Coast FI by 30 in a HCOL City (Here’s How He’s Doing it)

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2:39Hello, hello, hello, and welcome to the BiggerPocketsMoney podcast. We have a special week on the podcast. Last year, we had Paul Olinger on the podcast and he lives in New York City. Scott called out that achieving financial independence in a high cost of living area like New York City is nearly impossible. And the New York City community said, excuse me, Scott, no, it's not. Our audience is filled with smart people and they know how to make the most of an expensive city. This week, Scott and I are going to highlight four people's different stories working towards or achieving financial independence in the Big Apple.

3:21Today, we're talking with Eli. Eli is just 24 years old and already on track to hit COSFI by age 30, and he's doing it while living in New York City. Eli argues that living in the city is actually accelerating his path thanks to unique opportunities and big city hacks you won't find in a smaller town. Eli breaks down his personal numbers and story in today's episode. Eli, thank you so much for joining us and welcome to BiggerPocketsMoney. Thank you so much for having me. I'm really excited to be here. A longtime listener, big time follower. I was just listening to your book right before the recording started.

3:56Oh, fantastic. Well, thank you so much again for all the support and for joining us. And I think, you know, just as we discussed, I put out a challenge out there where I said, hey, I think that FIRE is probably less appealing, less popular, maybe less practical to pursue for folks living in New York City and Manhattan in particular. And a good chunk of people actually reached out to me and you were one of them. And so I'd love to hear a quick reaction to that. And then, of course, let's get into your story. I have definitely been described as somewhat contrarian. And I think that that really aligns nicely with FIRE because on the surface, absolutely, you are correct.

4:31New York City is the worst place to fire or pursue financial independence or really have much of anything. But I think that fire is all about looking kind of beneath the surface and figuring out what actually makes things work, what actually makes things tick. And I've calculated it that I would have a higher salary and that I can control my expenses. And that right out of college, I know that the most important thing is to pay off that student debt if it's above, you know, six to eight percent interest, depending on who you hold like. as well as securing a high starting salary, because that is one of the single biggest determinants, at least in the traditional world, of whether your lifetime earnings, what that will look like.

5:09So for me, it was very important to secure, I would say, on the high end and then control what I can control. And thanks to FIRE, I feel like I've had a really solid control in that I have raised my earnings from$82 ,000 when I first started at my company to$91 ,000 within about six months. And my expenses are below$40 ,000, I would say over a year. And I would say that's specifically, you know, the basics. I do like to spend money on Broadway. So that is my guilty pleasure. Can you give us a breakdown of what your expenses look like on this income? Because I think that the challenge is not hard for people to understand, hey, there's a lot of really good income earning opportunities in New York City.

5:45But it's that keeping your expenses low means deprivation or is it possible when you're living in Manhattan or New York City? You're completely right. I would say the number one expense that people typically are concerned about is usually rent. And I would say you can't necessarily house hack in the same way. It's much more difficult, I would say, buy a property in New York City than it might be elsewhere. And there's a huge, I would say, burden when it comes to regulation. But once you have rent, it's almost like unlocking the best credit card bonuses ever. So let's say people are usually not willing to pay$700 a month for an MX Platinum.

6:17But those who do recognize that there might be an extraordinary amount of benefits that are unlocked. To me, that's the same thing with rent. So my rent payment is$2 ,210. And that allows me to not have to pay for a car. I don't have to pay for insurance. I don't have to pay for maintenance. I would say my travel is locked in at$134 a month. Groceries is something that in New York City is relatively more expensive. But I have been, I would say, living large. In addition to, I would say, keeping more, I would say, stricter dietary regulations. So let's say groceries, I've been able to keep at$350 as a max.

6:50many months I don't even get to that point I would say eating out 200 I would say shopping and miscellaneous I just kind of have as an extra 250 buffer I usually don't hit that and I would say that your basics in New York City are controllable if you are not ubering everywhere if you are living with roommates if you are focused on what you can control you absolutely can control your base level of expenses it's the luxuries that people feel that they're in New York City they should experience I would say that's really what knocks people's financial budget off course. Because if you're shopping at Trader Joe's or the local bodega, it's really not that expensive compared to living upstate.

7:27I grew up upstate. I know that the prices are not that different. It's really about where you go shopping, where you're spending your time. Everybody on the path to FI has to control their expenses. So that's not unique to New York. But there's this like, I mean, Scott and I don't live in New York, and we both feel that New York is super, super expensive. You have listed a lot of really low monthly expenses in your budget. Do you feel like you're missing out on anything? Do you feel like, oh, I wish I could just loosen the purse strings a little bit and do this thing? Or do you feel like you're really getting it all because you live in New York and there's so much to do?

8:05No, what I found is with enough time, you can find almost anything you want in New York for free. Instead of focusing on, let's say, I'm going to, let's say, change my budget around. I'm going to figure out if I want a massage, I'm going to look at what are all the different massage places? What are the promotions that they're offering? If I want to go see a Broadway show, there are apps that show you which Broadway shows you can get pre-screenings to. I saw Angelique Front Row Center for free because I just looked on an app. I saw a free ticket. If I want to go to a fancy restaurant, and this is actually another thing that I really want to talk about, which is in New York City, there's so much people who want to live in New York City.

8:39And corporations and many of them, I would say, really focus on that. And that means that if I want to try a new restaurant, I can actually volunteer for my team and be like next time we plan a Team dinner or something. Let's go to a restaurant that I choose and because I'm volunteering I'm putting myself out there. I'm able to be like oh that restaurant that might be five hundred dollars a plate Let's figure out what the corporate discount will do and basically it'll be taking control in that sense of figuring out Not just what is going to be in my budget What are the opportunities out there?

9:06Like I have not paid for Starbucks over the past year because I'm the person who gets coffee for my team and I basically get thousands of Starbucks stars. Those are kind of the little things that I have been doing to, I would say, live New York City to the fullest. Remind us what your day job is. I do accounting, specifically auditing. What a surprise. I know. So you do auditing here and I assume this is you're a highly paid accountant in New York City. Great job out of college, it sounds like here. And how much food is provided by your employer on an ongoing basis in your situation? Significant amounts.

9:41For example, I'm about to approach busy season, they are giving a per diem amount for coffee, for restaurants. So if I want to get takeout and I want to choose a restaurant, I can get up to a certain amount paid for by the company. So that definitely does make the food budget significantly less and able to experience New York City to the fullest. I figured that was going to be the case. So as in second, how many hours would you say you're putting in on average and then on and off peak? I'm assuming you're talking about my job specifically? Yes. So that is a great question because there's billable, non-billable, and as an accountant, you know, there's so many other things.

10:16And I would say from a your money, your life perspective, I would say it's from about 8 a.m. till about 7 p.m. on off-peak. And when it comes to peak season, that's about three months. That is potentially as much as, you know, 8 a.m. to 2 a.m. nights, there are weekends sometimes. times. So yes, I would say from a typical job perspective, it's significantly more than nine to five. However, there are also going to be times when you're working two days a week. For example, because it's a very seasonal type of job and that I'm working on with financial statements, it matters when the financial statements are put out.

10:50There were days when, you know, I'm studying for the CPA at my aunt's, you know, house or something like that, where I'm like on the rooftop of my building and just enjoying because the job is very much when you're working, you're working hard, but they're also, you know, paying for food, they're paying for a lot of things. And when they don't need you, like you're not really doing crazy, silly, busy work, which is something I have appreciated. This makes sense to me. This is in line with what I understand the life of peers who went into New York City investment banking or big four accounting or those, you know, big law, those types of careers in New York City.

11:28Your life is work for during the week for the most of it for these big chunks, right? 8 a.m. to 7 p.m. is a big day. That's a much longer day than I really ever worked, excluding some periods of time when I was CEO. I never, even during my CEO time, never had an 8 a.m. to 2 a.m. day, maybe one or two in the entire time running a pretty large company at BiggerPockets. But that is a reality, I think, for a lot of very high income earner, very high potential folks who get these close to six-figure jobs right out of college in New York City. I guess the question I would have there is, I would imagine that one, that's very conducive to accumulating money because you're spending all this time at work.

12:05You're getting a lot of pay, presumably a bonus, presumably a very large career trajectory, and there's no opportunity to spend the money anywhere else. And there's not, so there's not really a reason to live large in the chunk of time that's remaining. How do you think this will change in four or five years though? Because if you keep on this trajectory, I imagine it's not going to be like, you're going to get a 10 % raise every year. It's, you're going to get a 30 or 50 % raise and you're going to be earning multiple six figures by the time you're 30. You're 24 right now, I believe, right? Maybe even more than that.

12:32Maybe approaching seven figures, depending on how the trajectory goes by your mid-30s in this type of career. And will the perspective begin to change at that point? How do you think that will evolve for you? Am I getting anywhere close to describing your reality? You're describing every single young person who's trying to figure that out. Because I actually started a community that I'm calling Sparks, because we're people who are just getting started into fire. And we're kind of dealing with these issues where we're like, we don't know ourselves. We don't have a family. Our fixed expenses are not certain.

13:01Like right now, I know that my life is going to dramatically change over the next five years. So how can I possibly plan? And I think that that's where I'm really thinking about the next endeavor and where I think of New York City as an arbitrage opportunity. I don't necessarily plan on living in New York City my entire life. I view this as a chapter and that the amount of money that I've accumulated is not necessarily meant to, for me personally, to continue to live life in New York City, continuing to live life on hard mode. I view that I can buy a house in let's say the Georgia Eagle co-housing community that's if they are going for about$120 ,000 so that means if in one year I could buy the house outright I kind of view it another point is I'm working two to three jobs I'm earning not that much money per job but I would say I kind of also view right now as a learning experience and almost getting my PhD in accounting and getting paid to do it so whereas many of my peers are in a PhD program with a stipend of$40 ,000 and barely covering expenses, continuing to go into credit card debt you know continuing to have student loans things like that I view that I'm actually not in my earning years yet.

13:57I'm trying to figure out what I want to do. And I look, the Gen Z has officially pushed out millennials when it comes to everyone writing articles, calling them lazy and everything else. Whatever you're doing ain't lazy. Thank you. And I would say another inspiration is I would say also Hamilton trying to work like I'm running out of time. And for better or worse, that has left an imprint on me. But I also want to push back a little bit on the assumption that you made, which is this is the longest, you know, maybe that you've ever worked with. For me, I used to go to school six days a week and every other Saturday we would remain in school.

14:29I would be waking up at about 6 a.m. and I would be getting home at about 11 p.m. For me, that was a religious school where we had extraordinarily long hours. I'll be honest, this almost feels easier in that I'm a lot more in control. I have a lot more things and I'm only working five days a week and the occasional weekend. For me, that mindset shift, I definitely recognize is something that might be more unique to me, but I kind of view what I'm doing as a learning opportunity as opposed to work. And I feel like once you're able to make work, not like that exhausting sounding sigh of what am I doing here?

15:06I'm trying to get to that fine number. What like, I can't believe rent is due next month and figuring out, okay, I'm going to be seeing my friend. And I would say it's about keeping busy, socializing as much as possible, and really having a clear picture of what life could look like. My yearbook quote was, it is what it is, but it's what it could be. And I think that that's what I'm trying to apply to, I would say, work and fire. So I'm not really trying to calculate my trajectory currently. I'm trying to calculate when it's the optimal jumping off point of this current trajectory. I think this is super interesting here, right?

15:39So it's enviable, right? The strategy is I'm going to work crazy hours, although they're easy for me because I've been doing it since high school. which by the way, I had a similar experience in high school. I just didn't, I'm only considering the time spent at work in that. My, my life was definitely, you know, my early to mid twenties, very similar to what you're describing here in terms of early mornings out and about, but some of it was recreation, rugby, or, you know, athletic persputes and those types of things, not just work for me at that point in time. Now that I have a family, that's not something I'm willing to do or what would be reasonable at this point.

16:10And so the strategy has to be, I'm going to earn so much. My earnings power is going to explode so much in this profession while I'm in New York that it's going to give me these options whenever I jump ship and move to a different geography here, or that I'll just earn so much that it kind of obviates the need to do all this other stuff, right? I'm like, it's going to be so much money that I can live a lavish lifestyle or a pretty, pretty nice lifestyle and invest through all my accounts and have plenty of money to build leftover and enjoy, you know, all the best things that New York City or wherever the area that I choose to live in has to offer.

16:43I think the traditional fire advice, the typical fire path is not built for someone with that trajectory, right? Where I'm going to earn a lot and have high expenses in my early twenties, but then it's just going to explode. So it's so high that it really doesn't, it makes all this other stuff less important. Does that jade your approach to fire or is it really just, I'm going to accumulate and jump ship as soon as I possibly can at this point? So I used to joke that as a kid, I wanted that my favorite subject was recess and that my ideal job was I want to be a retired philanthropist. Now I did not know about the FIRE community back then, but let me tell you that retired philanthropist dream is still alive and well and I would say that you're right that many of my peers I would say reject it and that they're looking why am I gonna stop when my ideal income earning years are just down the line and I think that that's why they're terrified of AI because they need the current circumstances to remain the same whereas I look at it as I'm using this opportunity to learn skills from out to the standard like big four is I would say a huge training ground for a significant majority of many different professions like the the income component for me is it's a lot relative to my expenses the way that I look at is if I were living in the suburbs I would have more expenses more things to worry about more things to deal with for example nine to five in the suburbs includes an hour of commute potentially even more.

18:04For me, like my commute is 10, 20 minutes. And like that, that's something that they have to worry about a car, car insurance, gas, fixing car. I actually just heard from my friend that, you know, she had to pick her car from the mechanic and the bill was almost four grand. That's something that I will never have to worry about as long as I'm living in the city. Additionally, when it comes to the explosive income potential, I kind of see that as entrepreneurship. I look at FIRE as a way to get rich slowly. And that is 20 years, which is still extraordinarily quick. I'm 24, so it doesn't feel quick.

18:33Like for me, I feel like my biggest financial mistake is that I did not buy a house in 2008 when I was seven years old. Truly a struggle. I view it that New York City, I'm able to control my expenses. I'm able to earn relatively more amounts of money. My life is relatively simpler. And I have the additional component, which is, I made up an acronym for this, but basically, I just think that socialization, commute, and quality of life in the city is significantly better compared to trying to fire in the suburbs. You know how the change in seasons hits and suddenly you just want to declutter the garage, clean out the closets, and get everything all organized?

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20:42Get your free quote at ethos.com slash bpmoney. That is E-T-H-O-S dot com slash bpmoney. Application times may vary and rates may vary. So will you fire in New York City or do you think you will move geographically in a few years somewhere else? Like what is your best guess? I know that that's up in the air. You're 24. Life can unfold a million different ways. But what is the kind of like tentative plan? I feel so blessed that I have so many fire role models in New York City. So initially my plan was very much burn, jump ship. And now I'm looking at these mentors of mine who are living in New York City.

21:20they're firing and they're able to take the fastest city in the world, right? The one that never sleeps and like take naps, relax, enjoy, right? In the middle of the day when everyone's at work, they're enjoying all the opportunities that New York City has to offer. You know, instead of waiting till the holiday season to enjoy whatever perks there are, they're able to really appreciate New York City at its fullest. And another component is if I were to stay in New York City, rent increases significantly less compared to salaries because of, I would say, a lot of the regulations involved. So while rent might be taking up approximately a little under 30 % of my current pay, over the next 10 years, it'll be significantly less than that just because of that delta between the two growth.

22:01So I can see myself potentially living in New York City. The thing is, I can't really see myself raising a family in New York City. And this is where I'm starting to think of FIRE as an evolutionary system, in that initially it was all about math. Then it moved to mental health, right? Like that's when we're talking about middle class trap, death march, all these, I would say, terms to try to describe the feelings that we're experiencing. And I'm almost trying to think of the next stage is philosophy. Like, what is the purpose of life? What are we trying to optimize for? Because once we recognize that optimizing for money is not ideal, like, I don't know, I could totally see myself living singly in New York City, but I, you know, trying to figure out what do I want in life.

22:39And that's a question that I feel like is better answered in New York City amongst friends, amongst many people with a variety of different experiences as opposed to kind of in my house hack in the suburbs. Not to throw shade, but, you know, I can definitely see myself just, you know, never leaving the house because I never want to spend money. Whereas in New York City, it's almost like a sunk cost. And obviously that's not the best way to manage your finances, but, you know, it definitely seems to be working a little bit. I house hacked in the city of Denver, but you would have called it a suburb.

23:08It is the city of Denver, but it's just, it's not the same. Look, I could totally see myself getting a cabin near a ski lodge, you know, maybe working as a ski instructor for a time. But yeah, New York City, once you're in New York City, every other city is like, huh? I lived in Chicago. It's not nearly as big as New York, but it still had the same feel. You're right. I lived in the suburbs of Chicago and in Chicago itself. And there's a lot more to do when you're in the big city than there is in the suburbs. And yes, there's things to do in the suburbs, but I found myself driving to the city quite a bit.