The All Out Approach to Achieve FIRE in Your 30s (Median Income Earner)

24:39I did this on about$7 ,000 or$8 ,000 less 10 years ago. So this is very similar to what I was doing adjusted for inflation here in 2025, 2026. So, you know, again, that biggest cost difference between him and the average person is going to be housing because he's going to have roommates, right? A roommate or roommates. The next biggest one is going to be transportation because he's going to drive a paid off Corolla from 10 years ago or a very cheap Corolla that has a very small loan for, you know,$7 ,000 to$10 ,000. Then he's going to have a very cheap food budget because he's going to be making most of his food most of the time.

25:09And he's actually going to spend more on entertainment than the average American. I have everything else the same except for personal insurance and pensions where I'm going to have to go spend very little because he has no dependence here at this point. And all of the additional savings can go into the bucket. $16 ,000 is amazing. And I want to calm down all the people who are like, there's no way you could do this. Okay, maybe it's not$16 ,000 that you're saving. Maybe it's only 14. Maybe it's only 10. Maybe it's only eight. It's still less than the average. And that money is going somewhere.

25:42It's impossible. I did this. Well, and that's the thing. Live like no one else now so you can live like no one else later, to quote Uncle Dave. But also, this isn't impossible. This is absolutely possible if you do it on purpose. And it's absolutely possible to spend all$46 ,603 of the average one person household, and more if you aren't paying attention to your money. You need to be conscious of where your money's going. And you don't have to track every single penny, although it's a great habit to get into so you know where your money's going and it's going there on purpose. But you need to be conscious of where your money's going.

26:22That's the bottom line here. All right. Joe has the option, and I encourage him to do this, to supplement that frugality with side hustles or investments in his career growth. So there's kind of two buckets. There's two themes that he can explore here, right? One is he can just work hourly, right? That's Uber driving, bartending, freelance work, cleaning or landscaping work, tutoring, working events or seasonal projects or something like that. And this is where you're trading time for money to more quickly amass that initial fund. That's great. I encourage Joe to do that if he has a specific use case for cash, is gonna deploy strategically, but it's not good to spend huge chunks of your life working a job and then working a lower paying side hustle in an indefinite timeline just to get ahead.

27:06This is good if you have a specific goal that you wanna advance and you need that extra two, three, four, 5 ,000 bucks. If Joe is very comfortable with his savings rate and wants to do some more strategic side work that can actually make bigger lump progress towards his goals, then I'd encourage him to think a bit more broadly about, hey, can I take study for those 100 hours or whatever and get my real estate license? Can I get an insurance or lender or financial planning license while I'm working my job? Can I become a notary? Can I learn to design code or use AI to build websites and get a couple of projects there?

27:39Can I begin writing regularly, producing content on some type of topic that I'm an expert in or that I'm willing to become an expert in so that as time progresses, I have the option to do some sort of online creation or freelance work there that could actually pay me like an expert. And so I would encourage Joe to lean towards those more upside concepts, but not dismiss the idea of ideas for hourly income, especially if he wants to aggressively build out a buffer base of cash. I would encourage him to really consider that real estate license because you need some experience in order to be a real estate agent successfully.

28:14So he can gain that experience while his friends are figuring out their life. And then as they are ready to buy houses, here's Joe with his real estate license and can start helping them out. Okay. And as Joe is accumulating this first$25 ,000, what I'm going to recommend he does is he just sticks that in his savings account. I'm recommending he does not invest that. I'm recommending he does not max out his 401k. I'm recommending he doesn't put that in retirement accounts. The reason for that, and I know that's controversial, is again, I'm a fan of these retirement accounts. They're really powerful ways to build wealth.

28:51But again, we're looking at the specific use case of a 22-year-old who is hell-bent on achieving financial independence early in life. And that person, when they're 23, with 20 books on business, having read 20 books on business, and has$25 ,000,$30 ,000 in cold, hard cash, is going to be much more dangerous. They're going to be able to have much more opportunity than if that had gone into maxing out their retirement accounts. They're going to have much more optionality at that point in time. In a year or two, I'm going to say max out those retirement accounts and maybe do that for the rest of your life or the rest of your career.

29:23So I'm not against retirement accounts. It's just for this first year, for this very aggressive individual who wants to get ahead early, the optionality of that cash to buy real estate, house hacks, live and flip, start a business, buy a business, or transition into a sales or commission role that has real, real high upside from an income perspective, that's so much more valuable than getting that head start in this scenario for that 401k. If this person was saying, I want to just begin investing now for a long-term time horizon, and I want to retire at 65, totally different advice. We're going to max out those accounts.

29:56So that's my caveat here. So if you agree with that order of operations in this situation, we're going to build up that thousand dollar buffer. We're going to pay off any bad debt if we've got that, maybe excluding student loan debt, for example, we are going to take the free money in our 401k match. So if their employer offers a 5 % match or three grand, I'm going to put three grand in my 401k and take the $3 ,000 match from my employer, of course. If my employer offers some other form of free money, like my old employer used to offer a stock purchase plan where I could buy the stock at a 15 % discount and then sell it the next day as soon as I bought it for a 15 % gain, that's free money.

30:31I'm going to take that and I'm not really investing and I'm just delaying it for a little, I think it was one quarter. I would defer my money for one quarter. I'd buy all the stock. I'd sell it the next day and I'd get a 15 % gain. Great. I'm going to do that before I build cash. There's not much in life that gets better than that from a return perspective. And then I'm just going to build that cash position to prepare for my first house hack or one of these really high potential opportunities. What do you think, Mindy? First of all, I think this is a great plan for this specific scenario where he wants to reach early financial freedom as quick as possible and be saving for his house hack.

31:05So step two, you say pay off bad debt. What does bad debt mean? Anything over 8 % is an easy answer to that. Some very aggressive people might say it's over 9 or 10, but you're somewhere in that range. Once you get over 8%, you got bad debt. All right, so we got our 25, maybe 30 ,000 bucks. Now we're gonna be thinking about how do we move to part two? How do we move to$100 ,000? We are not gonna be able to frugal our way. I love the FIRE community. I'm a part of the FIRE community. I think the world of this community. But there's a little bit of rigidity in the FIRE community about the textbook and the rules here.

31:37And a valid criticism that some people have of the FIRE community, in my view, is that they try to frugal their way to financial independence. And it's just not efficient to focus on frugality for this extended period of time as the main driver. Frugality is important. We're going to keep our expenses low. But now it's time to layer in real bets on income generation and some side bets that can potentially move our position forward much faster. And that's what we're going to do here. Frugality is the first lever, but it is not the most important one over the long term. The most important one over the long term is income and the side bets that we make that can drastically propel our position forward.

32:16Yes. So I think that frugality gets confused with being conscious about your money. And I would encourage Joe and everybody who is following the same path with Joe to just be aware of where your money's going. You don't have to be hyper frugal and eat in all the time. Just consciously realize that I am going to eat out once a week or twice a week and then make a plan to only go out to restaurants once or twice a week, whatever your plan is. I think that the frugality, especially in the beginning of the FIRE community, it got equated to being conscious where your money is going. So don't just spend willy-nilly.

32:58It's so easy for money to fly out of your pocket when you're not paying attention. So you don't have to be frugal so much as just know where your money is going. And I'll even go so far as to say this. Frugality is not a virtue. Frugality is a lever in the financial journey. and once you start prescribing it to being a virtue, a part of your identity, I think that's where you've gone too far. And we're gonna be frugal because freedom and optionality is so much more important than the stuff we buy. But the goal is not to be frugal forever. The goal is to live the best life that we can and we're pursuing financial independence to live the best life that we can.

33:34With that said, the largest expense in Joe's life still, even with roommates, is going to be housing. If we can eliminate the housing expense and get that cost to zero or very close to it, we can dramatically accelerate our wealth accumulation for the next several years. And the way to do that is with this special type of purchase called the house hack, right? The house hack is simply buying a house with extra bedrooms or a duplex or a triplex or quadplex, a two to four unit property, and renting out the other units or bedrooms. And you're living the exact same lifestyle, right? You're living with roommates before.

34:09Now you're still living with roommates or tenants. they're just paying you the money and that can offset or entirely pay for the mortgage costs plus some. This was very hard to do with a positive spread for the last couple of years. And in the latest couple of months in some markets, like here in Denver, that's begun to really open up to my observation where you can actually, I think, live for free again if you make a really smart purchase and look hard. This is a big decision. Joe is not going to just like buy a random house and live in it. Joe is going to become an expert as a real estate investor, read a bunch of books, meet with a bunch of agents, look at a bunch of properties and make a very calculated decision for this house hack, a property that he's not going to mind living in, that's going to has a very good shot at providing more rent than the mortgage and other costs to manage the property.

34:57He's not going to forget about things like vacancy expense or maintenance or CapEx. He's not going to forget about taxes, insurance as part of the P &I payment, But he's going to make those decisions. He's going to buy one of the very best properties in his area. And that property is going to make sense as a long-term rental after he moves out of that property. So he's going to take this house, live for free, and in a few years have a cash flow and real estate investment. And he's having a very high probability. If that's not possible, then Joe's going to cheat. So let's say he's in a very high cost living area on the West Coast, for example.

35:28Well, a lot of those areas have very stringent short term rental laws where only the people who live in properties can rent them out. That's a huge cheat code for someone like Joe who's willing to be creative and find that opportunity to buy in there. He's going to put himself in position to buy a house hack in whatever market that he's living in. He's going to save up cash to make sure that he has that optionality. He's going to fix up the place or be willing to do some of that work. And he's going to put himself in a position to live for free. Another option here or spin on this is called the live-in flip.

36:00So let's say that it doesn't really make quite as much sense to buy a rental in a certain area. Well, Joe can buy a property that needs a lot of work. And over the next one to two years, fix that up on his nights and weekends. That's his side hustle now. And then at the end of those two years, he can sell that property for a gain. And for many people, the entirety of that cap gain, in Joe's case, as a single individual, up to$250 ,000 can be tax-free as long as he's lived in it for two of the last five years when he sells it. Yeah, Scott, I want to make a couple of points. I want to just highlight what you said before.

36:31He is going to buy the best property in his area that he can. It is difficult to entice people to live in your house when it is a super dump. You're also not going to make as much money in rent as you could if you were in a better location or you were not in such a great location. Don't buy the house next to the gas station. Don't buy the house on the busy street. Buy the house that you can consistently rent out because you don't want vacancy. You want rent money every month. And with regards to the live-in flip, know your limitations on the projects that you can do. But you can combine the house hack and the live-in flip where you have a rental that needs a little bit of work or even needs a lot of work, but is still habitable.

37:20And then you rent it out to people that are handy and you ask them to help you with these projects and you pay them. You don't take it off the rent. You want to receive the rent and then pay for the projects. And the reason you want to do this is your live-in flip is tax-free if you live in there for two of the last five years, up to$250 ,000, but your expenses count towards your cost basis. So if you are paying somebody to do the work, then that's an expense that you can take. So maybe you hit an amazing real estate market and you have$350 ,000 in gains, you would be paying taxes on that$100 ,000.

38:02But if you put in$100 ,000 to make the house the way it is, then that's reducing and now you're paying no capital gains. This is not a move everyone can make, but it's a move that Joe should be asking, how do I make this work? Because unless Joe has some superstar career opportunity, like if you're an investment banker and you have a path to making a million bucks a year, don't house hack, right? Focus on making a million bucks a year and you're probably very expensive market, live close to the office, which is going to be really expensive in downtown Manhattan or LA or wherever you are and go after that.

38:36But for the median income earner, who is trying to figure out ways to get ahead here, this is going to be an incredibly powerful move. And Joe needs to figure out how to put himself in position to take advantage of, to turn his housing, which is his biggest anchor on his journey to financial independence to his biggest propellant on the journey to financial independence. There's a lot of ways to do this. The simplest is buying a multifamily property and offsetting most or all of the mortgage payment if he can. But if that's not feasible, we got to get creative, right? The answer is how do I do this?

39:05And if the answer is, I live in San Francisco, LA, New York, or someplace where this is totally out of reach for now, then you better be having paths to make a lot more money in those areas if you want to get financially independent. Because that's the advantage of those places is they have better income opportunities. So you don't have to house hack. Pursue those. If you can make$300 ,000 a year in San Francisco or whatever within the next couple of years, then that's worth the opportunity cost of not being able to house hack. Just rent somewhere cheap with roommates. But this is a path for much of the country that's very powerful.

39:36Aside from house hacking, Joe is going to dramatically improve his skill set, right? In the end, we've talked about frugality. We've talked about house hacking. But your journey is going to boil down to how much income you can generate. There's no guarantees for how to increase your income. Let's start with that, right? When you control your spending and you don't buy a$15 beer at the ballgame, you guarantee that you've saved$15. It's a guarantee, right? You just know you're going to keep it. There is no guarantee for how to increase income that I'm aware of. These are only probabilistic bets that we're going to make.

40:07The best probabilistic bet to increase your income is to become more knowledgeable. Joe should read a book every single week. Just plop in an earbud, inaudible, put it at one and a half, two times speed, and consume a book on business. Then one on personal finance. Then one on self-development and goal setting. Then one on economic theory. Then one on psychology. than one on how to have a good conversation, than read how to win friends and influence people. Just go after it, one after another. You read 25 or 50 books and you work hard at your job, you will get promotions and raises and you will get opportunities and you will see the answers, right?

40:45If you read five books on management, you're gonna be more knowledgeable than most managers are on how to manage people. And that's going to shine through eventually for you. It may take you a little longer than you want. It may go rapidly, but this is a cheat code to getting ahead in the workplace. The next is going to be networking. Opportunities are created when you network. There's no opportunity that's going to present itself if you're at home playing video games on Tuesday night, drinking two beers, three beers, whatever it is. The opportunity is going to be presented when you go to the happy hour for the Denver startup or whatever it is.

41:16Or when you go out there and ask a colleague out for coffee and ask them about their career and the history of this particular division of the business. You do that enough times, 70, 80 % of them are going to be a complete waste. They're not going to go anywhere. The other 20 % are going to provide weird opportunities for you that you wouldn't have foreseen otherwise. But you have to keep putting yourself out there over and over and over and over again, asking how you can add value to people. And eventually, that comes back to you in unpredictable ways. And the last is going to be intentional skill development.

41:45It's not enough to just passively absorb information and network. You also got to develop some hard skills that do translate. Think about this as your toolkit. When I was CEO of VigorPockets, I thought about my CEO toolkit. What is a strategic plan? What does a board deck look like? What does a delegation of authority, who makes what decisions look like? What does a good performance management process, including a performance review, look like? But Joe should develop the skills that are relevant to his world, whether that's learning a new programming language, whether that's getting one of those licenses we talked about earlier.

42:19But there's got to be some process on a reasonable periodic basis of developing these hard skills. You do those three things, your income will increase and it will increase much, much faster than the average person's. I think this is great. I want to encourage Joe to talk to his boss. Have some conversations with your manager about what it is they're looking for and how you can get promoted. Because nobody else is doing this. First of all, your boss is going to give you an idea of what it is you're supposed to be doing. It might not be what you think you're supposed to be doing. Just having that knowledge is going to help him when it comes time for a review.

42:59But also, Joe, keep track of all of your accomplishments. It feels a little braggy to keep a spreadsheet or a scorecard. Oh, I did this. I did this. Keep track of that. And anytime anybody emails you, hey, Joe, job well done. Thank you so much. You were so helpful, whatever. Put that into a folder in your email inbox that's called bragging or, you know, praise or whatever it is you want to call it so that you can have those at your fingertips for your review. Even a little bit early, give that to your boss in advance so they are aware of how great all the other people in your company think you are.

43:41So that when it comes time to give you a raise, give you a review, they're giving you great reviews and they're giving you the top amount of the raise that they can. Can you imagine Joe, who's like pretty aggressive about his finances, buying a Corolla, right? And not knowing whether the Corolla was worth$7 ,000 or$18 ,000 for the 10-year-old maker model. It's a preposterous consideration. He'd never pay$18 ,000 for that vehicle. He'd pay much closer to the$7 ,000 or$8 ,000 number for that vehicle. Joe is going to get that sophisticated and that clear on what his compensation should be for the job he's doing.

44:21It's that simple. And you just update this very regularly. This is your asset. So if you are a financial analyst and you are doing a certain type of work, you should know when and where you're ready for a financial analyst to or finance manager or finance director, whatever that is. And you should have that very clearly defined in your head and be clear about what is needed from your boss to get there. And then you need to make a rational assessment. Is my boss going to give me that in a realistic timeline that I think is fair? Or should I go looking for an opportunity that will? That's it. You're going to do that at all times and And you're going to get there much faster than most people because you're reading all these books and developing the hard skills at that pace.

44:59Now, the other thing that's going to happen here is at some point for a lot of Joes, you're going to sit there and you're going to be like, well, the Fortune 500 company I work at just ain't going to promote me to finance director, even though I clearly have the skill set of finance director. Because I'm a financial analyst one and I'm one year out of college. It's just not going to do it. It would be ridiculous. It would kind of disrupt the culture there. It would make a lot of people angry or whatever. So you're going to have to consider, how can I apply that skill set to something that has better opportunity, right?

45:27There are 185 companies. This is from years ago. When I was looking, I was looking at this. 185 companies that were unicorns, valued at a billion dollars plus. Now there's thousands, right? But private companies. When you join a startup, there's a chance it will fail, but there's also a chance it will win. And if you're making 80 grand at the Fortune 500 company and the startup's going to pay you 70, but it's got a chance to succeed in a really big way, that's an opportunity that Joe can take that his peer, who's 10 years older and locked into the house and the car and the family cannot. And Joe should take full advantage of that and think about when it's time to jump ship to something that does have that opportunity upside.

46:12That's what I did with BiggerPockets, right? I was working at Dish Network. Dish Network was fine. It just wasn't going to propel me forward toward financial independence. BiggerPockets was a small business that could potentially have done that, and it did. And yeah, I got lucky, but there's no way I would have gotten lucky if I'd stayed, right? And that's the evaluation Joe's going to have to constantly have here. And again, as you take that more high-risk venture, joining that small company or maybe going to a sales or commission role, you can increase your odds of succeeding because you're self-educating, networking, developing hard skills, and you have that higher risk tolerance because you have cash in the bank.

46:47You don't need that base salary every single month coming in the way everybody else does. You can afford to take a few months to let something ramp an opportunity to materialize. How am I doing, Mindy? I think you're doing great, Scott. I love every aspect of this. And I hope that all the Joes that are listening right now are really taking this to heart. I'd also like to encourage them to really think about the benefits going forward of taking this course of action right now. Scott, you had the opportunities available to you because you did all of these things. You were able to take the job with BiggerPockets and gamble, for lack of a better word, on this internet startup that could have just easily failed, and then you were out of job and you have to scramble to get a job.

47:37Except you don't really have to scramble to get a job because you've got this big savings account that's going to allow you to figure out where you're going to go next, as opposed to, let's call him Shane, who is not doing any of this, spending all of his money, still loses his job, and now he has to scramble to get anything because he has no savings whatsoever. All right, we're going to take our quick final ad break after this. 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.

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50:04Thanks for sticking with us. So that's the part two. That's how we're going to get to$100 ,000. We're going to scale our income. We're going to grind it out. We're going to keep our expenses low, and we're going to house hack, and we're going to get there. Moving on to part three, how are we going to get to a million bucks? And this is where we have both the process and the event. So I put together this financial model for a very conservative. There's a little bit of aggression here, but Joe is a high performer and should be able to achieve something like this as he approaches 30. He starts at this median income of 62.

50:32He gets a raise of 3%. Then he gets a promotion in year three, another 3 % raise, then another promotion in five years. than I was raised and one more promotion at year seven. He barely gets to a hundred grand by year eight, right? This is a good career path, but it's not something that Joe shouldn't expect to some degree given his skillset and getting a median income job out of college and getting going on a reasonable start of a career. He's also got a side hustle that he pursues there. If he does all this, I have a complicated model. You can beat it up later. And he invests in the stock market at 10%.

51:03He'll generate about$537 ,000 by year eight when he turns 30. right? That's good. He's getting rich for sure with this model. We want that as part of our plan. It's a base case. It has to be there. But you'll notice that this is not the million dollars that I promised Joe at the beginning of the presentation, right? It's far short of that. And ain't nobody retiring in eight years on$537 ,000 in total net worth. Maybe you can call it itself coast fire, whatever, but that's not what we set out to achieve here. We need more than that, right? And this is, again, where I have a problem with some of the discussions in the FIRE community is a lot of people's plan is this, and then you got to drag this column out for another 10, 15 years of grinding it out with low expenses in order to achieve FIRE, right?

51:49You want that in there. If it takes another 10 years, that's fine. It's still better than not retiring early like most people do, and you're going to be 40 at that point. But we want to get at 30, we also need to layer in the events. And so this is where one of my favorite little quips is, you know, apparently nine out of 10 businesses fail, or that's a commonly cited statistic. Maybe it's made up. I don't know. But if that's true, then the logical response is to start 10 businesses, right? Let's take a lot of these bets, right? So if we add in to this base plan, you know, a house hack, what happens?

52:23Does Joe get three, 400 ,000 more dollars, you know, over the course of the next eight years? What if he does three house hacks? So easy to do three house hacks over eight years, right? For Joe. What about three live-in flips? It's one every two years, super achievable for someone like Joe on this journey. What if he joins a startup or small business that pays in 10 % low, less base salary, but has a 40 % chance of paying out several hundred thousand dollars in equity in five years? That's not unreasonable. Millions of people have had that outcome happen. What if Joe buys a business in year four?

52:55What if he's worth 150 50 grand and says, you know what? None of these other things are working out. The small business I joined or whatever isn't working out. The house hack is good, but I'm living frugally. I'm going to try my own business. I'm going to buy a small business, Cody Sanchez or Alex Cormozy style, and see what that looks like in there. That could dramatically improve things. What if Joe tries a new side hustle every 90 days and nine fail? Well, over five years, two are going to work, generating hundreds or thousands of dollars in passive income or giving him some potential of an asset to sell for a couple hundred grand potentially or more that would do that.

53:31Over the next eight years, a collection of low risk, high upside bets like those are highly likely to provide some kind of payout. And an intelligent collection of such bets can add a massive boost to Joe's position. Joe could far surpass that$500 ,000 base scenario over the next eight years. I wouldn't bet on any single one of these, but I will absolutely bet on the aggregation of a collection of bets made over five to eight years by an avid reader who spends a lot less than he earns that something's going to pay off and accelerate this position pretty dramatically. And there's nothing that really constrains Joe from doing all of the things I suggested over an eight-year period.

54:13Eight years is a lot of time. If Joe does all of those things, Surely some combination are going to work. And again, you don't have to depend on any of these. You don't want to put all your cash or all your eggs into one basket. But you're naive if you think that this is not going to work on there. This is how people join the top 5 % or the top 1 % of wealth, even if they start from a position that doesn't have anything particularly special about it. No family wealth or money that has been passed down, for example. So those who understand this framework become financially independent early in life.

54:43And those who don't will drag out a financial model over 30 years in a spreadsheet and sit in an office doing that. Nothing wrong with that. But this is the difference. What do you think, Mindy? I think this is really, really doable. I can hear somebody saying, well, you can't do three live-in flips in eight years. Yes, you can. I've done it myself. I know that you absolutely can do it. It's a lot of work. but Joe is trying to take his, what is that? A 40 year career and cram it down into eight. So yeah, you're going to have a little bit more work to do. That's it, right? You want to retire early?

55:18You're going to have to do something different. That's it. That's the difference, right? It's low cost of living and a more aggressive base case than most and a collection of side bets. And I'll tell you what, you can have just as much fun doing these things, right? When you have a house hack, guess what? You don't have a landlord. So you don't have a lease. You can move whenever you want after that first year commitment from the mortgage and you can throw as many parties as you want in your house and no landlord is going to call you complaining about it, right? Your neighbors might not be happy.

55:42Our friend does flips. There's a huge party before he demolishes the place, right? And a couple of those, like you can have fun doing all these things. It's not like this is all work and no play here on it. You can have just as much fun as anybody else while you're pursuing this and get way further ahead. So I want to revisit something here. If you are going to do more of a process towards financial independence, let's say that Joe develops this hard skill and starts making$300 ,000 a year by year five, or has a realistic path to doing that, year five, six, seven, then go with the process. Then if you're making 300 grand a year, doesn't make sense to do some of these other things quite as much.

56:19You can spend more and just coast to financial independence pretty early, right? So if that happens and you do start seeing your income ramp, then follow the process-centered order of operations, right? And this is a very traditional style of investing where you're going to have a thousand dollar emergency buffer, paying off high interest rate debt, just same things we talked about, taking the 401k match, taking an employee stock purchase plan, fully funding your emergency fund. And then you're going to go down the ladder and max out your retirement accounts. If you've got an HSA, you're going to max that.

56:47Then you're going to do your 401k. Then you're raw. If you do, Joe does have kids in the next couple of years, he'd max out the 529 or 529 plans for those kids. then finally contribute to the after-tax brokerage account and then pay off his low interest rate debt. So that's if we start seeing our income start to grow and are like, I don't have to mess with all these other crazy side bets because my core job is paying me so much that I'm going to get there real easily. That's great. That's what we do. We follow the traditional path here. Both of these say process-centered journey. Do you mean events-centered journey on the other side?

57:21Yes. Sorry. This word here for the events-centered journey, right? Let's say that Joe is not seeing his income boost and he's still making below six figures in years three, four, five, six. Then I'm going to encourage Joe to go for a more events-centered order of operations, which is where we're still going to have the$1 ,000 emergency buffer. We're still going to pay off high interest rate debt, and we're still going to take our 401k match and employee stock purchase plan if available. But then we're just going to accumulate cash. We're going to accumulate cash and we're going to put that towards the next house hack or the next live and flip or the next business bet, something that could work.

57:55And we're going to keep trying those very intelligently for at least the next year or three or four while we really exhaust our option of side bets here and really play our hand to the best of our ability. And once something starts to hit and our income starts to really begin to ramp, then we just revert back to going down the traditional retirement stack. That's it, right? So we're just doing the process. We're doing the events-centered order of operations where we accumulate cash until we're able to successfully deploy the advantages we have as a young single person with lots of opportunity and time to pursue good ideas.

58:35Once something works, let's take advantage of all the tax cheat codes. And the reason I'm going into that a lot is people say I'm against retirement accounts. I'm not against retirement accounts. I just think that Joe is going to benefit more from cash in these early years than he will in the retirement accounts until he hits a few winners and has more cash than he can reasonably deploy on alternatives. From an investment standpoint, we're going to be really aggressive. Everything screams, be aggressive, Joe. Be aggressive. Joe has both a lifetime to accumulate wealth and he wants to maximize the probability of generating a lifetime of wealth early on.

59:06There's only one option, a bias towards the highest returning long-term investments that we can get. Right. That's probably going to be a common answer to that is going to be passively managed, broad based, low fee stock market index funds like Vanguard's VTSAX or BTI for the ETF version. That's a very popular choice and for good reason. And while many will just choose 100 percent stock portfolios, especially if Joe is able to get a high income generation early on or get on that track, that's fine. You can also responsibly leverage real estate and you can invest in private ownership and businesses to get to fire.

59:38Those are probably going to be his three best options, although plenty of creative Joes out there find other ways, other things to invest in. Joe's probably not going to invest in bonds or other forms of debt. They're likely too conservative or low yield for most. And to get higher returns in debt, you generally need capital to buy non-performing or higher interest rate debt. And Joe doesn't have capital right now. So he's probably not going to use this as a top tool. Maybe he'll lose it towards the end of his journey. Crypto and other alternative investments are likely to be red herrings. I think they're distracting.

1:00:07They're tempting. But I think ultimately, there'll be lower probability. A lot of Joes will disagree with me and allocate here despite my comments on that stance. What do you think about this? Is this the right approach for Joe? I think that this is a great approach for Joe, again, if he wants to reach early financial freedom, for him to hyper focus for eight years. And then he's got the rest of his life to do whatever he wants. Yep. Pretty good. Just in case he's wondering, right, Joe's probably watching this and he's not 80 % of the way to his FIRE number. But if he is and he's getting there and he's coming back and looking at this, you're going to remain aggressively invested until you're about 80 % of the way to your number.

1:00:48So let's say you want to get a million dollar FIRE number. You know, when you're hit$800 ,000, you'd pivot from this very aggressive phase one portfolio to a more conservative retirement-ready portfolio. And that retirement-ready portfolio might look something like the risk parity portfolio that we did recently with Frank Vasquez, where we have stocks, bonds, alternatives, managed futures, and some international exposure. But we pivot to this more diversified, uncorrelated portfolio that will probably produce lower returns over a long period of time, but can support a higher distribution rate, a higher retirement withdrawal rate.

1:01:26So we'll pivot to that at that point. So if your goal is a million, you'd do that around 800 ,000. If your goal was two and a half million, you'd do that around two million in net worth. You'd begin the transition here, and there may be tax things to consider. You can complete the transition by selling some things and repositioning, or you can allocate new dollars or cash flow from your portfolio to the more diversified positions at that point in time. So that's what I got. That's the plan. I do have a couple of additional considerations, but any early reactions so far? I think this is a great plan for somebody who is in their early 20s, who wants to reach early financial freedom in an aggressive timeline.

1:02:03I don't think this is quite the right approach for somebody who just wants to get COSFI. Maybe they love their job. Maybe they're super excited to work for a long time, but Joe isn't. Joe really wants to get there as fast as he possibly can. I think this is a great plan for him. By the way, I would recommend that more people pursue this because, again, I do not think it precludes having fun, getting ahead in other areas of life, experiencing life, experiencing where you live. I think you can do both. And I think it's so great and so powerful to be financially free early in life. The options are awesome at that point when you get to the other side.

1:02:39It's really, I think it was absolutely worth it to do, to follow a plan very similar to this. in my personal life some additional considerations and optional homework one define your why this is a fluffy thing i can see some people rolling their eyes i used to roll my eyes at this but you got to do it you got to do the fluffy work of visioning whatever you want to call it whatever the synonym is here because you're about to commit yourself to a pretty long-term plan that's going to integrate in every aspect of your life right where you live what you eat how you what you get around in what you do for work and how you spend a certain amount of your free time and knowing why knowing that there is a light at the end of the tunnel, that this will improve your life every single year as your wealth builds, giving you more freedom and flexibility and helping you realize your potential.

1:03:21All that's really important to put down to paper and revisit from time to time because you'll get distracted in the meantime by the shiny objects in there. Hey, that guy does drive a nice car. That sounds fun. It is fun, but it's not nearly as fun as being financially free at the end of that and having those options. And I think you also want to make sure you don't become someone you don't want to become, right? So again, that's a criticism that's valid of the fire community is there a bunch of frugal weirdos. We're not all frugal weirdos here, but again, frugality is not a virtue. Frugality is a tool that we use to achieve freedom in there, and freedom is worth more than many material goods, but if you have the means, there's no reason not to also enjoy the material abundance that this world offers these days.

1:04:05Next up, I would suggest you get a system for planning your year, quarter, week, month, and day. I've used this book called Living Your Best Year Ever from Darren Hardy. Love Darren Hardy. Love this book. I have no affiliation with him whatsoever, but I've filled out this book every year for about 10 years now. And I plan out my annual goals, my quarterly goals. And every week I have a little log here that says, you know, here are my top three goals, what I need to do for those top three goals this week and my habits that I want to pursue. I'm not perfect about achieving all the things in my log.

1:04:39I'm not even perfect about filling it out every single week, but boy, does a pretty high level of consistency at this simple act of planning my week make an enormous difference over time. I never go months not progressing on the most obvious ways to get ahead on my key goals. So whatever you choose, there's cheap ones like this. I never used the life designer. You don't have to use living your best year ever or anything, but pick something that is a system that you can stick with. And you do that, it's going to make an enormous difference in your life. Don't have more than one goal. Be financial as well, right?

1:05:11Something's got to be whatever else you prioritize, spiritual, relationships, health, business, whatever it is that your impact, whatever you're looking to do, make only one of those financial during this journey. I love it. Next homework assignment is measure and track. You got to create a PFS, a personal financial statement. This is going to list all your assets and liabilities. It's going to compute your net worth and financial portfolio. It's going to list all of your income sources and expenses, and it's going to project, give you an idea of how much you can accumulate for the next year, right?

1:05:43That's what we did today. We said, here's how Joe can accumulate$30 ,000. You need to have some tool that does this. You can do this on pen and paper. You can do this on a spreadsheet, but if you're 22, you're almost certainly going to be using a professional app. And our favorite to those as Monarch Money. They are a sponsor of BiggerPocketsMoney. They're also the tool that I've used for years, long before they became a sponsor of BiggerPocketsMoney. Mindy shows you how to set that up with her personal net worth, several million bucks, on a recent video, which was pretty cool. And we have a deal with them where if you use the code POCKETS, you get 50 % off the first year, which is 99 bucks.

1:06:20So 50 % off 99 bucks for that first year, if you use the code pockets. That's our favorite one, but you can do this a number of ways if you wanna do this. If you wanna play the game, you gotta keep score. And Scott, what I love so much about Monarch Money is it is a snapshot of your entire financial picture. You go to the dashboard, you open it up, there's your budget, there's your spending, there's your net worth, and there's your investments. You can see I'm down today because the market is having not such a great market. I can see that my spending has really ramped up this month, But also I'm building a house.

1:06:54So, you know, that's to be expected. There's my net worth. Monarch, you have to attach all of your accounts. Otherwise, it's not going to work so great. But it is so important to just see this really quick snapshot of where you're at. And you don't have to spend a ton of time on it once you've set it up. So it's just it's such a great tool. Love it. Yeah, my favorite tool used it for years and years now. And then I think the next one is create a written plan. You don't have to use this one. But this is hopefully a starting point for a lot of people on this is like, hey, what I'm going to do this next year is I'm going to accumulate 25, 30 grand.

1:07:27I'm going to do whatever it takes to do that. Then I'm going to find some side bets, some move I can make that could win beyond what is a normal career progression here. Then as I accumulate more wealth, I'm going to layer in a more formal process for taking calculated bets every single quarter or every single year that can get me ahead while continuing to pursue my base case and allowing that to compound. That's my favorite one. And then last, I think it's embrace community and education. I debated about whether to do this, but I'm going to shamelessly self-promote. I wrote a book called Set for Life.

1:08:03It's this plan in great detail. Mindy's got the original one there with the light blue. I have an updated edition from two or three years ago. And I'll probably update another one in another couple of years with just adjusting for inflation and some updates and those kinds of things. But I do think this is a good tool for somebody in Joe's position. It's literally written for exactly that purpose, someone in their 20s or 30s who wants to get ahead early in life and wants to go all out in their approach to early financial freedom. If you are looking for the best process book for someone who just wants to, doesn't want to layer in all these side bets or whatever, just wants a reinforcement of what is the best way to get rich for sure over a long period of time, The Simple Path to Wealth is my favorite by J.L.

1:08:39Collins. And I recommend the audio book version of that in particular because he sounds like James Earl Jones, who is Mufasa from Lion King, if you're not familiar. And Darth Vader from Star Wars. And Darth Vader from Star Wars. Yeah, you're probably familiar with Darth Vader. If not, if you're not with Mufasa, you're definitely familiar with Mufasa and Darth Vader. Yeah. So J.L. Collins has an even better voice than those guys and has been a guest here on BiggerPocketsMoney several times. We're going to, of course, promote our own podcast in our Facebook group. There's a lot of like-minded people here in this world.

1:09:08And if you're looking for even more depth, there's the slash R slash fire community. There are even subcategories of that for people who are pursuing lean fire, which is a lower net worth version of fire or fat or chubby fire, which are have greater net worths. There's also the choose if I Facebook group and they choose if I podcast. I can also shout out afford anything as another podcast. There's a ton of really good resources out there for folks looking to do that. But if you do want to join the community here at bigger pockets money, best way to do that go to biggerpocketsmoney.com and just sign up for our newsletter.

1:09:38We'll send out every week, sometimes twice a week, updates on what we're doing from the podcast, any eBooks that we produce, resources like this financial plan, which you can download at biggerpocketsmoney.com. This presentation will be available at Bigger Pockets Money. You can find all this, a bunch of great resources there, and we'll be building that out over the next year with more and more good stuff. Scott, this was a fantastic presentation. Thank you so much for taking the time to set this all up. I think this will be super helpful for our younger listeners. Again, if you have a younger person in your life, late high school, early college, just graduated college, this absolutely is the presentation for them.

1:10:16This can be life-changing for them because if they've never heard this before, they don't know that you can retire early. Scott, this was fantastic, but I think it's time to get out of here. Let's do it. All right. That wraps up this episode of the BiggerPocketsMoney podcast. He is Scott Trench. I am Mindy Jensen saying got a jet.