set the groundwork for a later real estate investing career. I mean, I was able to build equity in a very much appreciating market of Denver. And that just really set me up well for real estate investing down the road. Hindsight, really good timing.

We had someone on recently who bought in 2007 right before right at the very tip of the peak. And that really set them back for many years on this. But how do things progress? And when does your journey to fire begin? Yeah. So things started to progress not right away. You know, like I mentioned, I was a homeowner and I was just really happy to be living in a home that I owned and really I wasn't paying more for my mortgage than I had been for rent

prior in Denver. So for several years, I was living in this home. I later met my boyfriend, who was now my husband, and he and I were talking about our dreams to live a little bit closer into the mountains outside of Denver. And eventually we were able to swing it so that we could come up with money for a down payment for a home outside of Denver where I didn't have to sell this home that I already owned in Denver. And that's when I started to kind of daydream about what would it look like if I could be a landlord? What are people paying for rent in my neighborhood? So I went to trusteele Craigslist at the time that was, there was no Zillow for rental markets back then. And I was shocked that in my neighborhood, people were paying well more than what my

mortgage was. And I wasn't very calculated at that time. I was like, I just want to cover the mortgage. you know, and I look back now and kind of cringe at what I did as a very first time landlord, but I just was able to tell, you know, based on those numbers, I can make this work and decided to make that home a rental. And we waited at least a year of getting, you know, checks in the mail that were proving to us that this really could be a business when we decided, let's really make this a financial goal. So up until this point, you know, I hadn't been thinking about real estate investing. My financial goals beyond, you know, just having owned this home was I'll just keep saving for retirement. And then when it became clear that this rental was actually making an income, that's when my husband and I got motivated to, you know, turn this into more of a rental business. So we started to slowly get serious about it.

But, you know, there was nothing that really turned the table for us at that point in time that made us accelerate growing our portfolio. So we started to do it slowly and we started to do a lot of research. And I was on bigger pockets all the time. And I was trying to find more about real estate investing strategy and tax strategy. And that's when I first heard about the fire movement. So what really attracted to me, me to the fire movement, was the idea of free. and not being just tied down to a particular job until I was in my 60s. So I was less attracted to the like extreme frugality and, you know, aggressively investing in the stock market to to hit my financial freedom number.

And I was more attracted to this idea of maybe I can generate some passive income to help me break away from, you know, my dependency on a job until I'm 65. How was your job going at this time? We alluded to you leaving employment. Were you becoming disenfranchised with your job or were you still like enjoying it? I was still enjoying the work that I did. I really enjoyed the people whom I worked with. But you know what was happening is eventually my husband and I were living this this life on the weekends that we just really started to love. We were adventuring off in the mountains of Colorado every single weekend doing what felt like really fun and healthy activities. We were meeting up with friends.

And it just felt like this is the life that we want to live. So this is 2021, right, that you're having this discussion? So this evolution started to happen really back in like 2015. 2021 is when I actually left my job. I would love to dig a little bit more into kind of the timeline and numbers here. Could you give me a couple of milestones? We bought the first property in 2008. What does your position look like in 2015 when you start to get serious about fire?

And what does it look like in 2021 when you fire? In 2013 is when my now husband and I bought a home together away from that first home. So that's when I made that first home of mine into a rental. So 2013 is when I say the real estate investing career. really started. And that felt more like a trial. You know, let's just see what happens here. We hadn't bought that first home with the mindset that we were going to rent it out. I didn't have any practice doing any sort of underwriting on that first property. So at that point, it was just, let's see if we can make some money while renting this out, and it does well. So we took at least a year to test that

out. And after that first year, we decided this is going to work. Let's do it again. So, So we were trying to scrape up enough money for a down payment on another property in Denver. Ironically, we felt like in 2014, 2015, the market in Denver was just like too expensive for us because that's how it always feels, right? I'm sure that anybody listening right now is wishing that they had the opportunity to buy 10 properties in 2015 in Denver. But we decided, okay, we're really going to try and build up enough money for another down payment. it took us a while to be able to do that in Colorado, but we did. We bought another single family home

in Colorado in 2015. So that was the first property that we bought with the intention. We're going to rent this out. So we ran the numbers on it. And then again, it was taking a really long time for us to try and save up again for another down payment. And because we felt the market was so expensive, that's when we decided let's invest out of state and see if we can accelerate this. I also started to do a lot of work to try and find the right team in Grand Rapids, starting with an agent who he felt like really could think like an investor, who we could really trust and who understood that we were out of state and could help us find properties out of state. And I would say that the biggest accelerator to our entire real estate portfolio was when we decided to use a HELOC to start being able to fund down payments for. our new properties. So I know sometimes this is like a little bit of a controversial aspect of talking about real estate investing because we knew that we were going to be extremely leveraged. We were taking on additional risk. But we were also underwriting all of our properties to

ensure that we would have enough cash flow left over from all of the expenses from the home to also be able to cover the loan pay down of our HELOC. So not just. just the debt service of that particular property. And we built that into our underwriting. And our process became that we would fund the down payment with our HELOC. And then we would just focus like crazy to pay that HELOC back down. And as soon as we did that, we were already looking for the next property. So, you know, I would look back and say that was the time frame back. This was like 2016, 2017, where we used leverage to really accelerate our portfolio and that and that just like completely changed the pace. Our timeline kind of looked like it was growing like crazy,

2016, 2017, 2018. And then we were sort of switching things around, upgrading, consolidating markets in 2018, 19. And then into 2020, we did happen to start slowing down. I mean, it helped that the market was also slowing down a little bit, but we had gotten to a point where we felt like our portfolio was really stabilized. That's actually when we hit our financial freedom number, and that's when we also started to look into other investment strategies as well. Stay tuned for more on how Caitlin achieved FI with a small real estate portfolio after a quick break. In the meantime, if you're looking to invest out of state just like Caitlin did, starting with a real estate agent is vital. You can go to biggerpockets.com slash agent finder to find a great investor-friendly agent in the area you're looking at. Tax season is one of the only times all year when most people actually look at their full financial picture,

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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, Welcome back to the Bigger P. Money podcast. Let's jump in. So I want to just react to a couple of things here. First, I wish we had all the things we have now at Bicker Pockets back when you were doing this because like we've built a bunch of things like I'm going to plug very hard, a couple of things here, like the market finder, which talks about affordability, rent to price ratio, net and bound migration, those types of things in various markets. And I totally like the approach that you took there, right? You should,

I wouldn't go for the best cash flow market in the country, even if I want a cash flow. I'd go for the best cash flow market that was nearby. Or I had some tie to, right? I think that's a really good way to reframe that to a large degree, because I think there is a really power in there. We have the deal finder to help you find all the cash flow. We've got the agent finder and the lender finder and the property manager finder. Like all of those things, I wish they were there when you got started, as I'm sure that they would have been very helpful. But you know what, Scott, they were just they weren't like called those things. It's kind of, it was a great old school, like, tool that we could still use that, where we would just ask the questions on these forums

and people would answer. And now it's great because people can just go and use those specific tools. But I'm so grateful that we had the Bigger Pockets community to just answer some of our questions about, like, hey, who knows a great investor-minded agent in the Grand Rapids market. We'll love it. And then, you know, going back to the here, HILOC component here. I want to first ask before I react to the HILOC, what was your relative income like at this point in time? If you're not comfortable sharing the specifics of the income, can you just give us like a range? Like was it was it high, low, medium in order for you to be able to fuel this investing? Totally. Our combined income at the time was about 170K. And that,

you know, plus or minus based on the range of years that we were working on this strategy. So not like, you know, we weren't like really particularly high earners, but we were in a good position to, and we both had great credit. And at this point, we had a lot of equity on our primary home. And that, I think, is what really helped us to get a great he lock. Awesome. And okay. So we had, we had a high, relative, okay income, pretty good income here with middle, upper middle class incomes each combined to generate a good amount of cash. What would you say you were accumulating that was investable on an annual basis?

So our savings rate, which was always once we started to invest, it was kind of hard to calculate because we threw all of our savings. At one point, we just said, we're going to throw all of our savings back into our rental business. And that was after, you know, we both were contributing to 401K match, contributing to HSA. So we were doing kind of the traditional steps for contributing to certain retirement, vehicles. And then after that, we had a pretty aggressive savings rate of like, it was between like 8 and 10K a month. Eight and 10K a month. So we're saving 100, 100 grand on 170,000 combined income. So you're not living large during this period at all. Right. Let's talk about the HELOC here for a second.

I am a, I think you phrased it the way you did because I'm such a bulldog about not using a HELOC to purchase investment property for most folks, right? And my rationale for not using a HELOC and a down payment is the, is it just the destruction of cash flow until the HELOC is paid back. So, for example, a $60,000 helock is going to be $1,000 a month to repay over the next five years, 60 months, before we even talk about interest. Not many rental properties with a $60,000 down payment from a HELOC are going to. to produce enough cash flow to offset that. So while you can get an IRR on it, the property is suck in cash out of your life for the duration of that HELOC. You used a HELOC here. What was the size of

a HELOC for various of these purchases? We were not using the size of our HELOC for sure. We were using a pretty small percentage of it. But we were using down payments in the amount of 20 up to 50K when we bought our most expensive property with it. in that market. So a relatively small amount, depending on what you're used to paying for a property. But I couldn't agree with you more when it comes to, you know, if you're doing the underwriting, I think a HELOC, especially today. Look, I mean, this was back when HELOC rates were pretty low, like sub four and then hovering on four. And so that's when we felt like it made sense rather than take money out of the market, you know, rather than disrupt any other savings rate, you know,

having a he lock where we're paying 4% interest is going to make more sense for us to try and come up with this down payment. And then it became our first and foremost goal to just pay that he lock down. So I would agree with you, Scott, that you have to be really diligent that these numbers have to make sense. And I, you know, it became harder and harder for us to keep making those numbers make sense with a he lock when rates started to rise and then when cash flow margins started to shrink anyway. But I will also talk about another benefit that we had. And you can apply this. This doesn't just have to be a helock goal.

But we started creating these goals in our head of we just bought this house. We used a $20,000 down payment from our helock. We have to pay this helic down ASAP. And it literally became like an everyday thing, should I pay for this or should I put this into the HELOC? And having that short-term goal was a complete game changer for us. I mean, I think that really helped us live in a way that we were trying to, you know, not have lifestyle creep. And it made us feel like it was hiding our income too, because any extra bit of income that we had that we could save, we put right down into our HELOC. So we also weren't just dependent.

on the property, although we were underwriting to make sure that the property could cover this HELOC down payment, we were also supplementing that pay down with our own W-2 income just to make sure that we could pay that down quicker and just keep using that as a revolving door. Got it. Yeah. And the reason I wanted to cover this is the rule, the thing that I talked about there, that, like, let's say that your position was you're saving $1,000 a month, right? And the HELOC is the only way you're going to get into this rental property. Okay. Well, then it becomes a huge burden. You have one property and this is a real major pain in your life and it's going to take you a year or two to pay off the HELOC, right? That's what a lot of people do when they're using a

helot to buy rental properties. And that's where you're going to come to just hate real estate. It's going to be, it's going to take cash out of your life and you're going to be paying that thing off for the next two years instead of going on vacation or doing something fun. When you're saving $10,000 a month, on your savings rate, then the HELOC for 20K used for a down payment, you're just accelerating your down payment by two months, right, from this, or maybe five months on the $50,000 basis. And then you pay it off as a motivation, like the rules change, I think, to a little bit. You're just accelerating it by a good bit.

Still wouldn't be my cup of tea, but it makes, like, it's not, I'm not all the sudden, like, it's a very different world between those two scenarios. And I love the way that you guys approached it with this. It obviously paid off really well, and it was a motivating factor to save more. So I think that's a much better use of a helock than what I typically, you know, rail against with someone accelerating their real estate by four years because they otherwise couldn't come up with a liquidity. Totally. Okay.

So we bought a bunch of rentals in 2016, 2017, 2018, high savings rate, fire obvious outcome from that exercise here. walk us through the moment of fire, how things went and why you've gone back to work. Ah, the moment of fire. I wish it was like this real moment of fire. It was so anticlimactic. I mean, we hit our fire number, which for us was a cash flow number. And that was 10K. Our cash flow goal was 10K a month. And we had always talked about once we hit that number, are like, at least one of us should quit our jobs. You know, we've got two young kids and we're grinding. But none of us quit our jobs. Like, we hit that 10K number and we didn't quit our jobs. And I think it was, there were a few things going on. One is that we had grown pretty comfortable

with our savings rate. And it's not like we wanted to keep growing our portfolio at the same right that we had been. We knew that we wanted to slow down. But it's just hard. to walk away from that income and the savings, right? You know, that's so many people talk about that. Probably one of my biggest regrets in that transition is that I had in my head, I'm going to work this job and until I don't, until I could just quit. And then I don't have to work anymore. But ultimately, I've realized I'm not happy, just not not working. So me leaving my W2 job didn't feel great. And it also made me feel a little bit like a failure because I felt like I wanted to be a working mom. I wanted to show that I could do that. And there were so many factors at play in terms of why it just started to feel more and more impossible. And that included COVID when we had to pull our two kids out of daycare. And we were trying to work full-time jobs with two young kids at home. And it included having an employer who really didn't give a lot of space to their employees and didn't really walk the walk.

when it came to, you know, providing some space and flexibility. And then it felt hard to walk, walk away from my job. And then when I eventually did, it was because I hit a breaking point and it didn't feel as good. So unfortunately, like, I didn't celebrate my financial freedom right away. So it definitely took a little time for me to reflect on that and to come around and say, you know what? Like, it's okay. I didn't, I, that didn't have to be the outcome. And I can create a new outcome for myself, which really was, it took a lot of time for me to just learn about what is it that makes me happy. And it turns out I do like to work. And I like to be kind of on a team striving towards common goals with other people and really building towards those goals.

I just want to make sure that I can do that on my schedule. We have to take one final break, but more from Caitlin and her 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 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 in Edle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple.

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and full conference access for you and a guest. And the ticket also comes with a one-hour private call with me and or Mindy before or after the event. This call can be about anything you want, including a for entertainment purposes only, of course, private finance Friday. This offer is first come first serve and will be given to the first 10 BP money listeners. To receive the offer, please email our events director, Alex, at conference at biggerpockets.com. and let her know you heard about the offer on BP money. Welcome back to the show. I think this is really valid.

I think there's a lot of people who are thinking just like you. And I think it's because the fire movement has been historically, get to your fine number and then quit. Well, it's okay to like your job. I like my job. Scott likes his job. And it's okay to continue to work even if you hate the job that you have, but still want to produce something. you don't have to leave employment altogether. You mentioned you had 10K month in cash flow.

I'm phrasing my question poorly here. What were your lifestyle expenses? What did you need to live? Our conservative average at that point was about $6,500 to $7,000. So we had built in a contingency there expecting that, you know, there are unforeseen expenses as we grow. What if our portfolio dips? And also, you know, we always were trying to say whatever leftover that we have on this conservative number, we can then just continue to invest or kind of create more savings, more investing opportunities.

What do you need today to fund your lifestyle? Did that number go up? You know, that number hasn't yet gone up, although it's funny that you asked that because we just moved to a new town. And so on that note, actually, I will say that it's 2024 now. So this is really like four years after we truly hit our financial freedom number. But where we are now is my husband did leave his job. So even though he really enjoyed his W-2 and he like loves his coworkers and I think he still considers himself very much a part of his old company, we both realize like this is our time

to be with our five and eight-year-old kids. And we just want to spend as much time with them as we can. And the impetus for him leaving his job, too, was that we've always had our eyes set on this paradise place in Colorado where we've always wanted to live. And we were finally able to make it happen. We moved there, like literally a little over a week ago. Islands Ranch, right?

Yeah. How did you guess? Crested Bute. Okay. Awesome. Oh, my goodness. Okay. I have a friend who's moving from Crested Butte. That's a beautiful town. Yes. I mean, we've been visiting here for over a decade. And before we had kids, we were actually like, you know, we'll on our rental portfolio, we can just like, we'll go and find a place and just live there. And then we had kids and that dream changed, but evolved over time. And then we realized we're still in love with this place. Every time we visit with our kids, they love it too. So, It's been a dream for us to relocate and kind of create this. What I call my financial freedom now is like really being able to live in our ideal destination.

And it's this place that we feel like really accommodates the lifestyle that we want to live, you know, being active and being very outside and having a really close community around us. So we're really, really stoked that we've been able to make this move. But making it also means that. we are expecting our expenses to jump. So no, our expenses haven't jumped yet, but we certainly are accounting for that to happen. And I mean, there's a chance, honestly, like, our expenses wind up creeping past what our cash flow number is. And so we, we know that, you know, there's a chance at some point that what if we need to

tap into our, you know, our stock portfolio. to be able to live off of that income instead. We have a lot of options, but honestly, we're also completely open to the idea of either one of us going back to a quote-unquote, real job. I, like I mentioned before,

I found out about myself that I really need to feel a certain level of, like, professional productivity in order to be happy. That's just where I am right now. That doesn't mean that's always where I'm going to be. But I have. started to build a small business on my own. It's not, we certainly have not been able to rely on any income from this business yet, but I'm hoping at one point, you know, that maybe can supplement

us. But until then, you know, we're living off of the expense numbers that we had predicted. We totally expect that that could keep climbing up and our savings rate is going to get lower and lower and we'll, you know, we might hit a burn rate. And that's just a reality that we have, but we're also in a position right now where we feel like, you know what, we created this rental portfolio and we feel like we can create a new lifestyle as needed. You can always move back to suburban glory in Highlands Ranch at another point in time, too. So for those that don't know the inside joke, so let's talk about these locations a little bit. Highlands Ranch is where I live. It's a suburb, perennial suburb, like plan development, you know, all that kind of stuff.

Crested Butte is basically a resort town in Colorado. It's four hours on the best possible conditions from downtown Denver to Crested Bute. So it's way out there. So probably a little less touristy than places like Vail and even Aspen that are more like, well, like particularly well-known destinations. But definitely resort, nice, nice spot here. It's a breathtakingly beautiful place. So very expensive, very high cost of living area out there.

And that's awesome. I think that's a wonderful way to think about the optionality that your business, your real estate, the sacrifices you made for many years to get to this point. You know, that's a great option to have here. I wanted to circle back to your specific situation and just highlight what you've done. You didn't stop working until your cash flow more. than covered your expenses. So you are still able to save. That's a plus. You have a $3,000 buffer every month, $2,000 to $3,000, and some months you're going to go over, some months you're going to be

under, but you also have other buckets to pull from to fund the difference if you go over. And the third thing is, let's say you start consistently going over. Your $10,000 stays the same, cash flow-wise, but you're consistently going $1,000 a month over, $2,000 a month over. How easy is it to get a fairly, I don't want to say easy job, but like not a super stressful, complex job that can cover that expense. If you decide you don't want to pull from your stock portfolio or you don't want to pull from all these other things, you don't want to buy another rental property, your rents never go up ever.

There's all these different contingencies that you've built in place, and it just goes back to the beginning where you were, you made calculated moves to get to this position. And I think that's, that's really what I want to highlight here is FI doesn't happen accidentally. It, frankly, it does every once in a while, but it doesn't normally happen accidentally. It happens because you did a bunch of things on purpose. And it doesn't happen overnight. So I love everything about your story because you're thinking things through. you're not jumping in with both feet, flying by the seat of your pants, all the other cliches that we

could throw in here. And instead you're making calculated moves based on research and information that you've gotten from other people and like kind of crowdsourcing your knowledge so that you can, you know, oh, this work for this person. I think I can make that work for me too. And I like what they did. I can do that too. And I just, I love that you have such a repeatable story. Repeatable kind of with an asterisk because we had these these lower interest rates, but you can make money in any real estate market. So what advice would you have for somebody who's hearing your story and saying, you know, I'd really like to repeat this, but I'm not sure that I can because interest rates are higher now. Yeah, I agree. It's harder when you have higher interest rates in, you know,

I think that we probably would have, if we didn't have a helock, we would have done something differently to keep accelerating the growth of our portfolio. So what I would emphasize is we had a real turning point. I think that that was when I had a baby and I was commuting a lot. And I knew all of a sudden that I was going to be spending a lot of time every day away from my new baby. And if I wanted to shorten the timeline on that, we really had to do something quick with our real estate portfolio. So look at what options are available and really make the numbers work. I mean, like I mentioned, going back to those eight months where we were just trying to be really patient, even though we had our goals in front of us, I felt like I had this newborn in

my arms and I knew that I didn't want to spend so many hours every day away from her. But it still was not enough reason for us to just keep jumping at every deal that came across our desk. So continue to be diligent. Don't don't slouch on your criteria just because you're getting a lot of, you know, deals that are just slightly higher, slightly higher. And if it's not a helock, you know, find another way to make it work. Maybe it's just you're putting money away.

If there's a way for you to build additional passive income, you know, or not even passive income, but a side hustle that is allowing you to create this additional savings rate or, you know, if there's a way that you can cut down on expenses to keep that savings. And I always like to go back to that short-term goal that I think real estate investing has kept me disciplined in a way that other ways of investing really does not. And that is by providing you with your eyes on these short-term goals because you don't get to fire with just one property, you have to build a bigger portfolio, but in order to build that bigger portfolio, you do it property by property. So with each property, you have that goal in front of

you. And those short-term goals are what get us to our longer-term financial goals. And I really don't think it works if all you're doing is saying, I just need to create $10,000 a month in passive income. And I'm going from zero. So how do I do that? So you have to have these shorter-term goals along the way. So I think that that is really important, even though that's not a tactical piece of advice. It's something that really all of our minds need if we're going to stay motivated because it's not an easy path. We spent a lot of years really, really grinding. And if you don't have those goals in front of you, it's near impossible, I think, to work at that pace. Absolutely. I mean, this is, you know, we glossed over your whole story in a

an hour, but it is not an hour's, like you didn't start an hour ago and now you're financially independent. You started 15 years ago and now you're financially independent. And I think that that's really important to note. There's a long slog that isn't a lot of fun. It's just continuing on down the path. It's like like hiking the Appalachian Trail. You start at the beginning.

You're like, woohoo, this is going to be so awesome. And then you get to the end and you're like, yes, I'm done. But in the middle, there's a whole lot of nothing. There's a whole lot of like uphill hikes. I just want to thank you for sharing your story here and congratulate you on the incredible lifestyle that your sacrifices, hard work, smart bets, luck, all those things come together that have gotten you here. I look forward to seeing how the small business goes over the next couple of years and how the time in Cresta Beauty goes. Are there any last concepts you want to share with us before we adjourn here?

I don't think so. I think I would like to congratulate you, Scott, for having, you know, being someone who loves your W2 in financial freedom. I think that it's always important to give people permission, like to keep doing the work that you love, no matter how close you are to your financial freedom goals. And I think that that's not something that we talk enough about. So I love to highlight that. I love your intro on that. And I just appreciate being able to share my story. Well, thank you. And Caitlin, where can people find out more about you?

Sure. I'll share some of my socials. I'm at Rising Femm wealth on Instagram. Femm as an FEMME. That's my business profile. It's something, a passion of mine now to help other women who are on a financial freedom journey. And my website is www.Risingfemwealth.com. Awesome. We will include links to the these in the show notes. And Caitlin, thank you so much for taking the time to share your story with us today. I really appreciate it. Oh, it's been so fun. Thanks for having me on. All right. And we will talk to you soon. All right, Scott, that was a super fun episode. And we ran a little bit long today. So I thank Caitlin for sharing her story with us. Should we get out of here? Let's do it.

That wraps up this episode of the Bigger Pockets Money podcast. Thank you so much for listening. I am Indy Jensen and he is Scott Trench. And we are saying, until next time, line. Bigger Pocket's Money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Knutson, copywriting by Calico content. Post production by Exodus Media and Chris Mickin. Thanks for listening.