BiggerPockets Money Podcast - Did She Already Reach Coast FI at 46? (Finance Friday)

Episode Date: October 10, 2025

In this episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench tackle two pivotal financial decisions with their guest, Kristel. Has she already achieved Coast FI without realizing it? And should she keep her current house or sell it to accelerate her path to financial independence?  Kristel opens up about her journey from a frugal upbringing to building an impressive $1.32 million net worth. Mindy and Scott dig deep into her numbers—dissecting her assets, income streams, and monthly expenses—to give Kristel options for her ideal FIRE life. From house hacking opportunities to smart investment moves and strategic part-time work, this episode delivers actionable insights for anyone navigating their own FI journey. This Episode Covers: How Kristel built $1.32M Her current income, expenses, and savings rate Her financial independence goals and timeline House hacking opportunities to reduce housing costs Investment strategy options for her portfolio Is Kristel Coast FI? With help from The Fioneers Coast FI calculator Part-time work options to bridge the gap to full FI Tax optimization and withdrawal strategies And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices

Today, we're tackling two major financial questions that could reshape our guest's entire fire journey. One, has she already reached Coast Phi? And two, should she keep or sell her house? We will dig into the numbers on both fronts, exploring how her house fits into her Coast Phi calculations and helping break down decisions that could dramatically impact her path to financial independence. Hello, hello, hello, and welcome to the Bigger Pockets Money podcast.

My name is Mindy Jensen, and with me as always is my Zooming to Fire co-host Scott Trench. Thanks, Mindy, great to be here. Love to get a crystal clear picture into folks' finances and think about the paths to fire. Crystal, speaking of Crystal, thank you for your willingness to share all of your numbers for this episode of Finance Friday. We are so excited to explore your options and unpack your situation today. Welcome to Bigger Pockets Money. Thank you very much.

I as well. I'm so excited to see what you guys can offer and see what we can come. up with. Me too. Okay, before we get into all of the numbers, could you give us, you know, the high level 10,000 foot overview of your journey with money to, you know, how we got here today? Sure. So I am probably like a lot of other folks. I grew up in a big family, one of six kids. My parents were definitely money-minded. I would say looking back now that they more or less fell to the scarcity mindset, though. So we were super frugal, tracked money, tracked expenses, spent the least amount of money on most items, which I suppose really did help me as I, you know,

grew into adulthood. And as soon as, you know, I got married at a young age, married somebody that was a service member and so got to start kind of my own money story. and that interestingly happened, I think, right after Roth IRA started out. And so I didn't know a lot, but I had learned about specifically this one thing that you could do. And that became my mission is to save enough so that we could start filling this Roth IRA. So beyond, you know, anything else, I really didn't know a whole lot. I just knew to save money and then to fill this one bucket. Walk us through, you know, tell us about, you know, how that evolved to, spoiler alert.

You are a millionaire. Not, you know, and how did that transpire over the years? And when did you discover fire? I didn't really know what fire was. I knew the difference, you know, what we had and what we spent. That was a very simple idea to me. so I would, you know, sock money away in our Roth IRAs and I would save as much as possible. And it just grew in a savings account. Fast forward, you know, had multiple children and I just stayed

simple. That was something that my parents had done. So it was fill up, you know, this Roth IRA. It was save as much as possible. And it just slowly grew. Fast forward to about 2,000. 19. I started to realize that my marriage situation was going to change and that I really needed to figure out what I had and what I could do with it. So it, you know, started out with just this fascination with listening to the Dave Ramsey podcast. And so coming back to those simple, you know, baby steps. And I felt like, okay, well, I think I, I think I'm doing that. And then it slowly, I don't even know how I, I've heard about fire, but got involved in some of those podcasts. And then I really felt like, okay, I've got something to work with. I just didn't know what to call it. And yeah, and now we're here. Mind, do you want to preview the numbers? Let's look at where here is. So your net worth is $1.32 million, which is something to celebrate. Yay. This is great. You are 46 years old with a net worth of 1.3. Where that money is is a little different

than what most people have. We've got $422,000 in cash with an asterisk because we're going to discuss that. 31,000 in a 401k, $320,000 in the Roth IRA, $32,000 in the traditional IRA, and a primary residence worth $764,000 with a $241,000 mortgage against it. So about $500,000 in equity in that house. Your current income is $123,000. This comes from your full-time job. There's some nominal child support and income from investments. Your current expenses are a whopping $4,800 a month.

So we're talking $60,000 a year on $120,000 in income. So you're essentially saving half of your income. That's also something that we need to celebrate. And your debts are a whopping $241,000 on your primary residence. You do have an interest rate of 6.5%, which is higher than a lot of our people on this show. However, that's a reality that we're going to be seeing for a while. No rental properties, no pension or life insurance. insurance to talk about. So Crystal, what sort of help can Scott and I give you today? I feel like,

although I'm in a good position with numbers, it still comes down to, I spend quite a bit just to live. And I have this house, and it's been, you know, such a blessing for kids, but I'm nearing. I've got one child at home. and the rest are, you know, basically on their own. And so I have this asset of this beautiful house, but I really only need a couple bedrooms. And so this idea of what do I do with my house? That's a big question. Maybe it has, you know, greater meaning because, again, I have about three years of kids at home. So what do I want next? What does, you know, life 2.0 look like? I would love to optimize for simple. I would love to optimize for easy.

But I don't know really what it would take. What cards do I need to play and at what timeline in order to be able to make those decisions. When I react to your overall situation, you know, I see $800,000 in our traditional fire portfolio, right? the cash traditional and Roth IRAs with, you know, some of that cash is in private money notes. We are going to hope and assume that that all matures. And then the other half of your position is your primary residence. And so I think that the logical place to start is because there's a lot of lumpy decisions to make in that portfolio, well, I guess the logical place to start is if we waived magic wand

and we took this $1.3 million and I handed to you in cash, do you have even a first hypothesis or draft of what might feel like a good portfolio in that circumstance? I am leaning, and this has been kind of a process of the last few years, I have been leaning again towards simple and easy. And so by default, that hasn't, you know, buying real estate seems like an okay idea, but it also comes with a level of work. And if I don't have to, maybe I don't want to that's what I'm considering more the last year or so I don't see there's there's no reason why you'd have to buy real estate in this portfolio unless you unless you want to of course but let's let's let's zoom in on the the primary residence here

tell us about this primary residence and do you want to be living in this in three years what would you do if you sold the place today where would you live or how would you want to This house was such a gift. I have five kids. We bought it in 2011. It is, you know, is about a five-minute walk from the water out in the Pacific Northwest. But it's a five-bedroom house. And now, you know, looking at being an empty nester, you know, in the next few years, it makes sense to let someone else buy this, let someone else rent this, and then move on to something else. Whether I want to be a transient kind of, you know, travel, that is still yet to be determined. I am planted here, at least for the next three years. So I need to plan for the next, whatever the next three years

may look like. And then beyond that could be something else. Your mortgage is only 2180. And you said that rent would be about $2,000 a month if you moved out of the house and moved into a mortgage. So right there, you're not really saving much, but you're releasing $500,000 in equity to invest in other ways if you do sell the house. So I think that selling the house is probably a really good idea. You've been there for a while. Are you sure it's only worth $764,000? That was looking it up on Zillow just recently. So however folks feel about Zillow just to give a ballpark range, yeah, I think that's what.

Okay, that's a good ballpark. It's a great place to start. I wouldn't put a lot of rock solid support behind that. But that's a great place to start. And then I would talk to a real estate agent in the area just to get an idea of what your house could sell for. Get an idea of the market. and also pop into a rental and see what it would really look like. Is this really where you want to live?

Take your child who's still at home with you and take them in there and see if this is where they would really want to live. Because from a monthly spend perspective, that's not going to really save you anything, but from an investment perspective, that could be huge. We're going to take a quick ad break, but more from Chrysler when we're back. 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

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marisifi, whatever you want to call it, what would you spend your days doing? From my perspective, I was very blessed to be a stay-at-home mom for nearly 18 years. So that's actually what I would love to go back to. So I would love to go back to, you know, tinkering in the house, cooking good meals, volunteering in my community, being able to help with kid events more readily. That's actually, that would be my FI life is a lot of aspects of being a stay-at-home mom. It was simple, but it was very fulfilling. So that's what I love so much about that.

The idea of fire is to be able to make value-based decisions. I mean, that's valid. I don't know if it sounds like you're like, oh, well, it's just this really simple thing. That's a great thing. You're talking to a former stay-at-home mom here. It was wonderful to be able to spend that time with my kids. I really enjoyed it. Do you like your job? I like aspects of my job. Okay. I would love to move to part-time work if I could or pick a side gig that would more or less bring in some income while, you know, hitting those boxes of fulfillment. I have a couple ideas along that route, but I'm just, I don't have the time or mental space. I think to really dump into that. What is your job? I work in a civil engineering firm. And are you an engineer or what is the work you do there?

I do office management. Office management. Okay. Does that include being available to pick up the phone when people call? It is a lot of computer work. And that is what I don't enjoy as much. I really enjoy interactions. I started, you know, again, as a stay-at-home mom, very first job.

may go down as my favorite job ever, but I worked in a wellness clinic for the military population and absolutely loved it. I just was making almost poverty level money and I kept bumping into, you know, I wanted to buy real estate, couldn't buy real estate because I couldn't qualify for anything. So I, you know, because of a lot of podcasts and the fire movement, you know, learning how to advocate for yourself and grow your income, that was a skill that. that I had to learn quickly and made a couple shifts in jobs to try and grow my income. And this opportunity to work for a civil engineering firm

was fantastic because it did grow my income. It helped build a lot of these office and management skills that I didn't have. It's led to a lot of contacts and networking and in the real estate space that I wouldn't have had ordinarily. So it has been a great gift. I just know that, you know, if you ask me five years what I want to do, it's not a full-time job doing office

management. Let me spit out a hypothesis is how I think and you react and tell me what you like and don't like for this. Okay. Hypothesis, first hypothesis for you to react to. Look at the situation. One approach I might throw out there is we take the $800,000 in more of a traditional portfolio, the cash or loans that will come due shortly, your retirement accounts.

And we build a very traditional retirement portfolio, 60-40 stock bond or the golden ratio portfolio with that and add surplus dollars that come into our life to that portfolio right there. Maybe it goes up, maybe it goes down, but there's a lot of, that's a very defensive, very low correlation portfolio that could be able to spit off four to five percent in most traditional retirement models. That gives you, what, at 5 percent, 40 grand a year, right? which is pretty darn close to your number here. The second major component to the question is the housing situation.

And in this situation, what I'd be biased to do is I'd be biased to sell this property, collect what I imagine is a reasonable capital gain, and redeploy the money into some kind of lighthouse hack, something easy, something with maybe another area that you can rent out for portions of a year. I love the idea of a short-term rental. in the Pacific Northwest. I'm sure that there's just, you know, right on the beach and you like that. I imagine that there's some places where you could really do, you know, if you put 500

grand on a property, you could really do some damage on whatever remaining mortgage balance you pick up in there and partially supplement your income, obviating the need for any part-time work entirely if you're able to do that smartly in there. There's no consequence for swapping out the mortgage today because mortgage rates are about the same or even lower. than your current mortgage. So there's no real reason to stay in the property unless you want that continuity for your child, which doesn't really change our plan because you can just do that same thing in two or three years at that point most likely. Swapping out property, if you stay in the same area,

you're swapping out property that's going to rise or fall with the market anyways in that context. So that's my favorite plan there is to do some kind of lighthouse act that just really provides that extra stability and security in there. You could also just sell the property at some point in the future and pile the remaining dollars back into our traditional retirement portfolio, if no options presented themselves that were good in that way. And then the last piece is I'd be looking for part-time work. That is exactly what you want, actually applying for those situations over the next six to 12 months and seeing what that looks like. Maybe there's a way to do exactly the kind of job. If you write down, here's the job I want to do, and it would be my ideal, you go and find

it, maybe opportunities present themselves to you and they pay reasonably well. Maybe that's a reality that that could come to manifest if you start looking for it. That would be my first hypothesis for your situation. How does that feel? How does it sit with you? Yes. I think that is very doable. I do like that you put kind of a timeline of six to 12 months to make that happen,

socking it away in the market and essentially just, you know, getting that, what is it, six percent? Is that what the golden portfolio is expected? If Frank Vasquez were here, he would design it around the, the baseline assumption of a 5% safe withdrawal rate. Okay. A lot of people have difficulty with that. And there's an endless debate.

Should I withdraw at 3 to 3.5% on the big earn camp? Or should I go to the higher rate end of the range, 4.7 or 5% like Bill Began's research and Frank Vasquez are saying, I think that with your, the way you're thinking about things and the way I'm wired at least, you know, I would probably say, okay, I'm going to mentally say it's a 5%. But I'm all, I'm not going to count on that entirely. That's why I'm going to have some part-time work to offset that and why I'd also consider a house hack to give me so plenty of buffer in this particular situation. You may not even need to touch it for a while in there.

You may get far beyond what you need to do even with the transition of part-time work if you make a couple of smart plays or the market cooperates at all over the next couple of years. It could also work against you, which is why, you know, making these moves over the course of six to 12 months might give you a little bit of more padding. That's helpful. I have been actively looking for properties and tried to put an offer in. Nothing has panned out yet, but I would also say that I'm looking for a deal when I'm purchasing, and I just haven't found that yet in my school district. Would you still stay in that school district or would the opportunities exponentially compound if you were out of the school district?

They would, yes, they would. I would have a greater pool of options if I left the school district. I'm in a rather small town, yeah. The challenge here is what to do about the housing situation. So again, option A, plan A could be whenever kiddos done with school, you sell the place and you pocket this 500 grand, I'm assuming most of which is going to be tax-free. Is that going to be correct? It was purchased as a married, you know, both of us.

And then I refinanced. And now I'm single. So I think that there could be the potential of... What was the property's value when you purchased it? 344. Okay. So you might have a capital gain on this. There is a new tax bill introduced this week.

I don't know if it will be live and kicking by the time we actually release this and post this episode or if it will be killed. But there's a bill that this discusses killing the concept of capital gains on, primary resident sales entirely. But yes, you will have at least some capital gain on this. It may not be consequential to your situation, depending on the income tax bracket you're in in the year you sell the property. But that will be a tax move that we'll need to consider in that point.

But we still should be able to pocket most of that gain, of that $500,000 spread between your asset value and your mortgage balance whenever we sell. The bigger challenge than is if that house hack concept appeals to you, then the bigger challenge will be having an income that you can borrow against for whatever that purchase looks like in the future, in the future state whenever it. So let's say, let's say, I'm now biasing towards this plan. Stay in the job or something similar to it for a year or three while your kiddo is in the school district. Keep that income. Leverage that to do that next house hack. Hopefully you don't need too much of a mortgage. Maybe there's a property for 500 or in there,

that allows you to just sell your property, pay it off in cash, and put it all into this new house. Or you're getting a small enough mortgage where it doesn't matter. But if you give up the income, the job, the salary, then you're going to give up the option to take on a mortgage, probably in the several hundred thousand dollar range at the point when you want to transition to housing. And that's going to be the bigger barrier to you than any tax moves in this. So if you decide, hey, I don't really want to do a house hack. I'm not really care about that. I'm going to just put everything into a more traditional-styled portfolio, then you could make that move right now and rent until your child is done with school. But if you'd say, hey, that's

actually something that really appeals to me and would be give me a lot of a really nice security blanket in here that I would feel good about, then that would, I would want, I would want you to preserve the income source through that transition point. Because I've learned that it's very difficult to get a mortgage if you make very little money. You don't need a big mortgage. but you may need a mortgage in this, right? Like, you know, I don't think your income would allow you to qualify for an $800,000 house with 20% down, but it would allow you with 70% down at that point. That'll be the thing you have to figure out is, where do I want to really live once my kiddo's

out of school? And if you can figure that out and you don't need to buy to make that work to feel good about that situation, then you can sell at any point rent for a year or two and make that transition. But if you do decide that, then you would want to, I think you'd want to burn it for another three years and figure out how to keep that job and that income source. So you could make that transition smoothly. This will be our final ad break and we'll be right back 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, 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's 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.

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Employees also have the opportunity to grow their skills and their paycheck by enrolling in free skills training programs for in-demand fields like software development and information technology. Learn more at aboutamazon.ca. Let's jump back in. For the housing situation, what I would do here is the first thing you'd understand is what is your tax situation going to be like at that future point. You don't have to worry about this for six months. So let time pass and see what happens with this bill in Congress. But before you go to sell this house, talk to a CPA at that point in time, and figure out, hey, what is my gain going to look like?

And my guess is that if you sell this next year or the year after, you're going to have a very negligible tax hit from this sale, even though you will have a gain because of your income in your situation. I believe there's a way to have a very low tax hit. from that sale, where you can keep most of that. But you want to confirm that and make sure you don't sell in one year where you have a high amount of realized gains or whatever I'm in there. Okay.

Next, I would come up with a hypothesis for what a good house hack, what that next step looks like. You have years to figure this out. And it's the most consequential decision, I think, in your life, in your financial situation. So I'd have a hypothesis, just drafted, a piece of paper, one paragraph, two paragraphs. I looked on Zillow or whatever your favorite real estate browsing portal and these are some of the things that could be really nice. They give me a really good blend of the lifestyle I want, the location, the proximity to the beach and income generation potential as a short-term Airbnb.

I understand this is the area with those really restrictive HOA or HOA or Airbnb laws that only allow people like me to short-term rental at park portions of the year and give me a huge leg up. put that hypothesis to paper and start looking at some of those on a regular basis, maybe driving past them, but have that as a written document. There's no reason not to it. It's the biggest thesis in your situation, most likely. And the last piece is I'd also do the same exercise that's very simple, you know, half page there of like, my ideal day of work looks like this on a part-time basis. I show up here. I have these types of conversations with these types of people going through these types of challenges. I leave it at the door at this time and I'm able to do it. that and just start seeing if those opportunities exist out there and keeping an eye out for them.

You may find that all of this comes into your life pretty seamlessly over the next two years because your situation is pretty good. You got $1.3 million in net worth. You know, all the optionality in the world once your kiddo leaves the house and presumably goes to college or begins adult life in there. And these are all good options. This is a very surmountable challenge, but you can make the most of it by having a concrete plan for what I'm to do with my portfolio, what I'm going to do with my house, what I'm going to do after that with my housing, and what I want to do for work and making sure that those are all lined up. You're aware of those opportunities of what's realistic. Now, if I start, you know, transferring money into, you know,

the golden portfolio or whatever it's called, the gains on that, am I just letting that continue to roll? My belief is that there will be absolutely no tax consequence whatsoever for transitioning your portfolio to a future state portfolio. This may be a place where you want to invest a few, you know, one to $3,000 to $3,000 talking to a financial planner about specifically what portfolio you want, right? We cannot do that here on Bigger Pockets Money. Mindy's portfolio with Frank is only an illustrative example of one version of a golden ratio portfolio on there. But my belief is that if you were to move to a portfolio, even perhaps exactly like what Mindy's is in there that you should have very little to no tax consequence. All of the money you move

inside of your Roth can be transitioned tax free. There's no tax consequence for a gain or loss as long as it stays in the Roth, right? We're not distributing right now. We'll talk about distribution strategy in a few years. But to move from today's state to that portfolio, there should be no tax consequence. So Roth IRA will have no tax consequence. The 401k and traditional should have no tax consequence for selling or moving funds in there. So that leaves us with the $422,000 in CA. You will pay tax on the interest you receive on each of these three notes that you are invested in. But once the principal is returned to you, there will be no tax for that. So you are free then to invest it however you wish. Then you have 110 in a money

market account. If you will pay taxes on the interest you receive in that, but if you transition that or a big chunk of that into the components of this future. your state portfolio, you will have no tax consequence. As you accumulate dollars, you will probably not harvest this portfolio until you make the final decision with your housing and leave your job. That is when you'll need to harvest the portfolio. At that point, you will have tax considerations to take into account. I want to reiterate what Scott said. You currently have $31,000 in your 401k. I believe we talked that all of your investment accounts are in VTSAX. So what you would do is sell the VTSAX within the 401K and then move it to a different type of account, a different type of investment.

Because you're not taking any money out of the 401K, there's no tax consequence. The same with your Roth IRA. You're just taking from VTSAX and turning it into a different investment vehicle. The things that Frank had me put my account into were gold and bonds and international funds and a lot of other things. And it's been a minute since I recorded that episode. So I don't actually remember all of the things that he has me in. But you're just taking that 320 that's in your Roth and putting it into a different account. Your accounts are allowed to sell and reinvest in different things.

The only time you hit a tax consequence is when you actually take possession of the money yourself. And I just wanted to clarify that. I also wanted to say that one of your questions was, are you Kostfi or Burista FI? And I pulled up a copy of the Fioners KostFi calculator. And I threw your numbers in age 46, retiring at age 65, withdrawing 4% and assuming a 7% growth. Let's assume lower than that, though, right? because we are not going to be in a high growth aggressive portfolio, most likely, because the stated goal is to barista fire right away within the next three years.

Okay. What would you assume? Let me think about that actually thoughtfully here, because this is not a portfolio that she's going to be letting grow until retirement. This is a portfolio that she's going to begin harvesting three years from now. So her retirement age is 49, not 65. So we can't use those assumptions in that projection, right? Well, okay.

I had a different point, Scott. So you think about what the growth rate should be, but I'm going to continue on with this. So because this is the Coast FI calculator. So current age 46, retirement age 65, withdrawing 4%, assuming a 7% growth rate with $65,000 with $65,000 in annual expenses. We've got a portfolio. of 1.625 that she will need at age 65. And she needs $449,000 invested today. And I believe that the

pioneers are encouraging you to invest in the stock market. So 449 in the stock market, I think we've got that over here. Yes, we do. So, but you want to, you want to change your retirement age. Let's move it to 55. You'll still need 883,000, which is, again, you've got it. So let's do age 50, that's in four years. You would need 1.2 to grow at 7%. And that, I think, is not quite where you're at, but you have 1.3 total. Unless I sell my house. Yes. And if you sell your house, are you coastfi? I'm going to go ahead and say, yes, you are coastfile. I'm going to go ahead and say, yes, you are coastfi, but not traditionally coastfi where you're investing only in the stock market? You are certainly coastfi, right? If you decided, I'm going to keep working, I'm not going to

add you more, I'm going to spend everything I get it coming in. No question that you're coastfire. The question is, are you fire right now? And I think the answer is you have the constraint of needing to stay in this property or one very much like it for three more years. And that is your only blocker to fire at this point. Once that constraint is removed, you will be able to fire under the current assumptions that we have here. And I think the question then is, do we want to do that with a traditional portfolio or do we want to have some nice wiggle room and buffer in there? And based on your goal, instead of goal of barista fire, and there's some part-time work you'd like to do, I just think I'm almost like resetting the problem. Like, let's not do a traditional

portfolio. Let's put a bunch of it in there and let's house hack and do some part-time work. because that should give you the quality of life that you're looking for and a huge surplus relative to what you came in today seeking if you can pull off those two moves reasonably. And you want to do part-time work anyways. So doing a short-term rental, we'll probably have super high ROI in your situation. And we'll involve a little bit of part-time work. And then you can have the rest of the part-time work how you'd like in there. That was more of my hypothesis.

That's why I'm struggling to answer Mindy's question with the calculator, because the calculator is not designed for this purpose. That's exactly what I wanted you to say, and that's what I was going to say. You are KOSFI based on age 46 and retiring at age 65. You will need $449,000 to retire at age 65. And that's what the KOSFI idea is. So yes, you are, but I don't think that this calculator is right for the scenario that you're trying to create. I do want to encourage everybody to go to the pioneers and download this calculator because it's an awesome way to just play around with the numbers.

They already did all the projections for you. So all you have to do is enter your numbers in there. It's a super easy calculator to use. Are there any parts of your house you could turn into a rental right now? I am in a small town that is not super Airbnb friendly. So they actually don't allow it. But because the state of Washington has kind of changed some of the laws, It is becoming more of a, they're forcing the issue that, you know, density laws, things like that. So I am, I feel like I'm looking for a needle in a haystack of a property in my town that will work. I don't think that I can modify my house easily in such a way to actually build, you know, an ADU or something like that. Yeah, I've tried all sorts of things, talk to, you know, the town permitting. to see if I can get around certain laws, restrictions, and it just is not an easy thing with this house.

What it boils down to is you have set yourself up very well for success in almost any scenario. You just have to pick which one sounds the most fun. Oh, I love that. What sounds the most fun? How will you have the most fun with your money? If you sell your house, you've got 500,000-ish that's going into, I would assume you want that into a gold, ratio portfolio. Yeah.

500 times, oops, times 0.05, 25,000 a year that you would be able to withdraw. Okay. And that would be living towards just living, whatever, whether it's a rental or possible house hack at that time. That's if you take all 500,000 from the sale of your house and put it into the golden butterfly golden ratio portfolio. Okay. Again, that comes back to just the basics of your overall situation, right? You got $1.3 million in net worth at a 4% withdrawal rate, that's $52,000 a year, if you convert that to a

traditional retiree portfolio. At a 5% withdrawal rate, that's $65,000 a year, right? And it's all depending on your comfort. You could probably justify a little bit of a higher withdrawal rate because you want a part-time work. That's why your situation gives you so much flexibility because your willingness to part-time work. And that flexibility only compounds if you're willing to do something like a light house hack, like some kind of, some kind of version of that as well to defray that. There's just so many good options. Again, so many good options here and so many ways to go about it. I think that the best thing you can do is say, here's what I'm going to do with my portfolio, here's what I'm going to do with my work, and make sure that those are written somewhere,

simple exercise. And you can begin, you can review them. And I think that if you're thinking about those over the next year or two, the obvious answers will present themselves. If nothing appeals in the house hack front, that'll shift you towards the moving everything to the portfolio, maybe, maybe sooner, maybe bringing some freedom into your life a little sooner. If some really good options emerge there, we're like, wow, that's going to provide me so much buffer that I can actually expand what I was thinking about for my lifestyle. That's really appealing. Then you can do the, that might move us towards that one and actually have you more comfortable working for another couple of years. I do think that the questions you need to kind of frame with a

professional as a follow up and really get your, get your mind around are the tax consequences of your home sale whenever that comes about, those will be unaffected by the mortgage payoff here for the most part, very minor impacts, mainly what you do with the mortgage payoff. I think you have a question about income and what your social security situation will look like. I think you should grow that through that with a calculator, but I would imagine some unknowns there about how much social security you qualify for. And then, of course, you have to make an assumption about how much you want to assume you'd get of what you're currently on track for. I think people live in the fire community often discount that to at least some degree in there.

You'll want to think about health insurance, which I do not see as one of your expenses here. So you want to bump that into your consideration, at least from a bridge perspective. So that'll be, you know, that'll be part of your analysis. But again, if you have all of this conservatism and you're going to part-time work, you're in a great spot for that. But those would be some follow-ups. I'm sure that a couple others will emerge as you continue your research here. Okay. How do we do? Is this helpful for you? This was very helpful. Yes. I think confirming that I almost like a deck of, you know, like playing a card game, you know, I have really good cards. It's just how to and when to play. Yeah. So this was super helpful.

Well, thank you so much. We'd love to kind of hear how things go and what you end up doing in the next year or so. I would love to. These big moves are going to be really, really scary. So again, I think this is a great one to talk to with the financial planner. Hey, here's my draft hypothesis and what I want, but you've got a great situation. Here's my starting point. Here's a pretty clear, you know, clearish picture where I want to get to. And then what's the bridge to do that? How do I make sure I do that without making any tax consequences or other errors in there? That those will be the bits and pieces to fill in. And then there's a checklist of other things that we've got to, you know, button up around there, like assumptions around Social Security, Healthcare.

And you have life insurance in here already taking care of when you talk about that. But just makes sure those eyes and T's dotted and crossed. No, that's super helpful. Yeah, I like the way you frame that. I have, it's a card game and I have really good cards. You have really good cards. Absolutely. All right.

Well, Crystal, thank you so much for your time today. And thank you for sharing your numbers with us so that we could go through there and see, see what options you might have available to you. We really appreciate your time. Thank you so much. We will talk to you soon. Okay, Scott, that was Crystal, and those were her numbers and her specific situation. And I had a lot of fun with this episode today.

What did you think? When we think about a finance Friday right, there are four ingredients, I think, that may go into a good financial plan, right? One is a clear picture of where we're starting. Second is a clear picture of the destination. The third is a bridge to get from where we are, where we want to get to. And the last is what I'll call the checklist. the blocking and tackling, right? Like, do we have our life insurance and our state plan and all

those types of things set up? And we almost never talk about that list because that's not, that's not really the reason I think folks want to tune into a Finance Friday. They want to hear about the actual big moves to get there. And almost always the problem we have on Finance Fridays is I'm not exactly sure where I want to get to. And I think, and that's we spend most of our time unpacking in a situation like this. Because once, if we know where we want to get to, then the steps almost always, you know, in a lot of cases, fall right into place. Or you can go to a specialist like a CFP or whatever to knock those out. And it's not too difficult.

And so I think that that's the challenge is where do we want to get to in all these situations? And I think what this episode kind of brought to light here is in a situation like this, you know, I want to fire and go, we can do it. If those constraints are, I'm willing to do something interesting with my housing. and I'm willing to do some part-time work, oh my gosh, the game is so much easier to play in this fire world than it is with somebody who's just like, I want to be completely done. It gave us so many good options out there. And I think it also highlighted for me that this margin of safety and the ability for more

to come into my life is, I think, a really key ingredient, you know, at least for the way I'm wired and I think a lot of bigger pockets money listeners. It's really hard to say, I'm going to spend at this level for the rest of my life, and that's the plan. It's much easier to say, I'm going to bring in, I'm going to have a healthy surplus after I fire with just basic part-time work in this one house hack. And things should go probably pretty well that would allow me to expand far beyond my current spending if I ever want to do so. And I think that that's an essential ingredient for most human beings, at least most human beings who are a part of the fire community. I think that was, you know, something that's been, I haven't been able to articulate before today. and before Crystal's, you know, coming on the show and showing us her situation.

Look at that, Crystal. You helped Scott figure something else out too. So thank you again for coming on our show. Scott, you said something that I thought was really interesting. At the very beginning, you said, we, a good Finance Friday, needs four ingredients. Number one is a clear picture of where we're starting. And what we do for Finance Friday is send a document out to our guests to fill out that is a clear picture of what they want.

want. And we have this available for you, too. If you go to biggerpocketsmoney.com slash DIY, you will be prompted to make a copy of the DIY personal financial statement. And this is great if you want to apply to be on the show as a Finance Friday. But also, it's great just to give yourself a good snapshot of your entire financial situation and see if maybe you have some questions that you have for Scott and I, and you want to come on as finance Friday guess, or maybe you just want to see where you're at and look at them in different ways. There's a bunch of tabs along the bottom, but it's a really great, we've been working on this document for a while, it's a really great document to get a good snapshot of your personal financial statement. Yeah, and it's really hard

to do this on your own. You know, it's like, I can't, I, stuff that's so easy for me are so, so not easy, but like, it seems obvious or big building blocks or big chunks of people's portfolios. It's hard for me to do with my own portfolio, um, the same way. Well, hey, Scott, why don't you go to bigger pocketsmoney.com slash DIY and download this and have done that. I talk to you about it. Uh, so I'm, uh, with this, but, you know, it's hard, it's hard to do that uh, uh, in there. So give yourself a break with this stuff, right? If you don't have a textbook portfolio or the things aren't falling into place with that. This is hard to do with your own stuff. It's, you know, and maybe it's good to talk to a trusted friend or family member or community member or professional about this stuff and kind of get those building blocks into place because this is hard to do in your own situation, even as you gather reps from dozens or hundreds of these on our podcast and others like it about what to do. That may seem obvious to do.

It may be easier for you to analyze somebody else's situation than your own in a lot of cases because it's even that much higher stakes for yourself. Yes. Well, Scott, if you ever want to do a personal finance Friday with just you and me, or we can get Carl on here, we'll get you all squared away. That's great. All right. Should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying bye-bye, Dragonfly.