BiggerPockets Money Podcast 40: Taking Command of Your Finances by Understanding (& Controlling) Money with Joe Saul-Sehy

by | BiggerPockets.com

Today we chat with Joe Saul-Sehy from Stacking Benjamins. Joe shares his money story, which starts off with him figuring out how to get into debt, then discovering he didn’t like being there.

He learned that you can’t diagnose what’s wrong with you until you have it all in front of you, so he laid everything out and started a monthly money date with his wife to get everything sorted out and under control.

Joe has three fantastic tips to help you stay on your chosen financial path. He also shares the four assumptions about the FIRE community that are wrong.

This episode will help you take command of your finances and steer your life in the direction you truly want it to go.

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Welcome to the BiggerPockets Money podcast show number 40 where we interview Joe Saul-Sehy from Stacking Benjamins

It’s time for a new American dream, one that doesn’t involve working in a cubicle for 40 years, barely scraping by. Whether you’re looking to get your financial house in order, invest the money you already have, or discover new paths for wealth creation, you’re in the right place. This show is for anyone who has money or wants more. This is the BiggerPockets Money podcast.

Scott: How’s it going everybody? I’m Scott Trench. I’m here with my co-host Ms. Mindy Jensen. How you doing today Mindy?

Mindy: I’m doing great Scott. How are you today?

Scott: I am doing fantastic. I’m very excited to interview Joe who has got just an incredible charisma and energy about him and host of the Stacking Benjamins podcast over there at StackingBenjamins.com which is one of my favorite podcasts and just like a really fun time with a lot of insider jokes that is kind of an addicting personality and show.

Mindy: Yes, I love Stacking Benjamins. I listen to this show when I’m working around the house, most typically when we’re cleaning up the basement or cleaning out the garage, usually cleaning out the garage. I don’t know why my garage gets so much crap in it. So we throw on a couple of episodes of Stacking Benjamins as we’re cleaning up, and it’s kind of interesting to have this guy on my show that I listen to all the time. His voice is always in my head, and then here I get to talk to him. So yes, I am very excited.

He’s not usually telling all about his life, so this was a really fun episode to record.

Scott: Yeah. And he’s also got a brilliance about financial management and a story that I actually hadn’t heard before. I’ve listen to some his podcast, not all of them, but I really enjoy his show but I’ve never heard his personal story before so I was just really, really excited and grateful to hear that. He’s got a very awesome set of experiences that are really applicable to a lot of people.

Mindy: Yeah, and I mean I can’t believe that somebody who is a certified financial planner made money mistakes. They should be perfect, right? And it’s kind of refreshing I would think for somebody who is in this position of debt or hasn’t reached financial independence yet, to hear from somebody… you know, we’ve done this a couple of times on this show where we hear from somebody who is supposed to be a money expert but they also made mistakes in the past. So don’t beat yourself up because you have a less than perfect financial situation. Just take the information and apply it to your own self.

Scott: Yeah, I love it. Should we bring him in?

Mindy: Let’s bring in Joe.

Joe Saul-Sehy. Welcome to the BiggerPockets Money podcast. How you doing today?

Joe: Am I really here?

Mindy: You’re really here, you finally made it! You’re finally a big enough deal to be on our show!

Joe: This is a life dream. I’d like to thank all the little people who helped me get here. Fantastic. If I start sweating profusely in here, in the presence of greatness, just calm me down.

Mindy: I will. I will call you out.

Joe: I will say this before we start. So Scott was nice enough to autograph a couple copies of his awesome book for my kids and I have to tell you Scott on the show here, that that book has already at the beginning of my kids’ career changed both of their lives. Just great absolute stuff. My daughter is doing very well in Kansas City but my son who is in Seattle at Microsoft is like totally on the “How do I bike to work every day? Let’s make sure I have place next to work.” I’m like “Is this my son Nick or am I talking to Scott Trench?”

Mindy: I’m sorry, what is that book Joe?

Joe: I think it’s called Set for Life. It’s a fantastic read. You should read it Mindy.

Mindy: I actually have. I’ve read it before you and before your kids. It didn’t change my life just because I already embody pretty much all of it but yeah, but if I had been starting out, that would’ve been awesome. That is my go-to book to give everybody. For graduations and weddings and all that stuff. That is my go-to present. So yeah Scott, thanks for being awesome.

Scott: Well guys I really appreciate the plugs. I’m just glad your son and daughter like the book and are applying it. That’s awesome.

Joe: Yeah, no. It’s really cool to see them because you know how important it and for anybody listening starting out, to start out on the right foot, to build those habits early. I mean, some of the biggest things people do when they do first start out is they decide very quickly how to get into debt. I used to talk a lot at high schools, and it was funny. They have this question and answer sessions and every single question was a variant on “How the hell do I get myself screwed by the time I’m 21? How do I make sure that my life is just climbing out of a pit by the time I’m getting a decent wage? How do I get a car loan? How do I get as big a mortgage as possible? How do I get the best credit card with the highest interest rate that I can?”

Like all these horrible things, I’m like “No guys. Let’s talk about building wealth,” “No, no, no. Let’s talk about how I get better rims on my truck? That’s what I want.”

Mindy: You need Sprewells. Are those even still a thing?

Joe: No idea. I’m a members only jacket kind of guy. And so yeah, Durand Durand, right? That’s dated me slightly.

Scott: Yeah, but I think it’s great. This is like a key leverage point in your life where you can really begin applying these things with a clean slate, is right after you graduate college. So in high school, in college, getting access to any information about how to just build wealth appropriately I think is a big advantage. Like my advantage was I graduated college at free and then I was able to start from scratch, learning from Mr. Money Mustache, learning from Joe, learning from all these other resources and not have to make any mistakes or any big mistakes really on the path towards accumulating those first assets.

Joe: Well you know Scott, if you learned anything from me, you’re supposed to keep it to yourself. You ruin my reputation dude.

But I’m a guy who did things exactly the opposite of you Scott. I mean, I messed up everything. I came from a family where we never talked about money. Every time that my parents were having a money conversation, I get sent out of the room. My brother, my sister and I would immediately be sent out of the room. When I got to college, I immediately went to that little table that they have where they’re giving away credit cards and I signed up for the American Express card which is funny because for nine years, I became a spokesperson later for American Express. They apparently hadn’t checked my credit and the fact that my first credit card in college I had taken away at the three-month mark because I didn’t realize that you had to actually pay that bill. After you took everybody to lunch?

Like I took all my friends to lunch because I had this awesome little green card. I bought a sweater. I was at a military college, the citadel, the Military College of South Carolina. I don’t know if you know this but in my military college, you wear uniforms. That’s number one. Number two is you can’t have a job. So why the hell am I applying for a credit card where I can’t pay the bill and then number two, why do I need a sweater? Like why am I buying an expensive sweater from my department store? And 90 days later, my credit’s ruined. I’m in collections and I had to climb out. So I’m a guy that started my life making a ton of bad assumptions about life, about money, about everything.

And you know, part of that by the way guys is I also come from a family where my parents did talk about a money. We always talked about payments. I grew up like Americans in a payment lifestyle. How can we afford to finance? And don’t get me wrong, my parents are great people. They just didn’t really know money. They knew hard work. They knew how to get along with other people, but when it came to cash, they’re like most people. We went to the car dealer, with bought cars new. The car dealer would talk about “What can you afford?” And he wasn’t talking about how much money, “Can you afford 20,000 dollars or 10,000 dollars?” He was talking about “Well, I can afford 350 dollars a month.” And we lived that lifestyle growing up. And that’s where I came from like most people and had to dig my way out.

Mindy: Okay, I thought you were a smart guy who’s great with money. Why are we talking to you? Bye Joe.

Joe: I know. One thing is, I did figure it out. I did figure it out. And not only did I figure it out, I figured it out the hard way like most people end up having to figure it out. And you guys have great people on your show who have talked about this before, about making big mistakes in their life and finally getting to the point where I remember I’m on the side of the road because my car has run out of gas. I’m a mile from a gas station. I’m driving a Ford Aerostar that has about 140,000 miles on it because it was all I could afford at the time, and I’m going through the seats trying to scrounge up money in between the seats so that I could walk down to the gas station and put a dollar of gas in that hopefully will be enough to get me home.

And I remember in that moment, saying to myself “I can’t do this. Like how are other people doing things so much better than I am? How are they getting ahead?” And I then went home and began looking at finance books, began looking at people on TV. I remember watching The Today’s Show and watching these people on TV that knew about clipping coupons and all these cool “Hey, if you put these things together” and I thought that was just magic. And then I found out that you could become a financial adviser, so here I am, a guy who’s not good with money, who’s had serious money issues, I apply to be a financial adviser, and of course by the way, I got hired. I got hired to teach other people about money.

But the funny thing was I’m already at that point pulling myself out and then I started being around a bunch of people who are good with money. My clients were people that had some great habits and me having to show them the mirror of how to do their money better, I then had to be better with my own cash as well. And so not only did I pull myself out of that bad one Mindy, I also learned how to kind of hack your way to wealth.

Scott: What was your lifestyle like? What were you working, what was your job prior to that kind of like revelation moment in the car when you ran out gas?

Joe: So I was working two jobs. I was working in telemarketing which by the way is a glamorous career. I was calling up people for a company called “Wolverine Water” where we’re selling water treatment systems. And we’re giving them, Scott I’d call you and I’d say “Hey, my name’s Joe and we’re in your area doing free water test. Would you like one of our technicians to stop by and do a free water test?” And of course what they’re gonna do is do a dog and pony show where they sell you reverse osmosis water system for all you water geeks out there. You know what that is. Maybe a water softener. We’d hook you up Scott. It was great.

Scott: Nice. Does it taste really good?

Joe: The reverse osmosis stuff did. If you had water, softened water, it’s horrible.

Mindy: And how much was this amazing system?

Joe: You know what’s funny? I didn’t sell it. I just set the test. So I have no idea.

Mindy: I believe it was 10,000 dollars for this system. Maybe back when you were selling it was 25,000, but when I was looking at it when they accosted me at Home Depot, they’re like “Hey, how would you like to have great-tasting water?” And I’m like “Well who wouldn’t?” So I have come over and they’re like “Oh yeah, that will be 10,000 dollars.” I’m like “American dollars? Coz no. I’ll do 10,000 lira.” Do you remember… I’m really dating myself. Joe and I are gonna date ourselves this whole show, and Scott’s gonna be like “What’s that?”

Joe: I’ll do 10,000 rubles. What’s that? 18 dollars?

Mindy: Yes. But 10,000 American dollars, I am not putting a water system in my house. Okay, I’m sorry. We’re getting off track.

Scott: What was your other jobs? You said two jobs. You had telemarketing and then you had…

Joe: I did. And at night I was a bar DJ. I worked in bars, I worked at parties. I did college fraternity parties. Weekends I did weddings. I was the guy out leading the chicken dance and the hokey pokey, doing all that fun stuff.

It’s interesting too because that was my first… the thing that really saved me was learning how to run a business. And I had learned how to run a business the hard way too. When I got to that point where I just couldn’t things the same way I was doing it, and I started reading finance books, one of the early books that I turned to was all about PR and all about marketing and all about running a successful business. And that book, Guerilla Marketing. Guerilla Marketing was fantastic.

And from there, then I started writing just basic business finance books like Business for Dummies and How to Run a Successful Business, and I was hoping to franchise that business. I ended up instead selling that businesses. My financial planning career was starting up and taking off and doing fun things there.

Scott: What was your spending like leading up to this point? I mean, you’re obviously spending all the money that came in but what was that going to? Do you have any idea?

Joe: No. Absolutely not. Because I didn’t track anything. I mean, it’s funny. To know where you’re going you have to know where you’ve been. I had no idea where I had been. And it was funny, one of the first personal finance books that I read, and I didn’t even remember what it was, but it talked about that, about actually taking a pad of paper with you when you went… of course this was the mid-90s, so taking a pad of paper with you and just writing down how you spend money.

And as you spend it, if you have to write it down and you have to look it, you might not spend as much. And that was one of the first hacks actually in becoming more successful with money, was I never wanted to write down the crap I was buying. Because I was buying computer games, I’m buying tons of CDs, and not for my business. I’m buying tons of business because I’m a big fan of music so I’m buying that. I’m buying DVDs. It’s funny. Then later on I discovered that the library had a bunch of the DVDs that I wanted, and cut that out of my budget too.

But it all started off when going from not knowing anything. Like seriously when you asked that question Scott, I’m like “I have no idea where all that money went. Zero.” But it didn’t go anywhere go. Let’s put it that way. And generally rule of the thumb is when you’re scrounging in the seats of your late model Ford Aerostar minivan to find a dollar, you probably haven’t spent the money before that in a good way.

Scott: Well the reason I’m asking that is what kind of changes did you notice in your lifestyle in terms of how you enjoyed yourself after you kind of had this revelation moment and began learning about financial independence, starting to track your spending a little bit, that kind of stuff.

Joe: For the first time in my life, I actually felt like I was in charge. It’s funny because I thought that spending more money equaled having more fun, equaled living your life better, and that didn’t end up being true at all. I mean, at the time I just got married and we did our whole honeymoon on credit cards. And I remember coming back from our honeymoon and feeling absolutely horrible. And when we stopped living that lifestyle and instead started making sure that we had a fun money to go on vacation ahead of time.

We took a trip the next year to Colorado, to Denver, and we went out west to Rocky Mountain National Park. When we took that trip, that was all cash. And I remember for the first time in my life, I felt completely relaxed on a vacation because I wasn’t worried about where the money was gonna come from to pay for it when I got home.

I remember after my honeymoon, just Cheryl and I both just feeling horrible. Like man, we thought we were having a good time, but now for the next several months or in our case it took a couple years, we had to pay all that stuff off, all that fun that we had.

Mindy: Wow. And paying it off over a couple of years is kind of soul-crushing. It feels like “I went on this trip. I don’t even remember it now. It was so long ago and yet I’m still writing out that check for 27 dollars and 32 cents for the minimum payment on the credit card.”

Joe: Financing that hamburger at 21%.

Mindy: Always a good choice.

Joe: Fantastic choice.

Scott: What was like the first time you kind of had a real understanding of your overall financial position?

Joe: Are you talking about like exactly where I was? I think when I was scrounging for money there. Like I knew I was completely screwed. And then when I started reading financial books and they talked about writing down everything… And so I spent 16 years as a financial years as a financial planner after this and what I learned was that you can’t diagnose what’s wrong with you, the sickness, until you have it all out in front of you.

And it’s funny because a lot of people I think are living the same life that I was living which is “If I don’t look at it, maybe it will get better. If I just look a different way, this problem will take care of itself.” And that never works. So instead when I wrote down exactly where the debt was, what the interest rate was, not what my minimum payment was but how much in total, I had to pay to every single thing to get out of that debt, and then by the way also figure out not just that but how do I start saving? Because saving ultimately, I kept being told over and over and over that saving was going to be the most powerful piece of this. Getting out of debt is one thing.

But I saw people, when I was a financial planning I saw people that would completely get out of debt and then because they had no savings, they then get right back into debt. Because if they had no cash reserve and your muffler is dragging behind your car, where do you got to go for money? So you go immediately back to the credit card.

And I’d meet people that would do this like I did for a long time but even longer. People would do this for 20, 25 years, just get out of debt, back in debt. Out of debt, in debt. Out of debt, in debt. So paying the debt off a little more slowly and putting some money above the line and saving was a big key for me to actually get a foothold and finally be able to not just pay off the debt but to be able to pay it off for good.

Mindy: Okay, so how did you go from scrounging in there, like how did you change your mindset? Because it’s one thing to say “Wow, I really hate looking for quarters in the seat of the car” to actually not having to look for quarters in the seat of the car. Did you have a conversation with Cheryl? Was she on board immediately? Did you have to convince her? Like how did this shift happen? Because that’s a big shift.

Joe: Yeah. She was on board immediately but I tell you, we hit a bunch of walls Mindy. I mean, like anyone, we didn’t get it right at first and I think the one thing that we did well was when strategy didn’t work or something didn’t work, we modified it.

So I’ll give you an example of one thing that’s really worked well for us but it’s because we play tested it for the past 25 years. And that is we now have a weekly money meeting. We used clarity money to track our expenses now. At our money meeting it’s usually over wine. Sometimes we’ll go out for breakfast on a Saturday morning and we’ll talk over breakfast. Usually by the way because it’s weekly, we found it’s better if it’s short. So a 15-minute meeting for us is fantastic. If it’s a 30, 40-minute meeting, we don’t want to do it the next week. So if we keep it short, keep it fun, it’s great. We walk through all of our expenses and clarity money. We walk through all of our, where money is coming in the next week. We also look at any upcoming expenses we have, and then we look at our investments.

And usually with our investments, we make no move. We usually make moves with investments two times per year unless there’s some big time extenuating circumstance or there is some opportunity that’s presented itself between those six-month marks. We tried not to mess with the investment strategy because I think too many people get too emotional and make emotional moves with their investment strategy. That came about because of the fact that either I’d come home with some stupid thing or Cheryl would come home with something totally responsible like school clothes for our twins and the other one would have no idea that we were spending the money.

And it’s funny because the fight started not because we weren’t tracking money, it was because we weren’t communicating. And so between clarity money or a spreadsheet or a tiller or whatever used to track your expenses and communication, I’ll take communication any day. I’ll tell you that our working together as a team is much better because of that meeting, not because of the fact that we know where out pennies go.

Mindy: Okay. Now I think this is so important and I want to reiterate and highlight this money meeting that you have. You have a weekly one. I can’t remember if the Frugalwoods have a weekly or a monthly meeting. I know Rosemarie Groner has a weekly meeting with her husband and just, you know, hiding from your debt, ignoring your debt doesn’t pay it off. Oh, spoiler alert. That doesn’t work.

So, having this money meeting, and we’re interviewing all of these successful with money people and they all say the same thing. “I used a spreadsheet. I tracked my spending. I talked about it with my spouse.” What’s the number one thing people fight about with their spouse? They fight about money. You know how much fun it is to fight with your spouse? 0%. Scott, should you ever get married, fighting your spouse is the least fun thing you’ll do, besides maybe like a root canal with no Novacaine. But it’s not fun at all. It just hurts your whole day, your whole experience in life for however long you’re fighting.

So don’t fight about money. Talk about money. And yeah, if there’s a problem, okay, you know what? There’s a problem. Let’s fix it. Let’s work on it. Let’s talk about our money. Let’s have these weekly meetings. Let’s review, “Oh look, I made a mistake this week. Okay. Well, let’s fix it next week.” It’s like dieting. You didn’t get fat overnight. You’re not gonna lose weight overnight. You didn’t get in debt overnight most likely. You’re not gonna get out of debt overnight, and you’re gonna make mistakes in your diet because somebody brings in chocolate cake to work and it’s really, really good. And you’re gonna make mistakes in your budget because there’s really cute shoes that you just can’t not have. And then you get back on track again. And beating yourself up doesn’t matter but having…

Joe: Well I was just gonna say “Really cute shoes is the thing that always kills my budget.”

Mindy: I know. That’s why I said it.

Joe: Generally get killed there. But you know, you make a lot of great points there Mindy but one that I’d like to emphasize is that, and I think it was Tony Robbins I heard say this. He said when you hear a guru say something, listen to it, it’s okay, but when you hear several people, and I wouldn’t call myself a guru but I certainly, I’ve helped maybe,  I don’t know, 150 to 200 families retire over my career. So I’ve seen people get to the finish line. I’ve probably helped another 150 to 200 put kids through college. So I’ve seen what most people will see once in their life. I’ve seen it over and over again.

But Tony Robbins says that if you hear one guru say something, it might be neat, but if you hear several people say the same thing, you’ve happened upon a truth. And finding that truth and embracing it is a big thing.

I’ll tell you the other thing that really helped me back to that original question you asked, which has been packhunting. It is who you surround yourself with, and the voices that are in your head. And I’m gonna use a non-finance analogy. When we moved to Texas 10 years ago, I had no desire to run a marathon. Like I had zero plan to run a marathon. So my wife got hooked up, Cheryl got hooked up with this cool running group, and she was running with them, and they were all marathoners. And so one day, she asked me if I want to come run with them. I said “Sure.”

And they were running I think 10 miles. And the most I had run at that time before that had been… I ran in college but I had grown lazy and fat. So, when I say the most I’d run is 10 miles, this is the adult Joe, not the kid in college that was really fast and a lot thinner. So I hadn’t run that far. And we went out to run the 10, they did this run-walk thing where you run for 7 minutes then you walk for a minute, then you run for 7 minutes and walk for a minute and I found that I could run much longer lengths because of the fact that I was running this. And then I could also run longer lengths because I’m running with a pack of 20 people. And we’re talking about movies, we’re talking about what we’re doing that weekend, and guess what, I went from not caring about running a marathon, to running 13 marathons in the last 10 years. And I love it. It’s changed. I’m thinner now. I’m healthier now.

But I find that’s the way it is with money. If you hang out with people who are successful with money, you have a much, much higher aptitude with money than if you’re hanging out with people who spend a ton of money throughout partying and blowing all their cash.

Mindy: It’s so much easier to spend a lot of money when everybody is too.

Scott: Sure. How do you go about doing that? How do you go about surrounding yourself with people who care about money?

Mindy: Oh. Good question.

Joe: Yeah. I think that’s a great question. I think the first thing is just examine your current friends and how they work with cash. Are these people building you up or are they knocking you down?

I remember, we talked to and I think, well you guys have talked to coach Carson before, to Chad Carson. I love what Chad did which is that he started hanging out with people in the real estate space for his niche. He’s a big real estate guy for people who don’t know coach Carson. He started hanging out with people that did what he wanted to do.

So if I want to run marathons, I go hang out with people who run marathons. If I want to be better with money, then I join groups of people who are great with money. And I think that you can find those groups online, of course there’s a bunch of closed Facebook groups, I mean there are groups like BiggerPockets as an example. We have a Facebook group that StackingBenjamins that’s always between telling bad dad jokes and talking money. It’s a lot of fun there.

But there are all kinds of great places to fill your head with that. And then I think, you can’t underplay just the surround sound of podcast and audio books. I find that just keeping that in my head is a fantastic place to start and I end up then seeking out people that seek out that same type of stuff.

Scott: I love that you mentioned the audio books and podcast concept because I think that that is… it seems like, when I was starting out, like househacking is this very outlandish concept that friends and family just don’t understand. But because it’s reinforced all the time in the stuff I’m reading, the stuff I’m listening to, and just all these general concepts are being constantly reinforced, I’m not the odd guy out anymore. I’m surrounded by people, even though they’re not really there, that I’m kind of relating to.

On the other side of things, what I think was really hard for me in my like early to mid-20s, I guess I’m now in my late 20s, is the concept of just like finding new friends. It doesn’t seem like an approachable subject I think to a lot of people that are maybe… like now that I’m a real adult, it’s more okay, I can make new friends and have these new things, but that doesn’t seem as approachable I think to a lot of maybe younger listeners. Is that something that you would agree with? Is that a challenge that maybe diminishes over time?

Joe: No. It gets harder. I think it gets harder. I was reading a statistic just literally this morning that a 50-year-old man have a hell of a time finding friends, and that’s a super lonely age for most men because I guy going out and trying to find new buddies at age 50 is… I walked out in the street and go “Hey, wanna be my buddy?” it just seems a little strange.

Scott: I’d be your buddy.

Joe: You already are my buddy.

Mindy: Would you be his buddy if he walked up to you on the street and said “Hey, can we be friends?” You don’t look like a total creeper at all Joe.

Joe: I’ve made a couple of friends in a similar way.

Mindy: It’s a lot easier to make friends when you’re making something in common. And that’s pretty much as soon as you’re out of college, even at Scott’s tender age. It’s more difficult as you get older. I make friends now through these FI meet-ups that I go to, through real estate meet-ups that I go to, and we bond around a common topic and I make friends with the moms at school as I’m dropping off the kids because we’re bonding around a common topic. But yeah, you can’t just walk up to somebody and say “Hey, you want to be friends?” It’s tough.

Joe: That’s where the shared interest piece comes in Mindy. I’m totally with you. You can’t go in looking for new friends. I think you have to go in looking for people that share the values and share the interest that you have and I think you have to though take a long look at your existing friends because I think you can divorce existing friends. I think going up and searching just for new buddies is tough. Searching for groups though that share your values I think is way easier. Then divorcing yourself from old friends is a difficult thing to do. I’ve had to do that with people before where they’re just toxic.

We have these people in our lives, I had a great mentors, and we talk about mentors too because that’s kind of a great side topic on this same vein we’re mining right now. But I had a great mentor who told me to stay away from clusters of misery. There are groups of people who are just clusters of misery.  They just complain about everything. They always talk about how something is somebody else’s fault, and instead grab on to people who are living life as if they’re the ones grabbing the bull by the horns.

Mindy: Yeah. That’s a really really great piece of advice. Because as you’re saying that I’m thinking to myself, “Yup, that person’s out. That person’s out.” Like I’m thinking of the people that I no longer talk to and it ruins your whole day to talk about. Life’s too short. But yeah, the Facebook groups are a really great place to start. In real life, nobody talks about money, so you don’t want to go up to somebody and “Hey, are you a frugal person?” Who’s gonna say “No way. I’m not frugal,” but you might find that they are. There are a lot of people who think they’re frugal and they really are. But these Facebook groups, you can find a lot of local groups, you can find just in general groups and then you start talking and they’re like “Oh, I’m in the next town over from you,” “Oh wow, would you ever like to get coffee?” And I’d met a lot of people who just happened to be traveling around my town or near my town that reached out and say “Hey, let’s connect.”

Scott: It seems a combination of things to do. One, surround yourself with content, written, audio, whatever, that kind of fills your head in with these concepts. Two, meet groups of people in real life that can help you do this. Three, maybe get a mentor or somebody who can walk you through it, that’s kind of like a more coaching setting where you are the apprentice. And why not do all of these things? I actually did all of these things when I was kind of getting started down the journey towards financial independence and it sounds like that’s a similar experience for you Joe.

Joe: Yeah. It totally is a similar experience for me Scott. I figured out early on that it was gonna take good coaches because as I mentioned, my parents are great people but they didn’t know anything about money. So I had to find people that were great at money, people that were also great at building business because I’ve built and sold three different business. But I didn’t know any of those tools. Like I didn’t know how to do any of that stuff. And so having somebody who’s been through that before is fantastic.

And I always get sad, when I read in an online form somebody that says, and let’s just take investing as an example, said “Well, you know what, you don’t need to talk to anybody else. You should just invest your own money and do your things just by yourself in a silo.” The frustration I had with that was I worked with some of the most successful people in the metro Detroit area when I was a financial planner, and whenever I met super successful people, they all had great coaches around them.

And I’m not saying hire a financial adviser. I’m saying have smart people around you that look at stuff with you, and especially people that think differently than you do around you. Usually, my smartest, and just the most brilliant people that I met had these people around them who always seem to be so different than they were that I started modeling that and I found my career grew much quicker, I found that my wealth grew quicker after that.

I’ll give you an example. I’ve had the same life coach now for over 15 years. My wife doesn’t like her. Like personally can’t stand her because I tend to look at the world very optimistically, I run into walls at 100 miles an hour. Mary Lou, my coach, looks at the world very negatively. Looks at things as if I need to be much much more careful than I am. Like she is exactly the opposite of me. And the reason I hire her isn’t to be my buddy. I don’t need a buddy. I need somebody who can cover my blindside and Mary Lou has been fantastic for me at doing that. And by the way, Mary Lou, if you’re listening to this. We love you. We think you’re great, but just socially, Mary Lou and Cheryl are two completely different people.

Mindy: Well I think that’s really important to find somebody that is different from you. I share your boundless enthusiasm for everything, and it’s really easy to see only the good. And that’s a little bit extreme but it’s really great advice to get somebody who isn’t your complementary. You don’t want a yes-man or woman.

Joe: Yeah, somebody that can see through your baloney. I’ve got a lot of baloney. I’ve got a bunch of stuff that I told myself. And I love when people tell me “No Joe. You’re wrong.” And maybe that’s my personality, is that I kind of like having Gordon Ramsey-type people around me, and for people who don’t know who Gordon Ramsey is, he’s this chef-guy that has these kitchen shows where at the beginning of the show he yells at people and he’s in their face, and then you realize halfway through the show it’s because he loves them and he really wants them to succeed. But he kind of has to knock down this wall that people have of thinking that they’re great at everything.

I get frustrated when I see people try really hard and I do this myself by the way. I try very hard to convince people that what I think is right, and I think that I do much better personally if I spend more time asking questions trying to instead figure out what’s correct, you know what I mean? Instead of pushing my right on somebody else, taking the time to go “Well maybe I should search for the better answer instead.” I found I’ve become more of a listener the older I get even though it seems like I can talk pretty well.

Scott: Well, going back a few steps here. So we talked about how you became a CFP and began to get your finances back in order. Can you kind of walk us through some of the levers that you think you might have pulled to move that forward? Like how did you go about paying off your debt? How did you go about building up those savings and what was your transition to investing?

Joe: Yeah. So first thing was negotiating with creditors, and I learned that the hard way, that you had to decide who was worth negotiating with and who wasn’t worth negotiating with, and you guys just had Jillian on and you covered all that stuff great so I’m not going to go into that. I think people should just go back and listen to your interview with Jillian to dig more into that.

But I went through that same process of learning that. The second thing then was realizing that I needed cash in the bank before I would be completely debt-free. Like I could either make sure no bad things ever happened to my life again, or I needed cash to cover the bad things so I wouldn’t have to go into debt again while I was getting rid of the mountain of debt.

So, that realization, and actually it wasn’t so much a realization as books and people around me telling me that, and me finally being less of a hard head and figuring out that having this fund set aside that was my emergency fund was gonna save my bacon. Once I got to a point that I knew that the debt was going to be down by a certain day, then I realized that I needed to invest and invest outside of my… I needed to invest in two different ways. Number one was I needed outside investments but number two was I needed to also start looking at my business as an investment instead of a place where I worked to own a paycheck. I needed to build it to sell even if I wasn’t interested selling right now.

And that was an aha, I had reading another great book which was E-Myth. And it seems every third person I talk to says the E-Myth is their favourite book, and that’s another… Mindy going back to your truisms, you hear people say stuff over and over and over, if you haven’t read the E-Myth, whether you own a business or not, understanding the concepts in the E-Myth I think are a great way to get ahead.

Because I’ll tell you just from a personal finance standpoint, another lever I pulled Scott was this. I realized by watching smart people around me and from the E-Myth that when I stumbled across something cool that I was getting right, I needed to recognize that I’d accidentally hit upon something that was good, and then I needed to figure out a way to automate that so that the next time I tripped on that again, I’d have this tripwire already set up and I’d be able to automatically take advantage of it.

So as an example, putting money in a cash reserve that was out of site was one of the early things. Like initially I set up my emergency fund at my local bank. But I was a guy that was crappy with money. And if you have a debit card and you’re putting a hundred bucks into this cash reserve and you got debit card access and you’re not good with money. There’s always a reason, like your brain comes up with these reasons why you got to take the money back out. So I needed up sending my money to a bank account in Minneapolis that I didn’t have debit card access to. I lived in Detroit. So I send it to another city. I could have my money overnighted to me, was the quickest I could get. I could actually have it wired but there was gonna be a huge wire fee. I could also pay a fee to have it overnighted.

And at first I thought “Well I don’t want to do that. I don’t want to pay all these fees to get my own money.” And I thought how great is this to have like a 40-dollar hurdle between me and my money and I know that I’m cheap enough that if I got to pay 40 dollars to get my money, my brain will come up with other ways to solve this big “problem” I’m having now. And you know what? It worked. It absolutely worked and that money started building and then once the money built, then it became a game.

And the next thing that I realized was gamifying things. I tripped across… I don’t remember what it was at the time, like what the first thing was that I tripped on here, but I realized that for me, turning things into a game was fun. And so I started setting up these milestones. And when I set myself a milestone, not for five years out but for six months out and a year out, and I needed to reach that milestone and I didn’t look at the five-year number, like I’m not motivated by a five-year number. I’m motivated by the six-month mark. I’m motivated by the three-week number. So if I can take this huge goal and break it down to this little bits and turn it into a game to reach the bit and then I give myself a reward each time, like for me that would be like a new board game, it would be fantastic, then I’m more likely to hit that goal.

So I started setting up this, I combined automatic savings with shorter milestones and gamification and for me that was perfect for getting where I wanted to go faster.

Scott: Another key point that I’m observing from this from what you said earlier is your weekly tracking of your progress towards this goal in those weekly meetings. Like I have a similar type thing. I do six months to 12-month goal, sometimes three months, depending on… I chuck them on 3, 6, 9 months depending on what goals are I track my progress every day at every week towards those goals and that’s what keeps me going towards them and then of course the reward at the end is always very nice.

Joe: I don’t know if it’s fun or a sickness. Maybe it’s both but I love it.

Scott: It’s a healthy obsession. It’s a healthy goal, a healthy habit, right?

Joe: I totally agree. Yeah.

Mindy: Okay, so let’s go back and talk about your debt. When you decided, after you’re done scrounging through for a quarter, when you decided you were gonna pay it off, how much debt did you have, what was it comprised of and how long did it take you to get rid of it?

Joe: I had 81,000 dollars in debt.

Mindy: Oh, so not just a little.

Joe: No. And so it was a combination of personal loans that I’ve taken out for my “business” which once again I had to get my business under control as well and create separate entities. That’s a whole different show. But it was a combination of personal loans, credit card debt, student loans, and on top of all the stuff, I also didn’t understand how taxes work, and I ended up owing the IRS a bunch of money that I actually, I know today I never owed this money. I just didn’t know how to track my expenses. I also didn’t know how to hire the right people in my corner. I hired an accountant who wasn’t really an accountant, he was just a dude who put the numbers together even thought he was CPA. And I went to him, and I don’t remember what the number was anymore. I think it was about 30-35,000 dollars. He said “Hey Joe, you owe 35,000 dollars and that’s due next week.”

And here, I’m a guy that has tons of debt, spending every penny plus more than I make. I remember being so mad at him, and going “Where am I suppose to come up with that money?” And then I realized later when I found good help, when I realized once again from mentorship that I needed to surround myself with good people, I found a great CPA who understood how taxes work but by then, the horse had left the barn and I was beyond being able to go back and figure out where all those expenses were, but there’s no way I owe all that money.

But not only did I owe that money, I owed that money plus penalties because the IRS, if you just once again look away, the IRS doesn’t look at that kindly. And so yeah, when I finally looked at it and wrote everything down, we were over 80,000 bucks.

Mindy: Wow. And how long did it take you to pay that off?

Joe: Oh god it felt like it took forever. I think I didn’t get it all paid for 7 years. It took 2 years to pay down the credit card debt part. Overall to pay off all the debt though, it took 7 years.

Scott: At some point when you’re paying this down, you say “Hey, I see the date that I’m gonna get to zero” I think you said that earlier, and I assume at that point you began building up that emergency fund and beginning to invest, is that right? So were you investing at any point during this time or you waited until you got to zero?

Joe: No, no, no. The last few years, the last three years, I had gotten my credits score better and I began transferring things to lower interest debt, and as I was able to transfer things to lower interest debt and I had an emergency fund in place, and I knew that that was taking care of itself, I also knew I had to start investing. So then I started putting money then into first my retirement fund, and then second into brokerage accounts. And then later I became a landlord.

Scott: What was your kind of philosophy as you approached investing?

Joe: Boy, my philosophy at first was just do it. I mean it’s funny because I think that  philosophy for me was just I gotta do something. So I didn’t “Hey buy a mutual fund.” I mean I bought growth mutual funds, growth no-load mutual funds through decent places. I mean, I wasn’t buying anything super and expensive. I wasn’t paying a lot of attention to having the perfect investment. I was trying to just buy aggressive stuff.

And it’s funny because my whole philosophy around investing changed later once I had money. And I tell people starting out that too. You know it’s funny because my daughter and I were having this conversation. She was setting up our 401k last year, and when she was doing that, she and I agreed “Why wouldn’t you just put everything in your 401k when you were first starting out into the small cap value fund?” Just like put in the most aggressive thing because if you’ve got a hundred bucks there and it goes down 10%, you lost 10 bucks. So just put it in the most aggressive thing you can find and just go. Like don’t overthink it. Just go.

And now it’s cool she’s saved a ton of money her first year working and as that money grows, I think diversifying it out is gonna make more sense later. But initially Scott, my whole philosophy was just do it. It was all the Nike thing. And actually, you know what, it wasn’t even that. It was Nike had a phrase before that that I like better. Like I like “Just do it,” but Nike’s old phrase was “Feel the fear and do it anyway.” And I felt a ton of fear and I still feel a ton of fear. I just remember thinking “Yeah, I just got to do something.” So my philosophy was “You’re screwed if you don’t start saving. So suck some money into a mutual fund pal.”

Scott: I think that’s a very appropriate way to kind of rationalize things. When you’re starting out and investing, whatever you’re gonna accumulate over the course of that year, you’re gonna be investing for a long time. Hopefully, 50, 60, 70 more years. Why don’t you go ahead and invest that you think is gonna have the highest possible long term results, and who cares what happens in the very short term? The savings rate and the amount that you accumulate and put away, that is the big driver of growth until you get to maybe six figures in investible equity, investments. Now, a 10% of that is gonna be a meaningful hit to your overall financial position in a given year.

Joe: I think the closer you get to wanting to start the spending pattern with your money, the more analytically you have to get. I think ultimately you should be very analytical. But not when you start out. I think people spend… you know, a week at questions on our show, you guys get questions, people asks us all the time about “I’m 22 and what do I do?” And it’s feel the fear and do it. Just go do it.

But let’s say… I love the whole idea of the fire movement. I think it’s fantastic. What I worry about though is there are some people who are entering the years where they’re pulling the trigger on fire and they’re not analytical enough about some of the numbers. I think when it’s time to pull the trigger and say “You know what, I’m now gonna be financially independent,” I think that’s the time when you got to have all those little nitty gritty numbers that I learned as a financial planner, but not when you’re starting out.

Scott: And I think there’s a conundrum in the fire moment as well in the sense that when you have, like it seems a lot of the fire folks are talking about, “Hey, I’m gonna stockpile a ton of index funds and then I’m going to invest that because that’s a high probability way of generating long term wealth. I’m gonna live off of that going forward.

Well, the reality is… I put up a poll in a Tuesday 5 Facebook group amongst people who actually retired or can have a retirement level of wealth. Almost nobody actually retires off an index fund portfolio alone. Almost everybody has got like a couple of other extra tricks up their sleeves including an index fund portfolio that would actually sustain them. So don’t get fooled by “Hey, the path to retirement is build up 25 times your net worth in the next fund and then you’re done.” That’s not mentally what people are able to wrap their heads around because everyone’s analytical by the time they actually pull the trigger.

Everyone’s got a rental property, a pension, or stays working or works part time that’s going on after they retire. Not everybody but a large portion of the folks in the fire moment.

Joe: Well the one thing I learned Scott to your point is that as a financial planner, is that while something might not seem to go wrong to you when you’re managing your own money, when you’re working with 200 families, something’s always going wrong with somebody. Like I’ve seen so many things go wrong with people’s investments and so having multiple investment strategies… well one overall strategy but different tactics I guess, 3 or 4 different tactics you’re pursuing instead of just dividend paying stocks or just purely rental real estate.

And don’t get me wrong, I think you should go strong with the thing that you know the best. If rental real estate is your thing and you’re great at that, lead with that. Make that the whole of your ship. But your ship still should have a different sail, maybe a different spinnaker sail, a different anchor, you know, I’m just trying to think of pieces of a ship, but just have other things that complement that so that if something does go wrong in the real estate market, you’re not sitting just there. You’ve got other places to turn. Yeah, I love that.

Scott: I think that’s fantastic advice. And you don’t hear that very often. You hear “Here’s the ideal portfolio allocation.” But what you’re saying makes perfect sense. I’m a little overinvested in real estate compared to what most people would say is reasonable. But I work at BiggerPockets. I talk about real estate investing all day long. I’m super comfortable with my portfolio there and I should be overextended in real estate investing right? And I do have stocks in other things and I have other income sources that I’m continuing to work on. But that’s the bulk of my portfolio and that makes sense for me. It might not make sense for somebody else who doesn’t feel as comfortable.

Joe: Well I’ll give you another story in that way. I had clients when I was a financial adviser, that came to me and they were very surprised when I came back… we had a first meeting where I get to know them, they tell me about themselves. I then come back with suggestions and strategies at my second meeting, and then we have a whiteboard and we start working through together how the plan is gonna come together. Because it’s not my plan, I’m not delivering it, we’re gonna figure it out, but I’m gonna bring in some suggestions.

And the one suggestion they were most surprised about, I told them that the lead in their portfolio should be livestock because this dude and his family, that’s what they knew, and he knew like clockwork how to get a 10% rate of return in livestock but not just that, not just get a 10% on going rate of return there, he also knew the downsides if it didn’t work. And he knew how to protect against those downsides. And I thought that was fascinating. And by the way, they thought it was fascinating me as a financial adviser because every other adviser they met before me, of course it said “Lead with something that I can help you manage.” You should always lead with what you know best. And then we diversify it around cattle and pigs.

Scott: Holy cow.

Mindy: Oh god. I quit.

Scott: That makes perfect sense to me. And I also recently, I don’t know where I came across this, but apparently cows a worth a lot of money. Like one cow is worth like 3 grand or something like that.

Joe: When I was looking through their spreadsheets, I remember my client Brian just walking through his spreadsheets, and I walked through every piece of his spreadsheets because I find that a lot of people, there are flaws in their spreadsheet. And I’m thinking “Okay, you’ve got this. I’m going 10% rate of return,” sometimes much much higher than that. “Show me how this works.” And he walked me… I think we might’ve spent three hours talking about how this works where I was confident enough that I said “Why wouldn’t we lead with this?” Because just like you with real estate Scott working at BiggerPockets, it’s what he does every day. It’s what the dude knows. Like let’s make sure we start with what you know.

Because I’ll tell you, when something goes wrong, if you know the underpinnings of why it goes wrong, you’re much more likely to respond in the appropriate way. What I worried most about when I was a financial planner, what I still worried most about is that when the stock market goes down again, and it’s gonna down again, when the stock market goes down, it’s hard to predict how people are gonna respond. And what I found was people that were more in touch with their portfolio and they kind of knew why their stocks were down, they were much more likely to respond appropriately.

But people that just wanted to push it off to me as their adviser and have me just “handle it,” they were the people that went off the deep end when all of the sudden the stock market goes down. And even if we’re down 20% when the stock market is down 35, so I pretty much saved their ass, those people were still really, really, really upset with me. Like why didn’t you handle this better? Like I don’t think you understand what we did. Like our strategy was defensive enough that you didn’t lose your ass as much as everybody else and they’re like “I don’t care about everybody else.”

I could go on and on and on about some frustrating things that happened when people would, and frankly that’s part of the reason why I left being a financial planner, was I loved it when people wanted to learn more about money, I didn’t like it when somebody wanted to handed it off. You should never hand off your money to somebody else. Have coaches in your corner. But listen, if you hired somebody to just take it, this is your net worth you’re talking about. Nobody cares about that as much has you do so you should be very careful with your money.

Scott: I got a good example of this, is index fund investing again. So I invest in index funds. I’ve got a lot of money in Vanguard index funds, low-fee index funds. However, I do that because I’ve studied both sides of the issue of “Hey, what are the advantages here? What are the disadvantages? Why shouldn’t I build my own portfolio of accumulated stocks and I’m comfortable with that.” And I think a lot of people are just like “Oh, passive index fund is the easy option, I’m gonna do that,” without understanding all these concepts. And there’s gonna be certain types of reactions that you have to go through in different market cycles. I think that’s gonna be an interesting test for me and for a lot of other people that are going to go through maybe their first recession with some savings built up.

Joe: Well, no, you think about how long it’s been right? It’s been nine years since the downturn. You could have a financial adviser look you in the eye and say “I’ve got nine years experience” and that sounds like a long time. Somebody has got almost a decade of experience. Holy cow you’re experienced. They’ve never seen a freaking downturn. They haven’t seen a downturn. I went through two in my career, that’s where all my hair went. It is horrible. You don’t know what’s gonna happen tomorrow. I’m in Detroit. I’m watching the auto companies go bankrupt. We’re watching crap on Wall Street every day. We’re watching people lose their houses, lose their jobs that you never thought we’re going to. Like you don’t know when it’s gonna end. It was horrible.

Scott: I thought your hair went to your chest.

Joe: You know what happened to me? I now only grow hair out of my nose and my ears. I don’t know if that’s age thing or what but I feel like I’m constantly creating hair there but not on top of my head. It’s very frustrating.

Mindy: It’s an age thing and a man thing. So Scott in a couple of years you can look forward to that too.

Scott: I look forward to it. I’m gonna let it grow.

Mindy: Okay, so Joe, I’m assuming that you’ve paid off all of this debt now. You’ve talked about it in the past tense. Where are you on the patch to financial independence and financial independence I am describing is “I don’t have to work anymore.” Clearly you do still work but when you do what you love, it’s never a job or whatever.

Joe: Yeah. No, my spouse and I still work. And you know what’s funny is that if you look at some of the people, and I don’t want to rip the fire movement because I think it’s fantastic, and I think people are doing some amazing things, and I love the stories, and I love the enthusiasm for savings, and we need more of that, right? I mean, we need so much more of that. Our community needs to be so much bigger. But I’ll tell you. I have a lot more money than a lot of people who tell me that they’re financially independent, and yet, when I look at my numbers and my assumptions, I’m just gonna be more conservative. So, to answer your question Mindy, I work because I like it, my spouse works because she likes it. We could quit tomorrow and I’m sure that we would be fine, but I’m a pretty conservative guy.

But like you said, I love what I do. I can’t imagine… you know, I feel bad sometimes when I read some people in some of the forums who are so excited about getting rid of their work, about not working because of the fact that I think there’s nothing wrong with a life well-worked. I think work is a fun thing. Not to pair what you said Mindy but really, if you love what I do, I can’t imagine not doing my podcast now. Like I want to finish an episode and like keel over. Like that would be my ultimate step. Like I just finished interviewing Scott and Mindy on my show and then I keel over and die. Take me. That’s fantastic.

Mindy: Please don’t die. Please don’t die. Please don’t die. So I have a couple of things to say about this. It sounds like you’ve only had jobs that you loved, and I had a couple where I did not love them so much. So I’m assuming all these people that are in these Facebook groups and are out there saying “I can’t wait to quit,” are in jobs that they don’t love. I work for several people because if I quit, I couldn’t pay my mortgage, I couldn’t eat, I couldn’t put gas in my car. But I certainly did not love those jobs. And I was actively looking all the time to get a different job because I hated what I was doing, who I was working for, whatever the political atmosphere of that job. And I think that there are a lot of people who are focused on solely on “I can’t wait until I get out of my job.” But you’re right. Working is fun.

I get up, and this sounds kind of disingenuous because I am actually at my work when I’m saying this, but I get up in the morning and I’m so excited to go to work. My husband is now a stay at home dad, and he’s getting the kids ready for school. And they’re close in age so they’re fighting all the time, and they’re in the middle of fight and I’m like “Okay, got to go to work,” like I’m excited to go. I feel guilty that I’m leaving these two fighting kids or the tone that doesn’t want to go to school today, and I feel really guilty about that as I’m leaving. But I’m leaving because I love my job and I cannot wait to go.

Joe: No, I had bad jobs too but like you, I realized early that doesn’t way I wanted to spend my life. And you know, I kind of threw my parents under the bus early in the show. And so I’m gonna circle back though and say you know, for my dad and my mom, they did jobs that they loved. And they loved working. And I think I inherited that from them. If I didn’t love a job, A I had to bring enthusiasm to it but then B, I had to either find a way to love that job or had to find a job that I love. And so, I kept searching for jobs that I love. And when I didn’t love financial planning anymore at age 40, I sold that business and moved into the piece of it that I really do like, the financial media piece.

Scott: Yeah, and one thing I pointed out about you guys and a lot of other stories that are kind of like this about how fire but love our jobs, is your financial means increase as you increase the savings rate, you have other sources of income and you’re less dependent on these jobs in order to get by. I think that there’s a lot more, you’re just not gonna tolerate work that is not satisfying. So you move gradually and, it’s different for everybody and their risk tolerance, but I think you move gradually towards work that you really do love as you get closer and closer to a reasonable approximation of fire. And then it ends up being a job. And I think this story is just repeated time and again across hundreds of people or maybe thousands of people, at least dozens that I’ve met.

Mindy: Well and when you’re not working for a paycheck, you can do something that you enjoy even if it doesn’t pay really well. My husband always wanted to be a ranger, like a park ranger. That doesn’t pay anything. That’s like 10 dollars an hour or something. So to support a family in an expensive cost of living area, being a park ranger isn’t the best choice. But now that he has reached financial independence, I say he, we have reached independence, then he can go pursue these jobs that don’t pay much, or even go start his own thing that doesn’t pay anything at first. You know, you find out what you’re doing but you’re optimizing your life for your happiness, and that’s the most important thing.

Joe: Yeah. I think finding a way to push back that hand to mouth as quickly as possible is an important thing for anybody. Like how long can I hold on this dollar before I needed to eat? And if I can push that away then I don’t need to be chasing the next paycheck, I can chase instead what really fulfills me.

Mindy: Yeah. And that is the best life lived.

Joe: Yeah.

Scott: Alright. So one topic that I think we want to cover before get to the Famous Four is some assumptions that maybe are wrong in the fire community, or something that needs to be challenged or debated. Let’s go ahead and transition into that with a very awkward transition there.

Joe: Well no. Actually it kinds gets back to what I said earlier, I said I think some people aren’t looking at all the numbers and maybe we’ll nerd out here a little bit for some numbers because I’m a guy who lived an early life of wrong assumptions and so I think some people don’t use some of the right stats. I tell you a few bigs ones. Number one, the 4% rule. I see the 4% rule quoted a lot which means if you live on 4% of the money that you have, you can accumulate that, that that’s gonna be enough. Financial planners have ripped that to shreds guys. That thing was used one point in time. It wasn’t enough research, and so living off 4% of your money, not a great place to start.

Mindy: That’s interesting. I would like to point out, because you said it and I just want to reiterate this, it is 4% of the amount that you have saved, not 4% of your income.   There were several articles recently in local publications that people were commenting “I could never live off of 4% of my income.” Yeah, same. Unless they get a 1200% raise, I’m not living off of 4% of my income either. It is 4% of the money that you have saved.

So this is interesting because that’s kind of my plan although I also have a job and my number was here and now with the stock market it’s gone up a little bit. William Bengen did the original study and then the trinity group came in and verified it. I am curious why you say that this is not Kosher.

Joe: Well, Wade Pfau is a certified financial planner who brought it to my attention, and he is a guy who is often quoted… and he may not even be the guy that ripped it first, but the fact that this was only worked in a very specific time frame makes it suspect. And if you look at many time frames over the last… well since the great depression, you’ll find that 4% wouldn’t have… your money wouldn’t have lasted forever. 

I don’t even like using that… so here’s what I like. I like that as a place to start. Like if you’re just gonna do, like the rule 72 which we won’t… I just opened up another can of worms. Go Wikipedia that. I’m sorry I brought that up. But the 4% rule, if you’re just using your fingers, you’re like “Okay, how much money can I live on… okay a decent place to start.” But why wouldn’t you actually plot out the numbers? Because plotting out the numbers is not as hard as you think it is. It is actually way easier than you think it is. So using a lot of these just rules of thumb versus saying “I’m gonna live on X amount of money,” and then have your… there are tons of financial planning software online where you can then see if the money that you’ve accumulated will fill in that need. So start with the need and work backwards. I think if you’d follow Stephen Covey’s 7 Habits of Highly Effective People and begin with the end in mind. How much do I need to live? How long do I think I’m gonna live? Add some time to that so you that run out of money, and then see if the amount of money that you have based on a reasonable interest rate will last that period of time. I think it’s a better way to do it. Sure, it might take you a few hours versus three minutes, but this is might be half your life. If you’re gonna retire in your 40s, it could be more than half your life. So take some time and do the real math instead of using a 4% rule.

Another thing there on that point, by the way inflation. Inflation is another thing I think people don’t take seriously enough. And by the way if you’re using the government statistic on inflation, oh boy, that’s a whole another podcast. Let’s just say it this way. It is incorrect. The government number is not the real number. There had been years where there has been zero inflation and cost on a lot of things went up and up and up, so using a reasonable number like 3% or 4% for inflation I think is a better way to go.

Once again, to be conservative, especially if I’m going to chase early financial independence, I’m gonna jack up that inflation number to 4. I’m gonna use the higher inflation number. Because it works at 4, it will work at anything below that. So that’s another one.

Scott: Actually the 4% rule is a good milestone. Hey, if you’re getting to the 4% rule, if you’re getting close to that in terms of your net worth and invested assets. This is your house, maybe your home equity, this is like equity and rental properties and stocks and all that. Okay, you’re getting pretty good. All probability you’re gonna be better off in most retirement scenarios than the rest of the population by a large amount and you got a reasonable odds of sustaining that. But the reality of the situation is people aren’t satisfied with the 4% rule. People aren’t stopping. I see very few families that are actually stopping once they hit the 4% rule in a portfolio and doing nothing else and having no other side income streams. And I think that that’s telling, right?

Whatever it is, whatever all the math is and argument, it’s just not good enough for your ordinary person that’s listening. There’s always a back-up plan that is going on as soon as you actually do leave that job.

Joe: Yeah and I think that’s a good point. Use the 4% rule and once you get there Scott, now start running the real numbers. Now at that point, now it’s time, the 4% rule is when the beacon goes of that says now it’s time for me to actually dig in.

Scott: But I will tell you, at the very least from the 4% rule I bet you that you will never have to work a job you don’t like ever again. And I think that’s the real victory you get to when you get to that 4% rule, right?

Joe: And by the way, the reason the 4% rule doesn’t work in some occasions is what they call sequence of return risk. Meaning if you shut off your income stream today and the market goes down immediately and let’s say you lose 40% of your portfolio the first couple years of retirement, you’re screwed.

So sequence of return risk I think a lot of times peopld don’t compensate enough for that which means especially once again if you’re gonna go early, I want to have a big enough reserve. I was talking to a financial planner just a few weeks ago who said he likes to have eight years of money in very conservative assets to avoid sequence of return risk. I think that’s incredibly conservative. Like I think that’s over the top conservative, but I still get his point that I want to avoid making the mistake of retiring and then have all my investments fall apart the first couple of years.

Scott: Yeah, and let’s all put this in perspective too. Like you retire and the market immediately tanks and you lose 40% of your portfolio. The only people that are worse off than you is everybody else. So everybody else is worse off than you and you can just maybe go back to work and not make quite as much money.

Mindy: That was awesome. Well I am gonna tag on to what Scott was saying just a moment ago. The personality traits that allow you to think ahead and save this much money and be this aggressive in your retirement planning, are the same traits that kind of won’t let your sit around and do nothing once you get there. So you’re not going to aggressively save and then just be like “Oh, what’s on TV today? I’m gonna Netflix and chill for 17 hours.” That just doesn’t happen. So while you might be making 100,000 dollars in your first job and your next job makes you 10, you’re still doing something. You’re still bringing in money, and with this low rate of spending and this low rate of income, you’re kind of balancing it out. So I do not want to bash the 4% rule although I totally hear what you’re saying. Yeah, you’re already in a better place than everybody else.

Joe: Yeah. I’m just seeing an over-reliance on it.

Mindy: That’s fair. What else do you hate about fire people Joe?

Joe: Oh my goodness. Send your hatemail to…

Mindy: [email protected]

Joe: Yeah. No. I think these are just stumbling blocks that I’d like to see more people avoid. And I do see a lot of people avoid them. So I’m glad we’re bringing a light to them. I also, we already talked about this next one which is over-reliance on one asset class. I think there’s a big danger. Not saying that dividend stocks, divident paying stocks are my strategy and that’s all my money and I’m gonna do it just that way. Something goes wrong in every asset class so I don’t want that.

But you know what the biggest ones are? When I was thinking of issues, the biggest issue that I see that I think we want to be cognizant of is this feeling that I’m going to feel the same about my life 15 years from now that I feel today. And I’ll tell you that doesn’t happen. As a guy who’s 50 years old, I don’t feel at all the same about my life as I did at 25. And my goals are different. My desire to spend money is different. So if I lock myself into a lifestyle that’s incredibly limiting at a young age, I really would be weary at that. I’d get really weary at somebody that says that I like to live in a woods in a tent and I’m 31 years old and I saved 100,000 dollars so I can do that forever. I’ve done the math and I can live off this money and never do anything differently. By 50 you might not want to live in that tent.

Mindy: Okay, so this is the problem with the audio is that I can’t put an asterisk next to what you’re saying and I totally hear what you’re saying, completely do not disagree with that but if you are young and you are getting used to this super frugal lifestyle, you’re only going to do better as you go on. Oh, I saved too much money, now I can buy a Porsche. That’s not a bad thing.

Scott: Well I would say the way I view it as someone is I understand this. I don’t spend very much money right now and I don’t have the desire to spend a lot of money. But I understand that that’s going to change most likely and I’m going to want to spend more money, if nothing else to at least a home in a good school district if I have kids. And like there’s gonna be expenses that come in. So I’m not sitting here saying “Oh, I’m done now. My passive income could cover my lifestyle right now which is very conservative where I live in a half a duplex.” That is going to change, right?

So why would I, I’m not gonna stop right now. But I feel like the way you can kind of do it so you can spend in proportion to your passive income that you’re generating from your portfolio, right? That’s how you can allow that… if you’re gonna allow lifestyle creep as I am sure will happen in my life, it should come in proportion to the passive income that I’m continuing to build, not from my income that I’m generating from my job.

Joe: But you just need to give yourself the opportunity to build a portfolio enough that you can allow for changes to happen in the future. That’s what I’m talking about. I think there are some plans that are built on not enough flexibility. I think that a lot of things are gonna change. And by the way on flexibility, let’s talk about that too. You know, the tax lines are gonna change. I mean, every time I talk to a tax expert, all that I hear is that it’s a math problem.  The government is going to have to tap in to some of these investments where we have text shelters, and so we don’t know where that’s gonna hit. We don’t know if it’s gonna hit pre-tax money that’s probably where it will hit right or 401Ks might not work the way they work now or IRAs may not work the way they work.

It could Roths. Most tax experts are telling us that that’s probably less likely but it could hit here. The HSA loophole that we all love right now. Sacking as much money into HSAs as we possibly can. That loophole might go away. But I think having a plan that’s flexible enough to realize that a lot of these rules that we’re using might change and to keep checking in to make sure that as changes happen that I’m abreast to those changes, I think is a super important thing especially if you’re trying to be super aggressive with your financial independence. If you’re going for aggressive financial independence, staying on top of that and being flexible I think is gonna be huge for you.

Mindy: Okay, that is a really great way to say that. I appreciate you explaining a little bit more. What I was trying to and completely did not succeed doing is saying get in the habit of not spending a lot of money. If you want to be financially independent, get into this frugality habit. You can always change later and have this lifestyle creep and spend more. That’s way easier to spend that mindset I would think than to change the one of entitlement.

And the story that comes into my mind is Tori Spelling. She grew up, her dad is Aaron Spelling. He was behind every single TV show in the 80s. Scott, you don’t know the Love Boat and 90210.

Scott: I’m listening and learning.

Mindy: You know these shows but I remember Aaron Spelling on every single TV show, and she grew up in this like batrillion dollar house and her dad is like “Hey, you want another shopping cart full of money today?” Like it was kind of ridiculous. And then when her dad died he didn’t leave her anything. And I’m not really sure what happened with all of that, like her mom got all of the money, and this isn’t going to be a Tori Spelling Show, but now she’s constantly in the news because she has this build that she can’t pay to your favorite American Express, or like she’s getting kicked out of her house because she didn’t pay her rent, I think. Don’t quote me. Allegedly. I don’t want to get sued. But like she’s having a lot of money problems because she’s been in this mindset for so long, of just I can spend anything. And when you this mindset of “Oh, I can’t spend anything,” oh wait, I could buy a new pair of shoes for Joe and Scott who only has one. I could go out to dinner tonight and it’s not gonna change my world. So I would definitely recommend to be on the side of caution, but that’s a really good point, is life is not gonna continue the same way forever.

Joe: Sure. And it’s funny you say that because we kicked this off talking about Scott’s book, and one thing that my son really took from that book was it’s easier for you to begin with these great habits around how you but your house and about how you, what your transportation costs are, than if you’re somebody like me let’s say, at 50 years old, or like me when I finally got my act together back when I was what, 35, figuring out exactly what are we gonna do differently? And now I already have the house issue. I already have the car issue. Now I have to solve some of these big problems and reduce my expenses.  But if you start off on the right foot to your point Mindy and build those early, I think it’s gonna be way easier for you.

Because then when you have the extravagance, you’re going to appreciate it more. I found that when we started having our money meetings, one of the things that we cut, like a lot of people, was going out to dinner constantly. And I found that if we go out to dinner at a restaurant once a week, we really flippin’ enjoy it. Like we loved it. But when we’re super busy, Cheryl and I, and we love being busy people, or if I’m on the road and I go out to dinner four nights in a row, I don’t appreciate it at all anymore. And it’s super fattening food and I feel worse, but man that once a week is a great date night.

Mindy: Yup. Perfect. Okay, what else do you hate about fire people?

Joe: I don’t hate anything about fire people. I love fire people.

Mindy: I’m just kidding Joe. But do you have any other…

Joe: No. I think the big thing though is behavior. I think that monitoring your behavior and realizing that you’re gonna think differently over time and thinking about how you think differently over time, and realizing that when the markets change, keeping your emotions in check, and having systems with your investing. So as an example I said earlier that Cheryl and I will change our investments twice a year. That is a system. Good financial planners have something that we can all replicate called an investment policy statement.

So earlier Scott asked me what my philosophy was around investing when I started, I didn’t have one. I didn’t really need one. Now that I have a portfolio, I manage my money based on an investment policy statement. I know what my guidelines are so that when it hits the fan, and we know it’s gonna hit the fan at some point, when it hits the fan, I’m not gonna wonder “How do I react? How do I respond?” I’m not reacting or responding. I’m pulling the levers that I already said I was gonna pull. I knew this day was gonna come. I know what I’m going to do because it’s already written out.

And I love that. I love having an investment policy statement versus just being emotional. You need to keep your emotions in check when you’re talking about your money.

Scott: So I wanna throw in one thing I don’t like about the fire movement, if I got a bonus one. So one thing that I don’t like about the fire movement is the dogma I think that comes with a lot of folks where other people are making the wrong choice by not following the fire movement. I see that in a lot of things and I really feel that that’s not helpful to our movement. We want everyone to acknowledge and understand the benefits and the possibility of fire, but I think there’s a lot of people out there who take that a little too far, once you get going on this path, maybe judge people who are not making what you consider to be the correct decisions with money.

Joe: Man, I think you hit it on the head. Our community is so small. It is so small, and it’s funny because when I talked to new podcasters getting into the financial podcasting field, they’re like “Wow, there are already so many good podcasts,” and I’m like but there’s not really… when you look at the population of the United States versus the number of people who listen to financial podcasts, there’s room for a lot more podcasters. There’s a room for a lot more people… we need a lot more people talking about this. And you’re right Scott, I think being judgy at all is just gonna turn people off. Like we can’t afford to be judgy. I think the more people are proactive with their money, it gets more exciting for all of us.

It’s funny. You know we talked about the mentor earlier who talked about avoiding clusters in misery, he also had another he told me which was you can have what’s called a limited pie mentality or an unlimited pie mentality. And I think we should advocate an unlimited pie mentality. There’s room for a lot of great voices. We need more great people talking about this stuff. And when we become judgy of each other, it doesn’t help us do that.

Scott: Yeah. Hey, work towards fire and do the best you can, build your personal financial position, work towards financial freedom, and then live a good life. And that’s how you can invite more people into this movement, when they ask or are ready to come in. But I am a culprit of this go it out into the community or to other people and say “You’re doing it wrong. I’m doing it right. Here’s how I do it.” And I fully admit that I’ve done that in the past and I’m saying hey let’s not do that. Let’s just keep doing what we’re doing and more people will probably see the benefits and continue to learn about it.

Joe: I love it when somebody says that they discovered us, any of us in the past six months. I was thinking that’s exciting because I remember that journey. I remember right after digging for those quarters and thinking “I got to get it together it man.” And I remember how empowering that was but I didn’t really know what it was. And just that first step of the journey, I think if we put ourselves in those shoes, that everybody’s got that first step in the journey and put yourself back there, it’s a fun place to be in to help people along.

Mindy: It’s very fun. You discover it and you’re like “Oh. I have to change everything.” And it is exciting, and then a couple of months later you’re like “I hate this. I don’t want to change everything. I want this added back in.” And you know, we mentioned Liz Frugalwoods at the beginning of the show as somebody who has a money date with her husband every week or every month. She also discovered financial independence cut out everything.

And then after the first month, she’s like “Well, I miss this. How can I add it back in frugally? I miss this. How can I add that back in frugally?” She had a lot of really great tips for things you can do once you go down the rabbit hole and discover you don’t want to be all the way at the bottom.

Joe: I saw that at my time as a financial planner. You’d see people that they’d cut their budget to the bone and they do great for three months, and then they’d celebrate by buying a big screen TV. Just at the end of three months, they’re like “I’ve been so good about this.” They go off to the other side to this boom-bust cycle of getting way too intense and realizing it’s a marathon, not a sprint, I think is also a good idea.

Mindy: It is a marathon, not a sprint. And you know, if we’re gonna go with cliches, personal finance is personal, and what you spend your money on Joe is completely wrong and is not what I choose to spend my money on, which is not what Scott chooses to spend his money, so spend on what really matters so you can save on the things that you don’t care about.

Joe: I think we all just turned into my mom there the last like 4 minutes. Financial truisms. Yeah. Nice job.

Mindy: Okay. Now it’s time to make our way over to the Famous Four questions. These are the same five questions that we ask everybody all the time at the end of the show. What Joe Saul-Sehy is your favorite finance book?

Joe: My favorite finance book is Ric Edelman’s The Truth About Money. I think it’s the most even-handed book on personal finance I’ve read. I think it’s comprehensive, so I think where I see a lot of people speaking of what Scott was talking about earlier about people being kind of judgy, you see a lot of books are kind of judgy, it’s one of the most non-judgy books I’ve read. And the better thing for me, because I like a lot of humor with my stuff, is that the book’s funny.

He’s explaining how things change around Roth IRAs and he goes to this whole explanation and he says… and by the way, here’s the reason they made this one very technical change. Turn the page for it. You turn the page and he goes “I don’t know why but that’s not important.” I find myself at the beginning of the next page laughing a lot and I love that. So Ric Edelman’s The Truth About Money is my number one.

Scott: That’s awesome. Alright, so what was your biggest money mistake?

Joe: Hiding from the taxman. Explained that earlier, do not hide from the taxman. That you have to put your mistakes down in writing and you have to attack them but especially when it’s the IRS.

Mindy: Yeah. He will find you. I’m gonna take this time to say to my favorite taxman, my friend Evan. Hi Evan.

Okay, back to Joe because he’s the focus of the show today. What is your best piece of advice for people who are just starting out?

Joe: Just do it. Well actually, feel the fear and do it anyway. We all feel afraid. We feel afraid of what we don’t know, but feel that, and it’s okay to be afraid but don’t let that stop you.

Mindy: I love that.

Scott: Alright, my most difficult question here is what is your favorite joke to tell at parties. I know that you in particular have a huge arsenal of these things right?

Joe: But I don’t tell jokes at parties. I don’t but if you tell me a joke I know four others that are like it which is bad. But if I were to tell a joke a party, it would have to be a bad, bad joke.

Mindy: Oh good. You’ll fit in perfectly there.

Joe: So what did the pirate say when he turned 80.

I’m a-tee. That’s the same thing he said when he went to the golf course. I’m a tee.

Mindy: So I read in one of those Facebook groups, somebody said, I thought this was very cute, somebody said “Mindy Jensen has a really tough job because she has to listen to Scott’s jokes all day long.” And then somebody responded “Have to or gets to?” And I replied “Have to.”

Scott: Yeah. I don’t know I think it’s more gets to.

Joe: Some people hate him, some people love him, but everybody eagerly anticipates them at the end of the show, so you’re welcome.

Hey did you hear that there was a murder down at the IKEA store?

Scott: No. I didn’t hear.

Joe: Police are having trouble putting the pieces together.

Mindy: How do you stop recording?

Joe: I heard that one today and it’s suitably awful. I like this man walks into a bar jokes, I like those. The horse walks into a bar, the bartender says…

Scott: Why the long face?

Joe: Yes, yes. A skeleton walks into a bar and says “Give me a beer and a mop.” A guy walks into a bar, his friend ducked…

Scott: A termite walks into a bar and says “Where’s the bar tender?”

Mindy: You’re horrible both of you. Joe, should you ever want to hear those all day every day, BiggerPockets is hiring. Go to BiggerPockets.com/jobs to see all the open jobs that we have right now.

Joe: Pinch me.

Mindy: I know. You could sit between Scott and Craig who just sit there and back and forth like a thousand times. And I think Connor is getting into it too now so I’m surrounded.

But enough about me Joe. Let’s talk about you. Where can people find out more about you.

Joe: Well, thanks for having me guys. And you’ll find me at StackingBenjamins. Different than your show where you dive deep into topics. You guys know that our show is meant to be a conversation starter. It’s meant to be very light. We want to introduce you seven or eight different concepts. We want to make it really approachable, the goal of the show. I was mowing my lawn when I was listening to Car Talk. For those who don’t know Car Talk, it’s this two guys Click and Clack, one of them died just about a year and a half ago but they still play Car Talk episodes, because they were so good. And you don’t learn anything about a car. So Stacking Benjamins is not designed around you learning anything. It’s meant to be that conversation starter piece and introduce you to people in concepts, and if you want more, then you go from there. So we’re three days a week, Monday, Wednesday, Friday, and that’s what we do.

But Mindy, we are bringing the show live to three cities. Because a lot of the bad jokes we do on our show with my mom’s neighbor Doug and my partner OG and I and mom, we can’t do a lot of them… there are some visual stuff we want to do. And we’ve been told that because our show kind of has a late night talk show kind of format, like it would be really fun to do live. So we spend a lot of time choreographing it. In the next six weeks we’re taking the show as long the minivan makes it there. We’re coming to three cities. We’re coming to comedy clubs around the US and I’m excited about that.

We’re actually playing the improv. I never thought that I’d be able to say that I’m playing the improv, but we are going to be playing improv in a couple different cities.

Mindy: Well that’s awesome. I’ve listened to your show and I never thought you’d play the improv either.

Scott: One thing we never talked about though is where you live, right? That’s a huge component you saving a lot of money, right? That’s a huge component, you saving a lot of money, right? You living in your mom’s basement?

Joe: The mom’s basement. Absolutely. But the basement is moving. Right now I’m actually… because mom’s moving to Detroit in January, because that’s when you move to Detroit. I don’t know if you know this…

Mindy: The best time.

Joe: Yes. January. What could possibly wrong? So in January we’re moving there. So right now, we are saving money Scott by being in my friend’s dad’s three-room apartment over his garage. So I’m looking at my friend’s dad’s house right next door to me.

Mindy: And I’m sorry. What is the suite called?

Joe: Oh, we call it the Kato Kaelin suite because he lives in this huge house, well big enough to have an apartment over the garage. Let’s put that way. But we’re saving tons of money. Yeah, rent is fantastic in a three-room… And by the way, realizing that you don’t need very much, live in a 400 square foot place and you learn very quickly that you don’t need much. I love it.

Scott: And if you’re a current podcaster, you’ve redefined the concept of studio apartment.

Joe: I know right? So September 25th, we’ll be in Orlando at the Improvs. So people are coming to FinCon, it’s gonna be the day before FinCon, so I hope people join us there. If you’re in Orlando already, come join us. We’re gonna be talking to… like our show we have a bunch of different segments. I think there are 15 different people on that show. Two weeks later we’ll be in Kansas City. There’s a big Fintech convention going on. We’ll be at the improve in Kansas City on October 9th. And then October 24th, we’ll be in Fabulous Ferndale Michigan which is just north of Detroit, and we will be at a club called the GoImprov Comedy Theater in Fabulous Ferndale Michigan. So tickets are 10 bucks and it’s at stackingbenjamins.com/tour to find out more.

Mindy: Awesome. Joe, Stacking Benjamins is the name of the podcast, stackingbenjamins.com is the website. Stacking Benjamins is the Facebook group?

Joe: Our closed Facebook group yeah is the Stacking Benjamins Basement. So come join the basement.

Mindy: Yes. Stacking Benjamins, the Car Talk of financial podcasting.

Joe: You will find a lot of bad jokes there. And it’s funny when we get new people in that don’t know the show in our Facebook group… because I remember we were talking about, OG my co-host was talking about like having his kids sit on random seats on the plane, and going up to the people that he sat next to and telling them that they were horrible parents and they need to make their kids mine. It was just a really dumb joke and this guy goes “Why is this appropriate in a financial forum?” And I immediately wrote “Wow everybody, the new guy thinks this is a financial forum.” High five! Welcome of the basement, where we have a kindler, gentler, kind of fun approach to the money topics.

Mindy: I listen to you as I clean out my garage. My husband really, really, really likes to clean out the garage so that’s when we stack up on our Stacking Benjamins.

Joe: That’s perfect. Perfect time. That’s what I save it for too. That’s what we hope for. If we can make a show that will be the best garage cleaning show, that’s what we want.

Mindy: Alright Joe, thank you so much for taking time out of your basement cleaning and garage cleaning days to talk to us. I really appreciate. And I will see you in just a couple of weeks at FinCon.

Joe: Amen. Thanks for having me guys. It’s been a blast.

Scott: Thanks for coming on. This is awesome.

Mindy: Okay, that was fantastic. I love listening to Joe. I can’t believe we went so long except I can because he can talk, I can talk, you can talk, you get three talkers together and it’s gonna be for a really long show.

Scott: Yeah. We’ve got our favorite subject, three of us are very passionate about.

Mindy: Yes. So it’s not a surprise that it went so long. Scott, what was your favorite part of the show?

Scott: Well I really liked the challenges to the fire movement in general. I consider us and our show and our philosophy to be a part of that fire movement but at the same time, we kind of are a little bit… we’re very open-minded to different approaches that don’t fit in to that barrel, and Joe has clearly got some reservations and some challenges to the traditional… it can’t be traditional if fire only like a couple, not been around and widespread that long. But he’s got a couple of really good challenges to that kind of stuff and I could talk about that all day. I think there is no one right way to do things and anytime that you tip everyone against coalescing behind these certain philosophies, I think there’s trouble brewing.

Mindy: There is and I do want to do some more research into this 4% rule that he threw out and named Wade Pfau, I have to look into that a little bit more and see what Wade has to say about it. I did a lot of research into the 4% rule. I can see how somebody would have questions about it. I’m assuming that this Wade cat is a smart guy who is studying finance. It’s not just some schmuck on the street saying “Well that will never work.” I mean if Joe is quoting him, I’m assuming that’s something worth reading.

Because I have based a large portion of my retirement and my financial independence on the 4% rule. So I am glad that he brought that up. And I did like that part of the show because its really easy to find people who are super excited about fire. And it’s really easy to find people who are negative Nancys who want nothing to do with it. But it is not that easy to find somebody who is super excited about it and also wants to make sure that everybody is doing it right. You know, hey, wait, let’s make sure this all works.

Scott: And what I love about Joe is he’s not even really trying to say everybody has to do right. It’s everybody needs to have a clear understanding and background and the capacity to manage their money for themselves with a high probability of success. Because literally your portfolio could be best managed through your livestock portfolio, like that could be the biggest part of your portfolio and that’s a good financial plan for someone in a specific set of circumstances. Yours are gonna be some distribution that’s different than the norm if you apply yourself to study and are honest with yourself in building your portfolio in a way that maximizes your strengths.

Mindy: Yep. And again, tagging off of that 4% rule caution is his advice to be flexible. There’s so much rigidity I feel in the financial independence community. Oh, you have to do this. You don’t. You need to make a plan and have some solid reasoning behind why you’re zagging when everybody is zigging but be flexible in your plan because life throws a lot of curveballs at you.

Scott: Yeah. And one more point on that 4% rule which I hashed out earlier in the show but I want to come back to again is that regardless of whether, you know, one study says it works, another study might say it doesn’t work, there could be all these different flaws in it, whatever… Again, it seems like it’s a reasonably high probability way to go about it, but at the end of the day, what I see in the community, and again this is limited perspective from a poll and talking with people though, is that whatever it is, it’s not enough for people to mentally rely on as their total hurdle. People just aren’t leaving their jobs, retiring and having wealth nowhere else but in index funds and a stock portfolio and later on the 4% rule. I’m just not coming across that at scale.

There’s a couple of individuals that I see that but just for the majority of people in our community, it does not seem to be enough on its own to keep people happy.

Mindy: Well not only is it not enough to keep people happy but people who have gotten to that point aren’t going to be happy just sitting back and resting on their laurels or resting on their 4% bank account or whatever. They’re gonna continue doing work. They’re going to continue doing things that generates at least some income has been my experience. So the 4% rule is a really great goal, and I quote Joel from FI-180 all the time. What’s the worst thing that could happen? If I go by the 4% rule, I run out of money, what’s the worst that can happen? I go back and get a job. My worst case scenario is everybody else’s everyday life. I think that a lot of people use the 4% rule as an excuse, like “Oh, that will never last. I’m just not gonna do it.” Well okay, enjoy working until you’re 90. It doesn’t have to be this like excuse. Try it. See if it works. If it doesn’t work, pivot.

Scott: Absolutely.

Mindy: Okay Scott, this ran like 17 hours. We should get out of here. Do y ou have anything else you’d like to say before we go?

Scott: Nope. Just that I love our new exist.

Mindy: I love our new exit too. This is Mindy Jensen and Scott Trench and this episode is over. Seriously turn it off. It’s over. We’re done.

Scott: Goodbye.

[End of Recording]

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In This Episode We Cover:

  • Joe’s journey with money
  • Started off his life making a ton of bad assumptions
  • Growing up with a payment lifestyle family
  • How to hack your way to wealth
  • The importance of tracking your spending
  • The changes he noticed in his lifestyle when he began learning about financial independence
  • Why you should consider paying down debt slowly and putting some money above the line
  • How he changed his mindset
  • The weekly money meeting he has with his wife
  • The importance of hanging out with people who are successful with money
  • Tips for connecting with groups
  • When you should get a mentor
  • How he paid off his debt
  • Looking at his business as an investment
  • How saving money became a game to him
  • His philosophy when it comes to investing
  • Wrong assumptions in the FIRE community
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “I thought that spending more money equaled having more fun, equaled living your life better. That didn’t end up being true at all.” (Tweet This!)
  • “You can’t diagnose what’s wrong with you until you have it all in front of you.” (Tweet This!)
  • “Feel the fear and do it.” (Tweet This!)

Connect with Joe

About Author

The BiggerPockets Money Podcast is for anyone who has money… or want to have more! Join BiggerPockets Community Manager Mindy Jensen and Director of Operations Scott Trench weekly for the BiggerPockets Money Podcast!
Each week, financial experts Mindy and Scott interview unique and powerful thought leaders about how to earn more, keep more, spend smarter, and grow your wealth.
You’ll get tips for getting your financial house in order and actionable advice from guests who have been in your shoes – and found their way out.

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