Home Blog All

Mr. Money Mustache on Life After FI: The Truth About Retiring Early in Your 30s

The BiggerPockets Money Podcast
52 min read
Mr. Money Mustache on Life After FI: The Truth About Retiring Early in Your 30s

Mr. Money Mustache is the internet’s poster child for early retirement. At age thirty, Pete Adeney was able to leave a lucrative job as a software engineer to focus on building a financially free life. He brought the FIRE movement to the mainstream by teaching others online how simple spending skills could allow them to quit their corporate jobs, keep more money while working less, and live a life centered around passion, not a paycheck. His popular blog has garnered millions of visits, as early versions of himself flock to the financially-freeing wisdom so rarely talked about in average American society.

Pete has been retired for nearly twenty years now, meaning he’s been FIRE more than double the amount of time he spent in the working world. So, how does he spend his days? What keeps him going? Does he still have enough money? And how can someone repeat his system? Scott and Mindy spend this episode asking the “life after FI” questions, so you can know exactly what you’re getting into when you retire early. Pete’s answers shed light on often untouched topics that most of the money community can’t answer.

We’ll go deep into planning for financial independence, developing “spending skills” that can bring early retirement decades sooner, and the right way to quit your job and wean off work. Pete also shows what the day in the life of an early retiree looks like and how today’s stock market crash has affected his portfolio. Want to retire early? Strap in—we’ve got the man who brought FI to the masses on today’s show!

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Mindy :
Welcome to the Bigger Pockets Money podcast where we interview Pete Adeney from Mr. Money Mustache and talk about life after financial independence.

Pete:
Spending less money is not a deprivation, it’s a skill. It’s just lifting more weight or being able to run further or whatever, so you don’t say like, oh, marathon runners how do you cope with having to run 26 miles in these race length? Can’t you run less? And it’s the opposite. It’s like, no, I’m good at running, so that’s how much I choose to run. Well, when you get good at spending efficiently, you get more for your money, more fun, you might have a way to get your through connections or like Craigslist.

Mindy :
Hello, Hello, hello, my name is Mindy Jensen and with me as always is my unable to grow a real mustache co-host Scott Trench.

Scott :
Ouch. Mindy, I think I’m going to stumble to come up with a good response to that one.

Mindy :
Well, that was good. Scott and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you are starting.

Scott :
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or learn about what life after financial independence looks like. We’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy :
Scott, we are bringing back Mr. Money mustache. He joined us all the way back on episode number one and we are going to talk to him today about what his life looks like after he reached financial independence and retired because I think there’s not enough conversations surrounding this. There’s all sorts of conversations talking about the journey to financial independence, but there’s not a lot of people describing what it’s like to be retired.

Scott :
Yeah, I think that’s true and it seems hard sometimes to find folks who are truly living the fire lifestyle even after all this time. All stuff we talked about with this. Mr. Money Mustache is one of the original folks to have accomplished this. He’s a pioneer with a slot leadership and he’s a personal inspiration. So way back in 2013, 2014, when I was starting my career and journey, I was very heavily influenced by two websites, platforms, mrmoneymustache.com and biggerpockets.com. And so my philosophy still to this day is really a hybrid of those kind of two approaches to money.
This kind of the skill of spending as we’ll discuss with Mr. Mustache today and then the concept of real estate investing and that that’s a big part of my life in my portfolio. Highly encourage anyone and everyone to go to mrmoneymustache.com and there’s a new 50 series bootcamp, email, email series you can sign up for= that’s awesome or you can just start with the first post and start working your way through. There’s only maybe a hundred or so, maybe a hundred to 200 posts and they’re really a college level course in personal finance.

Mindy :
Yeah, I had a great time talking with Pete today and I think it’s really fascinating to see how his plan for financial dependence started off and how it ended up and how he approaches his journey to financial independence, his journey to enjoying his life now. I think it’s a lot of fun. Before we bring in Pete, let’s take a quick break. And we are back. Today’s guest is Pete Adeney, also known as Mr. Money Mustache. He needs no introduction, but it’s my show so I’m going to do it anyway. Pete runs this tiny little blog that nobody’s ever heard of where he talks about spending money, which I think is so funny because he runs this ginormous blog called Mr. Money Mustache. He is kind of the reason that most people that I’ve ever met on the path of financial independence have discovered financial independence. Pete, welcome to the Bigger Pockets Money podcast. I’m so excited to talk to you today.

Pete:
Thank you. It’s exciting to be back for my second guest appearance here.

Mindy :
Right. I should say welcome back to the Bigger Pockets Money podcast. We actually spoke with you a few episodes ago on episode number one. It’s now, what did you say, Scott? 378 episodes later, so I’m glad you could join us. What have you been up to?

Pete:
Congrats on the huge success of this show, I’m a big fan myself.

Mindy :
Oh, thank you.

Pete:
I’ve been up to the usual stuff like building things, helping to manage and be the janitor at our shared headquarters facility, co-working space and occasionally typing some into the computer as well. Same as most years I would say. Oh, and raising a boy, of course, that’s the main job.

Mindy :
Let’s talk about a few years ago before you were financially independent, back when you were actually still working. Why did you start pursuing financial independence? Because I know so many people who started pursuing after reading a blog post on your blog, but clearly that wasn’t how you got started. Where did you start?

Pete:
For me, I think it was just being a quirky thinker, just like the standard engineer who doesn’t really notice or follow what other people are doing. So I just noticed, whoa, this is way too much money they’re paying me for a 22 year old or whatever. What should a person do if they have extra money? So I just learned about investing and did the investing and then I thought, well, what do you do if your investments are growing and they eventually end up being able to cover your living expenses? Well, of course you’d want to quit your job then. So that was the basic idea. But then the bigger thing is at that age we were looking towards having a family eventually, the end of your twenties and early thirties, many people, and I didn’t want to be a worker and try to split my time with the intense job of being a dad. So that was an extra super boost to the motivation is having two stay at home parents for a young kid at the time.

Scott :
Where did you turn to for information during that period because there was no Mr. Money Mustache blog to kind of inform the strategy? How did you figure all this stuff out?

Pete:
Yeah, I didn’t know about the concept of financial independence and in fact the whole idea of this 4% rule, I didn’t make it up either, but I just read about it on other blogs and books long after I had already retired, so that was kind of secondary for me. My primary source was just reading normal investing books like stock market history and these old John Bogle books that talk about index funds and why they’re better than individual stocks and things like that. So I used to just go to the library and look in the investing section and just pick books based on their title because I was so interested in money, and this goes way back to when I was a little kid. I was interested even then. So it’s pretty much just stumbling upon it. I didn’t start writing about it until after I was already retired for something like six years. And of course that was 12 years ago as well. So I’ve actually been a retired 18 years. So a lot of this is really a bizarre bit of ancient history now.

Mindy :
So let’s look back into the way back machine. What was your plan for early retirement and how did it actually shake out?

Pete:
So the plan was to just enjoy unlimited weekends and more or less, it did work out that way, except a few times when I stumbled into committing to projects that I should not have and then I temporarily had a job again, and then I realized that wasn’t a good goal for retirement. And numbers wise, since I didn’t know about the 4% rule, we had this different concept of just thinking, okay, how about have the house paid off, so there’s no mortgage bill, and then an additional, I think the number was $600,000 of investments to generate the dividends and capital gains to fund the rest of life, like the groceries and the fun and the travel and child raising expenses.
So what that works out to you, if you now think about it through the lens of the 4% rule, it’s having really cheap housing plus an additional $24,000 a year of pretty reliable investment income. And remember this is like $2,005 so you can kind of almost double that with today’s post inflation numbers. It’s like having 40 ish thousand dollars to live off and on almost free house, which I think most people could still do today as long as they have control on a lot of their life expenses.

Scott :
And one of the things that I, because obviously you’re a huge inspiration on my personal journey here, I kind of uncovered Mr Money mustache and bigger pockets around the same time. But one of the things that really attracted me to your philosophy was also this concept of very simple, keeping your expenses low on that and 24,000 at the time or even 40,000 today, I think would feel very low to some folks, perhaps even with a paid off house. What would you say to those folks and how did you go about creating a life that was comfortable at really what much less than that level of total spending?

Pete:
Yeah. Well, the thing is I naively thought that I had a super, super fancy, huge lifestyle that wasn’t cutting back, that was pretty much the most I could spend. And the reason was because we were a double income professional couple at the time, both engineers making tons of money. So money wasn’t the problem. If we wanted to spend more, we would have and then just set our annual spending needs higher, 80,000 or whatever the number ended up being. So to me that was what the most you can imagine needing and then just cutting out the waste. So the way I encourage people to think about it is spending less money is not a deprivation, it’s a skill. It’s just lifting more weight or being able to run further or whatever. So you don’t say, oh, marathon runners, how do you cope with having to run 26 miles in these races?
Can’t you run less? And it’s the opposite. It’s like, no, I’m good at running. So that’s how much I choose to run well. When you get good at spending efficiently, you get more for your money, more fun, you might have a way to get your through connections or Craigslist, you can get the same fridge that your friend might have to pay $3,000 for. You can just snap your fingers and the same fridge appears in your kitchen for $1,000 because you have more skill at spending money on that particular thing. And the same applies for all these categories of life, transportation and food. There’s usually a really inefficient way to do it and then there’s a spectrum of efficiency, and it’s not till you get really, really hardcore that things get difficult, at least probably because I have less skilled than some of these other early retirement authors like Jacob, early retirement extreme guy, to use the classic example, he’s really skilled.
So he can spend let’s say a hundred dollars a week on groceries easily. Whereas for me, I have to spend $300, I mean actually these numbers are too big. He can spend $30 a week, I could do $100 a week, and we’d both eat the same amount of nutrition and quality. He’s just better at it than me. So I encourage everybody to think about it like that because instead of thinking, oh, I don’t want to shrink my lifestyle, I just tell them no, you just have to grow your skills at learning how to buy stuff and how to meet your needs. Not even buy stuff, but it’s meeting your needs and then the cost goes down and that’s actually, it’s more fun just because it’s a more empowered way, you don’t just have to purchase everything from other people. If you can source some of it from an inside your own skillset,

Mindy :
Let’s look at how you left employment. You didn’t do the 4% rule fine number that a lot of people are doing now, but you did at some point decide, I have enough money, I’m going to quit my job. What did that process look like? Because there’s the one more year syndrome, and I think that people who retire based on the 4% rule, I mean, I’m a huge fan of the 4% rule, we’ve talked to Bill Bagin on the show. His numbers don’t lie. Of course there’s all past performance is not indicative of future blah, blah, blah. But I think the 4% rule has some pretty solid foundation behind it.

Pete:
Yeah. It’s a pretty conservative, it’s not a best case scenario. It’s like a middle worst case scenario.

Mindy :
So how did you leave your job?

Pete:
Oh, well, I just sent an email saying that I would like this to be my final two weeks of work. Actually, I did a bit of a trial program. I started by going down to four days a week instead of five in my engineering job for the last year of my career. So that was an exchange for 20% pay cut. And that was kind of nice because it was training wheels, income was reduced, and my leisure was increased by 50% because I had three day weekends. And then I realized, hey, I really like this. I’m ready to go to 100% after that. And it also gave me an extra year. That was my one more year syndrome as to still saving a lot of money at 80% salary, but not quite as much but in exchange, I got to start the retirement a little bit earlier.

Scott :
Yeah, I think this is a real problem for folks in kind of actually pulling the trigger. There’s just like they add onto the pile and all that kind of stuff. And I was worried for a second there that I was just going to be like, well, I just sent an email. But no, it sounds like even for you going through this, there was a one year trial period and some training wheels to easing into early retirement. And would you recommend that folks follow that same path instead of just cutting all at once and going straight into full-time retirement, taking a year or six months or some period of time to ease into it if they’re kind of on the bubble?

Pete:
Yeah, I mean it’s nice if you have that option. It totally depends of course, if your job is super bad, you might need to just get out of it as soon as possible or if you have twins on the way and you want to be able to spend time with these newborn babies, don’t mess around with four days a week. But yeah, if you’re uncertain about either what would I do with my time aspect or the, am I going to have enough money aspect, then it’s certainly a nice thing. If you have a career that allows that kind of thing, then yeah, why not?

Scott :
We’ve talked about the 4% rule in the personal finance community, this has been really, really thoroughly debated here. But I find that in a practical sense, I meet very few retirees, early retirees who are truly living off of the 4% rule, specifically those who are actually selling off portions of their equities in their portfolios to actually fund early retirement. Most folks tend to have some sort of other ace in the hole. And I wonder if this is something you’ve experienced. And what I mean by that is they might have a large cash position, they might have rental property income, they might have a side business or part-time work that they do or something like that. Is that consistent with the folks that in the space there’s very few people who are actually selling down their portfolios? And if so, is there any takeaways from that for folks that are aspiring to early financial freedom?

Pete:
Yeah. Well kind of two separate things because I definitely know a couple people, maybe 5% of the early retirees. It really varies because it depends on the personality type. Some people really just want to be retired and not do any more work and those are the ones who choose to live off of their portfolio like dividends, keeping some larger cash reserve and selling shares occasionally if the dividends aren’t enough. But maybe 90% of the early retirees that I’ve met, first of all, they’re really young relative to conventional retirement age, and that means that they have a lot of energy and entrepreneurial ideas so they’ll still have income from things that they do because it’s kind of hard not to make money if you’re out there creating valuable things and interacting with people. That’s just how our money in society works. So first of all, rental house, I mean that’s really the same as holding shares in a company.
It’s like you own an asset and then it pays you dividends in the form of rent, and then sometimes you’ll hire out the management entirely so it’s entirely passive. I like to encourage people to remember that there’s no real difference between a stock and a rental house other than a rental house requires more work sometimes, but they’re both assets that pay you. And in my own case, I guess it really has varied. I’ve ranged from living off of stock investments to losing a whole bunch of money, wasting my retirement savings by starting a money losing house building business in the mid 2000s. That was my biggest mistake of my life, probably. Then you’re recovering from that, getting rid of that company and then back to no income and focusing on child raising and then starting a blog which was no income for a while.
Then I had a period of making lots of income way more than I needed. And then now that’s back down to a much lower number. So it’s kind of a roller coaster ride. And I think of it as independent of my actual retired status because that nugget of the original savings has always just been there in the index funds. And sometimes it’s shifted over to owning a house more or less or whatever, paying off a mortgage. But in general, it was kind of just a psychological crutch. And this is true for a lot of people. Sometimes you don’t even really need your retirement savings after you so call retire. But it certainly helps people get the courage to quit their job and there’s no real harm in doing it. It’s a nice safety margin that gives you the confidence to do the rest of stuff in your life.

Mindy :
Okay, so what is your net worth now versus when you retired, you had that period of heavy income from the blog, which has gone down dramatically. Do you have more money now than when you retired?

Pete:
Yeah, yeah, definitely. So there was a period, initially 2005 retirement and then house building company where we made a little bit of money initially, then lost a whole bunch because the housing market crash, happened right then, and the stock investments also went down at the same time. So that would probably be the worst period of my net worth, maybe in 2006. Then I chose to do a bit of extra work and so did my wife at the time to rebuild our savings. So in a way we came out of retirement, but only in a very part-time way because we really wanted to stay devoted to parenting. And then there was a flat period and then the blog went up and then I did some philanthropy because it was a lot more money than I needed. So the amount I gave away from the blog income is actually much more than I spent more than 10 years, or maybe even 20 years of my personal spending.
But I didn’t give it all away because I’m not that courageous so I still have some of that nest egg stored. So the end of that crazy story is that I have a few times higher net worth now than at the moment of retirement. And also we split Seemi and I got a divorce a number of years ago, so we split our big nest egg pile. And so we were each financially independent at that point. And then, so I still felt fine, but I think mine has grown a little bit since then just because of the natural earning more than I spend in the stock market has continued to go up as it does over time. So yeah, I’m more relaxed than ever. Don’t really think about money to be honest in my own context because my spending, it never seems to go up all that much no matter how much I feel like I’m splurging. So that’s the real cool part about money and early retirement is you, it just lets you forget about money entirely and you focus on the other stuff in your life.

Scott :
Yeah. You have a metaphor buried in one of your blog posts somewhere about, hey, money should be clean, drinkable water from a tap. Yes, it’s essential, but once you have enough of it ceases to be something that is a focal point in your life. And so I think that’s a really healthy end goal for folks when thinking about their relationship with money.

Pete:
And that can be hard because earning money and stashing is a bit of an addictive thing cause people are like, you can never have too much money, so I’m just going to do a bit more, a bit more and there is some dopamine and rewards stuff going on that you can truly get addicted to. And it’s okay in a way if as long as it’s not hurting any other area of your life. But many people who are super wealthy, they might have 10 million of wealth, all these properties and stuff, and they’re still just trying to get one more investment property even they totally don’t need it, they don’t want it, they just want the money and they like the so-called game, but it’s hiding a lot of other aspects of their life from them because they’re pretending it’s important and then thus they’re neglecting other more important things like their relationships maybe with their children or their loved ones, or maybe it’s their health, oh, I don’t have time to work out because I’m managing my 100 rental properties.
So that’s a really big thing to watch out for. There’s this concept of mindless accumulation and a really neat psychological study on it that I read somewhere where humans are naturally prone to just piling up they don’t need. It’s a little bit, if you have the clean tap water, just like I’m going to pour myself a glass of water and another one just in case and another one, and you fill up the countertops in your kitchen with clean glasses of drinkable water and then you start filling up the floor and the tables and you know what you never know, I might get thirsty later, this tap might stop working. And then they kind of wreck their lives just by filling it up with glasses of water. That’s what happens if you’re overly focused on money when you already have enough.

Scott :
So let’s talk about I mean the end goal here isn’t the money, right? It isn’t having that many glasses of water on the tables having this lifestyle. So could you walk us through what your day-to-day life looked like in the months or in the immediate aftermath of retirement, what did it look like, and what does it look like today? Could you get a glimpse into the day-to-day?

Pete:
I think the best way to imagine is it just looks like a weekend. It’s always Saturday and that can be bad for some people because if you use your Saturday semi destructively like, oh, okay, work was so hard, so I’m going to just spend Saturday drinking beer and watching sports on TV, then that’s not something to aspire to. However, my weekends were always just filled with work and projects. I would always be renovating my house or doing some stuff like a trip to the mountains with friends or hiking or whatever. So it just lets you do more of that. And of course in my case, the last 17 years almost have been pretty strongly defined by just raising our son because it takes a lot of work to raise a kid so that has been the first activity. It’s not like you’re constantly just hovering over them the whole time.
So there’s a lot of free time to do projects. And so I’ve done all kinds of fun things since then. But it’s nice to just have that as your main thing when you’re a parent, just to be like, yeah, it doesn’t take a lot of time, especially as I get older, but I like to be there for the key moments and be able to just say no to everything else. If there’s a key moment like your kid is going to be in a concert and you got to help them be in just the key moment of life where they need your help or you want to stay up late and read books with them, it’s so nice for me.
That was by far the number one thing for retirement and that job is almost over. He’s actually in the next room here and he doing his own thing all day, I’m doing my thing right here with you guys. So I got to figure out something else to do for the next stage of my life pretty soon actually, because I’m not going to be a active parent for much that much longer.

Scott :
Awesome. In addition to the family activities there, have some of the other pastimes changed over the last coup couple years? What were some of maybe the focuses and immediate immediately after retiring and what are some of those today in addition to of course, the number one job?

Pete:
This is definitely just me because everyone has their different preferences and I happen to love, my number one love in my free time is just construction, strange enough like manual labor. So I like building stuff, building new kitchens, renovating houses, and I’ve just done years and years of that with friends in my free time. So when we had a baby, it would be like during the naps I would go over and just do two hours of construction in the neighborhood. So because of that, my friends and I have renovated, I don’t even know, maybe a dozen or more old houses right here in the neighborhood and built a couple from scratch or maybe a few. And so that’s number one. And then I got into writing of course. So that’s how that Mr. Money Mustache blog started to exist. And during the early years of it, like 2012 through maybe 2016 or ’17, I worked on it quite a bit.
So it was a couple, maybe an hour or two per day on average. That’s having a really small job. Now, I don’t do that as much and I do more construction and probably should add some new activities. I mean, we started this co-working space of which Mindy is a co-owner and that’s been pretty nice as a side job too. It varies sometimes, I’ll work really hard on it, especially when there’s, oh, construction I guess related to the building. But we have great events there and it’s a great place to meet friends as well. And that’s been a really lucky decision that we stumbled into because it brings a lot to all of our lives and hopefully to those of the members and the attendees is well.

Scott :
What advice would you give to somebody who might be listening and saying, well, shoot, I spend my Saturdays drinking beer and watching football, and I do not spend my Saturdays renovating my kitchen or my friend’s bathroom or anything like that. Would I even be productive in early retirement? How could I begin reframing that to be really confident that I’m going to have a wonderful early retirement instead of get into some really unhealthy pastimes if it’s always Saturday?

Pete:
Yeah, it’s tricky. I mean, I probably should dig into more success and failure stories in that department because I can’t really fully relate to what’s going on in such a brain. But I do think that the longer you keep a job, the more likely that condition is to happen because a lot of times people will… Your brain is plastic and it changes the more you do something. So if you have the same job or a career that just goes for decade after decade, by the time you get to my age, like 48, I could have potentially been working for 28 years or something. So my brain would’ve just molded into the identity of, I’d probably be an engineering manager or something at this point, director of engineering. So all I would be able to think about is design specs and teams and deadlines and goals and I would’ve poured so much into that.
The rest of my brain with side entrance interests might have kind of atrophied a little bit, and I maybe really just would want to relax on the weekends because my job was so intense. So if you’re in that situation, you have to wean yourself off the corporate world, either stay in it forever, which is a valid choice if you enjoy it, or wean yourself and do less work and strike up new interests on the outside. You can only do figure it out by just trying things, I guess, and interviewing your friends. If you have successful friends who do have big interests outside of work, try that. But I think most people in that situation, they like the idea of being creative and solving problems. So that’s why watching sports is not going to be a sustainable program for most people because you’re not creating anything, you’re just consuming it. So could even be a side business or could be a volunteer situation, but something where your brain is actually solving problems with a bit of difficulty, it’s more likely to be a path for a good retirement.

Mindy :
I think that’s a really important question, Scott, because people who are maybe not pursuing financial independence, they’re not pursuing fire for the FI part, they’re pursuing it for the re part because they work for a horrible boss or they just hate their job or whatever. They are, oh, I can’t wait to quit. But they don’t really have any plans for quitting. I think this is not just for early retirement, I think this is for any retirement. What is it? Death by retirement. You retire, and I don’t remember what the statistic is off the top of my head, but such a high percentage of people who retire are dead within a year, traditional retirement, not early retirement.
And the reason they are is because they have no plans. They sit around and watch TV because that’s what they do on the weekends. So I think it’s a really valid point. Whatever you’re doing on the weekends right now is what you’re going to be doing when you retire. So if you don’t like what you’re doing on the weekends, if you don’t like that person, don’t be that person. I think that was a great piece of advice, Pete.

Pete:
And that dying shortly after retirement and some people use that as an argument against early retirement because they’re like, you’re just going to die, but I think that’s incorrect. I think of it as more of a cautionary tale of retire while you’re still young enough to come up with a healthy retirement. Because if you wait too long, then you’ve destroyed your brain and your body and then there’s nothing to retire to. There’s no life waiting for you there. So yeah, think early and build your freedom while you still have this nice active brain and body to enjoy because it is a lot more fun. It’s a lot more varied and it makes your life seem a lot longer too. I feel that I retired more like a hundred years ago. My career was somewhat monotonous because you’re going doing the same thing every day. But once that ended, I’ve just had so many crazy things happen.
Just one year is different from the next year and there’s child raising years and pre-child raising during and now post and it just gets longer and longer. I feel that not only is it sort of like I’m living in some bizarre version of man heaven, it seems improbable that life could actually be this good and prosperous, but it also feels like it’s just really, really long. And if I were to die right now, find out I was dying and be like, well, at least I had a good 200 year lifespan with a lot of experiences, that was totally worthwhile, what a ride. So I think it helps me be more grateful for life and more appreciating of it.

Mindy :
So is early retirement what you expected or is it different? Is it better? I mean I kind of think it’s better than you expected, but-

Pete:
Yeah, it’s better.

Mindy :
How is it better than you expected?

Pete:
I think it’s mainly better because the variety that I just mentioned, I thought it was just going to be leisure and projects and vacations and good child raising and then that’s about it, but the fact that you can always meet new people and to be honest, this writing situation, Mr. Money Mustache has been very helpful for me because I can be a bit of an introvert and retreat to my workshop a bit too much. And by being forced out into the world to meet a whole bunch more people and go on a lot more trips than I would’ve and be exposed to a lot of new ideas that I wouldn’t otherwise have seen, it’s made my life more full. And of course not everyone’s going to become a blogger or whatever podcaster because that’s just not everyone’s interested in that.
But it was my quitting of the regular job that allowed this to even happen. I wouldn’t even considered it’s taking up writing, even though I’ve always enjoyed writing since I was a little kid, I would not have done it as a blog while I had a job at the same time because that’s just not the way at work. I don’t want to try doing two difficult things at the same time in my life. So I needed that space created by the lack of career to feel like I had time to try my hand at writing. So I got really lucky there.

Scott :
How about relationships? I think a lot of American men, perhaps women as well, have a lot of trouble forming new friends after, let’s call it high school, college in the workforce. You however seem to have built a really strong community. Would you say that early retirement has aided in helping you form friendships in ways that wouldn’t have been possible in the work world?

Pete:
It let me explore new things that I wouldn’t have otherwise had time to explore. So first there is friendships from college, university days, and then the next round of friends for a lot of people including me, is through child raising. You become friends with all of the parents of your kids’ friends like the other kids from the elementary school or whatever. And that’s a great community here in our neighborhood. A lot of us are still friends, like the dads and the moms and the kids are all still neighborhood parties all the time and that’s excellent. But to go beyond that, it’s kind of nice to have something beyond and one way to do it nowadays I’m realizing is just we run a meetup group for fire people just on that website, meetup.com. And so that’s a common interest, it’s a bit of a quirky interest, but it brings out very interesting and smart and fun people.
So for me, that’s been great source of community and everyone who’s part of our meetup group, which has 1400 and something people now, I think it helps a lot of them too. So anyone who’s looking to expand their own social circle, whether you’re retired or not, I think using a service like Meetup is probably a good idea because then you can broaden and find people with interests and aren’t just parenting or other things that you’re thrown together by default. And you might have more in common with these people. And I think that’s really the spice of life for friendships is getting adult friends that you really pick yourself like you really enjoy spending time with them rather than just having to be friends with the people who live closest to you. As good as that is, it’s good to have a bigger search net if you really want to spark intellectual spark in your life.
I think so having more money and more free time or at least a lack of money stress I think can be good for personal relationship because you’re not pinching your friends or in case of married people, you’re not pinching your spouse and trying to nag them about money or worrying about your debt, your shared debt. So in my case, we went through a divorce a number of years ago, five years ago, and some of the allegations that came through blog comments were like, this fire stuff doesn’t work because you guys broke up because you were too cheap. Which is funny that I could see how that line of thinking would happen, but it’s actually the opposite. We had surplus of money for the whole time and in a way that was really, really good for parenting, it allows you to devote your time in parenting.
It lets you not fight over money as a couple and even in if you do have to go through a divorce, it makes that whole process way less bad because you’re not fighting over the scraps and feeling defensive like, oh, if she takes the money then I won’t have it and we’ll both be poor. We have to give up the house and we have car leases. All that stuff is eliminated if you’re better off financially and especially if you’re a spending needs are lower. So that was a huge blessing in our case. The relationship itself has nothing to do with money or one way or the other. It’s just not everybody is compatible for an entire lifetime relationship and I encourage people not to think about that in form of shame if that is what’s happening to them too, because it’s not.
Our society likes to heap shame on people and make a sin to ever get a divorce and I think that’s not a healthy way to think about it. So money didn’t keep us together in our part, but it certainly made everything better during and after the relationship and it’s still better now. And I think the fact that we’ve become friends really, really good and very cooperative friends is partly because there’s no money worries around the whole situation.

Scott :
Makes sense. On another topic of personal relationships, perhaps with previous friends, I think some folks maybe may go through the journey to financial independence and hey, if you want to do that, you’re going to live somewhere that’s much cheaper. You’re going to work on the skill of spending as you talked about it earlier, and get a lot more per dollar spent. You’re going to over a year or two rack up perhaps tens of thousands of dollars on a median income. You invest that in properties and that’s unrelatable, perhaps it was unrelatable to some of your colleagues when you first started out working, they perhaps lived some substantially different lifestyles than you on the same income and they don’t understand why are you doing this? How is that going? I’m extrapolating here, that could have been different in your case, but that that was true for me in some situations.
And then all of a sudden it says, well how’d come up with a hundred grand to buy a rental property two years later, which is also totally unrelatable. There’s no way they can relate to coming up with that kind of liquidity and they don’t perhaps see those connections. So did you find that the path buy had perhaps some impact in perhaps creating distance between previous friends any cases or do you think that that’s something that folks who are pursuing this go through to a certain extent?

Pete:
It definitely affects some people and probably if you have a lower income, you might have to make more difficult choices. If you’re trying to become financially independent on a Target salary, for example, working at Target, you might have to forego all restaurant meals and all car ownership or something and it might make you very different from your friends and then they might be like, oh, Pete’s no fun because all he ever does is stay home and eat beans and rice. I mean there are some situations where that might be true, but as soon as you get a little bit higher on either the income scale or being willing to stretch out your savings a little bit, there’s really almost no difference in the perceptible lifestyle. As an engineer, I still got to do all the stuff like the trips and the snowboarding and had a nice bike and had a car and had a beautiful house.
And it was kind of funny because the stuff I stripped out it was almost invisible. So I was cutting out the waist but not the fun. And that still allowed the lifestyle to be like $24,000 plus housing. And just as an example, I had chose when it was time to buy a house, I was like, okay, my job is here, where’s the closest house that I can afford? And I picked pretty much almost the closest house. And because I worked in Boulder where it was really expensive, I had to be just outside of the town eight miles away, thankfully still within biking distance so that’s my choice, beautiful neighborhood. I got to bike to work and then my colleague who worked in the next cubicle over, he lived 23 miles away, he bought a house in a big suburb and he’s like, yeah, we’re kind of the views out there and it’s quiet.
And house was roughly the same size as mine, but he had to drive, he had to spend a hundred thousand dollars per decade on commuting that I did not have. And I got hundreds and hundreds of hours of bicycling exercise over the same period of time. So you take the starting points and then you fast forward 10 years, the difference is one person’s body is wrecked and they’ve destroyed three vehicles from driving so much and spent hundreds of thousand dollars on the driving and then the other person is more fit than when they started, they still have the house and they have more free time because they’re not driving or having to buy as many cars and maintain them. So it’s funny, little choices like that and what type of car you buy and what you do with your leisure time, it’s almost seems invisible at the time, but the butterfly fact of those decisions over a 10 and 20 year period becomes really huge.
And that’s why I tried her. That’s why I’ve had to write so many blog articles because you can’t just have a single thing saying spend less money have to have, if the people haven’t thought of it themselves it helps to share ideas of here’s exactly how to get a vacation for lesser, here’s exactly how to get your transportation for less money. And I’m just happy happened to sort of be I’m a different version of Warren Buffett. I’m the Warren Buffett of frugality where it’s just really fun for me and I can’t help but do it regardless, regardless of the money. It’s just fun to figure out how to optimize stuff for me.

Mindy :
Well let’s look at your cell phone. What kind of cell phone do you have?

Pete:
Yeah, that’s a good question and it’s pretty much the exact example. So I have a Google Pixel phone right here. And-

Mindy :
What number?

Pete:
What number? Oh, it’s the 4A. It’s going to be upgraded pretty soon, but this phone cost me, I think $220 something two years ago. It takes pictures exactly as good as the iPhone of that same era which was a thousand dollars or something insane. And I’m using it on the Google five phone service, which is like 20 something dollars a month. So normal people, including people’s teenage children, will have the iPhone 13 Pro Max on a Verizon $100 a month plan. And I’m a professional photographer sort of, right? I have a platform where I make money for posting photographs and image and content.
And even I have a phone that costs five times less than a teenager, but the photos are just as good. It’s just weird that these decisions are not more widespread. Like Apple as a company, as smart as they are and as pretty as their products are, like they shouldn’t even exist because they make these profits by charging five times more for the same quality but people are attracted to the brand and they’re like, oh, creative people use Apple stuff. So good place to be business but not a good thing to do as a consumer.

Scott :
But don’t you feel that your credibility is completely destroyed by not showing up in text chats in the blue of Apple instead of the green of your Google Pixel?

Pete:
Well, I like to do the opposite. I’m like, oh, so you’re one of those iPhone people. I’m sorry to you. You heard of non-Apple films?

Scott :
I have an iPhone, so I’m a little embarrassed here after this one.

Mindy :
But let’s look at this. I know many people, I am an Apple shareholder, so I have benefited greatly from all of the people who go out and buy the new Apple phone as soon as it comes out. And what is it like? It used to be $500, I think they’re like $1,000 or $1,200 for the phone. And that’s the phone that you’re buying now at full price to replace the phone that you bought when it came out last year or 18 months ago at full price. And you’re on these higher per month choices. You were talking about these invisible decisions that you’re making or almost invisible decisions that you’re making. I have a Google Pixel three because I’m more frugal than you Pete, apparently, because I don’t want to learn how to use a new phone. Part of my frugality is my lack of technology, but I don’t have a phone that works fine.
Why do I need another phone? Because they came out with a new phone is not a good enough reason. Now my camera may not be top notch, but I’m also not taking a ton of pictures that I’m making money off of with my camera and if I need to, my husband has a Pixel seven because he broke his camera or he broke his phone, so he had to get a new one. So there’s opportunity to take, I mean it still takes really great pictures. I mean remember the first digital cameras that were like this big, it took horrible pictures, it still takes great pictures and I’m fine with it. It works for what I need, but I have a mint cell service that is $15 a month. So I’m not paying these huge dollars for my cell phone service, which I could easily afford, but why spend that much money when I don’t have to?
So it’s these little things that I’m getting what I need at a smaller price. It goes back to that comment you made about refrigerators for #$100, I need a refrigerator. So if you’ve got $100 refrigerators just coming out of your nose, Pete let me know. But my phone service is great. I think it’s on the Sprint network, it works perfectly fine for me. It covers everything that I need. So why would I pay a hundred dollars for a big brand name when I can pay $15 for Mint Mobile, which is a great service. It doesn’t make sense. But if you are unaware that it exists, then how do you know to go get it? Which is kind of the whole reason we do this show.

Pete:
Yeah, that’s the real point. If you want to summarize everything we talked about in the last few minutes, it’s a lot of people don’t have that curiosity or the awareness of what the alternatives are. So someone would be like, oh, I rented a Chevrolet Tahoe for a ski trip once and it was nice so then I bought one and it’s like $70,000. And it was nice because I was able to fit my suitcases in the back not realizing there’s a hundred other cars that can fit the suitcase and use half as much gas and cost a quarter as much to purchase and have better performance and everything else.
So there’s a lack of research and awareness in people. So it really helps if you have other five people, other frugal people, they make great friends because Mindy, if you met somebody who said like, gosh darn, I wish my phone bill wasn’t $200 a month. You’re like, oh, well guess what? It can be 15. And if they trusted you and respected your ideas, they would just do it and then suddenly they’re saving like $2,000 a year and that stuff is contagious just as much as the wasteful spending is contagious among friend groups.

Scott :
What I’m hearing here are there’s community and this skill of spending are two kind of the big takeaways that I’m pulling from today and where would someone go… First of all, I believe that spending, the skill of spending is a process. It’s not going to get good at this overnight. And there’s a lot of decisions here and they correlate directly with your life in a lot of cases. I do think that there can be some event component to that. You could tomorrow go out and switch your phone plan and 15 other things about your spending patterns, but for most people it may be more of a process. What’s a good way to begin that process and really say next 12 months, I’m going to up my game here? Do you have any tips that someone could take away from for that?

Pete:
Well, I have a self-serving one. You could go to mrmoneymustache.com and find the link where you sign up for the bootcamp email series where you’ll just get one email per week with sort of it’ll program you to be a more efficient and wiser spender because it just has the ideas for how to handle each category of life. That or finance books on other blogs and finance books on how to optimize stuff. I really focus on spending more than other people. Some people are like, just increase your income, which is fine, but the problem is it’s easy to spend any amount of income. There are people who make $10 million a year who manage to still be in debt. And NFL players who have an average salary of $2 million a year, roughly 75% of them end up completely out of money as soon as they stop playing professionally, even though they could have been retired every single year, there’s enough to retire on.
So they could be retired like five times in a five year football career. So it’s easy to spend any amount of money, which is why you got to learn about your spending even more important than boosting your income. And then when you do boost your income, you get to keep that money cause everyone just go up in flames.

Scott :
I just want to second the signing up for the bootcamp emails. I read through all, I’m sure I missed one or two here, but I think essentially all of the posts that you posted on the Mr Money Mustache blog when I was kind of going down the rabbit hole of financial independence and that’s a great one. You can just start from the beginning and read all of them, but I think you’ve created a list of them in the order that you think is appropriate for folks to consume. That could be very helpful. And if you haven’t referred back to it, you can also go to mrmoneymustache.com and click on random, which is one of my favorite things. And there’s something interesting pops up every once in a while when you do that as well. But I think that’s a great place to go and to start this and you really, I think have a great handle on, I love the way you phrased it, developing the skill of spending.

Pete:
Yeah, thanks. I would also recommend Scott Trenches book Set for Life, which I’m sure has been mentioned on this podcast at least incidentally. But I wanted to credit you because that book is… We were just rereading it with a friend who’s actually a bit of a Trench fan and it’s super well written, especially considering as your first book or one of your first books. And I heard that you have a new edition coming out too, but that book is really cool because it does talk about the spending and encourages people to have some grit and not just be like, nah, I’m not willing to make any changes. He’s like, do it. You’ll be glad you did. And then it also goes on to the technical stuff of how to invest in different things, including rental properties. And it’s super cool to have a book that combines both including the attitude, I think most books don’t have enough attitude, which means people aren’t going to be really realizing that you have to make some personal changes rather than just some spreadsheet changes.

Scott :
Yeah. Well, thank you. My approach in Set for Life was definitely heavily inspired by Mr. Money Mustache and then meshing that together with a really real estate heavy approach, particularly the concept of a house hack in addition to trying to scale the income in some creative ways and taking control of that. But I really appreciate that. That means a lot coming from you.

Pete:
Yeah, that’s probably why I like it. It’s like winning mustache style, the only style I understand. But anyway, I was still living. It’s awesome and I hope it’s still selling well.

Mindy :
Okay, Pete, last question. How has the recent market downturn affected your mental status with regards to your early retirement?

Pete:
Yeah, so what market downturn are you talking about? Do I need to look at the stock market this year? That’s my exaggerating answer. Really obviously I know, I do look at finance, read the economist and everything. So I’ve prepared a few statistics for this answer just because it’s kind of fun to put things in perspective. So a lot of people, especially in the news they talk about the stock market is way down and no one’s going to be able to retire now. But the truth of it is, the biggest measure of the US Stock Index, which is the S&P 500 is down 20% in the past year, pretty much it started a year ago and it’s just gone mostly down and it’s kind of been flat for the last few months. So that’s 20% down from one year ago. However, it’s actually flat from where it was two years ago, so January 2021. And then, so if you had just bought two years ago, at that time we thought, wow, the stock market is so high, I can’t believe it.
Is it ever going to go up again? Surely given us its next 10 years of gains upfront, which is sort of true at the time. So if you had bought two years ago held, you still would be up four and a half percent now because those stocks would’ve been paying dividends this whole time. So that’s actually pretty good. Now, if you go back three years ago to just before the COVID crash of 2020, so January 2020, from there to now, even after our current decline, the stocks have still returned about 9% annualized, including the dividends, which is actually really good. So even just going back three years, the stock market has been exceptional. In other words, the current decline is a bump that you shouldn’t have noticed if you’re a proper long-term investment. And then just to make it a little bit even more amazing to think about the power of investing, if we go back 10 years to January late 2012, or January 2013, the stock market over that period of time has returned 13% per year. compounding and annualized, including the dividends, you should always include the dividends.
So in other words, anyone who started investing early in my blogging career has done exceptionally well. Their money has just exploded even after the current decline. And the super funny part is I remember writing in 2013, the stock market had made a pretty nice recovery from its 2009 super crash from the great financial crisis. And even back then, you could dig into my articles right now and look at comments when I wrote about stock market investing and people are like, it’s a little expensive. I’m going to wait for the dip. Stocks are too rich for me, I’m holding cash or gold or something. And people will always say that regardless of when the stock market, whatever the level is, but it would be such a foolish thing to do that in 2013. And the reason is because not that stocks have become bubbly and inflated, it’s just that for the most part, the earnings of the companies have grown a little bit each year.
And the American economy is a pretty wonderful thing despite all the ridiculous stuff you read in the news. So yeah, it’s a better investment now than it was before. And if you are super, super fully retired and you have no other sources of income and you’re living entirely off of dividends and stock sales right now, then you’re still fine. It’ll just hurt a little bit more because you see a tiny, tiny fraction, more of your shares are getting sold each month to buy your groceries and hey, if it makes you feel better, maybe just postpone a couple of luxury purchases this year and delay them until next time the stock market is at a record high and that’s a way of stretching out your retirement savings even more. And it’s also good mental discipline because we didn’t really need those luxury purchases in the first place. So really it’s no problem. But I am glad the market went down because it was overvalued by real math on last year. It was getting painful to buy shares last year because they were so high on a price to earnings basis.

Mindy :
Interesting. I think that is a great way to look at it. Yes, the stock market is down for 2022, but even just going back 10 years, did you say 13% per year?

Pete:
Yeah.

Mindy :
I feel good when I’ve got 10%, that’s even better.

Pete:
Yeah. It was on a really good decade and that’s why even now stocks are a bit more expensive than average. So instead of thinking they’re too cheap now, when’s it going to go back up so I can really have the money that I deserve, it’s better to think they were overpriced last year, way overpriced. Now they’re slightly more than the average expensiveness because really what matters is price to earnings ratio. That’s the only thing that matters when you’re buying company shares as a whole. And so they’re a little expensive now, it can either go down a little bit more and then it’ll be a true bargain or it can stay flat, and the company earnings are going to rise over time because the companies are competing with each other and getting more profitable and growing.
Either way in the long run, the stock prices will resume going back up hopefully at a moderate and reasonable pace so it doesn’t create bubble like speculative mentality like the whole Bitcoin craze where everything’s built upon nothing. You don’t want your stock market or your economy to be built upon speculation should be built upon earnings and productivity.

Scott :
I agree completely with your premise, but just to play a little bit of devil’s advocate and push someone listening might say, okay, I hear that, but you’re also saying right now that you feel the market is overvalued and you’re still saying, I should dump all my surplus dollars into stocks, even if things are still overvalued or they were really uncomfortably unvalued overvalued last year, but they still are today, should I really still do that? How would you reassure someone, maybe ask themselves that question?

Pete:
Yeah. Well the thing is you never know how long… I mean, there’s no guarantee that the price earnings ratio is going to revert back to its 200 year old historical average. One place I like to look at this is if you go to the website multipl.com, like M-U-L-T-P-l .com, it has a 200 year history of the stock market. And my favorite thing to look at is the Shiller PE 10 ratio, which is basically just a super smoothed out version of where is the current price of shares relative to the earnings of the companies over the last 10 years so that way it smooths out the business cycle of busts and booms. And it’s cool because it helps you see if we’re expensive or cheap, but it also helps you realize that in the modern era, stocks have been a little bit more than average because the average is set from what happened in the 1800s and early 1900s, and it’s a little bit different time now.
Money flows more freely so you can’t be super stubborn and say, I’m never going to buy stocks until they go back to the cheapness of 1929 because then you’ll never get onto this train of dividends and appreciation and growth. So the best thing you can do is not pretend that you’re smarter than the market and then just buy in little chunks. And if you want to be a little bit sneaky, you can look at these graphs and say, all right, it’s overvalued now relative to any other time, like I was saying, that’s a year ago. So if I am going to cash some out to buy another investment like a house, a rental property or some other thing that I needed money for, it’s a better time now than it would’ve been during the pit of a crash.
But I’m not going to try to be so sneaky as to say I’m going to take it out and just hold it in cash and hope to buy in later at a cheaper price because like I said with my 2013 blog post example, people are saying, yeah, 2013 don’t buy stocks this year they would’ve missed out on these 13% annualized gains and shares are never going to be back at 2013 prices and all of human history. So that person, that mentality tends to lose if you try to get too clever, which is why dollar cost averaging just dumbing it down, it is pretty much the best strategy you can get without being all knowing in predicting the future.

Scott :
One last question on this. So for example, I love what I do and here at Bigger Pockets, so my portfolio is essentially all an aggressive allocation. I don’t have any 60/40 stock bond allocation with that. What would your advice be to somebody who is thinking about retiring, just retired, or maybe entering that year long trial run of this in terms of moving from a stock only to perhaps a more mixed bond allocation? Do you have any thoughts around that, or any thoughts about how you would handle that personally?

Pete:
Yeah, I’m also on your camp and not even because I’m basing it on future income. I think that when I look at these charts of the expected survival rates of a stock versus bond portfolio, having 100% stocks usually ends up better, almost always. And as maybe a couple of cases in history, when bond yields were really high, that would’ve been better to do the 60/40 thing, but right now bond yields are low. They always seem to be low, which means you don’t get much for your money investing in bonds and there’s not much chance for them to go up in the future. So in the modern era, I don’t really see a problem with %100 stock portfolio. On paper it will be more volatile, but it doesn’t really affect your 30 year survival rate of a retirement portfolio.
When you run it in these simulators, one of my favorite simulators called cFIREsim, letter C, and then FIREsim, you should try it for yourself if you don’t believe what I’m saying. It’s basically adding bonds, kind of just lowers the overall return. It makes it a bit more stable, but it doesn’t make your portfolio survive longer if you’re trying to retire off a chunk of money because overall the increased returns of shares more than makes up for that stability of bonds. So anyway, I’m 100% stock person as well and a nice way to balance it a little bit is if you choose to own your house mortgage free when you’re retiring, pay off your mortgage, that’s like a bond that pays a guaranteed rate equal to your mortgage interest and it lowers the cash flow you need forever.
And it also puts less demand on your stock portfolio forever. So that’s one way to think of balancing your retirement in a different way as opposed to saying, well, I’m going to pay off my 4% mortgage and buy a bond that pays 3%. That’s a bad trade off. You might as well just take the 4% return on your mortgage. Plus you have this nice psychological reassurance of I own this house and they can’t take it away from me and I don’t need thousands a month of cash flow to stay in my house. So that’s one way to make things feel more relaxed at retirement.

Scott :
Well, is there a rate environment where that would change some of your sentiments on this?

Pete:
Yeah. I think, I can’t do the calculation in my head, but if the interest rates that you can get on long-term bonds reach a certain percentage, like five or more percent, some number like that, then you can plug the same numbers into a future retirement calculator and suddenly you realize, oh yeah, that’s going to be a higher return than having a pure stock portfolio. So it’s kind of just basic math and there’s a book if people want to get into this, if they’re techy, mathematic, investment oriented people, there’s a book called Towards Rational Asset Allocation. I think it might be like Burton [inaudible 01:02:38], the investment writer, that thing does analyze all that stuff quantitatively and you can see it in what situations it’s better to branch out from a pure stock allocation and it basically boils down to, the better the bonds are, the more it is worthwhile adding them into your portfolio.

Scott :
Awesome. So something to watch if rates do in fact continue to rise over the next year or two, maybe there’s an inflection point coming, but for you not yet, super simple, straightforward.

Pete:
I mean, to be honest, we have probably already passed an inflection point where some bonds will make your portfolio be better than pure stocks if you were to do it today. But I don’t really worry about these numbers because I’m past that tap water stage of I don’t really want to think about and tweak my money situation that much. I’d rather focus on things I enjoy doing with my time instead.

Scott :
Makes perfect sense.

Mindy :
Pete, this has been so much fun chatting with you. I really appreciate you sharing your life after five journey because I think that there’s not enough people talking about what happens after you retire and it’s nice to hear a story about everything is kind of going the way that you planned. And if it didn’t go exactly the way you planned, it still worked out okay. And that’s really, I think, encouraging for people who are like, oh, what happens after the fact? So thank you so much for your time today. I really enjoyed talking to you.

Pete:
Yeah, it’s my pleasure. I can’t wait to be back another 300 episodes or so.

Mindy :
Maybe we’ll have you back sooner.

Scott :
Yeah. Maybe a little sooner than the 377 more episodes. But yeah. We really appreciate it and your wisdom again was obviously just life changing for me, the perspective with all that, and I know it has been for hundreds of thousands, maybe millions of other people who have come across your stuff. And so I think that leaving the takeaways for folks of honing that skill of spending and then just thinking through that life that you want after retirement, I mean, those are just important things to… Those are the essence of I think your message here and what people need to prioritize in their lives.

Pete:
Yeah, I hope so.

Mindy :
Okay, Pete, we will talk to you soon.

Pete:
All right, talk to you soon.

Mindy :
All right. That was Pete Adeney, also known as Mr. Money Mustache. Scott, what did you think of that episode?

Scott :
I think it’s always just a privilege to learn from Pete, Mr. Money Mustache and really just immerse yourself in his perspective on things. He’s got a really healthy perspective on an outlook on managing money and life, and I think that a lot of folks, certainly me, aspire to a lifestyle like that. And I think that he’s really built something special here, and I think it’s really telling that he’s a builder and that’s what he likes to do and he likes to do it in his own terms all day, every day, exactly the way he wants. And he makes the most of that and really tries to build a great life for himself. And I think that’s something that you have to ask yourself a hard question about, is that going to be you? And how do you get to that point so that there is something even better to retire to than the current situation that you have maybe at work? And I think that’s an interesting question for perhaps some folks.

Mindy :
I completely agree.

Scott :
I really thought that that was a powerful example of how if you spent 28 years as an engineering manager, your brain gets wired to become a great engineering manager with that. And I think that was really, it’s a really interesting mind that he has to be able to envision that alternate parallel reality and then speak that bluntly about, hey, that would be one place that I could get to. And there’s a training process here and it’s intentional and it takes years to become the kind of future person that you want to be and to design to a life that allows you to optimize for that every single day.

Mindy :
That is so key, Scott. Figure out who you want to be, how you want to be spending your time, and then design your life to allow you to do that. And the way you get this is to get finance out of the way. Get your money situation settled, get your finances figured out, get money out of the way so you can lead your best life. Scott, let’s recap some of these resources that Pete mentioned today. First was cfiresim.com, the calculator to help you understand how much money you’re going to need in retirement and how your finances are going to work in retirement. You go to this calculation and it was written by a programmer, a software developer, and you just type in your numbers and you type in what type of portfolio you have, equities, bonds, gold cash, et cetera, adjustments for things like social security, and you hit simulation and you get this simulation of your retirement. It’s really, really fascinating and you can throw all sorts of different numbers in there. It’s a really fascinating calculator.

Scott :
We also talked about multipl.com, which is M-U-L-T-P-L .com, which you can go to get just a very quick view at priced index ratios for the S&P 500 and the stock market in general sense. I also want to call it Early Retirement Extreme. I think Pete or Mr. Money Mustache would say that if his blog is a college course on early retirement and financial freedom, that Early Retirement Extreme perhaps is the PhD level of program where they take it to a whole nother level and have that skill and really go into that skill of spending very effectively. So that’s another interesting resource. Of course, we have mrmoneymustache.com. And then lastly, I want to talk about, you mentioned this concept of community and surrounding yourself with folks that are kind of like-minded and there are mustachians in practice Facebook groups in that you can join.
There are actually Mr. Money Mustache meetups around that might be going on your local area. There might be Choose FI or Financial Independence meetups. Of course, we have the Bigger Pockets Money Facebook group, which we are particularly fond of, but immersing yourself in these communities, starting a meetup of your own, if there isn’t one locally or attending that might help you meet some other folks that are in it together in your local area that you can go and discuss these situations with. There’s also the Bigger Pockets forums and the Mr Money Mustache forums where you can go and discuss this and get advice, ask questions, hey, what are people using for their cell phone plans? Or I feel like I’m stuck here and don’t have any good solutions to solve this problem with my spending, anybody have a good advice? And you will get responses from folks who have really been perfecting this craft for years or long periods of time. In fact, that’s the favorite question folks have to answer in the Bigger Pockets Money Facebook group are questions around spending or real life spending or investing scenarios.

Mindy :
And if you are facing a bunch of financial issues that you want to solve or you just want to have your finances reviewed, you can apply to be on the Finance Friday episode of this podcast. Go to biggerpockets.com/finance review to apply to be on the show.

Scott :
And by the way, that if you have a problem that you feel like you need help with for your money, that makes it better, not worse to come on the Finance Friday show. No one wants to hear about someone who’s got a perfect financial situation and that’s not helping those folks. We want to help folks that have issues that are unpacked or complex issues or those types of things. So please, please do a feel free for you to apply. Our goal is to help you and help you work through those problems and get to the next level.

Mindy :
Awesome. Scott, should we get out of here?

Scott :
Let’s do it.

Mindy :
That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen saying, keep that cash Money Mustache.

Scott :
If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney.

Mindy :
Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Caitlin Bennett, editing by Exodus Media, Copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.

 

Watch the Podcast Here

Help us out!

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds. Thanks! We really appreciate it!

In This Episode We Cover

  • Pete’s repeatable plan for FI and the simple steps that can lead to financial freedom
  • Quitting your 9-5 and why leaving work all at once could be a big mistake
  • Why most early retirees never touch their nest egg (and why you probably won’t either)
  • Whether or not early retirement truly lives up to the hype
  • The 2022 stock market crash and how it’s affected Pete’s portfolio and investing mentality
  • Stocks vs. bonds and why someone who’s chasing early retirement should choose one over the other
  • And So Much More!

Links from the Show

Book Mentioned in the Show:

Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Check out our sponsor page!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.