From $90K in Debt to Coast FIRE at 45
00:00What if losing everything was actually the best thing that ever happened to you?Today's guest went through a divorce that could have destroyed his retirement dreams.Instead, he cracked the code to Coast FI and is now living proof that it's never too lateto take control of your money.Today, Aubrey is going to share the exact steps he took to go from rock bottom tofinancial independence and why starting over in your 40s is absolutely possible.Hello, hello, hello, and welcome to the Bigger Pockets Money podcast.My name is Mindy Jensen, and with me as always is my free-only financial advice co-host, Scott
00:41Trench.Dang it, I came up with that free only financial advice co-host Scott Trench intro line, and I forgotto give myself a pun to respond to it with.We are so excited to be joined by Aubrey Williams today.I won't go too much into his background because we'll be talking about both his personalfinancial independent story, and then on Friday's episode, we're going to have him backon the podcast to discuss how to build drawdown guardrails for early retirement.Aubrey, welcome to the show.
01:07Thank you, Scott.Thank you, Mindy.It's a real honor and a pleasure to be here.I'm first and always a member of the FI community.I started out desperate in 2011, I think it was, reading early retirement extreme.And then pretty soon after Mr. Money Mustache came on the scene and he was a little bitfunnier.It might be a slight exaggeration, but I told this to Pete Adonay, Mr. Money Mustache, when I first met him in person, that he's saving lives out there.
01:38And my life is forever changed by the contributions of people like him and him in particular.And so what I'm here for, what I'm doing, is trying to do that in my way for anyone, absolutely anyone I can to help with what we're doing here, which is financial independence.Well, Aubrey, I had several friends who attended Camp Fi Rocky Mountain week one and a half.And when they came back, they told me about this awesome presentation from Aubrey Williams about setting guardrails on your spending.And I said, you know, I need that.I need to hear that episode.And if I need to hear it, I know there's a lot of people in my audience who needs to hear it.But before we get into the presentation, I want to introduce you to the audience and give a little bit of your backstory.
02:22So you said 2011 you started in the FI community first with early retirement extreme and then moving on to Mr. Money Mustache.What brought you to the FI community?Yeah.What brought me to the FI community was a combination of heading towards and eventually going through a divorce.And I always joke.I say, oh, very difficult divorce.I haven't met the person yet who didn't put that qualifier in front of it.But mine, I have to say, it was in the end a very good thing.
02:55It was fair.But it had very significant consequences for my finances.I ended up with all the debt because I was the one who had the steady paycheck.And my savings were cut in half.I had to buy out my ex-wife of my pension.I had an old school pension the time.So I went from earning well, saving well, living in a three-bedroom house in Santa Barbara with two little kids.with two little kids to living in a one-bedroom apartment with the kids' bunk bed in the bedroom
03:26and me in the same room. And things were difficult. And this was unfamiliar and different.I was looking for help because I hadn't had to navigate anything like this before.And I went to financial advisors. I actually went to three of them. And I picked one to work with.And she was an amazing person. She was a Marine. In case you know any Marines, you never sayretired Marine, because they're never retired.She was very interested in choosing investments.And looking back, I might not pick the exact same investment she did, but that was what she was interested in.But I didn't need help with that.
04:02I needed help with budgeting and cash flow and paying down debt, obviously.And she wasn't that interested in that.And even though I asked directly, the best advice I got, sort of jokingly best, was, well, if you need more money, then you can reduce your 401K contributions.So following that advice, I gave up three years of the company match.It didn't really help things because the underlying spending patterns and behaviors didn't change.In what year did those underlying patterns change?Was that when you found the financial independence community?I think I found the first part of it, like I said, in 2011.
04:43But when I put it all to work was in 2014.That's when I was in that situation.And I had gone to professionals, paid them money.I didn't understand at the time how I was paying my financial advisor.I think it's shocking how many people are in that same boat.I was paying 1% assets under management.And as soon as I understood that, I built the spreadsheet that many of us havethat shows the impact of 1% assets under management over 10 years, over 20 years,
05:15over 30 years.I legitimately asked the question, is this person providingvalue that justifies me having 20, 30, 40 percent less depending on the assumptions you make.And I came to the conclusion, heck no. And so I was very nervous, called her up and said,I'm firing you, you know, in nicer words. And then it was managing my own investments,controlling my spending, food, cars, housing, all of the big rocks. And then I really amsomeone who believes in small changes, many of them add up to big effects also. So for example,today I wrote a blog post about how using an old school double-edged razor for which the blades are
05:597.91 cents each compared to a Gillette sensor or a Gillette Venus for women can save you about$1,284 over 10 years per person. So in my household, I have four shavers, two teenagers, myand my partner. And that's real money. And it's not just that thing by itself, but it's a coupledozen or even a hundred changes like that that also affect the trajectory. Okay, I love that point.You just said it's a couple of changes. It's multiple changes like this that affect your trajectory.There are so many people who will hear you $1,200 over 10 years. That's nothing. I'm not evengoing to bother. Well, that's just one thing. If you can change everything, then you can have likesignificant real savings and it isn't about the razor. It's about the thought process that goes into it.
06:51Is it easier to buy those Gillette razors? You bet your bottom dollar it's easier to buy thoserazors. I've actually never installed a new razor into those razor, the reusable ones that you'retalking about. But my grandfather had one. I remember seeing them. They seem a little scary to me.So it can be done. I mean, you haven't cut off all your fingers yet, have you? Changing out thoserazors? Not at all. I think what you're trying to say is that all those little shavings add up.Oh, my goodness.I could resist.Sorry, guys.
07:17What's your shavings rate?Scott has gone back on his shavings rate, if you can see.Oh, yeah.I use up, like, what, a fraction of fewer razors than that now that I'm not shaving this part of my face anymore.The other angle is not everyone's purely financially oriented, but that razor blade, the one from Gillette, is not recyclable.There's metal in it.There's plastic in it.They can't be easily separated.
07:42So it's landfill.Whereas the steel, 100% steel razor blade, steel is recycled at the highest rate of any material.So from an environmental perspective, it also works.So I like to look for things like that.And this really is an homage to Mr. Money Mustache because this is his combination,which is make your life better, spend less money, and do something good for the planet.If you could put those together consistently, then things tend to go well.You mentioned earlier, Mr. Money Mustache was a little bit funnier.
08:13than some of the other financial bloggers there.One post that sticks in my head that this conversation reminds me of is his diatribe,I guess I'll refer to it as a diatribe, about the universal men's grooming device,which is an electric razor that he discusses for $12 and its effectiveness in cutting costsin a variety of areas in one's life.So what are your top 10, like this example with a razor that you'd use?I'll tell you one that didn't work out because that's probably funnier.I love a certain Trader Joe's Trail Mix.
08:46And at one time, I was buying a lot of it.And it's organic, and it's $7.99 a bag.And it's not a pound.You know, it's like 12 ounces instead of 16 ounces.And I thought, okay, for sure, the financial independence,aficionado in me can do better.And so out of that whole bag of trail mix,I weighed and counted every single piece,
09:08every single pumpkin seed, every dried cranberry,every pistachio. And then I went to Costco and I priced shopped all the ingredients. And I thought,okay, for sure, for sure, for sure, I'm going to win. And you know what? Trader Joe's was cheaper.But that's the length that I'll go to. And I actually liked that result even more.Because who would think that Trader Joe's would be cheaper, even with me going to the trouble ofbuying every single ingredient, but maybe with volume? So,So now I buy that trail mix, 100% confident, I'm getting a good deal.Aubrey was able to build back a strong financial runway after his divorce.
09:50How'd he do it?We'll be talking about that right after the 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 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.
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12:37Kickstart your well-being journey with your first audiobook freewhen you sign up for a free 30-day trial at audible.com slash BP money.All right, let's jump back in.I love that you went to that level of researchbecause I'm never going to do that.I'm just going to be honest right there.But I love that you did because now you know where you're spendingand you're spending it on what you want.
13:05I can hear people listening and be like, oh, I would never do that.Well, you know what?I wouldn't either.But that doesn't mean that he's wrong for doing it.That just means that's not our personality.And that doesn't mean that that's the only item or you have to have that level of research tosee where you're spending your money.Personal finances personally, I say that all the time.
13:23And if you want to spend your time making sure that you are getting the absolute bestTrader Joe's level trail mix price, then you can do that.But if you choose not to, there are lots of other ways that you can look at yourspending without going down the rabbit hole. And I hope you don't feel like I'm being mean,Aubrey. I'm not. I'm trying to introduce an article from Jay Money over Budges Our Sexy calledChallenge Everything. And this is an article he wrote a really long time ago, but it goes intokind of detail about how he decided he wanted to make sure that he wasn't overspending on things.So he come up with this idea. I'm going to challenge everything. I'm going to look and see.
14:00The example that comes to mind is his insurance. I have heard and I have said, and I havesaid multiple times, your insurance company is not going to be loyal to you. So you don't need to be loyalto them. Your car insurance, your home insurance, that kind of insurance. I'm not talking about healthinsurance. That's usually you get to work or the ACA, and that's a different conversation altogether.But your car insurance, you notice that your car insurance just went up even though you didn't havean accident last year or even had an accident for a while. Sit down and call up all of the big names,call up the little names, and see who's got the best price on your insurance. What do you do forauto insurance? What do you do for home insurance? What do you do for umbrella policy? Pet insurance. That's
14:39one I've noticed a lot of people don't talk about. Pet insurance, right? Pet insurance. I actually don't havepets, so that's never going to come up in my spending. I want to chime in here and say,your example here of analyzing the cost of razors and trail mix is perfect fuel for the anti-financialindependence retire early influencer who says they're all a bunch of frugal weirdos over here.in the fire community. And I want to chime in here and say, this is absolutely necessary analysisfor most people who are not these big shot business owner influencers on the internet who havebig incomes, right? If you're making $250,000 a year, some big income like that, then you'd beabsolutely silly to spend any time really doing some of the analysis, Aubrey, that you did on these
15:27types of cost savings, because it's almost certain that you're going to be able to get a 1%annual improvement in your income, which will totally amplify your financial position. Or if you havemillions of dollars, getting your investment portfolio in shape and really crystallized is going to bemore important than this analysis. But what these people forget is that almost everybody starts outat a median income or with very little in the way of assets. And there is nothing to optimize on thosefronts. We are already working a job that takes us to the maximum of our abilities at that particularmoment in time. Investments in our career are long term. We may not have investments to optimizefrom a portfolio perspective. So it's go down a very short checklist of investment portfolios.
16:07And from there, the thing we can control is our expenses. And these analyses make an enormousdifference at that stage in the journey and get the snowball going. And that's why most peoplecan never get the snowball going is because they're not intentionally treating their costs with thislevel of analysis. And that's the part that people miss. In the context of a fire journey,people see the extreme frugality that people do and the links they'll go to get the snowball going.They forget about how that just in a few years translates to exploding wealth and optionalityand the option to spend big on the basis of a much larger portfolio.So I wanted to call that out because I can see people being like,
16:42I don't want to analyze the cost of the ingredients, my trail mix,all to just keep buying it from Trader Joe's and do this analysis 30 to 100 times on big cost of my life.But no, that's the answer.That's what you should do.In that context, one push I'd give you is it would never have occurred to me to analyze the inputs to trail mix or the cost of razor blades when I was started my financial journey.Instead, I looked at like housing.I'm going to house hack.That's my biggest expense.
17:09And if I can make a delay there.How would you encourage somebody to take the first couple of steps here, keeping in mind the prioritized order or the size of the benefit if they feel that they're in this place where, yes, I do have to answer.my cost because that is my lever right now in my financial journey. How would you start this analysis?So it's not so deep down perhaps the stack of expenses as a razor blade analysis.Yeah, absolutely. The way I looked at it was what's the proportion of expenses? And for me,the big four were taxes, housing, food, and transportation. And so taxes, I made contributionsas much as I was able to every tax advantage account, which at the time was 401K pre-tax,HSA flexible spending account, which was a special purpose flexible spending account just for
17:59dental and vision and dependent care spending account. So right there, drastically reduced taxes.I went from a $3,500 a month rent to $1595. That was that one bedroom. With food, I was spending$800 a month on restaurants and $1,500 a month on groceries. And I took that down to $400,or less of groceries and $125 a month in restaurants.And then finally, with my car, as my first car, after I got my first job, I really wanted a BMW.Now, I did it in a smart way.I bought one that was three years old.It was still under warranty.
18:40K knew it would have cost 55K.I got it for 25K.And it was an amazing car, a 2001 330I with a performance package.And I did track days and autocross.enjoyed the heck out of it. But I was stuck with a $400 a month payment for five years. That definitelyslowed everything way down. And so I sold that car and I bought a Prius. And this was a big identity shift.You know, I was the corporate guy and the BMW. And it almost helped that I had had that identity.It made it easier to let it go. And so I've seen that repeat itself over and over. We're going to catch up on my
19:21story. I'm now a financial advisor. I've left the corporate world behind and I'm helping peoplefrom the Phi community and from the neurodiverse community with financial planning. I'm advice only.I don't manage anyone's assets. I'm hourly. So my intention there is for it to be very accessible andscalable. But often it takes having the thing at least a little bit before someone is ready to let it go.So go out for the big fancy dinner with oysters and crab, have the experience, and then you can make it a once a year or twice a year thing instead of always feeling like I can't.That's a mental model or a framework that I have found helpful to people when they're feeling deprivation a little bit, but yet they need to control their spending, at least temporarily.I like that. You can afford anything. You can't afford everything from Paula Pantt.and that's, I think a lot of people in this community, me included, I'm not excluding myself
20:23at all here, really feel like I can't spend anything on anything ever. I have to be so frugaland it's really not so much fun when you are constantly saying no to yourself. I like thatadvice. So I have a question. You mentioned you were living in Santa Barbara, but then you alsomentioned that there were two kiddos involved. Did you ever consider moving to a lower costof living area or was that just not an option with the kids?It was an option. If anyone has been in a divorce situation, mine was, I'd say, high conflict.And so it is theoretically possible to convince an ex-spouse to relocate. And it was difficult.It is a high cost of living area. I think the median single home price now is around 1.4 million.
21:11And that's median. The average is higher.I really, really, really love this area.The fact that it's not overdeveloped, it's bikable.There's the mountains on one side and ocean on the other.And I grew up in Washington, D.C., in New York City, and different parts of central andSouth America.And I felt so good the moment I landed here and I made friends right away.So there was a lot of things keeping me here.
21:38And I think that it speaks to what's possible if one is willing to hold somethinglike location fixed, even in one of the most expensive places in the world, if you're willing to beflexible with other elements, it can work. And I did it. And within four years, that debt that I wastalking about was paid off. I had more than doubled my net worth and my savings rate. Net of taxeswas 62%. And that was from a negative savings rate four years before. And that's using the tools ofthis community. Was that including how you allocated if you had to allocate it? If you had to allocatefor child support or alimony? Yeah, and at one point, I did have both child support and spousal support,which is what they call alimony in California. And it was half of my take-home pay that was going to that.
22:27So as J.L. Collins says, learn to live on half. Some of us don't have a choice. And then once some of thoseelements stopped and were adjusted, spousal support continued for five years. I could keep living the way I was and just pilethat money into investments, which is exactly what I did and putting more power and control onmy side of the table. Scott, earlier, you were talking about jobs and careers, and at least at themoment for most people, wherever they are is fixed. Something in your book really stuck with me,and it was that you very intentionally went from a career and a job where outperformance mightonly be rewarded by the difference between a 3 and a 5% raise to a role where you were sellingand outperformance could mean 1.5x, 2x, or even 10x. I think that's a really important message.
23:24And the way I deliver that is there is no such thing as fixed expenses and there's no suchthing as fixed income and it fits in with Mindy what you were referencing with Jay Money,challenge everything, including your income.would say that, like I'm putting myself in the shoes of that person, because I get in LinkedInfights with these people from time to time about the fire movement. But there's like a little bitof this, hey, the fire community, all they do is just worry about expenses. And there's almost alittle bit of a truth to it on that front, which is what I was getting at earlier, right,is that analysis on the frugality side makes sense to a point. But if you're in a job that's
24:02paying a median income and the career is going to do that and your journey is 20 years,frugling your way to fire does not make sense.That effort is wasted or could be much better applied to becoming a more sophisticated investor,to house hacking, to taking some job in sales or starting a business eventually, right?It of course doesn't make sense to do that if you already are a very high earning corporateexecutive or whatever, right, or your field is already producing an income that is so high thatbecomes there.But I think there's a valid criticism there at some point of, hey, your plan is to work this median
24:35income job for 20 years and fire is a top priority.why aren't we beginning to set aside some liquidity to take a risk or to begin developing our skill set there?And this comes up on a lot of challenges I see is, hey, I feel like I'm doing everything right.I'm kind of stuck like, this is going to take me 15 more years.Well, nothing in your plan can work.There's nothing that could get you lucky.There's no business or a career shift in there.It's just this formula on a spreadsheet.
25:01And the formula is great.But you also got, I think, layer in a few bets.And that's what it sounds like where you arrived at and where you went into your business for yourself.Is that what I'm hearing?Well, it took quite a while.I'll catch up to that.But I was that person who wasn't willing to change anything.When I first came to the community, Mindy, as I said, I discovered it in 2011.
25:22I took in the information.But I said, well, three-bedroom house, I have two kids.Can't change that.I have the car payment.And I like my BMW.And it's part of my identity.Can't change that.And so I posted my whole situation on the Mr.
25:37Money Mustache Forum.And they said right away, it was lightning quick, change out the house, get a different car,work on your food budget.You know, they just ran down.And I wrote back in great detail, well, I can't change that because.Can't change that because.And the response was, okay, come back when you're ready.I think that that's it, right?
25:57There's a lot of people like, hey, well, I'm not going to do that.And it's not going to do that.And it's totally fun.There's more important things than fire.You're just not going to fire.Yeah.And when I was ready, you know, it was like it was my idea.Maybe I suffer from.
26:08that one where, oh yeah, I did it. I did it. Yeah, I was doing exactly what the members of thatforum told me to do four years ago that I wasn't willing to do, but it absolutely worked once Iwas ready. So that's another concept that we can use is just because you hear something rightaway, you don't have to decide yes or no forever. You can plant a seed and see how it mightapply to your life. You don't necessarily have to make huge changes all at once.Absolutely correct. When you are ready. I love what you just said. It absolutelyabsolutely worked once I was ready. And not everybody's going to be ready the first time they hear it orthe second time they hear it. And that's okay. That's why we keep talking about it. We want people to
26:48identify with a story. And I think there's going to be a lot of people listening who are like,yeah, I also didn't listen the first time I heard it. That's okay. There's been lots of things I didn'tlisten to the first time I heard of me there. Yeah. So, Scott, you're asking about my business.So I grew up a little bit of an unusual childhood. Home base was Washington, D.C., but my dad was ananthropologist and my mom was a modern dancer. So I was living in rural Mexico, in eight differentcountries in South America, where he was doing field work. And then my mom was traveling back andforth to New York City to perform. I would go from place to place. And for example, in Mexico,where I lived, my job was to take cows out to pasture at four years old. Two years later, I was
27:32in Chevy Chase, Maryland, which is a very posh suburb of Washington, D.C. Kids were,were throwing fits because they didn't get the Nintendo entertainment system that they wanted in1986. I didn't really question it. It just all seemed normal to me. It was only later that I lookedback. I said, okay, the money that was flowing through people's lives was vastly different. Did themoney fix everything? No. Did it help with some things like health care, being able to go to the hospital,shelter, housing. You bet it did. But it didn't fix everything. And so I brought that into my life, my career.And the way it showed up the most was I went to work for engineering companies. And instead of onlycaring about the bottom line, I really cared more about the people that I was leading. And so I became a
28:27director of research and development, associate director of research and development at Raytheon in Radartechnology and I was a program manager at Lockheed Martin in infrared technology. My goal, and I wouldsay this out loud, was for the engineers who were working for me to routinely, not just once,but routinely do the best work of their lives. And often they maybe had had that experienceonce or twice. And so I saw that as my role. That career, which was once my dream job,I stayed way too long. As I was making my own changes in my mind.life with financial independence. Friends and family said, what are you doing? How are you doing this?Can you help me? And so I started helping them. And then the friends of the friends were asking and I wanted
29:15to help them. And eventually it was taking up a lot of time, although I enjoyed the heck out of it.So I started doing paid financial coaching in 2019. And I continued that until I got tired of sayingthis is not financial advice. I wanted people to be able to take what I said as seriously as any otheradvisor. And so I became a financial advisor, even though that was the thing I was most critical ofa lot of the time, I said, well, instead of criticizing it, how about be one that does thingsdifferently? And I was doing that for several years alongside my 50 to 70 hour a week corporatejob. I was working 30 to 40 hours on the financial planning business. And at Camp Phi, my very first one,I made the commitment to the people there that I was going to leave the corporate job in March of 2024.
30:08And I was ready to.I had the date picked.And a layoff was offered right at the beginning of March.And I accepted it.So it took a real commitment because I was giving up a very healthy salary, 240K a year in this corporate job for a business that was growing exponentially.But if anyone's looked at an exponential curve, the first parts of it are very little.One to two, two to four.Exactly.
30:35Exactly.In the first quarter, I think I made 7K, which was a huge achievement.But compared to 240K, you know, showing up in a paycheck every two weeks, that's a huge change.And I had the savings.But even the savings and using tools like Projection Lab, which is amazing, it showed that even if the income from my business stayed relatively low or grew very slowly,I was going to be fine, but the emotional charge and fear and anxiety was still huge.I think that's a big part of the transition from working to FI is confronting that anxietyand a huge change in your life.
31:16And part of it's financial, but definitely not all of it.We have to take our final ad break.We'll be right back after this.Tax season is one of the only times all year when most people actually look at their fullfinancial 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,
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31:55Feel aware and in control of your finances this tax seasonand get 50% off your Monarch subscription with the code,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.
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34:35On the financial component, two questions.One is it sounds like several years have gone by where you'd been really racking up savingsand there was no more large outlay of expenses on the child support and spousal support,as it's called in California.Would this have been possible for you?Would this have been even something you could have considered while that was being paid out?In hindsight, absolutely yes.I had layered conservatism over conservative.
35:03However, financially, it would have been possible, but psychologically, emotionally, and the confidence needed to make it work, I don't think it would be.Because a big part of launching any business is putting in consistent effort, even and especially when there isn't a lot of feedback.And that takes confidence.And if a person is sort of in desperation mode, it comes across.It's just like if you're trying to meet someone, whether it's at a speed dating event or at a bar, desperate doesn't work.But if you're confident, relaxed, and glad to be there whether you meet someone or not, that's when a lot of people want to talk to you because you're not trying to get something from them.So that's where I say, yes, financially, it would have been possible much sooner.But psychologically, I hadn't built the confidence yet that I needed to make the leap.
35:59Tell us a little bit about how your business grew in the last, what is it, 18 months since you started it.Yeah, so April of 2024 was when I received the business, received the designation of registered investment advisor.So as you said, it's been about 18 months.I've worked with now just over 80 clients with traditional financial advisors who are assets under management or sometimes flat fee or retainer.80 clients means you have 80 ongoing.clients. And as an hourly advisor, that's not necessarily the case. If someone comes in and they have aquestion, should I contribute to my Roth or my pre-tax 401K? If the question can legitimately and confidently beanswered in 0.4 hours, then the next Monday, that's the bill I send them. And I've gotten
36:51questions from folks about advice from your show, for example, about Frank Vasquez's portfolioof recommendations and people want to ask, how does that apply to my situation? So I can do that.It doesn't necessarily mean that I have to work with that person forever. I do it that way becausethat's what I would want. As an advisor, let me take it aside here. Was that show helpful for thesefolks or did it create problems for them or nuance for you as a planner? I don't think anything createsproblems. It was helpful because it challenged their current investments. It challenged their currentasset allocation and help them look at, am I invested appropriately for the stage of life I am in,for the risks I'm taking, and what I'm comfortable with. They did not end up adopting any changes
37:37to their portfolio, but they could do that confidently. That happened a lot this spring, for example.I introduced a new way of working with people called a one-day financial plan, and I got theidea from Rick Ferry, who is the head of the Vogelhead International Foundation.He does a portfolio second look. He spends an hour looking over people's financial portfolio,two hours talking to them, and one hour writing up a report. And I wasn't getting calls for myclients, but friends of clients who were freaking out in February, March, and April,they wanted to know, should I sell, should I stay put? And I didn't have the bandwidth to do afull financial plan, which takes anywhere from 10 to 40 hours between meeting time and work time
38:23for all these people. But I said, can I one in the morning, one in the afternoon, do a super focussession where we dive deep into what they're doing, build models in projection lab or othertools, and then get them an answer about what needs to happen or most often not happen?That's been really transformative because people can come in, get the answers they need,at least for the time being. Then if they choose to, you know, we check in every quarter,twice a year, once a year. But there's no lock-in.That's one of the things that bugged me.It was like I had to pick a dance partner with a financial advisor,
38:59never be able to do anything else except pay them.So every aspect of the financial planning industry,when I was choosing to go into it, I questioned.So I'm not assets under management.I don't manage assets.I'm hourly.It's flat fee.If I give you an estimate, I won't exceed it.
39:19And you can leave at any time.And I will hand over all data, all analysis,to you or whoever you want to work with.It's what I would want, and I didn't see it out there.Now I'm glad to see folks like Cody Garrett.He built the Measure Twice Planners community.Now I see that there are other people doing exactly what I'm doing,and I form mastermind groups with them.
39:39A couple of years ago, 2019, I felt like I was the only one,and I felt like I needed to do something,because otherwise, folks who were looking for those answerswere going to end up talking to the same advisors that didn't help me.I feel like a few years ago, this concept of the fee-only financial advisor started coming out.That became all the rage, and rightly so, there were some really bad practices, especiallyin the commission space for life insurance.But it didn't go far enough, frankly.
40:06Fee-only includes assets under management fees, which are a problem from an incentive perspective.The incentive for someone with AUM is to keep the assets under management and keep that annuitygoing for them and rack up as much as possible.and that encourages an asset allocation that is stable and continuous rather than one that maximizes long-term gainsor that maximizes withdrawals or maybe achieves another client objective in there.And it's very hard to break.It's very hard to get somebody to understand something if their salary depends on them not understanding that, right?Like, I'm but that's the concept.
40:41I know that quote.It's very true.And this fee only concept has now been, I think, replaced or is being replaced with advice only,which is what you're talking about here.That's the bandwagon I'm jumping on here.I would love to see a continuation of the shift away from asset under management style incentivestructures to DIY or advice-only management philosophy.So love it.
41:06It's way cheaper, right?A million bucks under management and 50-50 basis points.It's five grand a year.Yeah, and good luck finding someone who will do it for 50 basis points.Around here, I've had clients come to me who've talked to three advisors who told them,Since you don't have a million dollars, I won't work with you.Or if you have less than a million dollars, then you need to be on this $400 a month subscription plan.As a pushback, some people have asked, well, why wouldn't you want to make more money?
41:35And there are very highly profitable hourly firms.The largest is a shop called Timothy Financial, and their revenue is $5 million a year.they serve more than 700 clients with 17 employees.And when I started to understand that, it's about 125 clients per employee.I thought, well, what's going on there?It's because they're not spending time guessing what their ongoing clients wantand sending emails with generic advice or, in the worst cases,organizing steak dinners to show their appreciation for their clients.
42:16at Timothy Financial, because they're hourly, every hour that they spend is actively helping someone.And so once they're done helping person A, they go on to helping person B.And so suddenly 17 employees, they could maybe serve 50 clients each and said they're serving 125.And so the math of that told me, by being hourly, I can magnify my impact.And that's more important to me than making money.Yes, I want to provide for my family.I'm determined to live in Santa Barbara because I love it so much. And I will do that. And I am doing that. But before that comes impact. And that's helping more people, helping people better and not wasting my time trying to guess what people need. What's the hourly rate one should expect for a good advice only financial planner? It varies quite a bit. The lowest I've seen is around like the 250, 300 range. There are some services, which are large.scale and nectarine and abundo are two examples of that where I believe the rates are lower
43:24around 150. But for an independent shop, the rates that I've seen are between 300 and 500 an hour.And that can be shocking to people at first. There aren't a lot of businesses that I engage inpersonally where I'm prying $300 to $500 out of my wallet. I can think of family law attorneys.That's one. It's well worth it, but still hurt. And I actually embrace that. Instead of the assets under management model where the money just disappears from your investment accounts, I want people to have to pry that money out of their wallet because it makes them question, am I getting value from what Aubrey or what any advisor is doing for me? And if not, then go somewhere else or do it yourself. That feedback of, I know I'm delivering value.because people continue to work with me, that's really important to me.And so I consider that a strength of the hourly model, not a weakness.I want the transaction to be visceral and visible.So what does revenue look like right now?
44:28Well, it's been increasing.Like I said, in the first quarter business, it was 7K a month.Most recent month, it was 22K in a month.And so my goal for the month was 10K, so I more than 2x exceeded the,goal and I'm now at a point where operations efficiency systems are becoming very importantjust because of getting people's data organized, being prepared for meetings and so forth.And so I'm actually turning down the client intake lever so that I can focus on buildingthose systems and efficiencies in the background, working on the business instead of in
45:10the business. But in terms of revenue, it's been very positive.over the last couple of months.So what's next for you on your financial journey?We have a divorce.We've got intense focus on savings.Sounds like career progression to this executive role.Did you achieve fire or were you close when you went out into business for yourself?And what's the goal now?
45:31If I lived anywhere else, I would be fire.But since I live in Santa Barbara, I'm Coast Phi.I'm having more fun than I've ever had in my life.That's one element that I try to bring into everything, which is play.A lot of times this business of saving, of investing, it can feel very serious.And it is, but it can also be fun and enjoyable.The reason I told the ridiculous story of the trail mix is because it's ridiculous.I'm not prescribing that for anyone.
46:07I want them to laugh at me.And the razors too.But it's not as if I'm saying,exactly what I do. It's consider things the way I consider them. How can you play in your lifeto make your life better and save money and increase your progress towards five all at the sametime while having fun? Getting to go to in-person events, getting to meet people, that's what Iwant to be doing. I love that. I love that you have found your place. It sounds like you arethe embodiment of if you love what you do, you'll never work a day in your life. Like,
46:43It's something that brings you joy because you know you're helping people.You mentioned that you are CoastFi.What does your portfolio look like?I am just about 100% equities with cash position.So you call that a barbell.But the end of the barbell that's equities is much, much bigger than the end that's cash.The thinking behind that was that my salary job was very much like fixed income, althoughnot as secure as something like a tips ladder.
47:14So I could afford to take the risk.And the savings that I built up in cash allowed me the runway to build this business intoa reliable revenue source.Again, it's not fixed income.I don't believe there's any fixed expenses or fixed income, but it's stable enough thatI'm prepared to take the risk of full exposure to the equity markets.In terms of monthly or annual spending, what amount of...Are you keeping in cash?
47:44I am keeping nine months of cash at this point.Okay.And how does that feel?You're a business owner and you've got the equities.So you're Coast-Fi.It seems to me that the cash doesn't need to be so overwhelmingly heavy because you'reCoast-Fi.Is that how you feel about it too?
48:04Because we've spoken with business owners who are 18 months, 24 months of cash because they'rebusiness owners.but I can't now remember if they were FI or Coast FI or just somewhere on the path.To some extent, it's a hangover from my anxiety and fear before leaving the corporate job.I recognize that it's a cash drag that is potentially unnecessary, and I've been bleeding it down over time.It's basically the advice that I would give someone, if they've got it locked in their head, I need 12 months.I might give them my assessment.I think you really need to be at six months,
48:42but if it takes you two years to go from 12 months of cashand build your confidence to be at six months, that's fine.It's not going to derail your path to fire or anything like that.So I'm sort of the recipient of my own advice there.It may not be 100% optimal,but for me, psychologically, it's serving me.Tell us about your entrepreneurial journey.Did it start with this financial planning business
49:05or did it start somewhere else?Yeah, my entrepreneurial journey started,very young. I was in Mexico. I would go around town and gather bricks and sell them to constructionworkers. I would gather oranges and lemons from trees. So in Chevy Chase, Maryland, which I mentioned,I made pot holders and sold them door to door, and I sold greeting cards. I think it's part of methat's just got to be contrary. My dad and anthropologist and my mom, a modern dancer,they were not into money.They wanted it to be there so that they could go where they wanted to go, but it was not of
49:42interest to them.But I took great interest in it so that when I was 10 years old, they were sometimes borrowingmoney from me.When I was in my corporate job, I still had that entrepreneurial spirit.And I really credit Tim Ferriss in the four-hour work week for igniting it.And I didn't do a drop-ship business or make a supplement company like him.but I saw a need in my own life.My daughter, who was a toddler at the time, loved going in the ocean.
50:11But if you've been in the ocean in Santa Barbara, it's cold.It's between 55 and 65 degrees.And that didn't stop her one bit.But the scientist in me, I measured her temperature, and it went within 10 minutes to mild hypothermia when she was in the water.Again, she didn't seem phased at all.And I saw the wetsuits that were out there for infants and toddlers.and they were really just clothing or bathing suits made out of neoprene.They weren't effective.
50:40So I found a pattern maker in Hollywood who was actually a pattern maker for rock and roll stars leather outfits because they have to be form fitting and also durable.He did the pattern design for me.And I made really high quality wetsuits for kids that were comparable to those that the surfers in Washington State, Oregon, Northern.California where to surf in those even colder waters. The thing that held me back was I starve thebusiness for my attention because I was still working in the corporate job. It had possibility,but working as hard as I was during the day, I couldn't take a trip to China, which is what I reallyneeded to do to get production started. And so it just sort of stalled. And then I started a businessteaching fitness in a system called Move Nat, Natural Movement Fitness, where I took people
51:34out into the forest and taught them how to climb trees and crawl and lift rocks and logs and lift eachother. Again, it was right on that tipping point where I had 15 people coming to classes,but I didn't really have the time to market the business or to launch it, and I didn't have theconfidence to do so. So I see that sometimes certainly in myself where the foundations of a successfulbusiness are there, but if you're not willing to commit and you don't have the confidence to commit,it won't happen. I had this idea like, oh, every business I'm going to start is going to be a failure.I knew it wasn't true, but I still had that thought a lot when it came to the financial planningbusiness. But what got me through was change something, which is if you're going to do it,
52:19commit. So you're leaving behind the corporate job, you're going to the conferences, you're going tothe events, building your tool set, treating it like a real business. This is your career now. That'swhat made the difference was commitment and belief in putting the effort more into the businessand less into the corporate job. And low expenses in a big cash position. Yeah, low expenses issomething I'm all about, even in the financial planning space. Here's an example. Most advisorsas their payment processor use advice pay. They charge three and a half percent. So when you'resending out bills that are $3,000, $6,000, $8,000.$3.5% is significant. I was able to put together a payment processor by using Costco and their
53:09provider, Elevon, combined with authorized.net as the gateway, and I'm paying 2 to 2.1%. And I made aspreadsheet about it. I sent it out to all my financial advisor friends. And mostly the reaction Igot was, that looks hard. I give that advice to myself. And I give that advice to my clients.Yeah, something might look hard at first. But if you step up.through it, step by step, nothing needs to be hard, especially if you have someone who's done itto guide you.Aubrey, this has been fantastic.Thank you so much for joining us here today on Bigger Pockets Money.
53:41Where can people find out more about you?My website is openpath.financial.And I'm also on Facebook, Instagram, LinkedIn, look for my name, Aubrey Williams, OpenPath Financial.And I've got talks on YouTube from various Camp Phi events.I also speak about neurodiversity, ADHD, and autism spectrum as it concerns clients, as it concerns advisors, because I'm a proud member of those as well as other neurodiversities.And so thank you so much, Mindy.Thank you so much, Scott, for the opportunity to share today and hopefully to help.And thank you for what you do.
54:21Thank you for coming on.And thank you for the changes you're making to the wave that you're part of and the changes to the financial planning space.You're very welcome.Yes, Aubrey, thank you so much.And next episode, we are going to talk to Aubrey about his presentation that he gave at Camp Fi about setting guardrails around your spending when you are drawing down.That wraps up this episode of the Bigger Pockets Money podcast.He is Scott Trench.I am Mindy Jensen saying peace, geese.
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