She Retired at 39… After Moving to New York City

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2:42Hello, hello, hello, and welcome to the BiggerPocketsMoney podcast. Today, we've got a special bonus episode. Scott and I are highlighting real stories from people living in New York City who've achieved financial independence. Today, we're talking to Wally. Most people leave New York City to achieve FIRE. Wally moved there and still retired at age 39. After discovering FIRE in 2015, she and her husband got intentional with their spending, leveraged New York City perks, and reached early retirement on a combined income of under$200 ,000. Her story proves that FIRE isn't about high income. It's about intentional living.

3:19Wally, welcome to the BiggerPocketsMoney podcast. I am so excited to talk to you today. Thank you so much for having me. I am glad that I could be here to bring a different flavor to what FIRE looks like in a high cost of living area. Yeah. Well, I love that you are telling Scott, who said, oh, you can't fire in New York City. I love that you're telling him he's wrong. So tell us a little bit about how you reached financial independence. Yeah. So I discovered fire or the fire movement through a very click baity blog post, or actually it was a Forbes article talking about how a couple had reached financial independence in their thirties in order to travel the world.

3:57And I remember reading the article and I sent it to my then fiance and I was like, wow, this is kind of cool. And it kind of stayed there. And then just like what many people's story is, I had a really bad day at work and I went through my sent inbox and I reread that article and they were using terms like investing and wealth building. And I didn't know what any of those things meant. The more I sort of Googled, I literally came home on a Friday after a really bad day at work. The more I Googled, the more I found out that, wow, there's a whole bunch of people who are reaching financial independence and using their nine to five income in order to be able to fund retirement when they want.

4:38So that was how I came to the FIRE movement. Me and my husband both worked a nine to five job. The most money we ever made was the year prior to us firing was the most money we ever made. And it was less than$200 ,000. I think that year gross, it was$180 ,000,$179 ,000, something like that. Yeah, that was how we reach financial independence. Where in New York City did you or do you live? So at the time in 2016, we were actually living in California. My husband is from California. I'm born and raised in New York City, but I was living there. I had moved there for a job transfer. Then I came back to New York City and I moved back to New York City in 2017.

5:17We were living in high cost of living areas, both in California and in New York City. and I'm originally born and raised in the Bronx, but I live in Manhattan now and I've lived in Manhattan since 2017. Oh, that's the expensive part of New York City, right? I think some people might consider it that for sure. That's the part I was specifically referring to as I don't think that's that compatible with fire. Walk us through what you did here. How did you keep expenses low and what did you invest in in order to get to this point? Yeah, absolutely. So again, my journey started in California and so my cost of living there was still pretty high.

5:53When I moved back to New York, we did get a slight increase in salary, but that was eaten away by the fact that we were not only paying federal taxes and state taxes, but now we were also paying city taxes. And our mortgage, so we owned a home in California, mortgage, everything, principal, insurance taxes was like$1 ,800. and now we were living in a 400 square foot apartment that was like$2 ,500. So our cost of living also increased. One of the things that we did was get really clear and this is something that we did even when we first started on our journey was what was important to us. Now I know a lot of people's entry point into FIRE is like Mr.

6:36Money Mustache. I did not hear about Mr. Money Mustache till a couple of years later. So the frugal side of financial independence or that path wasn't something that I really like gravitated towards because it wasn't even something that I realized like some people sort of frugal their way to FI. And that is a path. For me, it was never something that I sort of connected with. One of the things that we did was decide what was it that we wanted to spend money on and what was it the thing, you know, where did we want to get really intentional and sort of reduce our expenses? My husband is not a big spender, but I'm a natural spender.

7:14I'm a natural shopper. I love to shop and spend money on all the things. So for me, it was really evaluating like, where is our money going? You know, and I realized that it was going on random trips to, you know, Target and random trips to, you know, I was on my way to the gas station and I would stop off at, you know, TJ Maxx or marshals. And so I really just got intentional about where the money was going. And it was at that point where I realized, okay, once I listed out all of our expenses, I was supposed to have money left over, but every single month I didn't have money left over. So I realized, okay, I think I need to get kind of clear about where is money going actually.

7:58So I'm listening to you talk about, oh, I just went into Target for these staples and I came out with all of this other stuff. And I was reminded of way back on episode four of the Bigger Pockets Money podcast, we had Rosemary Groner from The Busy Budgeter come on and talk to us about her money story. And she said that she was the exact same way. She would go for one thing and come out with a cart full of stuff. So her idea was to create a mini store in her house. She says, when I go to the store and I need Tide, I buy two or three when they're on sale and then they go into my store at my house.

8:38So when I need laundry detergent, I already have it. I do the same thing with deodorant and dish detergent and all these things that you run out of and you know you're going to run out of and they last for a super long time. And I love that idea so much that I am currently building a house and I have a space under the cupboard under the stairs, which will be my little store for all of these things that I need and will trigger a trip to Target that comes out with a whole shopping cart full of stuff. Yeah, I will say I always was the type of person who liked a good bargain. So I love like it was very I really gamified spending money.

9:21So even when I did spend the money, it was generally things that were like, oh, this is a good deal. My husband in his vows when we got married was like, I promised to help you clip coupons on Sundays to build your, to do the couponing. I was huge into couponing. But one of the things that was happening was that I was quote unquote saving money on toothpaste, deodorant, shampoo, but then I wasn't really saving it. I was just, it allowed me to spend on something else. And so once I began to realize, wait a minute, if we're really talking about saving money, it's actually using the money that you're spending less on in whatever category, whether it's, you know, airfare or, you know, those household staples and supplies and actually putting it into a savings account or putting it into investments, which was really, it did help me as I was on that fire path, right?

10:16Because I knew that I could find a good deal. Like I know some people don't want to spend their time doing those things, but to me, it was always fun and I still enjoy it. But it was being able to say, okay, I'm really gonna live up the whole saving aspect of it, right? So it's like save, you know, a few dollars on this thing or on this experience so I can truly save it. And that also helped me on the path. What hacks do you have to keep your expenses low in New York City while still adding all of these things back into your life or keeping them in your life? I think it's really important to spend intentionally.

10:53One of the things that I did not want to do was to stop traveling. That was something that was always important to me. I had solo trips before I got married. I've taken solo trips after I got married. Me and my husband love to travel together. So traveling was something that I did not want to reduce that category. And my husband was actually food experiences. We loved going out to eat, but we just got really intentional about how those things happened. So rather than just, you know, ordering takeout and then forgetting three days later what we had that week, we got really intentional. So we didn't even reduce the amount of money that was spent in the eating out category, but we made more intentional decisions about we are going to have a food experience.

11:40And what ended up happening was that then naturally the area of food, for example, just reduced because we didn't need to spend money on Uber Eats or DoorDash or takeout because we knew we were going to go to a really nice restaurant, you know, once a week or we're going to have a date night, you know, at the end of the month. And so I think it's really important to spend intentionally about the things that matter to you and that bring you joy. As I mentioned, for some people, you know, sort of frugaling their way to FI is the path to FI. That was just not something we wanted to do. And one of the things that I will say is that New York City, because it is New York City, there are so many free things to do out there.

12:23I'm talking about meeting authors of books, right? There's always some sort of book signing or some sort of like author panel reading, right? There's always something going on. There's always free concerts happening. There's always last minute tickets for a Broadway show that if you have the flexibility, you can just go and watch a show that you've wanted to watch for years. My husband and I, we watch Hamilton for free front row because we entered in the lottery, right? So there's so many things that you can do and just get really crystal clear about what are you willing to not only spend money on, spend money on the things intentionally.

13:02And then what are you willing to maybe take a little bit more time, right? So I think for some people, they would say, OK, I want to go watch, you know, whatever Broadway show on this day, this specific hour. And for us, we were a little bit more like, OK, well, we'll join the lottery and we'll see if we get it. And I think I did that for a few weeks and then we ended up getting free lottery tickets to go watch Hamilton. So, you know, and it's not to say we don't spend money on, you know, something like a Broadway show. But if you are willing to be a little bit more flexible or going for a matinee, for example, you're able to experience some of those things.

13:37So, yes, living in New York City has a high housing cost. But I think for entertainment, there's so many free ways or less expensive ways to do those things that you really enjoy. How do we ballpark your annual spend for your household? One of the things that happened for me is that I've always been somebody who had a spending plan. And so when I was trying to think of our FI number, I thought about, okay, what is all of my living expenses? And that included things like entertainment, that included things like vacationing, that included things like, you know, eating out, right? And we just did what everybody else does, which is multiply that number by 25.

14:21And because our numbers stayed pretty consistent as we got closer to reaching financial independence, like I felt really comfortable with that because I could look back at the years prior or the year prior and say, yeah, we tend to spend, let's say, you know,$10 ,000 to$12 ,000 a year on vacation. And we would just add that to that number. That's how, I mean, we just use the 25 times rule. Your housing is$2 ,500 a month. Is it still$2 ,500 a month or has it gone up since then? No. So our housing actually has gone down. So our housing expenses now is about$1 ,800 a month. And we live in a two bedroom apartment, which is we have a relatively low cost of housing expense.

15:07We own our property here in New York City, mortgage-free. We live in a co-op. So it's an apartment. And in New York City, they have these things called co-ops. So you pay like this flat monthly fee. Consider it something like a HOA. It includes everything from all utilities, insurance, taxes. And so we pay$1 ,800 a month. Okay, great. And so this is a paid off primary residence with$1 ,800 a month in the equivalent of property taxes, insurance, HOA dues, all that kind of stuff, utilities. Yeah, monthly. Yeah. Okay, great. And so do you include this home in your FIRE number or do you reduce your FIRE number by the amount of excess rent or housing costs you'd otherwise pay?

15:48Yeah. So we include it in our net worth, but our FIRE number is specifically in our stock portfolio. So that house in California that I owned or that we lived in, I purchased it before I even got married. So I include that in my net worth, but I never include that in part as part of my FIRE number, right? because the amount that I get in rent and things like that after expenses, it's only a couple hundred dollars a month that I can actually live off of. And that is building that safety net for that rental property. So the properties that we have, we include it in our net worth, but our fire number is the money that we actually would need to cover all of our living expenses.

16:28And our rental property in California, we don't use that money at all to live off of. We only use our portfolio. Now, you know, at some point we'll either sell the rental property we have in California or it will be paid off and then we'll have an additional amount. But even that I've never counted it because, again, right now it's not accessible to us. It's not available to us. When spring hits, some people suddenly just want to declutter the garage, clean out the closets and get everything all organized. Whether or not that hits you, Monarch will do your financial spring cleaning for you. One dashboard gets your entire financial life organized.

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18:49and you have a, I imagine, several million dollar stock portfolio that you can withdraw from at the 4 % rule to sustain your cost of living. And you have a rental property in California and you never earned more than$200 ,000 a year in household income. How long did this journey take you? What are the other ingredients that are going on here for us to comprehend this? Yeah. So our investment portfolio is not several million dollars. Actually, we have a lower cost of, let's say our annual expenses are a little bit lower, right? Like our for New York City, 18. I know for most people, it's like, that's a mortgage.

19:27But for us, $1 ,800 in New York, like it's pretty good deal. So as I had mentioned, I sort of like off topic, I just looked at an email that I had sent. And in 2016, right when we started our fire journey, combined, me and my husband had about$110 ,000 in investments. And that was all 401ks. Really between 2016 and when I received my last W-2 paycheck, which was in January, 2024, our portfolio just grew because we maxed out our 401ks, we maxed out our Roth IRAs, And then we also put money into a taxable brokerage account. So by the time that happened, I turned in my notice at my job in June 2023.

20:19We were really close to our FI number, but me and my husband had agreed that he would stay working for an additional year to, you know, to test things out, to make sure everything was going to be okay. But once I told my boss that I was leaving, all of a sudden I had so much flexibility and I turned in my notice in June to leave at the end of the summer. And then I ended up staying an additional six months. So January 2024 was like my last time. And then my husband, he was supposed to continue to work for another year. But by June 2024, he was like, okay, we've surpassed our fine number. Like I'm done.

20:55And so he left as well. You sent this in this very wonderful email he reached out that he is a Air Force reservist, right? And that's how that covers all the health insurance and those kinds of things. So that's eliminated as a concern, essentially, because of that reservist role. Yeah, that's right. So my husband considers himself semi-retired because he still works one weekend a month. But like his pay is like$400 a month. And that essentially covers our dental and health insurance. But we have talked to several people who are already FI here in New York City to get an estimate of what their health insurance was going to be.

21:31And so we knew that it was going to range anywhere between$800 to$1 ,500 for a family. And we just sort of knew that if he were to leave the military, that we would need to increase our FI number in order to cover an additional$12 ,000 a year. But as long as he stayed in, our health insurance would be covered. I mean, that was part of the FI plan, I guess I should say. Tell us about your transportation and food budgets. I think you mentioned you drive to Target in there. And I was like, oh, that's surprising, right? Because you think of Manhattan as generally folks opting not to have vehicles.

22:05Why do you have a vehicle? And does that relate in any way to lower expenses in other areas because of those car trips? So the driving to Target and the gas station was really an example of when I lived in California. So in California, both me and my husband had cars. When we moved to New York, I decided to keep one car. So we decided to sell one of our vehicles and we kept one vehicle. And so we are very rare breed where we have a vehicle here in New York City. But I will say that vehicle rarely gets used. We use that car maybe on the weekends, a couple times a month if we're going to take a road trip or something.

22:44We have a Trader Joe's within walking distance. We have a Key Food, which is another supermarket chain here in New York City within walking distance. We have a Target within walking distance. We have a Lytles that opened up within walking distance. So we use our legs to get around, but also we use public transportation. So when my husband and I were working, although we had a vehicle, we would take the subway to work because trying to find parking in New York City can be a hassle and can be very expensive. So we do have a vehicle that is paid off. The car is a 2008 Honda Accord with 150 ,000 miles that still drives pretty solidly.

23:24I will say that we've already decided that we're going to give that car to one of my nieces. She's going to be 16. So we're going to give that car to her and we're going to upgrade. So we're going to get a nicer vehicle now. But again, this is all part of, you know, these are sort of thoughts and plans that you have as you make that decision. Do you need a car in New York City? No. And I think that that's where a lot of people save money, because even if you're buying sort of like a monthly MetroCard pass, if you're not paying, you know, vehicle insurance and you're not paying a car payment and you're not paying for tolls and parking and things like that, your cost of transportation can be greatly reduced because that car was already paid off.

24:07And, you know, we just have the car insurance. And, you know, I think we put maybe 30 or 40 dollars of gas every month, if that. Where do you park this car? We are super lucky that we live in a small little pocket in New York City in Manhattan, where it's very residential. So there's a lot of street parking. When we lived in a different neighborhood where that like$2 ,500 a month apartment was, parking was a nightmare. We had really considered parking it somewhere and the parking would have been about$400 to$500 a month. Thankfully, we never did that. We just sort of dealt with street parking and all its hassles because we have alternate street side parking.

24:47So it's not like you can park it and like set it and forget it. But now we live in a really residential area. So parking is pretty plentiful here. Help me understand something. You said$1 ,800 a month in your co-op fees. Yeah, maintenance. And I'm going to say like 300 bucks a month for the car or, you know, insurance and all those other things. between those two things, we get to like 25,$26 ,000 and spend just those not even in counting food or fun or travel to$12 ,000 a year in travel. How does this work from a five perspective, given that you say you don't have a multimillion dollar stock portfolio?

25:19Do you earn additional income in some other way? We have 400 bucks coming from the reservist. How does that work? Yeah. So our vehicle expenses. So for example, our car insurance is a hundred dollars a month. So it's a 2008 Honda Accord, right? So our vehicle insurance is$100 a month and we spend maybe$30 to$40 on gas. So vehicle expenses is really low. Our food expenses have gone up since both me and my husband left nine to five work because we're home a lot more. So I tend to do a lot of cooking, but our monthly expenses on groceries around between $350 to$400. And I will say me and my husband, we're both meat eaters.