Cruising to FIRE in Her 40s (After Living Pay Check to Pay Check!)

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Today's guest, Emily, proves that where you start does not define where you finish. From growing up in poverty and working three jobs to a $2 million net worth and financial independence by age 40. Let's hear how she did it. Hello, hello, hello, and welcome to the BiggerPocketsMoney podcast. My name is Mindy Jensen, and with me as always is my non-magical co-host, Scott Trench. Thanks, Mindy. Great to be here. I'm super excited to talk about how Emily and her husband stacked the deck in their favor and then played their hand to its logical conclusion. You'll get it later, I promise, guys. It's a magic story. We are going to be going back to the beginning of her five story and talk about how she built this impressive portfolio today. Emily, welcome to the BiggerPocketsMoney podcast. Thank you so much, Scott and Mindy. I cannot wait to talk to you about this. This is one of my favorite subjects. Ooh, us too. Yay, I'm in the right place. Emily, where does your journey with money begin? Well, honestly, it goes way back and I'll try not to give you my, here's my whole life story, but I'll sum it up here. I grew up in poverty. So food stamps, food banks, we just did not really have a lot. And to go to my friend's house that had like a refrigerator with running water was like mind blowing. And like, those were the rich kids in my class, right. But I just remember, you know, a lot of hand me downs. And we didn't live in very great homes and great areas. And unfortunately, like when I moved out as well, when I was 17, it was the same thing. I had very little money, I was working three jobs struggling to make ends meet. And it was kind of just survival. You know, I was never taught about money. Like I was only influenced by what my parents did and they never taught me about money. So I just knew that money was scarce and from what I had perceived and that you had to work really hard for it. And so when I finally came into my first corporate job making, you know, a decent amount of money, when I first started, I was 22 years old and I was making about $32,000, which was a lot coming from poverty. So I was like, oh, wow, okay, this is like real money. And, you know, I eventually after a few years of working corporate. I was about 25, 26. I was making closer to 65 to $70,000. But I was just spending it. I mean, I was keeping up with the Joneses. I was leasing a car that was worth my salary. That's a whole other story. And I just realized I was like, what am I doing? I make pretty good money, but like there's like nothing really to show for it. And my coworker at the time brought up, I don't know how it got started, but he was like, you know, have you heard of this Dave Ramsey guy? and I was like, who's Dave Ramsey? No, I've never heard of him. And we were maybe talking about buying cars or something and he was telling me about the baby steps. For someone who had always seen her family struggle with money, who has also struggled with money herself, who had no idea how to manage it, when he was like, oh, there's these seven baby steps, you just go one, two, three, four up the ladder. I just clung to that. And I was like, that's what I need. That's the solution. I've always needed someone to lay it out so simply for me. And from there, I don't know what, but it lit a fire in me, I guess, no pun intended, but it lit a fire in me for personal finance. Because the idea of financial peace, the idea of eventually what I learned about financial freedom and fire, I was like, oh my gosh, this is unbelievable. I could never imagine a life like this. I want to build it. What was your financial position when you discovered Dave Ramsey? You said you were spending all the money that came in. did you have any sort of savings or any sort of debt? As I mentioned, I was making probably about $70,000. And if I had savings, it was probably no more than a few thousand dollars. If that, I did not have like an emergency fund. I was not intentionally like trying to build something. And although I didn't have consumer debt on my, like a credit card, I had a very irresponsible car lease. And so I ended up leasing this top of the line Audi, which not sponsored by the way, not sponsored by Audi, but I leased it. It was like show floor model. It was probably worth $65,000. And mind you, I'm like 23 years old or something at this point, 24 years old. And my car payment, I had put like $12,000 or $15,000 down. My car payment was still almost like $600 a month. I mean, this had to have been over 10, 12, 15 years ago. So that's a lot of money. But you deserved it. Right? I deserved it. I deserved a $600 monthly payment, right? So it's so interesting how perspectives shift as you start to really dive deeper into like, financial freedom and, and personal finance. So I would say I had a really big car payment draining my budget, I had very little savings. And I was not investing, I was terrified of investing, which is so funny now, because all I do really, I promote so much investing. Now. It's just it's funny how it's come completely 180 from where I was. But you had no history of seeing your parents invest. Growing up, I didn't have a lot of money, but my parents did invest and I knew they invested. And I knew that once I got an adult job, I would also have to start investing because that's what you do when you're an adult. I didn't, but that's what you're supposed to do. So don't beat yourself up because you weren't investing before. You turn this around in your mid-20s, mid to late 20s. that's awesome because there's a lot of people who don't turn it around for a super long time. Yeah. What did you start doing when you started following Dave? When I started doing the baby steps, I think I had just gotten engaged to my now husband or soon to be engaged. And so now it was kind of a dual thing. Like I remember finding Dave Ramsey and I told, I think my fiance, I was like, Hey, this just makes so much sense. Like we've got to start doing it. And he was like on board with it. I think I did like Financial Peace University. There was a partner that's like, make your partner sign this contract to do monthly budget meetings. And I actually made him sign it and I put it on the fridge. I was so invested in this. So immediately it was like, get an emergency fund going, pay off the debt. And I remember, I think I had like three or four months left of my lease. And I was like, hey, you know, I'm going to save up money. Like I'm going to save up the cash to buy a used car in cash. We both made a promise to each other. We will never go in debt again. Like we are not going to be in debt. I ended up paying off my lease early and I bought a car in cash, like a used car in cash. And his name was Boris. I loved that car. Miss him. He was very sentimental. Then it was like building up the emergency fund and, you know, building up that savings. And then I had to learn how to invest. And I started to, I was scared, but I was like, I know I got to start doing it. That's when I came across like the simple path to wealth from JL Collins. and index funds and financial freedom and FIRE. And I just like, I set my target on, I was like, that's it. That's what I've been looking for is financial freedom. From there, I mean, it's been a almost decade long journey now, but we're getting close. What was your partner's financial position before you got married and before you started this Dave Ramsey thing? And then he, I'm assuming he was on board with it. So my husband's name is Kenji. Fortunately, Kenji, he's always been a very simple person. And so like he hasn't been very materialistic and bought a lot of stuff. So he fortunately did not have any debt. He definitely comes from, I would say he had a comfortable life, but not a spoiled life. So he was comfortable financially, but he didn't really take a lot of initiative with money. And so I remember when we started talking about combining finances and like, he doesn't mind if I tell this story. It's a pretty funny one. But I remember when we talked about like, OK, like let's start thinking about how much we could set aside for the emergency fund. And he's like, yeah. And I was like, do you have, you know, do you know how much money you make? He's like, no. I was like, do you know how much you spend? He's like, no. I was like, oh boy, we're starting from zero. We are like starting from scratch. And I remember like, we had to like check his account together. And he's just like, I just keep it in my checking account. Like I just keep money there. And I was like, looking back, I'm like, oh my gosh, all of the returns we missed out on all the games. He had been working for a really long time. He had like a decent amount of money just sitting in his checking account. And I was like, oh my goodness, we have to have a plan. Like we can't do this. So he fortunately, he got on board and like we've on ever since we signed that paper, we have monthly budget meetings since and it's been 10 years now. I want to ask you about the psychological importance of having a plan. Did something shift when you kind of figured out, hey, I can do this, that immediately translated to behavior change that should have that maybe you in hindsight should have been there all along? Is it is it that simple for a lot of people that once you just get that a plan will get you there, your behavior snap falls into place behind it? I think it also depends on how badly you want it. And I wanted financial freedom. I wanted financial peace so badly. I was willing to do anything. I do think like the behavior shift and like that mindset shift is necessary. And if you don't have a plan, it's like you're driving a car without your hands on the wheel. And you're just hoping for the best, which we all know how that goes. Like, maybe you don't have an accident for a while, but eventually something's going to pop up. Some emergency, some unexpected thing. It was really important for me to get that plan. And that gets both of us on the same page. And now we can be focused on one set, like shared goal. I'm still interested in the psychology here, in addition to the numbers that we've very lately touched on so far. We have this, Dave Ramsey is giving us hope and changing behavior immediately and lighting a fire. And then at some point, we also have the fire movement come into play. And that seems like an evolution in your psychology or approach to money there, based on what I'm hearing you say. Could you describe that? Is that accurate? How does that intertwine with or branch off from Dave Ramsey's baby steps for you? I think the baby steps were essentially the, this is how you get started manual. And it was kind of a one size fits all. Those first few steps made a lot of sense. And I was like, yeah, that's great. And then I think his fourth step is like, save or invest 15% of your income. As I was learning about the baby steps, I was just trying to learn about personal finance in general. So I was off on Reddit and all the deep subreddit forums. There's lots of FIRE folks there. And I was learning so much in other places too and reading other books. The Simple Path to Wealth was one that popped up and index funds and people mentioning FIRE. And I learned about financial freedom. And I was like, oh, that sounds a lot better than just working my whole life, investing 15% and hoping it turns out okay. Like, I don't want to work corporate. Like, I want to be done really soon. So, like, the idea that I had an out even sooner was, like, the 2.0 plan for me. And I got even more excited. And this was also at a time where we started to earn a bit more money. And I was like, hey, we could actually do this. If we really focus on it, we could probably do it pretty darn early in life. and my husband had always joked like when we first started dating he's like I want to retire at 35 and I was like okay unless you're a secret millionaire like good luck like there's no way but it just kind of funny how like years later when we actually started talking about it like we could probably retire at 40 like maybe this could actually happen and so I was like it got to the point where I mean I was just running the Monte Carlo Sims and I was like doing all this stuff And he's just like, uh-huh, I trust you, honey. He doesn't really understand the personal finance stuff as much. So I guess in terms of the mindset shift, it was the idea that I kind of had this starting path and it felt very one size fits all. But then I realized that that wasn't the only option. And I was extremely burnt out. I was very stressed. And I wanted that out. I wanted the freedom to work when I wanted to work or to not have the golden handcuffs. And so the FIRE movement felt that's kind of when I started to branch away from the baby steps. And I was like all in on FIRE and financial independence and learning about, you know, the Trinity study and the 4% rule and like all of those different things that we know about. What do you count as your savings rate right now? Right now, it's definitely dropped because we added a kid to the mix and daycare is very expensive. We're also on self-employed insurance now, not through an employer. So that is astronomically higher. But we still tend to be ballpark around 45 to 50 percent savings rate. Do you count your insurance as part of your spending, given that you're self-employed? Or does that run through your business? I'm kind of trying to figure that out, honestly. I think we do write it off as a business expense, but we don't have like a special, like small business plan per se, if that makes sense. My husband just got his S corp. I am hopefully going to convert to an S corp this year. So we're just still trying to figure out that whole thing. But unfortunately, like, you know, we're just going through the marketplace right now and we dropped down to a bronze plan and we're still paying over, I think it's like 16 to 1700 a month now for everything. It's insane. Insurance is so expensive. That's one of the biggest questions I get around fire a lot of times is like, how do you plan for health care and health care expenses? Like, it's such a big question mark with so many changes that happen to policy and things that impact it. You know, fortunately, like we do have an HSA. I'm hoping to use it as a stealth retirement account. So just loading it up, investing it, hopefully not touching it until much later on. But, you know, if things really come down to it, too, we do have like a backup backup emergency fund for health care expenses as well. I would do everything in my power not to touch that HSA money right now, if possible. What things have you changed from the mid 20s making $60,000 a year and spending it all to current day Emily besides the expensive car? What haven't I changed? Honestly, like all aspects of my life, I found ways to save money, pretty much. And having lived in poverty, I was very well aware of like how to save a lot of money and like different resources and tricks and tips and all those different things. And so a lot of it was experimenting about like finding what's the minimum viable solution, like what's the minimum and cheapest I can go but still feel like life's pretty darn good. You know, like I didn't want to be miserable. And that's not sustainable, right? You can't deprive yourself so much and save every single penny. You still have to live a little too. So we would save money by cooking at home and eating leftovers. And I would almost never get lunch at work when all my other coworkers were eating out all the time. Or I wasn't upgrading our cars. We had very reasonable older cars that we paid for in cash. When we did travel, we would never go into debt for traveling. We would do smaller trips or local trips, or we would, you know, save in advance and make sure that we paid it off. Like we were much more mindful about how we spent our money. And it was really exciting to see us getting closer to those financial goals. And it made me want to like, just keep doing it. Like just, I know for a lot of people, it's like the drawn out middle of just saving and investing. It could feel like it takes forever. But when you start to see the money compounding, when you start to see those efforts pay off. I mean, there was a day, I mean, it wasn't that long ago, I think the market was up like 10 plus percent or something crazy in like one day. And I saw our investment accounts make as much money as my salary used to be. And I was like, this is insane. I don't come from money. I started my investing accounts at zero, like everyone else starts them. And like, it was just the fact that we paired really good money habits with our good incomes at the time. And we're like, we're going to utilize this by buying our freedom. That's how we want to use this money. And we just invested, invested, invested. And we invested every month, no matter what the market was doing. We drowned out the noise. We never panic sold. And now I get to sit back and I'm like, it feels like my contributions are nothing now because they're so small compared to how much it grows in compounds now. But that's the power of compound interest that a lot of people don't realize. It's slow to build up to, but once you get there, it just takes off. When I evaluate debt funds, I look for things like first position loans, personal guarantees, deep experience by the fund operator, low fund leverage, fast liquidity, and consistent returns. These are some of the reasons why I'm excited to partner with Pine Financial Group. Their fund six offers investors exposure to real estate credit, largely for construction and rehab, largely here in Colorado, with loans originated by an experienced originator with over $1 billion in origination volume. 75% of their borrowers have been repeat customers over 17 years. They offer investors an 8% preferred return paid monthly and a 70-30 LP-GP split of everything over 10% paid annually. The lockup period is nine months with liquidity available within 90 days after that nine-month commitment. The fund is open to accredited investors only. 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When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the U.S. with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Build your business identity fast with Northwest Registered Agent and get access to thousands of free resources, forms, and step-by-step guides without even creating an account. Northwest makes life easy for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data and all services are handled in-house because privacy by default is their pledge to all customers. Don't wait. Protect your privacy, build your brand, and get your complete business identity in just 10 clicks and 10 minutes. Visit northwestregisteredagent.com slash moneyfree and start building something amazing. Get more with Northwest Registered Agent at northwestregisteredagent.com slash moneyfree. I remember the day that we saw our investment accounts grow by the amount that was our W-2 income in one day. I'm like, wow, it took me a whole lot longer to make that amount than it did to just watch this happen in one day. I've also seen it go the opposite. I've seen it drop by the amount that we were making in one year, in one day. And you're like, oh, I don't like it going that way. I like it when it goes up. I'm not such a fan when it goes down. But like you said, you never panic sold. I have a friend whose company was acquired by another company. And for some reason, everything in their investment accounts, or maybe it was all the company stock, was liquidated to cash. And this was in 2008. And he looked like a genius. but then he never put it back in. So he missed all of that growth after the, what is it, the great financial crash or whatever. He missed all that growth. So he also missed the drop, but the drop wasn't nearly as big as the growth. So time in the market beats timing the market. And these are cliches, but they're cliches for a reason. It makes so much sense. Yeah. I just wanted to ask about this time in the market, but moving towards fire. I think you're a few years away from your FIRE number based on your latest projections. Is that right? We were targeting for age 40 and we were actually invited to be guests on the Money Guys show. And they ran through our plans with us and they were definitely leaning a bit more conservative. And I think we were more optimistic. And so it was helpful to kind of reality check us. And I think we are probably a little closer to like age 42, which would be like six, seven years off. But we're hoping that I'm increasing my income a bit right now too, to get us there sooner. But ideally, I'm trying to get there in five years. So but we have a bit of a dual fire situation going on, which is a little less common. So when I say dual fire, we're having early retirement from about 40 to 60. And so we are solely funding like a bridge fund and a brokerage account for that, because I want to coast and potentially continue growing our traditional retirement accounts. So the idea is that we would use this brokerage account to get us from 40 to 60. And then once we get to 60, we have all this other money sitting in our IRAs and such waiting for us at 60. And it's like, woohoo, we get a double tap into the new retirement fund now. So it's a little bit of a more complex fire, I guess. The drawdown strategy is a little bit different coming from the brokerage account, and it's a 20 year span. So the drawdown is like probably a little bit higher than like traditional retirement will be. The FIRE number, we're technically like Coast Fi for traditional retirement, but early retirement, we're trying to get to about 1.5 and we are right around 600,000 right now. You want to increase this after-tax brokerage position by $900,000 in five years is what I'm hearing you say. It sounds crazy. No, it doesn't. You know, with market growth and the compounding and ideally with me increasing my income too. We still live below our means, save at least half of what we make. So I'm hoping that math works out for us. In the BiggerPocketsMoney community, we polled the audience and a third of members, a third, a third, a third. There's a big, a small and a medium-sized third, but they're roughly a third, a third, a third. One third is certain that they want to build a business or work in early retirement. Another third is open to that. And another third wants to not assume anything at all and certainly does not want to work. How would you bucket yourself given that you're both self-employed today? Definitely in the middle. I would say that it's hard for me to see myself just completely stop all work and producing something or adding value into something. My husband is the same way. We say we're going to go till we go. That's kind of our motto. It's like we want to keep doing what we're doing out of passion and out of want. And once it starts to feel like we just don't have the same passion for it or we don't have the same like, you know, if it's just not bringing us the value and joy anymore, that's when we're like, okay, let's maybe ease out of it. Like, let's work part time or let's not work at all, like, or take a mini retirement. I mean, there's different, there's so much. That's the thing is like, we have the option to really do whatever at that point, whether we want to work for like a few months at a time and then take time off, or if we want to work five hours or full time, and it really just kind of goes based off how we're feeling in our mood and what's going on in our life. So I became a certified money coach as well through this process to like help people. And it's hard for me to just to see myself just stop. I've seen the impact that a lot of my videos are making and inspiring people. So I want to keep doing that. And can it bring in some money? Awesome. Yeah. But at that point, I think it's going to be more of like, this is really passion driven, less like, it'll be less income driven at that point. Okay. And so with your portfolio, does this essentially mean that you just invest everything very aggressively in like 100% stock portfolios through to your number? Or is there more complexity to it in terms of how you'll bridge to a drawdown portfolio? That is something I've gone back and forth on so many times. And I always lean towards simplicity. And so for right now, like we have a pretty aggressive investing, like risk tolerance. So 100% stocks, index funds, a little bit of international, mostly domestic exposure. and I have gone through so many conversations with myself, with friends, advisors, chat GPT, you name it. I'm like, do I add in bonds and when, what's that flight path look like and all of that? I don't know why. Maybe it's just because I really like to see the numbers go up. Bonds are so boring to me that I'm like, I'm gonna wait to the last minute. There's always like what the book says, but then there's also just like what feels good to you and what works for you. And so for me, I think what I probably plan to do is stay very aggressive up until the point where I essentially switch from wealth accumulation to wealth preservation. That's when I start to see myself bringing in maybe some bonds, a little bit more cash reserves or something like that. But for right now, I'm like, I have a big target to hit. I'm kind of trying to maximize the gains right now. How did you feel in March of 2020 when COVID hit and the stock market went down and then it had the V recovery but it went way down really really quickly How did you feel when that happened You know the first few times you see that happen or the first few times you see the dips, it's kind of like a, it's a roller coaster. The first few times you take those dips, your stomach is kind of like, oh, a little queasy. And you're like, that's a lot of money. But I have found that when I remind myself of the data that we know. And I remember, you know, when in doubt, zoom out, right? Like I know eventually it trends back up. I know what the data tells us. I know what the trends have shown us. And I also tell myself that if I sell, I lock in that loss. If I don't sell, I'm not locking in the loss. And I still own the exact same number of shares that I owned before. They're just valued differently. So for me, it was a really big mindset shift that took place. So now when I see those dips, even if it's really big dips, I'm just like, Oh, yeah, that's gonna take a while to recover. But I'm getting everything on sale right now. So my money's buying more. And I haven't lost the money unless I sold my my assets. And so there's a quote from Dave Ramsey that I do like, which is the only people who get hurt on a roller coaster are those who jump off. And so I just see it as that. I'm like, I'm on a roller coaster. It's just one of those dips and dives and I'm not jumping off. No way. That's how I see it now. And honestly, it really doesn't phase me at this point anymore after I've seen it. We find that the overwhelming majority of folks, even as they are approaching fire and their number, they remain invested extremely aggressively in all or mostly all stocks, even as they get there. So this has worried me for a long time. It does not worry. it seems like most people that listen to this podcast, but it is something I have in the back of my mind. And it seems like that's not a concern that you have on the journey. I also think for the record that six years out is potentially too soon to begin thinking about shifting towards the more conservative portfolio. But five years or 80% of the way, this is a Frank Vasquez has given me this framework, I think is the time to really begin thinking about that for folks who are transitioning there. But most people will hear that rule and not do it, is what our data tells us from the polling that we do on BiggerPocketsMoney? We'll see how I'm feeling. Like, you know, money is very emotional, right? And so I might get to a point where I'm like, okay, yeah, you know, I want to smooth out the ride. I'm going to add some bonds in and maybe I do that like three years out and I add a little bit and a little bit more and a little bit more. And so I get to the allocation that I'm looking at, you know, I've thought of allocations like 80 20s, maybe as conservative as 70 30s. But for the time being, it is a privilege, though, too, that we have the flexibility. Like we're not going to get to age 40, 41, 42 and be like, we have to quit and we have to quit right now. Like everything relies on this. Like if the market takes a dip before we want to retire, it kind of stinks. Okay. We'll just keep doing what we're doing for a while. Like we're not so set on that time. It's just that timeframe in general is we want to start having the option to be a lot more financially independent at that point. Going back to the beginning of your journey when before you discovered Dave Ramsey, how would you describe how you felt about money in a general sense? That there was never enough. I mean, I had a very scarcity mindset from seeing my parents struggle, from me, myself struggling. And it felt like no matter, I was working three jobs and no matter how hard I worked, I felt like I, I mean, I had almost no money at the end of the month. And I mean, I was living off bare, bare bones. Like I was poverty line living. So I guess like my mindset around it was just, I must have to work just super hard, I guess, if I want to be happy. And it's such a polarizing feeling because the more you work, it doesn't correlate to how happy you are, right? And so, and more money doesn't always equate to more happiness or more wealth. It's about how you manage the money you have. I think for me, there was that mindset. But also, I think one thing that set me up, it was almost like an ignorance is bliss moment for me because one thing that actually helped me a bit was I never even knew that getting credit was an option. My parents had never talked to me about it. I knew credit cards existed, but I thought they were for like older people with big corporate jobs. Like I never knew I had access to even get a credit card. So to me, my mindset was like, I can only spend what I have. I can't spend more money than I have. So that actually, in a way, helped me a lot by not accruing debt. How do you feel about money now at this point in your journey? How has that emotional relationship evolved over time? It's almost like making me emotional, if I'm being honest. That's okay. This is like why we obsess is the right word, I think, over money is for this new emotional situation, right? I cannot tell you how much more peace I feel in life to not worry about the bills, to not have to calculate my groceries when I'm shopping and put things back. And when people think of financial freedom, I think for a lot of people, it's very all or nothing. It's like, you don't have to work or you do have to work, but there's so much in between. The freedom, like I was saying, to not have to put the groceries back or calculate them, the freedom to not rely on food banks, the freedom to take time off of work when you need it, like truly need it. And I'm at a point now in life where it gets me so emotional because like I have a fully funded emergency fund. I have all my bills paid. I can give generously to people. It just brings me so much joy to be able to do what I do now and to help other people. And to know that like my son, he is not going to have to go through what I did. And I cannot tell you how much it has changed my life completely. I mean, as you can see, this is why I'm so passionate about just personal finance and financial freedom and all of these topics, because like it truly does change lives and it is accessible. I know that a lot of people might look at our situation or be like, well, you had good jobs or, well, I have credit card debt. But these principles of building wealth and managing your money well apply to everyone. Now, we were able to get here quicker than a lot of people because of our incomes and because of how aggressively we did it and lived below our means. But that doesn't mean it's inaccessible for other people. People can still retire with dignity. They can still set up college funds for their children. It's just, we're not taught this stuff. I still would be working at my corporate job, probably just keeping up with the Joneses and spending what I make until someone had told me and introduced me to personal finance. I'd just be in the same rat race. I think that's extremely powerful here. I want to dig into a couple of more dynamics that I think that we have not yet covered. One is you guys are both self-employed and have transitioned out of corporate work. Can you tell us a little bit more about how that came to pass? Because the way you're telling your story and the way your journey has unfolded, it seems a little less like we were hardcore entrepreneurs from the outset and more like that confidence evolved over time as your story progressed. But I'd love to hear in your words how that transition came to be. My husband definitely got lucky because he has been a content creator for 13 years now. That has been his full-time job. And he started off at like a grocery store. He was like stocking shelves overnight. And then in the meantime, building up his, he's a video game streamer. So he would stream video games after he worked at Night Shift. And he built up his business from just doing that. And so like he had pretty humble beginnings with his work and not really corporate, but, you know, just working at the grocery store. What game does he play? He plays a game called Magic the Gathering. Oh, and he streams this? This is a I didn't realize that was a video game. I thought that was like a card game. It is, but they made like a video game client for it. And so he has streamed it. I mean, they've had an old one that looks pretty old and dated. And then they made a new one a few years ago. And he's been doing that for 13 years. And like it has been so steady for him. And I know everyone's like content creation is so unpredictable and all that. And like, it is, I get it. But like, he has built such a steady community and like his income has been very predictable. And it's almost just like just a normal job. It's, I don't know, it's kind of interesting, but he got lucky for sure. He has like the dream life with his career. I worked a bunch of just random jobs. And I actually, by trade, I'm an esthetician, but I only did that for a few years. So while I was working three jobs, I put myself through school and became licensed. And I just realized it wasn't for me. Like I didn't enjoy the work I was doing. So I got introduced to social media marketing. And I did that for about 12 years. I was hopping around. I started at like really small studios. And then I started getting into like, you know, the big hitters. Like I was working at really like globally recognized, huge companies with very big budgets. and I got the title I wanted. I was making tons of money. I think like at my peak, I was like, I had about a $200,000 compensation package. And I mean, I felt like I had made it. Like I spent all this time and I finally made it. And I'll summarize this story a bit because the little, there's a lot of nuance in it. But essentially there was like a perfect storm that happened where I was so burnt out and stressed at work. And we were going through years of infertility struggles at the same time. So just balancing the work with the appointments and the medications and all these things. And it was just a lot of grief and trauma and loss. And just it was a lot for my mental health, my physical health. So my husband and I were talking, we're like, you know, he has built up his business to be really stable at this point. We've been saving a ton of money, we invested a ton of money. Like we probably knew I wasn't going to last much longer doing what I was doing. And he's like, you should just quit. I was like kind of taking it back at first. I was like, I can't quit. Like I have to work. And I realized like my identity was my work. My identity was my title and the company I worked for. And like, it was so scary for me to even think about quitting my job. And he's like, I think you should just do it. Like, let's see if it changes anything. And like, you just got to take some time. I was like, yeah, I think I got to. And like, I ended up quitting my corporate work. Sure enough, we had a family a few months later. Like, no, I don't think that's coincidental. I really don't. You know, we were able to start a family and I was like, you know, I don't really want to go back to corporate work now that I've had like a taste of this life. Like, I finally feel like I can breathe. Like, I don't have this horrible dread and anxiety and it's like having to wake up all these emails and meetings that should have been emails. And like, I mean, you know, the corporate life. And so I guess that's a long winded way of saying that I definitely have the more traditional career path of like working corporate. And then we had built up so much security. And my husband had also built up his income that it gave me a safety net to quit. And then as of about a year and a half ago, I was like, you know, I really want to help people and I don't want to go make a business more money. So maybe I could go into the social media thing. I've done it for brands. So maybe I can do it for myself. And I started talking about personal finance and our situation and our story and retiring early. And here I am. It's actually starting to turn into something. What was the interplay between the liquidity that you had in your life at that point in time that was not in your retirement accounts and your comfort level with this decision? Because that I think is an interesting dynamic that I observe in the FIRE community. Some people are comfortable with, hey, I'm going to just jump in. And some people need a lot of cash or a big buffer to feel good about that decision. I'd love to know what that was like for you. I don't remember the exact number off the top of my head of our emergency fund at the time, but we did have an emergency fund that was at least, I want to say, probably like $30,000 or more. And then we had a significant amount in our brokerage account, as well as like all of our other investment accounts. And my husband had been steadily bringing in about $200,000 or more a year. So I mean, that with the fact that we had also just paid off our mortgage, so we were completely debt free, our expenses were a lot lower, I just ran the numbers a lot, I ran all the different scenarios and situations and oh, well, if you lose your job, then what do we do plan A, B, C and D. And so I think it was a little bit of like, there were two parts of it, there was a big mindset portion of it, too. There's so much fear when you pull away from corporate work or just like a traditional nine to five, because that's so much security for people. And that's what we do our whole lives, right? We're working nine to five. And like, that's our income, that's our stability. And so it was really scary to jump out of that. But then I tried to just reinforce the facts of like, okay, we've spent all these years building up all of these financial resources and all these accounts, and we have his income and we have plan A, B, C, and D, Like there was a lot of reassurance in doing it. And I also just knew that like for my sake and my mental health and my physical health, like I had to take a step back in some capacity. Was your job very high paying before this? Like start to the two kind of high paying before you stepped down? You mean at the time I stepped down? Yeah. Yeah. I stepped down when I was making around $200,000 a year. There are no easy jobs in corporate that start with that number. No. That are secure. It's just, it is, it is so brutal. Extremely demanding. and this was, I think this was the year before we had gotten pregnant. And so he had also peaked in his career. He was ended up like pulling like 300,000 and I was pulling about 200. Like, I mean, that was the year that we blew it out of the water. And instead of being like, how do we upgrade our life? We were like, how can we save every penny of this? Because we know that I'm probably not going to last much longer in this job. And we want financial freedom. I know some people will hear that. And I mean, that was just one year of our life, right? That was not average or ordinary for us. But people will see that or hear it and be like, well, it's a no brainer that you can do what you're doing. But the statistics even show us that there are a lot of broke rich people. There are a lot of people who make well over six figures, over 200,000 a year, and like a third of them are still paycheck to paycheck. So it's not just about what you bring in, it's how much you keep of what you bring in and how you're utilizing it too. And so we had just chosen to use our money in a way that was going to support our financial goals. I still have my eight-year-old Honda outside, you know, like even though we were pulling like half a million dollars that year, we could have bought a Lamborghini, but I'm like, this doesn't serve us. My cute little Honda gets me to the grocery store just fine So in 2024 you needed to make or more to be in the top 1 of all U households So you were not in the top 1 And I also put in another detail here which is that 12 of U.S. households will earn in the top 1% one year, at least, out of their life. And that number goes up much higher for households that get into the top five or 10%, right? I think a majority of Americans will actually be in the top 30, 25 or 30%. I'm now reaching a little bit for the data here, but a majority of Americans will have a good earned income year. And the BiggerPockets money listener, the person who is listening to a personal finance podcast instead of the Chainsmokers, they have a great remix of Ophelia, by the way, which we listen to every day, along with the original version from Taylor Swift on the way to daycare with my little girl. But it's that you're listening to this instead of that, you're probably disproportionately likely to have one of those high income years at some point. And if you're pursuing FIRE, it's going to happen towards the end of your journey right before you FIRE. And this is a frustration that keeps coming out in the FIRE financial independence community that you are instinctively aware of in the way that you're presenting this because there's almost like an immune reaction to people who don't get this, that, oh, they were a super high income earner, theirs doesn't apply. Where's the median person that has done that journey? We understand that there are people who have been in the median income their whole journey. Those are generally exceptions to the rule. Most people who pursue and achieve fire will start at a median income and end at a very high relative income at the very peak of their journey before they fire. And that's a very common thing. That's not unusual. It also cascades with saying yes to those opportunities and being very conscious with money over time. And yet we find ourselves in the community very surprised when we hear big numbers like yours in your household. And there's a defensiveness or unwillingness to talk about it because there's some sort of negative connotation attached to it. I think that's nuts. It's fine to do it on a median income, and it's also fine to watch those incomes grow. But I just wanted to call that out because I observe the way you are phrasing that in that defensive – not defensive, but cautious way because you know that challenge is coming from somebody. And I think it's unhealthy. I think it's just it's also just not acknowledging the reality of statistics and especially as they will probably apply to the fire community. Yeah. And I mean, people will look to that and gravitate towards that number. But then, you know, when I worked three jobs, I was making like maybe $18,000 a year, if that maybe. So my career, like I have made as little as $18,000. And then it took me 12 years to make this $200,000 that, you know, I coupled into that bigger number that we shared. And it took my husband 13 years to get to where he is too. And so I do understand, though, the idea that the median families or folks who are interested in fire and saying, well, where do I fit into the picture? I think there's this idea that when you hear fire stories, the ones we tend to hear are the really extraordinary ones. It's the tech bro in San Fran who fired at 23 because he sold his business for $7 million. And like, I mean, it's these really extraordinary, high income, crazy situation stories. But the reality, too, is that fire could be retiring at 50. Like fire doesn't mean you have to retire at 30 or 35 or 40. Like fire just means early retirement. before, you know, what, 60, 65, whatever traditional retirement is, they keep pushing it off because people are retiring later. But it's not that they can't achieve fire. It's not that they can't achieve financial independence. Stories like mine and other people, yes, like they're likely to have high incomes at some point in their life too. But the people who have these incomes early in life, I think of it as almost like going to gaming. It's like Mario Kart, you like you get power ups, like some people get power ups earlier on in life. But it doesn't mean that you still can't at those later on and still reach financial independence, journeys are going to look different. But the same principles of reaching financial independence applies. Live below your means, invest the rest, right? Like those principles apply to everyone's situation. I think the pushback comes from people who are like, oh, well, she did it with $200,000 in income. I don't have $200,000. Therefore, I can't do it. Well, if you're looking for a reason why you can't reach financial independence, why you can't pursue financial independence, you will find it everywhere you look. And it's just, it's a difference in mindset. You were making $200,000 a year and burned out. You were horribly stressed out to the point that you couldn't conceive. That's an enormous level of stress. As somebody making a lot less money probably doesn't have that same level of stress. And if they do, they are absolutely in the wrong job and they should get their resume together and start looking for a different job that isn't nearly so stressful because people run their companies in a lot of different ways. And there's a really, really bad way to run your company. And there's a really, really good way to run your company. Your job, I think, just came with a lot of stress. But for people to automatically dismiss what it is that you've accomplished because you had a high income, I think is missing the point of the whole story in general. You were saving at 1.85% of your income. That means that you're really not spending a lot of money. You're putting most of your income away and, like you said, buying back your future. So they could do that, even if it's not at the same scale. They could do that. They choose not to because they're looking for the excuse. So if you have an excuse for why you can't reach FI, email, tell somebody else at idontcare.com. I'm not going to go quite as far as you there, Mindy, on this. I'm going to say that there are plenty of people that are not going to be able to reach those upper incomes. But I think that a better framework is my career is going to compound just like my investments will compound in many base reasonable scenarios. You know if that doesn't apply to you. You know that if you're teaching middle school that you're going to get a pension and there's going to be some good things. But your career is not going to compound to $200,000 in real terms on an annual basis. But if you are in a corporate setting and there's a chance to climb the corporate ladder at a big company, that is a very realistic trajectory over 15 to 20 years, depending on how you set yourself up and how hard you apply yourself and what opportunities you take. It doesn't mean it will happen, but it's a potential outcome. And it's going to be relatively common among the FIRE community to the dismay, I think, of some folks who hear that number and then, you know, put a nasty comment on the YouTube channel or whatever, which is, again, what you were distinctly reacting to. I just wanted to observe it for a second here that this is going to be very common relative to the fire community. It's not common to earn $500,000. It's common to ramp up to an income that is approaching the top 2%, 3%, 4%, 5% in the fire community towards the very end of the journey to financial independence and the transition in the last few years of transitioning to that. That is going to be relatively common and also relatively taboo to talk about. Yeah, no, I completely agree. Sorry, my rant is now over on that particular front. My rant was aimed at people who were looking for a reason to not reach FI. Yes. It always bugs me when we talk about FIER journey and you're like, we did this one for Nancy, right? Who's starting her career over at 50, you know, and doesn't have any skills. And it's like, Nancy, you get an entry-level job. You're not going to be earning an entry-level salary for the next 15 years. If you do that and say it's impossible, of course, it's going to be impossible. If you assume that that's going to be the case, you're going to get a raise after three, four or five years. You're going to get a promotion after four or five years if you try that out. And that is what people don't factor into these plans. And once they see it, it begins to compound really nicely. It's in the same way that when you saw Dave Ramsey's baby steps and had that first plan put together, that lit a fire underneath you. And then when you got the fire movement concept, I guess fire is being used twice in this example, that again kicked it into another gear. And the last piece of that puzzle, I think for a lot of people is understand, don't model your career as this like static 3% raise trajectory the whole time, bet on, you know, or acknowledge the possibility that you're going to win in your career and get those promotions and things are going to progress, especially if you're starting out and you're at the relative early stages of your career. You've got a great shot at advancing over a reasonable period of time. Yeah. And I would say too, like when you're making the median income or, you know, you haven't hit that point yet, this is the perfect time to start to learn good money habits and how to manage your money. Because if you can't manage a smaller income or a more modest income, you're not going to just magically become good at managing your money when you all of a sudden get a $200,000 job. There's a lot more responsibility and like the same habits you have are only going to be amplified the more money that comes in. And so yes, like there's a good chance that people, like you said, over the long run, over when you look at like their lifespan or their working career or working timeline, they're going to come into money at some point. That's just like statistically that that's what supports it. But it's also a matter too of like when you are not making all that much money, like you are still building the foundation for fire. You are still setting aside money. You're still building an emergency fund. You're still doing these things to set you up for financial freedom later. Emily, let's end on this question. What does your typical Tuesday look like as you approach fire and are self-employed? Oh my gosh. I mean, there's like almost no answer to that. Cause it's really kind of, I mean, this sounds so, maybe this sounds really conceited. I don't know what it sounds like. It's kind of whatever I want, which is like, that's the blessing of, oh wait, you said Tuesday, Tuesday are my coaching days. I do one-on-one coachings on Tuesday. Dang it. I was going to say if it's my free day, my free days or like the days that I'm not coaching, I will usually like my favorite treat myself day is like I will go thrifting. Goodwill has $2 tags on Monday, my local store. I will go thrifting to Goodwill on Monday and I'll go treasure hunting and then run some errands. I don't know if I'm really, I might get like a drink at grocery outlet for like clearance out drink. I mean like legit, like I'm still very frugal. And we can all go see friends. I'll go to the gym whenever I want. I'll make a nice lunch. Like I kind of just, I've slowed down my life and like, I've really tried to focus on like savoring the time that I have and be really grateful for everything that I have and my loved ones and, you know, just how far I've come over the years. And so yeah, to a Tuesday, I'm working any other day. Hopefully I'm probably kind of a wild card. Good. I'm glad it's not structured. It doesn't count if it's not Tuesday, unfortunately. Oh, dang it. Yeah, I'm working on Tuesdays then. Stickler Scott. Just scratch all the other answers. I'm working. That was our tagline for a while. We optimize for Tuesday, not terminal net worth. So you unfortunately don't check the box. Scott, you're fired. Where can people find out more about you, Emily? Yeah, so if you guys are interested in frugality or financial freedom or fire, you can check me out at HeyFriendIt'sEm. I am on Instagram, TikTok, and Facebook. so you can find me there and follow along. Well, Emily, thank you so much for sharing your story with us today. And we wish you the best of luck on finishing the play to true and total financial independence as you've defined it over the next five years, five or six years, we'll see. Thank you so much for having me. It was so nice chatting with you. Thank you so much for joining us and we will talk to you soon. Sounds good. All right, Scott, that was Emily and her magic journey to financial independence. She's not there yet, but she's getting there. What did you think of her story? I thought her story was great. I thought her energy or mana was great. I thought it was a fantastic overall presentation of the story. So I'm excited for her. And I think that I'm cautious. I'm worried that people hear this like, oh, my peak earning year was $500,000 and that doesn't apply. But I really think that's a limiting belief. And I think that a significant percentage of this community will see a peak income year in that ballpark. I think as much as 25 to 30% of the people listening to this podcast have a shot at achieving a peak income year in the top 1% of all Americans because you listen to personal finance podcasts here. It will depend on your career and your trajectory, whether you become self-employed or a business owner one day. But I think that that is underestimated by a lot of people in their model, their mental model about how they're going to achieve financial independence. And I think that that's an unfortunate and limiting belief. I think it guides a lot of my optimism around journeys that I think are grounded in incredible conservatism. as I can see those growth opportunities right in front of people that they can't. Well, 50% of this show's hosts will never make a 1% income because they don't want to do that much kind of work. The 50% of these shows hosts will never generate a top 1% taxable income, but you've generated a top 1% income when you've lived and flipped in some of those years. You just haven't paid taxes on those gains because they're excluded from income tax. I don't even think that was top 1% then. We'll see what happens when I sell this house. What's been your biggest ever live and flip gain? $298,000. And on top of a full-time salary at the same time from at least one of you guys, right? And then on top of dividends and other things like that, you're going to be approaching that level. Oh, I don't count dividends, even though the IRS does. I don't even look at those. They just get reinvested. It's not every year. But like if you live and flip and do it 10 times, probably going to hit on one of those in a way that puts you pretty close to that, especially if you're doing another full-time job at the same time. Okay. Going forward, 50% of this hosting staff will not be making a 1% income because she doesn't want to do that work. I mean, you have to put in a lot of work to make $500,000. I'm good. Or realize a lifetime's work, right? You build a business over many, many years and you sell it and that's the year you hit the 1%, right? Or you sell your house after living in it for 20 years, right? Those are all ways to get into these years where household income between ordinary income and gains can put you into those categories. Yes. But if you look at this and their top line income on one year, you look at that and you're like, oh, I could never do that. So therefore, I'm not going to listen. You've missed the point. Just because you can't save at their exact dollar amount doesn't mean you can't save some. She was purposely putting herself into frugality mode so that she could make it to early retirement. That is exactly what she wanted to do. And she did it. So great for her. But if you want to retire early, you're going to have to do things differently. And number one is don't spend every dime that comes in. Let's just end on this. The magic is not in the income generation. The magic is in the gathering. Oh, God. Should we get out of here? Yes. That wraps up this episode of the Bigger Pockets Money podcast. My name is Mindy Jensen. His name is Scott Trench. And we're saying, do you want to do some sort of magic-y thing at the end? We'll just leave with you. The end. Goodbye. Toodles, poodles. You can email Scott at biggerpocketsmoney.com to tell him how much of a groan that was. All right.