446: FIRE by 50: How to Have FUN on Your Journey Toward Early Retirement

25:43Now we did it economically off season, you know, and so forth. And we found really good deals, but we certainly weren't skimping on where we were going and we would fly first class. And the way we were doing that was using points. So we were kind of doing the whole points thing. At the time, you know, United was flying direct from Newark to St. Martin and you could buy an economy seat for like$300 round trip and then use points to upgrade to first class. And it was a really kind of good loophole at the time. You can't really do that as much anymore. But we were living a great life. We look back, my daughter, who's now 23, we look back and we had some really good times.

26:22And I kind of tell people that my wife passed away two years ago now. She was diagnosed with cancer about four years ago. And had we not done all of those things, we would have missed out on a lot of life events that we couldn't go back in time and replace. And frankly, I'd be sitting on just a larger pile of money. I think of like, what is it? Scrooge McDuck, you know, from Bugs Bunny sitting on a huge pile of coins and bills and whatever. But I'd be the most depressed person I think I would, you know, you would know, because I would have missed out on all these things that I can't go back in time and replace.

26:59So I kind of suggest to people, hey, it's great to go for financial independence. You can do it. You don't have to do it in five years or 10 years. Enjoy the ride because you can't replace that ride down the road, no matter how much money you have. Okay. So the enjoy the ride comment is really, really powerful. However, what about people who have a terrible ride? You alluded to personnel issues that you weren't so keen on. And we've all worked for that horrible boss where you're just like, I can't believe I have to go in and face this person again every single day. So how do you balance, I hate my job because of personnel issues with, I don't necessarily want to do this death march defy, to quote Carl?

27:53Yeah. So for me, it wasn't, you know, and I want to set the record straight. I did not hate the people I worked with. So I don't want anyone, if they're listening, thinking I hated them. No, that's me projecting. I hated the people that I worked with at that one job. Yeah, there were certainly some things that I was asked to do that I didn't want to do. For instance, they were like, oh, you should create this new fund because this is the hot new thing of the day. And I was like, no, I'm not going to do that. I don't agree with that. If you want someone to do that, you need to hire somebody else to do that.

28:24And I really just kind of towed the line. And even so I was managing a large cap blue chip dividend fund basically is what it was. And I was at the board meeting in 1999. If you remember what happened in 1999, when the internet stocks are all the rage, I had board members telling me like, just buy anything, all this stuff is going up, just buy anything. And I was like, no, that's not what we're doing. That's not what our perspective says. And frankly, I'm a larger shareholder than you are. So I have more skin in the game and we're not going to do that to any of the shareholders. And I was proven right, but I had to be willing to basically be walked out the door and say, see you later.

29:06So I always, I feel like because when you're in this position of not necessarily financial independence, but a situation where you have a financial wherewithal behind you, you can make decisions that other people might not make because they're worried about the next paycheck. I was never worried about my next paycheck. So I basically would push back and it never really came to bite me. So in all these situations, it really just kind of worked out because, you know, and frankly, I worked for a small company that was privately owned and the owner of the company would frequently tell me, I'm so glad you just tell us how it is because we would have made a lot of mistakes if you didn't say that.

29:49So thank you for doing that. And oh, by the way, you know, here's a few shares of the company as a result or whatever, you know, it would benefit me more than it would hurt me. And I just tell people that if you have the financial backing, you can make your own path. And if that path that you're on doesn't look good, choose a different path. Yeah. You know, it seems like your story and your care, like you're obviously a highly competent person and you have very clear values and are not afraid to speak your mind. And you had the basic financial position and strength to be able to say, this is how I feel about it.

30:25No, at various times in your career when those things came up. And I think all of those things are interrelated, right? It's so much easier, or you can have that confidence to speak up and say, no, we're not going to do it that way. when you've been saving for a decade and have built a strong financial position and know you've got a strength and a career, and you save that money and don't spend it and blow it on things when you have the character to begin with in the first place with it. It seems like these basic principles, it seems so obvious, so easy, the way that you've gone about building your financial position over a few decades and were able to retire early.

31:03Why don't you think this is more commonplace? Why do you think you were the exception? One of the rare folks who was able to do this early when maybe some of your peers making the same income as you, maybe weren't able to achieve the outcome you've been able to create financially in life? Well, I think it's being willing to walk a different path and being different than others. That's the first thing because all of my friends from back then were all spending all their income, especially people that work on Wall Street. It's crazy. I mean, you think people on Wall Street would be financially savvy.

31:36I would say it's actually the opposite. They always believe there's more money around the corner. And I wasn't like that. And we were willing to just be different. So, you know, we were willing to just say, no, we're not going to go out to that fancy dinner. We don't need fancy clothes or fancy watches or whatever. We're just willing to do what we want to do and walk this, you know, different life. So I think that is one thing you need to be is kind of independently minded. But I think that, again, not having as much information, I think was almost a benefit because today with so much information, I think you're comparing yourself to others.

32:12And I think that's a mistake because we never really compared ourselves to others. We just compared ourselves to how are we doing today relative to how we were doing a year ago or two years ago, five years ago. And that was our benchmark. We were never comparing ourselves to other people. And frankly, now that, you know, when I did retire, a bunch of my friends from back East who couldn't retire because they were, you know, continually increasing their lifestyle along with their paychecks were like, you were telling us this whole time how to do this. And we, none of us did it and we can't believe you actually did it.

32:43And I was like, yeah, it's not rocket science. You know, I really believe that if you save, and my daughter, you know, we kind of instituted this with her when she first started earning money was save 20 % of everything you earn and just get used to it. And if you do that, I think as a bare minimum, you're going to get there eventually. It's just a matter of when, if you want to make it 30 % great, you know, I'm kind of hesitant to suggest people do 50 or 70 or 90, because I think you're potentially giving up too much life to do that. Unless you just have, you know, big windfall or you have a ridiculously high income, then maybe that's a different story.

33:18But for the average person, I think, you know, So I've been there. It's fine to retire at 50. It's fine to retire in your mid-40s. You don't have to do it in your 30s or 20s. That's right. You don't have to retire in your 30s or your 20s. But if you do want to retire in your 30s or 20s, then you're going to have to have a much higher savings rate than 20%. You're going to have to have a 75, 85, 90 % savings rate. And you're going to have to have a super high income. You can't be making Mark's$23 ,000 a year starting bonus or starting salary back in the day with and save, you know, 80 % of that.

34:00That's not going to get you to early retirement at age 28. Support for BiggerPockets Money comes from Northwest Registered Agent. Your business identity is everything that shows what your business is about, from what customers see to what they don't see, like operating agreements, meeting minutes, and compliance paperwork. Get more for your business, more privacy, more guidance, and more free resources with Northwest Registered Agent. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses for nearly 30 years. They're the largest registered agent and LLC service in the United States with over 1 ,500 corporate guides, and they have real people who know your local laws and can help you and your business every step of the way.

34:37Don't wait. Protect your privacy, build your brand, and get your complete business identity in just 10 clicks and 10 minutes. Visit NorthwestRegisteredAgent.com slash moneyfree and start building something amazing. Get more with Northwest Registered Agent at NorthwestRegisteredAgent.com slash moneyfree. Support for the show comes from Public, the investing platform for those who take it seriously. On Public, you can build a multi-asset portfolio of stocks, bonds, options, crypto, and now generated assets, which allow you to turn any idea into an investable index with AI. It all starts with your prompt from renewable energy companies with high free cash flow, to semiconductor suppliers, growing revenue over 20 % year over year.

35:17You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds you a one-of-a-kind index, and lets you backtest it against the S &P 500. Then you can invest in a few clicks. Generated assets are like ETFs with infinite possibilities, completely customizable and based on your thesis, not someone else's. Go to public.com slash BPM and earn an uncapped 1 % bonus when you transfer your portfolio. That's public.com slash BPM. Paid for by public investing. Brokerage services by Open to the Public Investing Incorporated. Member FINRA and SIPC. Advisory services by Public Advisors, LLC, SEC Registered Advisor.

35:55Generated assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures available at public.com slash disclosures. AutoTrader is powered by auto intelligence. The hyper-personalized way to buy a car. AutoTrader's tools sync with your exact budget and preferences to tailor the online car shopping experience totally to you. Budgeting lets you input your info to see listings in your price range. Search and inventory helps zero in on your dream car. You can choose from new or pre-owned, the style of the car, and features like engine size, color, all the way down to whether you want a trailer hitch.

36:30Go ahead and get picky. Don't worry about scrolling endlessly. AutoTrader, powered by auto intelligence, only shows you vehicles based on what you can afford and what you want. And pricing shows you which listings are the best deals. So you can feel like you're winning the negotiation without negotiating. You can even choose how to close the deal online, at the dealership, or a little bit of both. AutoTrader, powered by auto intelligence, makes the process of buying a car less of a process. Try it today. Visit AutoTrader.com to buy your perfect ride. When I think back on past holidays, the gift I remember most wasn't expensive at all.

37:03It was this lumberjack-looking plaid winter coat my grandmother gave me when I was little. It smelled like her house, mothballs. It was a little too big and it made me feel safe in a way I didn't understand yet. I wore it everywhere. Until the fabric wore thin and the zipper gave out, I always wished it had lasted a little longer. Because what I really miss is the feeling of how protected she made me feel. And that feeling is why I turned to Policy Genius. As I got older, I realized the gifts that truly matter are the ones that protect the people you love. And with nearly half of American adults saying they'd faced financial hardship within six months if they lost their primary income earner, real protection matters more than ever.

37:36Policy Genius makes something overwhelming feel clear. It's an online insurance marketplace that lets you compare quotes from top insurers side by side for free. And their licensed team helps with questions, paperwork and guidance every step of the way. With PolicyGenius, real users have gotten 20-year$2 million policies for just$53 a month. Don't wait until next year. Give your family the gift of security today with PolicyGenius. Head to PolicyGenius.com. So mechanically, once you retired, how did you begin actually spending down the portfolio and harvesting the wealth that you created? As I understood it, you had a couple of big, great housing moves, the 401k balance.

38:14And did you have any after-tax accumulation, cash pile, other dividends, income? How were you financing this? Yeah. So because if you talk to people in my age bracket, you'll find that many of them have a very high percentage in tax deferred traditional type accounts. That was me. I did have somewhere in the neighborhood of 85 to 90 % of my assets, our assets really, but mine now that I've inherited my wife's assets in traditional 401k, traditional IRAs from previous employers. I did have, or we did have some money in cash as well. And also smaller Roth IRAs that we were converting a little bit over time.

39:03But actually, I avoided drawing down my portfolio for the first two years. And I'll tell you how I did it. Because I was kind of afraid to take the money out. And how was I going to do this? And there was money in the Roth. there was a runway of a couple of years in the brokerage account and cash and so forth that I could tap. But even that, I was afraid to do. So what I ended up doing was we had this classic car. I mentioned we used to race cars. I did have this car in the garage that was worth a bunch of money and I didn't really need it anymore and wasn't driving it on the racetrack or anything.

39:35Became kind of a collector car. So I sold that, which basically paid for my first years or our first years of income. So I avoided drawing down in year one by selling this asset that I didn't really count. I don't count it in my financial portfolio, a car, even equity in my home, for instance. I only look at the financial assets. In year two, I did own a very tiny piece of that company I worked for, but it was a private firm. I never counted it because I never knew if I would be cashed out. Who knows if the company will last? Will it be worth anything? I don't know. So they did end up calling me and saying, we're going to cash you out if you're up for it.

40:11I was like, yeah, I'm totally up for it. And that was a little less than year two's required income. So it was not some big windfall kind of thing. We actually did own a second home in Crawford, Colorado. So it's kind of over the hill from us. And we did end up selling that in 2019. So that helped with the aspect of not having so much in or having so much in our traditional bucket that was a little more difficult to get to. So that has somewhat bridged the gap that access actually now access is not an issue for me because an inherited IRA, you do not have a 10 % penalty. I would have to pay the tax on it if I were to withdraw from that.

40:57And my inherited Roth IRA from her is fully accessible without penalty. So that age 59 and a half thing is not as difficult for me now, but I'm actually not even really tapping into those too much. And so I've been doing really big Roth conversions. So we were expecting to do many Roth conversions between when I retired until RMD age and at the married filing joint tax bracket. But when she passed away, all of a sudden you become single tax bracket, which is half as much. So in the year that she passed away, we're still considered marrying filing joint. So I went up to the top of the 24 with a really big conversion.

41:47And then in the following year, my daughter was still considered a dependent. So I was eligible for qualifying widower, which is basically the same tax bracket as married filing joint. So I did another really big one. And then for the next two years, I'm still going to go up to the top of the 24, which is half as much for me as a single, but still a pretty decent bracket. But I am walking away from ACA credits by doing that because I'm trying to get ahead of having so much money stuck or not stuck, but in the traditional bucket where RMDs are going to kind of get out of control down the road. So Roth conversion kind of strategy is big on my mind now, how best to do that to reduce my lifetime taxes as opposed to my this year taxes.

42:32That answered that question extremely thoroughly and what obviously shows a financial wherewithal and savviness and sophistication that is way beyond what my capability set in terms of planning. Well, so I will tell you for fun, I did get my CFP after I retired because I just wanted to learn more. And I was, again, kind of scared about like, should I, you know, should I really stop working? And if I don't stop working, what am I going to do? And I said, I really like personal finance. Maybe I'll just sit for the CFP. I did take the exam. I passed it. And because of my history in the financial industry, they gave me credit for all the hours that you need.

43:15So actually, I do have my CFP, but it was primarily for a personal learning experience. I don't practice or anything like that, but that is where some of the knowledge base does come from. Okay, Mr. CFP. Mechanically, if I were to want to do this rollover Roth conversion stuff, I shouldn't use those words. Roth conversion. Do you wait until the end of the year just in case you made some income? Do you do it throughout the year? Do you do it at the beginning of the year? Yeah. So for me, I almost purposely don't make any income because I kind of want to prove a point that you can actually live on your portfolio.

43:51So it's funny because I go to all these camp fives and people are like, I don't know anyone who's living really on their portfolio under the 4 % rule. I'm like, well, I'm living on a withdrawal rate rule. It's not quite 4%. It's lower than that. But I am living on my portfolio. It is doable. So I almost feel like an obligation to prove a point that it can be done. So as a result of knowing I'm not going to have any income, I target, I calculate how much do I want to convert in a year? What are the pros and cons of doing that. Because like I said, if I convert any dollars I convert, I'm basically walking away from ACA subsidies.

44:29So I view that as an additional tax. What does that add it on to my tax bracket equate to? And so therefore, at what tax bracket do I want to go up to, including walking away from the subsidies? So for me, I kind of do it in two pieces. I do a pretty good amount at the beginning of the year, and then I'll do a true up at the end of the year. And for me, I have this little bit of a benefit in that because I have an inherited IRA, I can actually take a withdrawal from the inherited IRA and withhold. Well, you could technically withhold 100%, but Vanguard, which is where that account is, will only let you withhold 99%.

45:06But I can basically calculate what my tax liability is going to be in December and then do that withholding because the IRS, as long as it's withholding, considers it as paid evenly throughout the year. So I don't even need to make estimated taxes. I do estimated taxes on the state side, but not on the federal side. And I just do a withdrawal to withhold enough to pay my tax obligation. And I do all that in the fourth quarter. So the true up of the Roth conversion and the withholding calculation that I need to do to make sure I'm not going to be penalized. So for those of us who aren't CFPs ourselves and kind of got lost in what you were saying, but understand that it's very important and we would need to do this when the time is right for us, would we connect with a CFP to help us with this?

45:54Or would we connect with an accountant to help us with this? Hopefully the CFPs understand this. So a CFP could help guide you, but a CPA would be the one that would actually make sure that you're doing it all correctly and so forth. And actually finding a team that is a CFP and CPA combined might even be more beneficial to doing that and making sure you're doing it correctly. It's not really that difficult, especially if all you're focused on is the tax code that pertains to you particularly. It's easier to understand it just like, you know, Brandon, Matt, fine test goes down rabbit holes with that.

46:29It's not hard to do it on your own. And it's not, there aren't really too many levers to kind of worry about other than really kind of figuring out the whole ACA aspect, because that can come back to bite you a little bit if you're not aware of that. And frankly, if you go over into the next bracket, it's not like all of your dollars are taxed at that next bracket. It's just the incremental dollars that are taxed. So, you know, yeah, it's great to, you know, be right up to the edge on your tax bracket, it perfectly. And you can do that with different software out there that there's public free software tax planning software out there that you can use to make those calculations.

47:09But again, if you go over a little bit, it's only that extra dollar or two that's going to be taxed to that. But you do need to think about things like, is net investment income tax going to come into play? Are you walking away from capital gains at a 0 % tax bracket? There are some other levers that you do need to kind of pay attention to. How do you handle health insurance, Mark? So I purchased my health insurance through the ACA and Colorado has its own plan. I actually, you know, it's interesting because my wife was working when she was diagnosed with cancer, just at a local, she worked for the police department, wasn't making much money, but it did come with pretty good benefits.

47:45And frankly, she could actually stuff all of her paycheck into a 457. So that was actually our, you know, access to, because when she, you know, planned to leave. We had full access to the 457. So that was another little kind of quiver in our packet there, I guess you would say. But she was staying for the healthcare primarily. And we ended up actually going on COBRA, which in hindsight was kind of a mistake, I think, because we were afraid of rocking the boat as far as her doctors were concerned. And I think it was fear that was unnecessary. We would have been fine if we just immediately switched over to the ACA, They would have been a lot cheaper.

48:24That was also when there were specific rules about she was actually laid off. So she was considered unemployed and receiving unemployment benefits. And if you recall back in the COVID times, there was a special carve out if you had received unemployment benefits, no matter what your income was, even if you made a million dollars, you were considered to receive full subsidy from the ACA. We should have taken advantage of that. We didn't. So we would not only not have had to pay COBRA, we would not have had to pay really anything on the ACA either. And I think it was just a fear that the ACA wasn't going to be as good.

49:00But what I found out is it's actually better than what her insurance was through the employer, which was a small municipal government. So I think, you know, don't fear the ACA. It actually is really good coverage. So what's next for you here? Well, so what I've been doing is, you know, I really do like, you know, I read Jordan's book, taking stock and die with zero and really thinking about, you know, how can I, you know, move forward after my wife has passed away and really enjoy life. And what I found is that, you know, spending money on experiences and I am kind of learning how to spend. That was a whole another little piece that I've been working on and have this thing called a fun bucket.

49:42And if we have time, I can talk about that a little bit. But basically I found that enjoying experiences and enjoying them with your social network is really where I get the most joy right now. And I think most people do if you do that, combine experiences with social aspects. So I was just on a cruise to Alaska with 50 friends a couple of weeks ago. I do a whole bunch of campfires. I love those. Actually, that community has been so good and economy as well and things like that. And as I mentioned, I'm doing the FI Freedom Retreats with Amy Minkley in Bali this year. There's a bunch of us going over to that.

50:26So I just find, you know, traveling around with friends and, of course, living in a ski resort in a recreational community. And there's always plenty of people willing to come and hang out here, too. So that's kind of what the focus is. And a lot of it is also with my daughter. She really enjoys hanging out with me, which is great. So getting those experiences, memory dividends, lifetime memory dividends, and putting them in the memory bank, I don't think any of us would be disappointed in having those down the road. So I'd love to hear about the fun bucket. And then I'd also love to hear about if any of this savviness with money and financial planning is rubbing off on your daughter and a summary of how she's doing.

51:06Yeah. So the fun bucket actually came out. I was at a campfire in California and I was staying with a friend ahead of time. And he was asking me, so how's it going with drawdown and all that? And I'm like, yeah, well, you know, I'm kind of working on it. And I don't really draw that much. It was sub 2 % at the time. And he's like, dude, you need to start spending some money because you're just going to end up stacking it up and you're going to turn around and you're going to wish you had done more. And I was like, yeah, but I just, I don't know. You know, it's hard to, you know, get comfortable with pulling that money out.

51:38He's like, well, you need a fun bucket. I'm like, well, what is a fun bucket? He's like, so if you think about, I retired 2015, I had the wind in my back. You're always worried about sequence of return being a bad sequence. Well, not only was it not a bad sequence, it was a really good sequence. And he said, look, you have a lot of cream on top of the cake. Just peel some of that off and stick it over in a fun bucket and just allow yourself to spend on things that you wouldn't ordinarily do. So I said, oh, that's a pretty cool idea. Maybe I'll do that. So I moved some money over into this separate online savings account labeled FunBucket.

52:10And it's for all these things that you would normally not be comfortable doing. But you're saying, hey, it's pre-funded. It's sitting over there. That's what it's for. You need to spend it. And I actually put a timeline on it. I put four years worth of... And people ask me, what's the number? I'd rather talk about it in percentages. It's 20 % of what my normal annual expenditures are per year. And I did that for four years. So let's say you were making$50 ,000, maybe it's$10 ,000 a year for four years or$40 ,000. You can change numbers however you want, but that's basically what it works out to.

52:46And so it's things like, well, like for instance, the Bali trip, when it came up, I was like, I'm in. And Amy's like, well, do you want to know how much it is? I was like, no, I'm in. Or this cruise, which was crazy expensive. It was a really expensive high-end cruise. And I was like, nope, I'm going. No question. That's what the fun bug is for. Normally I would have like stressed about it. I don't know if I want to take this money out of the portfolio and so forth. And it's also for little stuff. Like, you know, if I get an email from a airline that says, Oh, for$400, you can upgrade to first class.

53:19I'm like done. Or I never fly. I always fly nonstop. I never stop it. And I know that's a sore point for Mindy. You know, I always fly nonstop. I also fly whenever I feel like during in a day. I don't, you know, do early flights. I'll do flights that make sense for me. I will, you know, when we got to dinner, I'll pick up the dinner tab sometimes, you know, just like, no, don't worry about fun bucket, you know, and people are like, oh, I feel bad. I'm like, no, it's fun bucket. And they're like, oh, that's cool. You know, what else can we do on your fun bucket? But that's kind of what the fun bucket was about.

53:51It was to retrain myself how to spend and it's worked. And actually what I found was I thought, so what I do is I will reimburse myself from the fun bucket. I spend on my credit cards as all of us travel hackers do, and I can reimburse myself from the fun bucket. What I've actually found is that I'm finding that I don't even need to reimburse myself always from the fun bucket, but having the money in the fun bucket has allowed me to make that decision, even though it really actually fit in my normal spending pattern. So it was just a way to kind of retrain myself on how to spend. And how much did you say you put in the fund bucket initially?

54:30So in percentage terms, it is around 20 % of my annual expenditure amount. So, you know, and I live, I pay, I pay myself a paycheck every month from my financial independence portfolio. And this was over and above that. So you think of it in terms of, let's say you spend$100 ,000 a year,$20 ,000 a year times four years. And then as that depletes, I'll re-up it down the road at some point. I haven't had to re-up it yet because I actually opened it two years ago. I'm actually only at about one year's worth of spending, even though I've spent the equivalent of two years. I just haven't had to withdraw the full two years because a lot of that kind of fit into my regular spending pattern.

55:18So are you going to increase your spending to increase the withdrawal rate of your fund bucket? Well, so I will tell you that this cruise that we went on was, so my daughter did go with me. It was a seven day Alaska cruise on a very high end cruise ship. And it was$18 ,000, I think, for two of us. And then on the cruise, you save a little bit if you sign up for the next one. So we actually signed up for Mediterranean cruise next year. I'm going, my daughter's going, and my mother's going. My mother's paying her own way. But our room for that one is 11-day cruise going from Greece through Croatia to Italy.

55:58And it was 20 grand. So, I mean, it's not small. But if that money was not sitting there, there's no way I would have just said, yeah, sure, let's do it. That's awesome. So speaking of your family, is there a FI tradition getting started in your household, your family? Oh, right. That was the second part of your question. So yes, my daughter has come now to two Camp Fies. She was at Rocky Mountain last year and she actually spoke with me. And so that is up on the YouTube page for Camp Fies. So you can see our speech there. But basically it was talking about how we talk about financial matters in our household, how that's translated and some of the things she's learned from us.

56:39And what the moral of the story is, she learned from modeling, not from preaching. Really what we do is what translated into her kind of path. And she's also just graduated from CSU with a master's in accountancy. So she's got the right kind of brain for all this stuff. But she did come to Camp 5 this year as well in Colorado and brought a friend. And so, yeah, she's definitely on the path. And I actually teach a financial literacy class in high school that I was asked to create about seven years ago now. So she was in that class as well when she was in high school. So she's definitely drinking from the Kool-Aid.

57:22That's wonderful to hear. So we'll have to have her on the show at some point if she's interested. So I would love to hear about her journey and how that's going. Yeah. Well, I mean, one of the benefits in a way is that she started, we actually contributed to her 529 account and had her understand what that account was the whole way through. So really once she was in middle school, I think, and we kind of, we have an only child. So it was a little easier. I do, you know, kind of preface it with that. So we kind of mathed out what did we think a state school would cost when she turned 18. And we kind of mathed out, oh, we think it'd be about a hundred thousand dollars worth of contributions and we'll see how that goes.

58:04So it was$500 a month from the day she was born every month through her 18th birthday. So that's like$108 ,000, I think, in contributions. But there was also really good market returns during the time. So there was actually quite a bit of money in that account, more than it would cost to go to a state school. And we basically sat her down and said, hey, look, this is a pretty good amount of money. You could go to an Ivy League school, it may not quite pay for that, but that you would have to figure out the difference. Or if you go to a school that costs less, this is your start in life. So she chose a state school and actually the 529 ended up paying for five years of school, including her one-year graduate program.

58:45And she still was left with over half the money. And so that was kind of her start in life. And then also originally we started with a UTMA account, which I wouldn't necessarily suggest before we kind of figured out the 529 thing. So it was basically 50-50 between UTMA and 529. So the 529 basically was used to pay for school and she ended up with the UTMA, which basically turned into a regular brokerage account. But over the years, as she was earning money, starting I think at age 15, we would move money from the UTMA account over into a Roth IRA to the degree that she had earned income. So she's been doing that since she was 15.

59:25So now she has a pretty sizable Roth IRA and this brokerage account and did not have to pay for school. So she's got a pretty good start. Just even starting off without having to pay for school, graduating without student debt is a huge leg up. Yeah, for sure. Never mind all that other extra money. Not extra money, additional money. There's no such thing as extra money. She did ask, am I close by yet? I said, well, I don't know if we're quite there yet. Mark, thank you so much for sharing your incredible wisdom and savviness and technical expertise on managing a FI portfolio here with us. Thanks for sharing the principles that got you there and for the wonderful success story from a financial independence standpoint that your approach has been.

1:00:15So really appreciate it. And where can people find out more about you? Well, first of all, thanks for having me. I really appreciate it. And so I'm pretty active on like Facebook, just under my name, Mark Troutman, and that's with an A-T-R-A-U-T-M-A-N. On other platforms, it might be at Mark's Money Mind. And for my blog, it's marksmoneymind.com. And I don't, I like to joke that I write about as much as Brandon the Mad Fientist. I think we're in a competition for the least number of posts. but I do, I would like to post something about the fun bucket. And I think I'm kind of obligated to do that.

1:00:52So I want to, I want to get that out there at least. So maybe there'll be more on that there. Do it. If you get that article out before this episode comes out, we'll link to it in the show notes. Cool. And if you get it out after this episode comes out, we'll link to it in the show notes afterwards. Just send me a link. And if anyone is interested in that financial literacy class, a lot of people ask me for that. So I actually put it out there as a post on the website that you can see the entire course. You know, it's basically it's not a paid course or anything like that. It's totally free. Anyone can go view it.

1:01:21It was basically what I recorded in 2020 for COVID. So I couldn't go in the classroom. So I just put up all of those videos from 2020 and all the handouts. So if anyone's interested in basically a seven-week financial literacy course directed towards high school students, but pretty much anyone. I mean, adults go through that, too. So it's free. Anyone can see it. It's just easier to put it there than to email it out to people that ask for it. And we will definitely link to that in the show notes. Awesome, Mark. Thank you so much for your time today. It was great to talk to you and we'll talk to you again soon.

1:01:53All right, Scott, my mind is blown. That was Mark Troutman from Mark's Money Mind. And holy cannoli, all of those things he was telling us at the end, I'm going to need to go back and listen to this show and take a lot of notes. What did you think? I think that despite the personal loss that Mark had with his wife passing a few weeks ago, I think that this is a fellow who really has attempted and done a really good job of living his best life inside of his values, being consistent and conservative and disciplined with his finances, is extremely confident as an individual with how he thinks about money, building wealth, and pursuing and designing his life.

1:02:36And I think that's an example of a great way to go about it and to go about trying to optimize for that happy, wonderful life. I think it's funny to a certain extent that he has to make an actual point of not earning money because he prides himself on being this expert in the financial independence space. And so it makes a point to not charge anything or anything, even though he got his CFP license and clearly loves talking about all of this financial planning stuff and could easily get paid for doing stuff that he likes to talk about anyways. I love the fact that he travels to these camp fives and makes asked to make a point to spend more because he's reflecting on some of the good advice and die with zero.

1:03:20I just think it's a fantastic story here and someone to learn from. I think you would a lot of listeners would do well to follow a lot of the stuff that Mark's putting out and and learn from him. Yep. I like what you said, Scott. He's living inside his values. And that seems to be something that he has done his whole life. He knows what he wants. He doesn't waver from that. And that gives you ultimately what Mark has so far, a life well lived. Yeah. And there's just fun in there. This is not like an all out intense effort to pursue financial independence and wealth creation. This is a guy who raced cars and went to St.

1:03:59Bart's and had a great time. So again, I think there's a right way to go about it. And if you have a competence set and ability to earn income, a discipline and those kinds of things that Mark has had, thinking about how to emulate some of the things he's done might be a wise approach. I completely agree. Oh, I do want to point out one thing before we get out of here though. So we talk, I've observed a large number of people who are financially independent and they've all got an ace in the hole, right? Mark's no different in the sense that he doesn't live off of a 4 % role, with a 60-40 mixed stock bonds portfolio.

1:04:35He had the car that he sold and he had this, that, and the other thing associated with his first couple of years for income generation in the path to FI and has a much more conservative overall portfolio. I think it's just another example of, hey, this FI concept, the 4 % rule is the beginning of the end of the journey to financial independence. Even though it's technically the right answer, We continue to see examples of folks who need a little bit extra on top of that to truly feel comfortable and secure as a financially independent person. Yes. And honestly, I don't know that we'll ever be able to convince everybody that 4 % is the way to go.

1:05:14I know that 4 % is the way to go. We haven't convinced anybody that the 4 % rule is the way to go. Again, I can't think of a single example of someone who has retired of the 4 % rule and nothing else, right? It has no other ace in the hole, no other cash position, no other actual backup plan there. Well, I understand that mathematically it works, but even though I do this every day, I don't really want to put all my eggs in that 4 % basket. So that's right. So I think it's just I just continue to observe that in discussion after discussion after discussion and discussion with financially independent folks that everyone agrees with the math and not a single person lives it in a literal interpretation of it.

1:06:07Yeah, that's OK, though. That's, you know, it's your life. Live it the way that you are comfortable. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the BiggerPocketsMoney podcast. He is Scott Trench and I am Mindy Jensen saying bye-bye, apple pie. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple. And if you're looking for even more money content, feel free to visit our YouTube channel at youtube.com slash BiggerPocketsMoney. BiggerPocketsMoney was created by Mindy Jensen and Scott Trench. Produced by Kaylin Bennett. Editing by Exodus Media.

1:06:41Copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.