541: Finance Friday: I've Got $150K Student Debt at 6.95%, Should I Invest?

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30:10Add some peace of mind to your future with Trust & Will. Go to trustandwill.com slash bpmoney for 20 % off. That's 20 % off at trustandwill.com slash bpmoney. Trust & Will is an online estate planning service and is not a law firm. See trustandwill.com for details. Welcome back. We just got into Lauren's financials before the break, and now we want to hear about this path to financial independence. Yeah, I think it's really interesting that it would take eight years. First of all, I have a physician's assistant instead of a physician, and she does everything that a physician would do. So for you to have to essentially go to start over to become a physician when you already have the experience and the education, I would personally, if I was in your position, not do that.

31:01It just seems like you're trading off eight years of$100 ,000 salary for a few years of $200 ,000 salary, and then you would retire. I think it would push down FI quite a ways. What about medical adjacent, like medical device or pharmaceutical sales? And I don't know how it works in Canada, but I had a friend who was in pharmaceutical, or I'm sorry, medical device sales in America. And he said in some cases, he was making more than the surgeons that were inserting the device in the operating room. So there's a lot of potential for income in America. I'm wondering how it is in Canada with the different insurance that you have.

31:45Yeah, it's a good question. I don't know that I have the answer for sure, but it's definitely something that I have looked into. Those types of roles seem to be more salesy, which is, it's not a good or a bad thing. I'm just not 100 % if that is my personality type, in that I don't take rejection very well. and so you know I think that if you were to commit to that um yeah it would be a different career path and and the one thing I do like about my role right now is is being able to help people and and being like really uh you know like serving people in a uh very genuine way I really like so I mean I wouldn't say it's off the table but if I could reach fi in a way where I still continue you to have that patient-facing role and feel that I'm really contributing to society in a helpful way, then I think I would prefer that route.

32:49And that's what I'm getting from our conversation is that you really enjoy being a physician's assistant. You've already gone through the education. You're actively working in the role for coming up on four years. I think that's the route you go. And it stinks that you're not making the same amount of money that a physician is when you're doing essentially the same job, but I don't make those rules. So we'll just, we'll call it what it is. And, uh, but I think that's a great, you know, I think we've walked through a couple of these things. Do you want to be a doctor? Well, maybe, but I have to take off eight years.

33:24Okay. Then that's an easy no for me. If I was in the same situation, I think that that, that what you want to do really determines what you should then do with your money. Like if you're going to go down the route of becoming a doctor, then I would say now is not a great time to get into real estate investment because you're going to be consumed with medical school, residency, those types of things. And then the first few years of being a two doctor household and managing your duplex on the side might be very difficult to manage from a time perspective. I'm assuming the hours for physician's assistant are a little bit more reasonable and give you this flexibility or you feel that you will have some time to pursue an active role in a real estate investment capacity if things continue as they currently are.

34:14Is that right? Yeah, that's right. Okay. Now, if we stay in that role and things continue exactly as they are, including the coaching side hustle, I'm estimating, revised estimate, that you will accumulate about$120 ,000 in cash after tax each year. That's$7 ,000 from you plus$16 ,000 from your partner minus$12 ,000 in expenses. Is that pretty close? Yeah. Yeah. I think that's right. Yep. Okay. So let's round to a hundred grand. A hundred grand a year is going to come in and we want to deploy that somehow. Well, it sounds like you want a mixed real estate and stock portfolio in the long run. And so to get there, a lot of the benefits of real estate and the freedom that real estate provides over a 20-year time horizon will come from investing now in real estate, letting leverage do its work in the early years, and then having leverage be very light, relatively speaking, on the portfolio in later years to produce more cash flow.

35:20So to me, that says that if this is the interest, then now is a perfect time to take those proceeds in the next year or two and invest$100 ,000 in one, two, three, four rental properties over the next four to five years. You can still continue, I think, to make baseline contributions to the TFSA and RRSP, the Roth and the 401k up in Canada. But then you could take the majority of those proceeds and invest in real estate in these early years, amass a couple of properties, and then in the later years really round out the after-tax stock portfolio. That would seem to me like a great way to get to that mixed portfolio while getting most of the benefits from the real estate in the early days and most of the benefits of the cash flow in the later years when you approach FI.

36:10What's your initial reaction to that as a high-level framing? Yeah, yeah. I mean, that's sort of along the lines of where I've been thinking. The one sort of a wrench in the plan is this lingering$150 ,000 of debt that my partner is taking on and has. And so as you can tell, he would be a big contributor to our collective investments. And so he's a little bit held up right now dealing with that debt. um and so i guess one of our questions is now he now i guess i should also say that he could potentially he has the ability to pay it off in let's say one to two years um if he really wanted to focus and and just kind of um get that out of the way and then we could start investing in real estate and after that um but i wanted to know your guys's opinion on kind of how to tackle that debt in that should we just sit with it?

37:18And I say we because we're kind of a team, we're just working on it together, though he would be paying it down himself. Should we be trying to pay it off and be done with it? Should we try to invest in real estate and manage the debt. I should say too, that the interest rate on that is 6.95. And so it's relatively high. Is that a fixed rate, 6.95, or does that fluctuate? It fluctuates. So it's prime minus 0.25. Let's see. Are you planning on combining finances 100 %? Ooh, another good question. So no, we're the philosophy that we are taking is we like the idea of having our own accounts and having a shared account, which we use for shared expenses.

38:20We call it the yours, mine and ours philosophy, where we'll have a joint account that we each contribute X amount per month. And then we use that account to pay down our grocery bills, our mortgage payments, yada, yada. And then we'll still have our own accounts. So to answer your question, no, not necessarily. Yeah. Help me understand more about how long you've been together, what long-term plans are, those types of things. Because are you going to need to each achieve a separate financial independence or will this financial independence be achieved jointly with equal ownership in the assets long-term?

39:07Yeah. So we have been together for many years. We're definitely a long-term couple looking to get married probably within the next year or so. And so our vision together, our vision for FI is that of a shared vision. And so, you know, this is actually something I wanted to get your guys' opinion on, is how to best go about achieving our goals together while kind of maintaining our separate accounts to some extent, but still having that cumulative nest egg. We did an episode with Craig Kerlop way back, episode 35, where he shared how he didn't pay down his debt. And instead, he focused on accumulating real estate.

40:05He's American.

40:12He's But he was able to get, I think he had three house hacks by the time he decided to pay off his student loan debt. So he paid the minimum and instead saved up for these down payments and then kind of snowballed his student loan debt once he had all of these house hacks up and running. So that's an option. But again, we're in a different market. You've got higher interest rate. You don't have fixed rate for 30 years. How do you both feel about the concept of debt? He's got essentially 75 % of his annual salary in debt. So technically, you could live off of your salary, tighten the belt, pay that all off in one fell swoop, well, in one year.

41:03and then just be done with it. Some people really feel the weight of debt on their shoulders and they will do anything they possibly can to get rid of it. And some people are like, nah, I don't care. I'll pay it off when I pay it off. Yeah, I also want to point, I want to just piggyback two more things on what Mindy said here as well. Craig, when he decided not to pay off his debt, lived in the living room, which was cordoned off by a curtain so that he could Airbnb all the remaining units in his duplex in an up-and-coming neighborhood in Denver, which I know very well because I, too, lived in that place three or four years ahead of him in that general area there.

41:46Craig's student loan debt was not 7 % interest rate at that point in time. And Craig was not paying his long-term partner's debt at that point in time. he was deciding not to pay his own debt to make highly leveraged real estate bets on the side. So anyways, just those are some additional considerations there to point some differences. Yeah, absolutely. So it's a good question. And we had the discussion prior to this podcast. and both of our thoughts were we are okay with some debt, but in this circumstance, specifically with the student debt, we feel that just getting it off our plate, getting rid of it, just doing away with it will create a more mental sort of runway way to be able to move forward and have a free kind of thing.

42:54I see the answer. I like this plan a lot. I like it for so many reasons. I think it's the most obvious approach for your guys' situation. Once you're married and moving on this path, I like what I just talked about, right? If you want to back into the long-term portfolio, focus on real estate for the first couple of years, and then put everything into stocks after that. But for this next year, This is a great plan. You guys are not married yet. You haven't figured out how and when to combine finances. That will probably become clearer, I would think, post-marriage at that point. This is a 7 % guaranteed return.

43:31You just get 7 % as you pay down this debt. That's pretty darn good here. This will give you time to evaluate and educate on real estate investment opportunities in the local area or out of country, if you're going to do that. And you can chunk it down in one year. It makes life super simple. And you can pursue this separately. He, your partner, can chunk down the student loan debt and the line of credit in this next year while you continue your investment approach here. And then you combine when you're married. It's a really clean balance sheet and a really great place to, I think, start that journey together in an official or like combined finance capacity.

44:20I'm stretching there with a couple of things. Any reactions to that? Any piece of that or that overall? I do agree with everything that you're saying. One other sort of, another wrench for you here is just with regards to sinking fund expenses. And so what I mean by that is specifically we were talking about getting married. So as we know, weddings are God awfully expensive. And unfortunately we want to pursue one and as well as, you know, a honeymoon and ultimately saving for kids in the next two to three years. And so with all that in mind, we, as we know, those can be quite expensive. I was calculating it to be almost 100 ,000 as a somewhat conservative number in terms of like what these things cost to be put towards sinking fund expenses within the next, let's call it like, you know, even like three to four years.

45:29And so I'm just my hesitation is how do we fit that in to paying off debt while investing in real estate? If I was in your position with your same parameters, I would look at this as we want our debt gone. And do you have any specific timeline for getting married? Just in the next like kind of one to two years is what we had talked about. But if it makes more financial sense to adjust that, that we're open to it. Okay. So I was speaking with Aaron Thomas, who is the prenup guy at the Economy Conference recently. And he suggested when there is income disparity like there is in this situation, that each of you contribute a percentage of your income.

46:20Let's use 50%. So you each take 50 % of your income and put it into the combined account. And now you have 50 % of your income to do what you want. And he has 50 % of his income to do what he wants. But you have this giant pile. And now you can use that to save for retirement or save for the rental property or put down on the wedding or however you're planning on allocating that money. So I would look at a conversation with your partner, what feels fair to throw into this pot. If he's putting 50 % of his income into this pot, that's gonna help fund the wedding, but then he's also got 50 % of his income, so$100 ,000 to throw at his debt.

47:08He's going to be able to still pay that off in maybe a little bit more than a year. but you're not necessarily postponing what it is that you're looking to do with regards to the real estate and the weddings and all of that. I don't know how weddings – it's been so long since I've been married. I don't know if you can get a loan for that. I don't love that idea, but you could – there's a lot of opportunities to swipe the credit card and get credit card points and that sort of thing. But also, a wedding doesn't have to cost$100 ,000. I think mine cost$5 ,000. But like I said, it's been 100 years and it was very small.

47:49Just a couple of things here as well. That does not make sense to me for your partner to save at 5 % in a savings account for a wedding when he's currently paying interest on 7 % student loans. So to me, it just makes better mathematical sense for him to just chunk that out as much as possible in the next year or two. And then you guys could get married whenever. And that would bump up the line of credit essentially by a little bit at that point from the wedding. But at least I think your position, you got to just zoom out here and say how good it is at the highest level as a couple here. There's going to be plenty of income and plenty of spread between that income and expenses for you accumulate a lot of cash over the next three to five years.

48:40You can't like right now without making a change, pay off all the student loan debt and have a hundred grand left over to pay for all of these expenses and buy a rental property. But like, this is a luxurious set of trade-offs here. You guys are in good shape here. The only reason there's any debt in your entire combined financial picture is because the student loans and the house hack that you bought. Like this is not an irresponsible use of debt. This is a great use case for debt in this situation. So I think if you just kind of zoom out in that picture, you guys are totally fine here at the highest level.

49:14And if you say, hey, for the next 18 months, we want to get married, go on a honeymoon and chunk down this debt as much as possible, you're going to get pretty close to cover it all those things and maybe have like 20 to 30 grand left over there and still be just set up for a wonderful wealth accumulation lifestyle journey in your 30s here. So I think that's the perspective I'd have at the highest level in all this. Now on that, if you're going to have a 45K wedding, I assume a lot of people are going to come to that wedding. Is that right? Yes. Awesome. And are these people that are going to come to the wedding, are some of them going to want to or be able to give a gift that is of some material value?

49:57I would hope so. Now, part of that$45 ,000 in wedding expense is going to go on a credit card, right? Your credit card or your partner's credit card, right? That's right. I see a combination outcome here, if that's what you want to do, of being able to knock that honeymoon expense down to close to zero between those two observations here, right? There's a travel hack here. Be smart about that. Educate yourself on that. Figure out where you want to go and which credit cards and travel rewards will get you there and use that in the process of planning for the wedding. And then have a registry that has the things that are most important to you and encourage people to, after those few items are filled, donate to the honeymoon fund.

50:42Like that's an easy button for a wedding attendee. You're like, great. Now I can send some money there, go and have a good time. Easy peasy. That's what they want. Like I see a way to knock out a good chunk or at least that component. And then again, as long as you don't let lifestyle creep get in the way, you're going to have the cash and emergency reserves to cover some of these other things around home improvement or future children in there at that time. So I don't see that as a now problem to save for. And I think if you think about it that way, that will greatly simplify things because then you can just say, great, we already have an emergency reserve.

51:17We're going to chunk down the student loans. If we decide to have a wedding, we can, because you both invested so well in your careers and your future here that you're going to have a little cashflow and accumulating a little debt in your situation for that. If that's what you really want is no big deal to me. It'll just delay your real estate investment by a couple of months, essentially. What do you think, Mindy? I think that's really spot on, Scott. I like the way that you explain that too. Yeah, I would, based on everything we have discussed, I would throw all the money at the student loans and get those taken care of and then start looking at rental properties.

51:55I would also look into American rental properties. You don't have to invest locally. You can invest in a place that's, I mean, you're going to save up$100 ,000 for a down payment. whereas if you come south of the border, you can pay$100 ,000 for a whole house. That's pretty crazy to me. Yeah. And with that$100 ,000, I believe you can get a mortgage, but your down payment is going to be more than my down payment because I am a US citizen, but it's still not going to be 100 % down payment. So there's the opportunity to invest sooner, start making money quicker, just by looking in a different location.

52:44So I would definitely look into that and see, you know, start looking at the cash flow markets in America. Those are going to be the ones that are kind of in the middle of the country. So your Kansas City, Indianapolis. I know Florida was cash flowing for a while, but I'm starting to hear stories about homeowners insurances. The insurance companies are just leaving Florida. So Florida is not my favorite place to invest right now simply because they have hurricanes, whereas Kansas City does not. One other thing I want to ask about here, because I think it's important to your long-term plan, is could you describe what the FI lifestyle looks like to you and your partner?

53:26What is your day-to-day once you've, once you're done. Yeah, absolutely. So as I, so I'll, I'll talk, I kind of section it in my brain and categories of like career, family and relationships, and then hobbies and investment too. I would say those are kind of my four pillars of how I frame it in my brain. From a career standpoint, taking the time off to have personally time with my family and raising kids is extremely important to me. And also just probably like healthcare is a slippery slope to burnout, let's say, just because it's quite exhausting. And so to me, the remedy for that is decreasing the number of hours worked.

54:15So whether it be a part-time thing where you're working 20 hours a week. Same thing with my partner. So continuing to provide care to patients in some regard, but at a much more flexible schedule. And the other kind of big piece to go along with that is just the ability to pursue our hobbies. So we are both avid kite surfers. So kite surfing is a sport where you, on the water, you have a board on your feet that looks like a kind of like a wakeboard and then you have this harness around your waist and then a big big long ropes with a kind of looks like a parachute that you fly around in the sky and it sounds funny to describe but it's very very fun that's how we met actually was was doing this sport and so one of our ultimate goals would be to travel the world and try and in search of like the ultimate kite surfing destinations.

55:16So whether it be like driving across Africa to like find these cool deserted beaches or, you know, going to Brazil to like one of the windiest cities in the world to find some of the really expert kite surfers. That is what our vision of FI consists of. And not all the time, but, you know, I would say at least one to two pretty big trips a year to be able to pursue that and of course get our family and friends along the way. But having the financial means to do that, but also the time and the flexibility in our schedules to be able to pursue that is what is the most appealing or gets me most excited about FI.

56:03Is kite surfing an expensive hobby? Is it ever? It is crazy expensive in that. So to give you an example, a kite that I, you're going to roll your eyes, but a kite that I am buying like soon is a six or$1 ,700 kite, which is one piece of equipment. and let me tell you, you need multiple of these pieces of equipment. And so you can see in my expenses listed here that I actually have what's called a fun account. And so that is the income that I take from my coaching business. I put my revenue into that account in which I spend on these expensive pieces of kiting equipment is from that. But once you own the equipment, the activity is free, right?

57:01So you could buy this kite and it could last you 10 years, right? That's right. So once you're set up with equipment you like, I mean, I'm sure like any hobbyist, you just can't stop buying new equipment to keep the thing going. But this trip around the world that you'd want to do, you would not be able to buy a serial keep buying equipment. You'd have to pick one and take it with you to all these locations, right? One get up, as I'll refer to this, the set of things that you need here. One or like three or sometimes five. Will you be able to take five kites and surf across the world? You would be surprised, but these bags, they look like, picture like a large golf bag or like a body bag almost, where you just shove equipment into it and you haul it all over the world.

57:52It definitely can be done. Okay. So we need a baseline level of equipment. Let's call it 25 grand. Does that sound like a high enough number to easily cover all of the kite surfing equipment you'd each need to do this? Or do you need 50? No, no, no, no. 25 is fair. Okay. So I think that your plan here, like you have to, you have to really think that, sit down and think about with your partner is like that activity that you described is not conducive with young children. Right. So you will have to do that now or in the next few years and then again in 10 years when you may not want to do that the same way at that point in time when your kids are well old enough to the point where you're going to be comfortable taking them to these remote locations around the world.

58:40So that's something to think about here is that's not really a FI consideration. You're just not going to be able, I think, to do that the way that you are envisioning it if you don't do that soon. And so maybe that, in your case, is even a reason to delay. Do you really need that first rental property investment? I think physician and physician assistance jobs will be waiting for you when you get back from this trip. So something there that's probably the opposite of what you expected me to say on BiggerPocketsMoney, but just something to consider in your situation if that trip is really the driving force there.

59:15I don't know if you have a reaction to that bad financial advice, Mindy, from your seat. I think that you can travel with children, but it is exponentially more difficult. So I would, in your same position, look at when you want to start having kids and when you want to start traveling to do these kite trips. And I can't imagine kite surfing with a baby. I don't even know what kite surfing is. But it's on the water, right? So you can't, like, you're not going to strap your baby to you. So you'd have to have somebody, or maybe you will. Hey, Virginia, will you hold Katie for an hour or three while I'm on the lake?

1:00:06I am always shocked when I see somebody on the ski slopes with a baby on their back as they're trying to, like, teach their other kid how to ski. I'm like, oh, no, don't do that. Yeah, I this kind of puts some some different parameters in there. I mean, if you do have a baby and then you go on this trip, somebody's going to have to watch those kids while you are kite surfing. And I don't even know what age you can start kite surfing. Do they have baby kite surfers? I hope mine are. But I don't know. I, again, I just keep going back to like this, this trip sounds like once you have the equipment, it's not going to cost you more than like 25 grand to do this for like a while, because you're basically be camping at remote lakes around the world and taking this out on there and drinking, you know, local beers and eating, you know, local campfire food.

1:01:03So like, it seems to me like that's not really like, like, you don't need a lot of money to do that relative to your overall position. You might want to not like have this debt looming over your heads and those types of things. But like, is that like the honeymoon there? You know, is that, is that something that can be combined there? Like, Hey, we're going to do like a three month trip and just like live this dream here. And then, you know, chunk out things a little bit more because like, I, I don't, I, that's my, that's my big worry about your five plan here. If that's the dream, you may chase it for the next two decades and then not be able to live it, which would be super unfortunate.

1:01:35Which is so funny that you say that, Scott, because I too agree with you 100%. And as I kind of want to do this right now, because it's, you know, it's our dream, but I can't help this naggy feeling of being like, well, is this really the smartest financial decision to be doing right now? Like, would my investment grow exponentially if it were to be invested in real estate? Is it an opportunity cost kind of thing? But I think you also have a really good point that the opportunity cost is also in our physical ability and willingness at our young and free lifestyle that we have right now. So it's a good point.

1:02:21Yeah. My hobby was rugby, right? It's very different to play rugby at 26 than 33. I don't know how kite surfing probably ages a little better than that one. But it's a little different. So just something to consider there. I think that it would be irresponsible to go on a trip for three to six months right now with$140 ,000 in student loan debt hanging over and some of these other things not figured out. But you might regret it if you try to amass$2 million in capital over a decade or two instead of taking this trip at some point earlier in that journey. And with a 20-year time horizon, you're going to delay your FI date by a year.

1:03:03it, you know, six months to a year, if you just make this a part of your, like an earlier part of your travel plans, like you just, your investment you made was in your incomes. And the, like these jobs, physician assistant and doctor aren't going to be going away in five, six, seven years, I think, or at least that's a bet I'd be willing to make. You can always lose on those, but like, that's not like, I wouldn't be that scared there. So anyways, that's, that's something to consider. Maybe that changes my thoughts here of like, can you use that honeymoon and that like all the things that are coming up to take that trip of the lifetime now, and then get back to work for a year or two, take another one, get back to work for a year or two, take another one, and then life will hit.

1:03:46And at that point, you'll be in the grind, moving towards the five, and that'll be just fine. And you'll, you'll love it then too. Yeah. I wonder what sort of opportunities there are for sabbaticals at your hospital. or doctor's office or wherever you're employed. Because if you could take a one month sabbatical, then you go out and you discover, hey, I thought I liked kite surfing, but I like it on the weekends. I don't like it 30 days in a row. Or you discover that you do in fact love kite surfing so much, you wanna sell your house and just go and kite surf all the time and hop around and come back and do a quick stint to generate some income and then go back out and kite surf again.

1:04:28I think it's a great test of, you know, a long-term trip is a great test of your, like, desire to actually do it. I love snowboarding, but I don't want to do it, you know, every single day. Yeah, yeah, absolutely. Those are all very valid points. And I really like your advice from both of you about almost like seizing the day or seizing the moment now because that's when you have the energy and freedom and ability to do so. And I'm not sure, Mindy, about sabbaticals, but I'm sure you could kind of negotiate something or figure something out and get that exposure. So, yeah, thank you for those suggestions.

1:05:11Those are really great. Yeah, those options are all yours right now because your expenses have stayed flat relative to this enormous jump in income from your partner. So as long as that is true, then you will have these options. When that starts getting closer, like if you have kids and you decide, hey, I'm going to stop working there, which you said was something that you wanted to consider, that would then be – those things would be less true at that point. But because you spend less than half of what you bring in after taxes right now as a combined household here, you have so much optionality with all of these things, and you can really rely on that.

1:05:50But again, factor in whether those goalposts are going to move for the lifestyle expenses, because that then changes the math and what's responsible and what's not for your position. I have one final question to get your guys' take on, if that's all right. Just like with regards to our current primary residence, as we said, it is the interest rate on this is nothing. It's 5.69 with the three year fixed term. And so my question to you both is, how would you approach paying down this mortgage? Would you be in a rush to pay it down or would you be trying to leverage by investing in other properties rather than trying to pay this down?

1:06:46How would you go about tackling this kind of primary residence? So in the next three years, I would pay$0 towards the interest rate. And if I was looking to pay down debt, I would focus on the student loans instead. After three years, we don't know what it's going to jump up to. I'm going to guess 7 % or 8%. At that time, I would be more willing to put additional money towards this mortgage. with the understanding that I was going to be living there for a long time. I'm going to be living there until I pay off the mortgage. If your plans change, like does this house work if you have one kid but not two?

1:07:31Does it work if you have 27 kids and it doesn't matter, it's your dream house, it's your forever house, then once the rate goes higher than the 5%, I would focus on paying it down. Um, however, you've got what, two, three, like three years of salary in this mortgage. So it's not going to take you a long time to pay it down. I would look at, again, the, the lower cost markets to see if there's any way to generate other income, um, through investing in those lower cost markets rather than a Canadian market, just because it's so expensive. I mean, I can't – I'm trying to think when the last time I heard of a Canadian house that was less than like$750 ,000, whereas you can buy a rental property in Kansas City for$150 ,000.

1:08:24Yeah. Look, I think for someone in your shoes with a relatively long-term outlook on their finances, you're not in like a hurry to become a millionaire in three years and willing to just totally upend everything to do that. You have a more kind of, I think, maybe realistic, more, you know, reasonable approach on there. Like I would say for you less than 5 % don't pay it off. 5 % to 8 % it's dealer's choice. And over 8 % then it becomes a priority, right? It's hard to get a better than 8 % guaranteed return in this market. And so because that 6.95 % is there for the student loans, I think that makes life very easy for that decision.

1:09:08Just crush that. That's a great guaranteed rate of return. Don't stop contributing to the individual, the retirement accounts here, especially if there's a match or anything. But after reasonable contributions are made there, chunk that down. That mortgage is a joint expense. And so that's a good one to like leave relatively untouched for now and to really kind of figure out how you want to handle that once you're married. I think that would complicate things. If, for example, he's paying the student loans and you're starting to chunk out the mortgage, I think that would that would kind of complicate your situation just a little bit in the next couple months.

1:09:46So good one to kind of leave off until that point for variety reasons. But that's how I think about it. And then in three years, if that rate jumps, then it goes past, you know, upper, you know, mid upper sevens or into the eights, God forbid. Great. Then that's your that's your primary investment from there. I sure hope not, but that would be scary if so. But yeah, that's a very valid point for sure. Thank you. All right, Lauren, this was a really interesting conversation. Thank you so much for joining us today. Thank you both so much for all your valuable insights and your honesty, both of you, about just taking life by the reins and pursuing your passions now all you can.

1:10:31I appreciate both of your insights. Thank you so much. And send us pictures from your trip on the kite surfing. Absolutely. Will do. So, Lorna, I know that they do it different in Canada, but you may want to check out episode 514, Travel Hacking 101, How to Travel for Free with these credit cards. We interviewed Eli Facenda and really kind of got some wow information from him. So, again, it might be different where you live, but something to look into and see if the similar opportunities do exist to help fund this trip of a lifetime or the honeymoon to a different location, if that's what you choose to do.

1:11:08Cool. Thank you. I will certainly check those out. Thank you so much. Awesome, Lauren. Thank you again for your time. And we will talk to you soon. Thanks. All right, Scott, that was Lauren. And that was a lot of fun. What did you think of the show? Mindy, I thought it was really interesting here because, you know, when I was hearing that, and I think this has come up with a lot of doctors. I bet you this is a problem that a lot of doctors face. They start their career and they're like, I'm broke. I'm negative net worth because, and I'm like late 20s, early 30s, and I'm a doctor. and you know but it's like hey man like let's zoom out here and remember the strategy here like you're among the best and the brightest in your country to become a doctor you have great income potential downstream you will have the opportunity to build lots of wealth and achieve lots of financial outcomes in your life but like probably trying to pursue fire in three years is not congruent with the approach of becoming a doctor like let's go and enjoy and reap some of the benefits of that and live a great life and build lots of wealth over the next 10, 15, 20 years for the most part.

1:12:09Of course, if you want to do it and you want to sacrifice and cut costs and go do it, you can achieve a multimillion dollar net worth early in life. But remember what the goal is. If the goal is to go kite surfing or traveling the world, backpacking around foreign countries, um, in a very, with very physically strenuous activities, you might want to do that on a break in your early 30s or mid 30s and not in your 50s or 60s. Some things are more important than early financial independence. You have to decide on an individual basis what those are for you. Scott, I love that you brought up goals.

1:12:41It's not just about the money. And if your goal is to retire so that you can just travel the world and see the seven wonders of the world or whatever, that is something you can do when you're 40 or 50 years old. But kite surfing, I mean, And I can't even imagine kite surfing now at slightly older than our guest, Lauren. It just is a physical activity that I am not going to be able to do right now. So I love that that was your advice to them, to her, to focus on what she can do now to accomplish this kite surfing goal. And again, I cannot imagine trying to go on a kite surfing adventure with small children, which is what it sounds like would have been the goal.

1:13:26So I really like that you reframed that. And they've got such great income potential. Yeah, check out the sabbatical. Check out a longer vacation just to see if you can do this, if you want to do this, if this is really the goal that you think it is or the dream that you think it is. It's totally okay to not know what you want to do when you achieve fire and just aggressively pursue it because you want that freedom. Like I can totally emphasize that I did not have a dream of kite surfing or anything like that. In fact, I buy a lot of real estate so I can sleep inside, not outside on a regular basis.

1:14:02And so, you know, it's totally okay to have those and just pursue fire with a will and really make the sacrifices and changes to do that because it does bring a lot of options that you can then see from the other side. But if you know exactly what you want your life to look like after fire, and it involves taxing your body to the limit and doing these things that require balance, speed, coordination, strength, all those types of things, you got to really weigh that in the context of your overall financial position. That may not be congruent with fire unless you're going to really crank it and get it done in three to five, seven years and really incorporate it into huge chunks of your life.

1:14:39So I thought it was a really good lesson and a good – I think we learned a lot from Lauren. Hopefully, we helped her with some of the decision-making in terms of how she's going to prioritize cash flow. Yes. And what I like so much about Finance Fridays is all of the specific scenarios we talked about were Lauren's. But a lot of our listeners are going to identify with different aspects of her story. So that's why we do Finance Friday. And if you have an interesting story or an interesting problem, we would love to talk to you. Please reach out to Mindy at BiggerPockets.com or Scott at BiggerPockets.com.

1:15:14Or if you would like to apply to be on our show, go to BiggerPockets.com slash finance review. All right, Scott, this was a super fun show, but it's time to hit the road. Oh, it's time to hit the wind. Are you ready to get out of here? I sure am, Mindy. All right. That wraps up this episode of the BiggerPockets Money Podcast. he is Scott Trench and I am Mindy Jensen saying go fly a kite but I'm saying it in a nice way BiggerPocketsMoney was created by Mindy Jensen and Scott Trench this episode was produced by Eric Knudsen copywriting by Calico Content post-production by Exodus Media and Chris McInn thanks for listening

1:16:10But before that, we'll see you next time. Trishback Outbell