What if you could access your retirement fund years before traditional retirement age without paying hefty penalties? Today’s guest is going to reveal how at age 55, while her peers were still grinding away at their corporate jobs, Diana had walked away from full-time work already. I am so excited to hear her story and see how you can recreate it.
Hello, hello, hello and welcome to the Bigger Pockets Money Podcast. My name is Mindy Jensen and sadly, neither Scott nor Amberly could join me today on this podcast. But fear not, Amberly will be back next episode. Before we bring on Diana, I have a quick question. How many hours did you spend last month chasing down rent payments, sorting through piles of receipts, or filling in spreadsheets? If the answer is too many, then I need to tell you about Baslane, a trusted bigger pockets pro partner. Baslane is an all-in-one banking and financial platform built specifically for real estate investors. Baslane automates your rent collection and uses AI powered bookkeeping to auto track transactions for instant cash flow visibility and reporting without doing any manual expense tracking. Plus, they have tons of other features like recurring payments, multi-user access, and free wires to save you time and money. Less financial busy work means more time to scale your portfolio with confidence. Sign up today at baslane.com/biggerpockets and claim your exclusive $100 bonus to kickstart your path to becoming a pro. Now, let’s get into today’s show.
Diana, thank you so much for joining me today. I’m so excited to talk to you. So good to meet you on the computer, uh, because I listen to you on my, uh, earbuds, um every day during my morning walk. So I’m always doing my power walk, educating my mind and working up my body. I love it. Thank you so much for listening. Let’s go back to the beginning of your financial journey. When did you discover the concept of financial independence or the FIRE movement specifically? I think when we actually discovered the FIRE movement itself, it was probably a lot later. But what happened to us is in our mid-30s, um, before that, you know, we had started working and and and, you know, were saving and, you know, on a regular basis, you know, just kind of going through the the normal grind. In our mid-30s, you know, all of a sudden my parents who had been working all their careers to be able to retire at 65 or maybe even 62, they both passed away. And they weren’t able to do the things they wanted to do. They were waiting till they retired to be able to travel, to, you know, spend more time with the family and all that. And my dad, unfortunately, retired at 62 and then passed away at 63 and my mom passed away a year later. So for us, it was a wake-up call that said, you know, there’s no guarantees of how your life is going to. You know, my parents had thought they were going to live into their 80s or 90s because, you know, their family all did. So they just assumed that, but, um, but they didn’t get that. So from our standpoint, it was a wake-up call that said, what do we need to do now to number one, get balance in our lives and do the things that we want to do now, um, and also be able to retire earlier so that we have complete freedom to do whatever we want to do and not have to work. So that was, that was our wake-up call. So what were some of these changes that you made? Well, we had been saving, we had been maxing out our 401Ks and so we continued to do that. We also were saving extra money, um, you know, $1 to $200 a month. They always say pay yourself first, so we were automatically paying ourselves first, you know, having that money go straight to different funds, to different accounts. And so we were saving for that and then also our children were young at that time and we opened up 529s for each of them and had automatic monthly draws that went there as well. So we had, you know, all our little buckets that were being funded, but the most heavily funded one was our IRA, you know, 401Ks that we were funding through our employer, who gave us, I think like a 7% match at the time. You know, so that that helped obviously, but that was in in company stock. So it did help from that standpoint and we had that match and and we took advantage of that and maxed out. I think I think you could max out to 10% or something like that. So we both, you know, were big time into into saving. But, you know, living our lives too, going on vacations, enjoying ourselves, and spending time, our kids were both active in sports and stuff, so spending time with them and all that as well. What was your career at this time? We were both, um, you know, very heavy duty into, we were professionals. My husband’s an engineer, and he was in manufacturing. I’m a business major. I was in supply chain purchasing. So we, we had very demanding careers. We were working hard, um, you know, because my my kids now, my son’s big on, I was like, you don’t understand. I’m like, yeah, I do what you understand. And know we went through that. You know we had those years where we were, um, just grinding away and but trying to still have that balance with our kids so that we could do their sports and do the things with them, you know, trying to save as much as we could, but but not not being misers. I mean, because that’s the thing I’ve listened to a lot of the FIRE people and a lot of them, they are so tight with their money because they’re trying to save, you know, 80 or 90% of their money. That’s me too. And when I have friends that do that, it it drives me crazy because I’m like, you know, you’ve got to think, you know, you can’t, especially if you can afford to, do it. You know, don’t agonize over a few dollars or whatever. Just do it. Just just enjoy your life, you know, do the things you want to do. So, that was our balance that we were trying to do the things we wanted to do, but also being able to make sure that we, um, you know, had that balance, do the things, but also save, you know, so try to do that. So you said just a moment ago that you were saving in your 401Ks, your IRAs, your kids’ 529 plans. Did you have any after tax investments? What I was saying, we also had some mutual funds. And one of, I think one of your recent podcasts I was listening to, you guys referred to Peter Lynch. And at the time, you know, when when we were young, that was, he was the big, he was the Fidelity Contra fund. And so we had, um, you know, a lot of our money went into that because that was a kind of, you know, invest in the companies that you know, it performed really well. So, you know, fortunately, we had some some good strong performance, which I think helped, uh, our overall, you know, building our base, our money base. Scott and I have also been talking about the middle class trap recently, where you’re doing everything right, you buy the book, you’re you’re contributing to your retirement accounts and you’re paying down your mortgage, but you’re not really doing anything outside of that. So you become a millionaire on paper, but then you look and you’re like, well, I can’t access any of this money unless I start paying hefty interest rates, or unless I start paying fees to to access the money that’s mine because I’m getting it early. And it doesn’t seem like this really applied to you then. It actually does because we are definitely in the middle class trap as far as, you know, we have been since we’ve, since we’ve actually fired because we’re having to work that real balance, you know, we had healthcare because you know, when we had our small business, we had healthcare through our small business. Once we actually completely retired, you know, we had to get healthcare and um we both had pre-existing conditions, so we couldn’t just buy it on the regular marketplace because they wouldn’t cover our pre-existing conditions. So we got stuck in that trap. I mean, we’ve gotten stuck in so many traps. It’s just like, I feel like we’ve learned so many things the hard way. But in that, in that case there, you know, when the Affordable Healthcare Act came out, that was like our saving grace because they couldn’t discriminate against any pre-existing conditions and we could get it affordably, but then you had to work that fine line, especially when you’re drawing out a lot of your 401K money, that’s bumping up your income and so you have to make sure that you keep your income within decent limits so that you’re not having to pay, you know, a bunch more. At one point, one year, I think we withdrew like maybe $10 too much and it threw me into the next thing and we had to pay back $20,000. So it was like, oh, you know, it’s just like you really have to, you know, I mean I have learned so many things, you know, the hard way from that standpoint of just knowing how to navigate and and work, understand the system and and be able to work within it. That’s really key, being able to work within the system. The system says this, okay, well, let me figure out how to work within those, those boundaries. But yeah, you are not kidding. The ACA is a game changer. I also have a pre-existing condition and had to stay employed or my husband had to stay employed once we got married. Otherwise, there’s no insurance. It is doable, but it’s it’s not the easiest. Like you said. I I feel like since being retired or since being, you know, not having a regular job, my job now is how to figure out how to work our lives. Exactly. So I’m not getting paid for it except if I don’t do it, I’m going to be spending more money. Now we need to take a quick ad break. But my listeners, I am so excited to announce you can now buy your ticket for BPCON 2025, which is October 5th through 7 in beautiful, sunny Las Vegas, Nevada. Score the early bird pricing of $100 off by going to biggerpockets.com/conference while we take this quick break.
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Welcome back to the show. We are joined by Diana. Will you have alluded to a small business and you had traditional W2 jobs. So, when did you leave your traditional W2 job? At 45, okay. So at about, like right before 45, I guess. You know, I started looking at our savings versus our income and I was like, whoa, our savings rate is growing at a faster rate. We’re we’re making more money each year than we are on our actual W2 jobs. You know, when you said like, when did we discover fire? you know, at the time I didn’t know it was fire, but I knew that, hey, you know, our savings that we’ve been saving all these years is finally starting to add up and we’re making more money with our money than we’re making working. But I didn’t feel like, okay, we could just do nothing. Yes. Yeah, exactly. Yes, quickly. I didn’t feel like we could just do nothing, because we were we were in our early 40s. Like I said, it’s been like 10 years since my parents had passed and you know, we we had gotten to that point. I’m like, oh, we’re at that point now. We can do whatever we want to do. You know, so what is it that we want to do? I had always said, I I loved what I did as a career. You know, I was like I said, I was a business person. I did, um, supply chain, a lot of like what I do now is spend analysis. You know, I would look at companies like even when I was doing the consulting, I would look at, you know, the spend that companies were doing, figure out where their biggest spend is and look for opportunities to save money in those areas. That’s what I do with my life now with our with our personal finances. But but back then, you know, I love what I was doing but all of a sudden the corporate world, the company was going through some changes and it just I wasn’t having fun anymore. I always said if I’m not enjoying it, I’m going to do something different. So I wasn’t having fun anymore and and my husband wasn’t either. And so we said, I think it’s time for us to figure out what do we want to do with our lives. Somehow we had gotten this idea back when we lived in St. Louis because we had moved several times through our throughout our careers and we had seen this small business that was kind of a family fun center, you know, it had batting cages, minigolf, go-kart track and stuff. And it was just kind of a fun place. And we said, we would love to do something like that in the town that we were living in. We thought that that would be a neat thing to do. So, luckily there was some land for sale right outside of our neighborhood and we bought that. And hindsight is if we would have just bought that land and just sat on it and then sold it 10 years later, we would have been much better off. But we didn’t. Um, you know, we bought the land and we built a family fun center on it. and my, that’s what my husband did. So he left his corporate job to run that business and to work in that business. and I left my corporate job and became a supply chain consultant and worked for other companies, you know, helping, you know, some of them were smaller companies, a lot of them were big companies, you know, helped in their supply chain organization or in their purchasing organization figure out how to to save money as a as a corporation. So that’s what we did. Now, what happened, so, so 20 years of savings, you know, before that, we we just sat on. We said, okay, we’re not going to live off of that. It’s just going to continue to grow because it was already, like I said before, it was making, you know, making our salaries, so let’s let it keep turning and let’s let it keep growing. And we’re going to just focus on doing these other things. And it got us more quality time with our kids because our kids wind up working in this small business with my husband. And a lot of their friends got their first jobs too. So it was a real neat opportunity. We invested all of our money that was not inside of our 401k, which is really another key there. So our money that was in our 401k, we took that all and we liquidated it and invested it in this, you know, developed this land into a family fun center, put in a lot of concrete for minigolf, put in the concrete for the batting cages, you know, just, you know, spent a lot of money of our own money that we had saved as well as we took a home equity loan on our house initially until we could get a business loan because you know, wouldn’t give you a business loan right off the bat, so then we got a business loan. So we learned a lot of things, you know, kind of the school of hard knocks. But it was a good experience and it was it was a good experience to be able to to spend the time with our kids too and have more quality time with them and their friends. and they learned business skills as a result of, you know, seeing how a small business operates and and such as well. So you keep speaking about this in past tense. I am assuming that you no longer own the Family Fun Center. So we did that for 10 years. Um, we knew that, you know, what was going to help us there is at some point we either needed to sell the business, you know, and they say like small businesses it takes, you know, three to five years to to finally break even. It was about just exactly that at three years, we finally broke even and then the recession of 2008 hit and we could tell before anybody knew that there was a recession, people were complaining about not wanting to spend, you know, business really went down because that’s extra money. You know, people aren’t going to spend if if things are tight, they’re not going to go out and and spend money, you know, playing minigolf or or hitting balls with the, you know, or having an ice cream or whatever. So we started to see that already. But at that point, you know, we were in it and we were going to keep chugging through it. And luckily we didn’t have to tap our our savings because the consulting part was paying the bills for for everything and so we were able to to do all right. So, but we did so we had that business for 10 years. And then at about 55 is when we finally were able to sell it. We knew that it was probably going to be a developer because you know, we had some people at the end that we actually leased it out for a couple of years too, and they thought that they were going to, you know, they had a lease to buy option, but they decided, you know, that it wasn’t really because it wasn’t really a profitable business. It was a fun business, it was, you know, but it wasn’t really, it was kind of our community service to the to the area. So at that time we didn’t, you know, we were able to sell the business to a developer and that’s when we got our our money back out of it. And I stopped consulting as well. So, and and at that point too, our kids had grown up, they had gone off to college. So the business didn’t serve that purpose of having that family time because the family, you know, the kids had moved away. For a like a year or two after we had sold it. Um, I was still consulting and I said I can do that from wherever because I can just as long as there’s an airport so I can, you know, go to my client’s place or whatever, I can do that. So we moved further south, which is where our kids were. We were in Florida at the time. So we were up in the panhandle, then we moved down to our kids were in Orlando and in Tampa, so we moved down um to the beach area outside of Orlando. What percentage of your expenses did your supply chain small business cover? What percentage of the overall business because in that case there, the the money that from my consulting, we didn’t save any more, you know, so it it just pretty much covered all of our costs. We lived off of that and then it also helped support the um the small business too. Oh, so you were coastfi when you left corporate America and started out on your own and then it just grew for 10 years. The money that we had saved was just continuing to grow and to save in there. We didn’t touch that, except for, you know, the money that we did touch was the money that wasn’t in our 401k. So that was that’s how we got caught in the middle class trap is that so much of our money at that point was tied up because the money that wasn’t tied up in our 401k, we had put that into the business and the money that otherwise was in our 401K was, you know, we couldn’t touch it. And you weren’t saving and investing after you stopped your corporate work, you didn’t do any sort of uh 401k for your company or Roth IRAs or anything like that? We could have, we could have. And again, when I look back at it now, even doing the 72T, we should have at that time because when you have a small business, you can pretty much pay yourself whatever you you pay and you know, in the first few years our accountant had said, you know, you’re going to have to, to my husband, you know, you need to start taking a salary because you know, you can’t just not take a salary because he wasn’t taking the salary because of because that business itself couldn’t really support another salary. We had employees, um, you know, some of the like I said, our kids and and some of their friends that were working for us part-time. Yeah, so he finally had to start taking a salary too. But so it all came under our overall corporate umbrella. The two businesses were, you know, individual businesses within the the overall um corporate umbrella. We didn’t take advantage of of adding more savings, we didn’t convert things over to convert some of our 401K money at that time we could have converted to Roth or started the 72T earlier, you know, so we we we had options, but at the time, we didn’t, we weren’t looking at that. We were just trying to figure out how to not touch our savings and how to be able to live off of what we were making at that time. Okay, so you just said a fun word, 72T, or a fun set of letters and numbers together. When did you discover that you could do a 72T? The first time I heard about it was like when I was in my early 40s, before we actually left the corporate world, one of my co-workers had talked about it as to, he had just heard that there’s this thing of 72T, a way that you can actually access your 401k money early. So I had that in the back of my mind. But then all the years, you know, that we were doing this business, I didn’t think about it anymore until all of a sudden when we thought, okay, we’re going to get ready to to actually fully retire, how do we, how can we access that money because so much of our money was in 401k and not that much that was, you know, available outside of it. So that’s when I asked my accountant because we had accountant that did our business work for us. So I asked him, can we do a 72T? and he’s like, oh, let me look into that. And he’s like, yeah, you guys would qualify and you could do that. And and like I said, we could have, you know, now I look back at it, you have to take it five years or until you’re 59 and a half, whichever is longer. So we could have, we started it probably when we were like 54. We probably could have started even earlier and been taking a draw of that or converting it over to Roth, because that’s what we should have really done was converted over to Roth so it can continue to grow with no, um, tax impact once you do the initial, you know, paying the taxes once you first move it over. So hindsight is is definitely, so that would be one of my main takeaways for people is, you know, don’t get caught in that trap and and and figure out how to to roll money over or to do a 72T or whatever, you know, earlier. But once you start a 72T, you’re pretty much locked in like I said, until for five years or till you’re 59 and a half. So whichever is longer. So if we would have started it at 45 which we could have, we would have had to been doing it all the way till 50, you know, 9 and a half. But you can, you know, in this case here we could have done it and then moved it into Roth money or done something like that with it instead. So because now we’re we’re one of those people that’s going to be caught in that trap when we turn 73 and have to take our required minimum distribution. I’ve heard some of my friends that have gotten caught in that where they’re saying all of a sudden now my income is way higher than I’ve ever had because they’ve got so much money in their 401Ks that it’s, you know, it’s throwing them into the higher bucket there. So I’ve been looking at that now and that’s, so one of the things we’ve been aggressively trying to do is to start rolling money over and to to a Roth now. But we should have, like I said, we should have started that earlier or or and we’ve been doing the the the 72T since we started at 53, we’ve continued to do it. I mean, that monthly draw that we were taking is what we’re living off of and we’ve, you know, since we started at 50, like 53, I think is when we first started setting it up. So you don’t have to stop at five years or 59 and a half, you can continue on. Yeah, you could continue. You could do, yeah, so that’s kind of how we’re, how we’re doing that. Yeah. So we’re continuing on that way. Let’s talk about the process of the 72T. How does that work mechanically? That’s money that’s coming from your pretax 401k. You know, it is really similar to like a um, required minimum distribution from the standpoint it’s based on your life expectancy, you know, how much money is in the pot. So you could do it from your overall pot or you could do it from if you’ve got several different accounts, you could do it from just this account or that account. And it takes into account how much money is in there and life expectancy and so that tells you what the amount is that you have to take, you know, each month or each year, I guess is kind of the overall. And how do you take it? Do you take it monthly or do you take it once a year? Just like, so it’s like kind of like our salary. We take it monthly, so it’s kind of our monthly income. The withdrawals that you’re making, does it cover your entire expenses? It’s been covering about 80%, so the other 20, when we sold the business, we used the proceeds from that after we paid our huge tax bill from, you know, we uh used the rest of the proceeds to actually buy a um beach condo. So um so that’s a short-term rental. So that gives us some money. So 80% of our income that we live off of is from our 72T and then the remaining is from our rental income as well as other money that we have to, you know, scrape up from outside of our, you know, savings that we have. The beach condo, that sounds really fun. That’s a short-term rental that you that covers the 20% of your expenses or does it cover more than 20%? It probably makes up for the majority of the 20% that’s still left there. So yeah. And are you actively doing Roth conversions now? Yes. And that the Roth conversion is the Roth conversion uh where you take money from your 401k, you pay the taxes on it, but you don’t pay penalties on it because you’re putting it into a Roth IRA. Right, it’s like it’s rolling it into, it has to be directly rolled into the um the Roth. Yes. You can’t take possession of the money, your 401k doesn’t write Mindy Jensen a check and then Mindy Jensen puts it in the account. Your 401k writes the check into the Roth IRA. Yeah, if you take possession of it, then you’re paying taxes and penalties. And, you know, every once in a while, the the a company that is rolling it over will make a mistake and will write a check out to Mindy Jensen. uh, gosh, I wish. They they I that actually happened to me once. I was trying to go from one retirement account to a different retirement account. It wasn’t a taxable or penalty event. But they did it wrong and they sent me a check. If they sent me a check and I cashed it, then that would be the taxable event and fees and penalties on top of it. So what I did was I sent the check back to them and I said, this is not correct, you need to make it out to, I don’t know, Mindy’s 401K or whatever whatever I was doing. It’s been a while. And therefore I skipped the taxable event. So just because they make a mistake, don’t compound that by casting it and making your own mistake. But yeah, the the rollover IRA or the rollover Roth IRA is a great way to, especially when you have low or no income to start siphoning off some of those 401k monies so that you’re not subjecting yourself to RMDs at age 73. And I mean this is a first world problem. This is as far as problems go, that’s the kind of problem I want to have. Oh, gosh, I have so much money. I have to take so much money out and pay so much taxes. Well, you’re paying taxes on this income. So I don’t want to pay taxes if I don’t have to, but I do appreciate, you know, having a fire department and roads to drive on and you know, all of that. So I’ll continue to pay my taxes, but as low as I can. when you move it from the 401k to the Roth, you know, it’s coming out of the 401k and and you have to pay the taxes on. It’s a taxable income. So yeah, so we’re paying that, but then it goes into the Roth which then it can continue to grow, you know, tax free. So, and and then we’ve already paid on it. It’s a great way to start pulling, I mean if if I’ve got a million dollars in my 401k when I turn 73, then I’m going to have to take RMDs against a million. But if I had 3 million and siphoned off enough to skip those taxes, that’s even better. So, since you quit the supply chain consultant company, wait a second, what did you do with that company? Did you sell it or did you just stop doing it? I just stopped doing it. And and you know, and I guess the thing is is, you know, I had people say to me, oh, you need to get some employees and you need to, you know, actually be able to sell it as a business itself, where we sold the business. You know, first we were trying to sell it as a business, but then we just sold it as the land, as the property uh to a developer who, you know, took up all that concrete and everything and and you know, did something, put a shopping center in there. So yeah, but but the consulting part, I just I just stopped consulting. But but I still, you know, since then I have um one time um in the last 10 years I’ve, you know, I’ve had people, you know, always contacting me trying to get me to to take on a project, but you know, they want me to, you know, come to a place and work um Monday to Thursday or whatever. I’m like, I’m not doing like a regular job anymore. So. been there done that. But if it’s a fun thing, so the one thing I did do a few years ago is somebody asked me to develop some training material and then and then um teach some classes and so I did do that. And I was like, okay, that’s fun. But the end of the day it really wasn’t worth my time and effort either. So I don’t have to do it and it needs to really be something that’s that’s worth my time. Exactly. I know a lot of people who have retired, retired early and they might do a project that they are interested in, but they’re like, I don’t need the money for this so I’m not going to put, you know, it’s not going to be this like 40 hour a week job or 80 hour a week job. Uh I’ve got some friends who are like, yeah, I I’d be happy to consult on your little project for another friend, but don’t pay me because then I feel obligated to work 40 hours a week and I don’t want to work 40 hours a week. So, you know, let’s have a conversation and a couple of hours of charting maybe, but that’s all I want. And so I have to ask you this question because I have spoken with several people recently who say, well, I don’t want to retire early because I think I’m going to get bored. Which is fair. I was actually, my husband was never worried about that because he, you know, he’s always busy working on his little projects and you know, every morning it’s kind of like we get up and say, okay, so what’s, what do you got planned today? What do you got planned today? And so, um so from his standpoint, you know, he never skipped a beat, never never had any concerns. I, on the other hand, was more concerned because I really enjoyed what I did. And I, you know, and I was afraid that I was really going to miss it and I was I’m such an A- personality person where I was afraid that, you know, if I’m not feeling like I’m contributing or doing something. And I’m still every once and while saying I need to feel like I’m, you know, doing something. Do I, do I volunteer in schools to help educate people, you know, kids on just business planning or financial planning or something like that because, you know, the the financial literacy is is big time, you know, as far as kids understanding or people understanding, you know, kind of all the ins and outs of things. So I’ve I’ve thought about that and I thought about different things but, but I really haven’t because I’ve I’ve been really busy. And so it’s, you know, I I was concerned. So now my days are either, you know, like I said, I exercise, I love to travel. so I’m either traveling or I’m planning travel. so so I do a lot of travel planning, you know, so I I do really enjoy, um, we we do try to to get away on at least two to three big trips a year and then and then a lot of small smaller trips, so, you know, I spend a lot of time planning. I haven’t really missed the work, but I was concerned about it at first because I wasn’t sure like, what am I going to do with my time? Now I’ve got all this time, uh, and the day goes by and it’s like, wow, what did I do? At first I, at first I felt like I needed to have kind of my list of things and and felt like I needed to have um, accomplished some stuff but I got past that. So, um, it’s been great. I haven’t regretted it at all. Are you at all concerned about the recent stock market fluctuations? That’s a good question. I was thinking about that because when it happened to us the first time and like I said, we had our bucket of money, um, that we had saved and we weren’t, this is, you know, after we were 45, when we were on our, you know, kind of slow fire or whatever. When 2008 hit, I think we lost like 40% of our money and that was, that was pretty sizable. And but the good thing was is, you know, I’m not one of those people that gets all, you know, that reacts to to that stuff. And so I thought, well, we’re not having to touch it, so we’re okay because it’s it’s there that needs to grow and it it did. It came back in a couple years and it it, you know, exceeded where we were and and you know, pushed on past it. So, so that was fine. Now, it’s kind of scared me too, because now we’re actually drawing from it and now I’m thinking like, do we need to draw less? You know, do we need to, because you know, we are, like I said, 80% of our our living expenses is coming off of our saving. And I thought, should I diversify and do some real estate? Should we, you know, do some more of real estate? you know, get some rental properties or the the good thing is with our beach condo is before when we had it, it was in an area where we lived. And so we never used it. Well now, we live in Orlando and it’s across, you know, on the on the Gulf Coast and so now we’ve actually used it every once in a while. We’ll go over there and do some stuff on the condo and then spend some time there. So yes, I thought, well maybe I should buy another one somewhere else and do the same kind of thing. But we haven’t and I do look at the market and and I look at our portfolio and say, okay, if I if it had taken another dip again, 40%, would that, you know, would that really be a major impact on us or or now our pot is a lot bigger than it was initially. So, you know, hopefully that’s not going to be as much of a problem. So yeah, yeah, so I I do get concerned about it and and and and I guess worst case, and here’s here’s a here’s a good comment. When we first decided to do this, um, at that point like I said, our kids were, you know, our kids are adults now. now, they have been adults for a while. They were young and I said, you know, dad and I are going to leave our jobs, you know, we’re going to retire early. We should have enough money to last us until we’re into our 90s or 100 or whatever. But if we run out of money, would you take care of us? And so that was a funny, um, you know, funny comment and they, you know, chuckled and stuff. But then when we started sharing with them a little bit about, you know, where we’re at and stuff, they’re like, well, then you need to start spending more money, you know. So, yeah. So, so hopefully, hopefully we should be okay. But but I’ve always known and I’ve kind of looked at it this way that if things did really get bad and if we did run out of money or if it was starting to look like we were heading that direction, you know, I could to my husband, worst case is, I can be a Walmart greeter and you can work at Home Depot. you know, so we could, we could do, we could do something, you know, so, uh, but but of course if you’re really old and frail, then that might be bad too. So. But also, you are keeping an eye on your finances, right? You’re not just fingers crossed. Oh, I hope we have money. And I think, I was having a conversation with a friend and this subject came up and he said, you know, it’s not like we get to a point of financial independence. by being frugal and you know, saving and investing on purpose. And then stop looking at our finances. We continue checking it. My husband texts every day because it’s like gives him pleasure or whatever. I don’t check uh, because he checks, so I don’t have to check. Um, and we talk about it all day every day. And sometimes when things are as crazy as they are, it’s better not to check because I know my husband, you know, he’ll say, oh my gosh, the stock market’s down a thousand points or whatever. And I’m like, you know, I don’t want to be looking, but but I do. And, you know, and and I know, okay, we’re down some, but it’s not as bad as we were before and we’ll be all right. You know, we’ll be all right. So, um, yeah, we just have to stay the course and and not sell when, you know, when things are low and, you know, use it as a buying opportunity when you can and so, yeah, so so and and our portfolio is invested pretty aggressively because that’s how we got to where we were by being pretty aggressive. Um, my husband tends to be a little bit more um conservative, so we have like our two buckets, you know, our two IRA buckets, you know, his and mine. So his is invested a little um more conservative, mine’s a little more aggressive and so mine’s doing better than his in general. But, you know, overall it’s uh it’s doing all right. So that’s yeah, so we’ve just, you know, I do keep an eye but try not to panic, you know, and I also try to look and see are there things that are just um not doing well, that I need to get rid of, that’s not going to come back or um, you know, what what do we need to do? Okay, we have to take one final ad break. We’ll be back with Diana with more after this.
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Thanks for sticking with us. How does fire change your perception of work and life? I think, you know, we got into it because we wanted to have balance and do the things we wanted to do. By living the fire life as far as being financially independent, you know, we can do those things that we want to do. You know, my priority is I want to travel, see as much of the world as I can and spend time with my my family and my friends. And so if I can do them both together, that’s that’s an added bonus. If, you know, so a lot of times when we’ll travel with our kids, with our with our grandkids, and then uh sometimes we’ll travel with friends. and that’s, you know, that’s always fun because then you when you spend like a week or more with with some friends, you really get to know them at a whole deeper level than than just, you know, a little visit here, a little visit there. so, yeah, so it’s it’s been it’s been fun. It’s been great. And a lot of our travels too are because we we’ve lived a lot of different places throughout our careers is going back to some of the areas and and spending time with friends and and um, you know, you know, so visiting new areas, visiting old friends, and so that’s all good. Last question, what was the biggest mistake you have made on your financial journey and what advice would you give to someone else to avoid that same mistake? A couple big mistakes. One is having too much of our money in 401k, you know, and then having to figure out how to navigate our way out of it again, um, you know, how to to to roll it over or, you know, to move it into other accounts. So, so that was the biggest mistake. You know, so now when I tell my kids is, you know, have some balance. You know, when you can invest in your 401k, you can, you know, max that out at least to get your company matched, but then beyond that, you know, if you can’t put money in a Roth, otherwise, then then put it in that or as my daughter, I think she’s doing back door Roth now even conversions, you know, she’s putting it into her 401k and then and then coming back and taking it out because she’s in, you know, a higher income bracket so that she can’t do the, you know, by the the Roth individually. So, not have too much of your eggs in one basket. You know, in the, like I said, in this case here in the 401K is the number one um biggest mistake. The second biggest mistake is really understanding the tax implications on your money. So it’s it’s not just understanding okay, I paid this much last year, I paid this much this year, but what’s the big picture on your overall money and the tax implications of that money? So kind of doing tax planning. And that’s not something that most people do and unfortunately, it wasn’t until recently that I realized that if we would have done a better job of tax planning, like I said before, when we had our small business, that’s when we should have been doing the 72T or doing Roth conversions, you know, we should have looked at it when we had the opportunity because our income was, you know, lower or it was, you know, we could manage our income. I think that’s really key. and I’ve heard people say don’t let the tax tail wag the dog and that’s that’s great too. It’s kind of a fine line, but I love the comment about tax planning. There are just so many things to know and you don’t know what you don’t know. So you can’t just Google, what am I missing in my tax planning? And then Google be like, hey, here’s Mindy, here’s what you’re missing. They’re not going to they’re they’re going to be like, hey, sorry, no results found. you know, common tax mistakes might catch a couple, but it’s not going to catch it all. You need somebody who can see all of your numbers, all of your scenarios, all of your situations and say, oh, you could do this. You might be able to do this. And if you do this, then this would apply. I think that’s a great tip. No, definitely, definitely. and I and I think that’s one of the things that that most people probably they overlook it. Don’t let your frugal tax tail wag your your dog. All right, Diana, this was such a fun conversation. I am so thankful for your time today. I really appreciate it. Yeah, and it was great to talk to you and I feel really good about it. I’m I’m I’m hoping I can help, you know, somebody else not fall in the same traps that we did. So yeah. I hope so too. Yeah, if you’re listening, this is the voice of experience. Listen to Diana because everything she said is 100% true. All right, Diana, is there any place that our audience can find you online? Well, I’m on Facebook, um, but there I mostly post things, pictures of my travels and my my grandkids. And I’m on LinkedIn and then I’m also on bigger pockets, um, platform as well too. Yeah, so I’m I’ve got a an account there too. Connect with her on bigger pockets. Are you in the Bigger Pockets Money Facebook group? No, I’m not. I probably need to get in there, yeah. Oh, okay, yes, please. Go join. It’s facebook.com/groups/bpmoney. Okay, I’ll get on there. Okay, Diana, this is so awesome. Thank you so much. Yeah, thanks. It was great talking to you and I’ll I’ll be hearing you, I’m sure again tomorrow on during my morning walk. All right, that wraps up this episode of the Bigger Pockets Money Podcast. I truly love these conversations with people who have retired before it was cool, before anybody wrote a blog post about it. And I love Diana’s story. Thank you so much for joining me. My name is Mindy Jensen, saying, out I zoom, bloom.
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