Intro Voiceover: Nobody in the FI community has all of the answers. What might keep you up at night may be a really easy answer for somebody else. Today, we’re looking at your money fears. Yes, that’s right. These are fears from our dear listeners. Scott and I will give our take, and we’d also love to hear from you. Hop on over to YouTube or on our Facebook group to give your take on these questions, too.
Mindy Jensen: Hello, hello, hello, and welcome to the BiggerPockets Money Podcast. My name is Mindy Jensen, and with me as always is my fearless co-host, Scott Trench.
Scott Trench: Thanks, Mindy. Great to be here. I don’t know how it gets better than this. We’re gonna go headfirst, fearless into the most common money fears that we have on BiggerPockets Money. Hopefully, you got that if you’re a Taylor Swift fan. Uh, I was with the first two albums at least. BiggerPockets is the goal of creating 1 million millionaires. You are in the right place If you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting. And today we’re going to discuss common money fears that FIRE adherents, um, I think that’s the right way to describe us folk on BiggerPockets Money, uh, have including am I being too frugal? Am I not being frugal enough? How should I factor housing costs, real estate investing, burnout, inflation, um, all of these different things, the grind towards financial independence, and so much more. Um, so let’s take it off. Mindy, you’ve found a lot of these big fears inside the BiggerPockets Money Facebook group, I believe. You want to share the first one and talk about it?
Mindy Jensen: This question I think is really, really prevalent, especially among younger people who have discovered financial independence and who are a year or two into their journey. I wonder if I’m missing out on life by being frugal at age 25. Now, notice Scott, they said frugal, not too frugal. And I think this is a really important distinction. But are you missing out on life by being frugal at age 25? Well, what is your definition of frugal? Does that mean that you’re not spending more money than you have? No, you’re not missing out on life. You’re missing out on debt, which I guess is part of life, but also that’s not a fun part of life. So you can just skip right over the being in debt part if you’re frugal in your 20s and you are being intelligent with your money. However, our friend Ramit says you need to concentrate on living a rich life. So if you’re being too frugal, if you’re saving, saving, saving, saving, and oh, I’m going to save for the future, I’m not going to spend because I’m, I’m, you know, worried about reaching financial independence earlier, I’m worried about money in general, I think there is a point that you can be too frugal and enjoy the journey is the lesson that I have learned by being too frugal my whole life. Scott, what about you?
Scott Trench: Yeah, look, I think that if you sacrifice the things that really matter to you at 25, you’re going to regret it. At 25, the things that mattered to me were being able to to go to the mountains and, you know, go ski and enjoy a a weekend downtown, go to a Rockies game, spend a hundred dollars at a bar, whatever with my friends. Like that was the time and place in my mind, in my life for those types of of things. It was not the time and place for a very nice house in the suburbs or an electric vehicle or, you know, uh, eating out on Tuesday night or ordering takeout. Like, so what I did is I just I had my spending reflect my top values at 25, which was to have fun with my friends and play rugby and those types of things. And that was right. And and I and I spent in that area. I just didn’t spend on housing. I house hacked. I drove my Corolla or biked to work most of the time, and I packed my lunch and spent time at the grocery store. And so, to me, that wasn’t missing out on life. I sure, I didn’t get to live downtown next to where it was all happening. I had to Uber back and forth, but that was a happy arbitrage for me. So I think it’s how you frame it. And most of the time for most people in America, the big three expenses are housing, transportation, and food. And I believe that many people, not everybody, but many people when they’re 25, don’t value the very best in those three areas the same way that they’ll value them maybe later in life. And so I would just encourage you, be super frugal or keep those three expenses under really tight control. And then spend on the other areas if that’s travel, if that’s vacation, if that’s fun, um, or whatever it is for you. I that’s how I think you avoid that FOMO question.
Mindy Jensen: Scott, you said a couple of things that I really want to highlight. You said values. I was living my life in my 20s according to my values. And I think that’s really important. Uh, if you are just being frugal for the sake of being frugal, you’re like, you’re playing this game with yourself. How little can I spend because you feel like that’s the right thing to do? That may or may not align with your values, but depriving yourself of something simply because you don’t feel like you’re allowed to spend on it is very different than depriving yourself of something because you can’t afford it because it’s not something that you value because of, you know, whatever reason. It’s not really depriving yourself if you are, uh, if it’s not something that you value in the first place. Um, and when I first heard this question, I was reminded of a presentation that you did in our office, I don’t know, a hundred years ago, you were presenting the concept of financial independence to our coworkers. And one of our coworkers at the end said, but I’m in my 20s. I want to live my life now. And my first thought was, oh, she’s missing the message on this. And my second thought was, you know, when I read this, this question, what is it that they’re missing out on or what do they feel like they’re missing out on? If you are just spending to spend, Oh, everybody else is out at the bar, so I’m going to go too. I mean, when I was 25, I had friends who were attorneys. I had friends who were computer programmers making big money. And I had friends like me who were, uh, let’s say less well compensated. So you can’t, you can’t compare yourself to your friends salaries. There uh, let me take that over. You can’t compare yourself to your friends when you’re not playing on a level playing field. So if your friends are constantly doing all these things, if you value spending time with them and it’s something within your budget, great. But I think focusing on the future is important as well. Put put aside some money for the future, but don’t put it all aside for the future. Does that make sense?
Scott Trench: Absolutely. and look, a great framework for this is afford anything. Paula pant, we both know her. Friends with Paula Pant. She’s got a great podcast out there. You should go check it out. Her whole concept is you can afford anything, you can’t afford everything. That’s all it is. What do you value at 25? Well, I valued very different things at 25 than I value now at 34 with a two-year-old. And I spend on the things that enable that, that that I want to do with my two-year-old now. I don’t spend on the same things that I want I wanted to spend on when I was 24. Right? I haven’t I haven’t racked up a bar tab in a long time, Mindy.
Mindy Jensen: You’re not taking the baby out to the bar?
Scott Trench: Maybe we’ll come to the the brewery and we’ll get a beer, you know, kind of deal. So but there’s no, there’s no, yeah, none of that. But I do now, I I finally got rid of the Corolla and got a a Tesla, as I think we mentioned in a previous previous episode. And that’s good. I I I go to work and it’s 35 minutes each way uh, on that. And I actually have been taking calls from BP Money listeners um, and chatting about their situation for entertainment purposes only. So that’s been fun. And that’s a big big difference from doing that in the Tesla versus the Corolla. So that’s a value that’s changed, right?
Mindy Jensen: That’s awesome. Are you on uh, self-driving when you’re taking those calls?
Scott Trench: Yes. I I I I got a used one that had the full self-driving that came with it. So, yes, the Tesla drives me to work.
Intro Voiceover: We need to take a quick break, but stay tuned for more of your money fears, like how to feel confident in your FI number, explained after this.
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Mindy Jensen: All right, I am excited to get back into it. All right, question number two, one of my money worries is, will I have enough for retirement? And I think this is a really interesting question. Somebody asked for their information, and they said, I’m not sure I will have enough money saved or I’m not sure if I’m making the right choices now in my mid-40s that could affect my retirement. So, let’s hear from you, Scott. What do you say to this?
Scott Trench: I think we’re going to spend half our lives, Mindy, answering this question, right? This is the one, I mean, this is the whole question. This is why, like, the short answer to how much you need for retirement is the 4% rule, which we have now covered super exhaustively, probably at least five to 10 times on the BiggerPockets Money podcast with full dedicated episodes, including with the inventor of the 4% rule, um, or a variety version of the 4% rule with William Bengen, um, and his Trinity study, including with someone who arguably has taken that to the next level and studied it more exhaustively than any other human being in Michael Kitces. And that is the answer to what is enough for retirement. And we’ve also exhaustively discussed how nobody really accepts that as the answer for them. And they all want to go beyond it. The 4% rule is the starting point for FIRE for almost everyone that we’ve ever talked to. We have found a few close to outliers now as we’ve been putting that out um, to our audience here. But for the most part, folks want to get to that 4% rule and add in a big, even bigger margin of safety through some sort of extra bonus, whether that’s a big cash position, whether it’s a rental property or two, whether it’s a pension, whether it’s social security, whether it’s a part-time job, um, what have you.
Mindy Jensen: I’m going to tag on here and say that if you have not yet read the original 4% rule article that Bill Bengen wrote, you absolutely should. We will link to this in the show notes, but you can also email mindy@biggerpockets.com and I will send you a copy of this. It is not an easy read. It is not a quick read, but I felt that it was a very reassuring read. When you read through this, he didn’t just make this up. He ran test after test after test, and 4% is the safe withdrawal rate. That means when you’re withdrawing 4%, you’ll probably have more money at the end, but this one is in 96% of the cases, fine. You will have uh, money for 30 years because it was based on a 30-year retirement. It’s a 60-40, uh, stock bond portfolio, and it is uh, it is in many cases, in most cases, you have significantly more money than when you started 30 years ago after withdrawing the 4%. Uh, Bryce and Kristy from Millennial Revolution have been testing this theory for the last 10 years. They retired on their portfolio. Any additional money that they made went into a different pile that they have not been touching. They’ve been withdrawing 4% from their portfolio every year, and now, after 10 years, they have more money than they did 10 years ago. There’s math doesn’t lie, and I know that there are some people out there who say, well, well, you know, it’s not tested. It’s based on historical data. Yada, yada, yada. Uh, I get that, but this is, like, I don’t have a crystal ball. I can’t predict the future. I really want that Biff Tannen book from Back to the Future 3 where he he can see all the scores. Not, not to see all the scores, just to, not to, not to gamble, just to see what’s going to happen. Oh, look, the stock market is going to continue to go up and to the right. I mean, look at historical data, but there are also some people who will never feel like they have enough for retirement. They could have $4 billion dollars and spend $10,000 a year and still feel like they don’t, oh, what if, what if the stock market crashes? What if I run out of money? Um, so I think that there are definitely going to be people that this, we’re never going to be able to answer this question for. But if you are on the path to financial independence and aiming for a number based on the 4% rule, I think that’s a really great start.
Scott Trench: If you’re looking for guarantees, good luck. You probably need to find another podcast. We don’t have any guarantees. The 4% rule is as close to a surefire answer to the question how much will I need for retirement as you’re likely to find. It’s been back tested in every historical uh, situation. It has never failed to run out of money over a 30-year time horizon. But if you’re looking for a guarantee in the future, no, of course it doesn’t guarantee that a future event won’t be different from any historical setting. Um, I will say that another fear that people have around this is even if you accept the 4% rule, is my number going to change? And that’s very realistic, right? My FI number was something like $750,000 when I was 24 or 25. And I was like, okay, well, that’s not really the FI number that I actually would accept now at 34, uh, with a wife and a kiddo and another one on the way. That’s not, that’s not how we would be, you know, planning it at that point. So I think it’s fair to say that it’ll change. And I also think it’s fair to say that those needs may downshift once kids are out of the house to a certain degree, right? We talked to somebody who’s who is uh, going to have two daughters go, uh, in high school. And when they’re done with college, um, depending on how much you want to allocate for weddings, for example, in that particular scenario, you you may you may need a lot less than what you need today in in terms of spending when you’re planning out your retirement. So there’s different stages to that, and that’s that’s an evolution that I’m starting to go through and learn about and think about, um, from a more robust way is what are the stages here? FIRE at 25 is very different than FIRE at 35. FIRE as a single guy at 25 is very different than as a married guy at 35, and it’s going to be different still at 55 from a spending perspective. And how are those, how do we think about those changes and those those points waxing and waning? Is there one part where there’s accumulation, one part where there’s a little bit less accumulation, and then, you know, a a a a truly retirement um, level of wealth at at 55 or 60, um, closer to traditional age. I don’t know, but those questions are starting to pop up and they’re really good ones from the community.
Mindy Jensen: They are really good ones from the community. I mean, when we first started talking about this, what, seven years ago, we were in a very different economy. We had a different interest rate environment. We had a different uh inflationary environment. So one thing to build into your financial state of the family meeting every year is to re-evaluate your spending from the last year and your 4% rule based on that spending. If you find yourself like stairstepping every single year, perhaps your spending is out of whack or perhaps your spending isn’t and you’re your FI number needs to be adjusted, but adjusting it during the journey as opposed to reaching Scott’s $750,000 and then discovering, Oh wait, I’m married and I have a kid with another on the way. Maybe this 750 isn’t going to last me nearly as long as as I thought it I it was going to. In which case, I mean, if you’re spending $100,000 a year, 750 is not your FI number. But re-evaluating it, I think is a great part, a very important part of your financial state of the family address. Scott, our third question comes in a couple of different parts. I kind of combined a couple of questions here. Will I ever be able to afford a house? Is it worth it or should I prioritize investing elsewhere instead? Uh, also a uh similar, I make more than my parents did combined eight years ago and I still can’t afford a house.
Scott Trench: Mindy, I’m going to answer this question by annoying the heck out of our book publishing business and giving everybody who listens to this podcast free access to the spreadsheet that we put together for first-time home buyer, um, on this. And that that can be found at biggerpockets.com/homebuyerbonus. And at biggerpockets.com/homebuyerbonus, you will find a spreadsheet that Mindy and I created that tells you whether to run the calculation for buying or renting a home. And, look, what this person is talking about is in the last two or three years specifically. By the way, big misnomer. Housing has not gotten less affordable on a price per square foot basis over the last 70 years until 2022 when interest rates went up. Go look it up. Like it’s a headline, people talk about it, prices went up. Yes, they went up. But affordability per square foot really didn’t change much over the last 50 years until interest rates spiked this year because as as interest rates came down gradually over 40 years, those payments adjusted for inflation actually stayed remarkably flat per square foot. New home prices increased because they got bigger and bigger and bigger on average over that time period. The per square foot home home uh, affordability actually remained remarkably consistent for almost 50 years. But in the last two years, buying a home affordability has absolutely skyrocketed, um, in terms of uh, it becoming less affordable. Um, and and what has happened there is interest rates went up, which increased the principal and interest payments on many mortgages 30, 40, 50, 60% in many cases. What hasn’t happened and what should happen from an economic economist standpoint is rents should have gone up at that in lock step with that. So last two years as prices stayed flat, but mortgage payment costs increased dramatically, we didn’t see rents increase nationwide. And why is that? It’s because we built so much new housing supply over the last couple of years. 2024 will be the most multifamily new housing construction new housing deliveries in American history on top of 2023, which was then a record for the most new construction units in American history. So, no, you’re not crazy. Affordability for housing has gotten much worse in the last two years. And what again, the surprise that is that has taken place is that uh, the cost to rent has not gone up in lock step. I believe now is a great time for renters in America. It is a much more affordable option in many places and it’s much more relatively affordable than buying a home. I think that the average, when we wrote First Time Home Buyer two or three years ago, uh I think it was in 2022, um, it was like a seven-year payback to buy a home versus rent in an average market. Now it’s probably closer to 12 to 15 years, if you got to live in that. So I think that renting is a great alternative to buying for many, if not most, Americans in most markets here in 2024 and heading into 2025. And I think that will remain the case through the balance of 2025 and into 2026 until I believe rents will begin picking up pretty dramatically.
Mindy Jensen: Thank you for the data because I wasn’t aware of some of that information. Um, going back to this actual question, will I ever be able to afford a house? I want to temper expectations. My parents lived in a very large all brick house. They had a lot more money than I did when I was 20 and they were uh, 50, 60. Um, so temper your expectations. If you are looking at these larger homes, maybe pull back, maybe consider getting a roommate. I mean, house hacking is a really awesome way to own a home without actually having to pay the entire mortgage yourself. Um, there are instances where no, you will never be able to afford a house. One that comes to mind instantly is New York City. An average salaried person in New York City is not going to be able to afford a house because New York City has outsized housing costs. Does that mean you’ll never be able to afford a house? No, but that means that looking in the places that you’re currently at and knowing how much houses cost may not be the place that you’re going to end up long term. Can you move? There are lots of more affordable locations than New York City and L.A. That doesn’t mean there’s no affordable locations near there, but there’s a lot of affordable affordability, excuse me. There’s a lot of affordability in the center of the country. We did an episode about moving to Tulsa, Oklahoma. Tulsa, Oklahoma has a lower population growth and they wanted to increase their population growth. So they were paying people to move to Tulsa. You had to live there for a year, you had to have a job there that wasn’t a remote job. But they wanted to increase their community and they’re doing it. In fact, after we released that episode, Scott, one of our employees moved to Tulsa.
Scott Trench: And now she’s moved to OKC. Um, I don’t love that that’s the case, but I think, yeah, like if you’re in New York City and you can’t afford a house, moving is an answer um, to it. And it’s not one people like to hear. But, you know, I didn’t, I didn’t move out to New York City and expect to buy real estate after graduating college, right? I moved to Denver, Colorado, and I expected to buy real estate around there. And that’s part of the part of the decision tree that I think folks have to face around this is you know, will I ever be able to afford a house? Well, it depends. If you’re going to live in New York City and you want to be able to afford a house, better go and earn get one of those super duper high-paying jobs that New York City offers that isn’t available in a Denver, for example, to the same extent. Um, and there’s major costs associated with the career, the trajectory, the decade of of grind you may have to go through in order to climb the ranks and earn that salary. There are, there are always alternatives um to doing that. But in certain locations, if you want to buy a house, it’s going to be really hard. You’re going to have to earn a a super high income, and I just think that the obvious answer to a lot of those questions is rent instead of buy.
Outro Voiceover: We’ll be right back after our final ad break.
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Scott Trench: Welcome back to the show.
Mindy Jensen: Yeah, and I mean renting is a great option. Uh, renting can, your costs are fixed. Your rent is the most you’re going to pay every month. As a homeowner, my mortgage is the least I’m going to pay every month. That’s a quote from Ramit, I didn’t make that up. I want to give credit where credit is due. But I have my mortgage payment, and then I have property taxes, which are wrapped up into your rent payment. I have utilities, which sometimes are included in rent and sometimes aren’t. Oh, something broke. Now I have to fix it. My landlord is not going to fix it because I’m the landlord, I own the property. Whereas if you’re renting, your landlord is going to fix it. So your refrigerator goes out, you get a new fridge, or he fixes the fridge, but it doesn’t cost you anything. Renting can be a really viable option while you are saving for that home that down payment. You could rent a property in somebody else’s house hack. Help them pay their mortgage and then move in. Didn’t you, didn’t you do that with with your uh real estate partner?
Scott Trench: I rented for two years here in Denver, even while I owned a large real estate portfolio in Denver, right? Ramit, who we’re gonna talk to tomorrow um, is a big fan of renting. And, you know, look, I think that over 30 years, rents are gonna go up, whether or not they go up versus inflation is anybody’s call, but I will bet on rents going up at least or faster than the average of the rest of the CPI over the next 30 years. That’s a bet I take as a real estate investor and landlord all day long every day. Um, but if I’m gonna like over, I think that that day could be 30 years out in front, and if I were to invest the difference between a house a a home purchase price and um, a rent in a Manhattan, I bet you that you’ll come out ahead by investing the spread in the market and renting for 30 years versus buying a home in Manhattan, even though you’ll lock in that payment for 30 years. We’ll have to see, I’ll have to run the numbers, but I bet you that would be the case.
Mindy Jensen: Okay, Scott, tagging off of that, is real estate a good investment?
Scott Trench: Too easy. Next question.
Mindy Jensen: Is the amount of work in buying and maintaining rental properties worth the difference from owning a REIT or investing in a syndication?
Scott Trench: We had a great episode on this one where we went back and forth with Jussi Askola, that’s J U S S I A S K O L A. Um, Jussi also writes for the BiggerPockets blog and has a YouTube channel um, as well. Jussi has an opinion on every single one of the 200 plus publicly traded United States real estate investment trusts or REITs. And at that time, we discussed how REITs had seen their values drop by something like 30% from their peak in 2021 through uh, that point in into 2022 or early 2023. And that was a, I think was a fantastic take and very compelling. He and I went tip for tat on the pros and cons of REIT investing versus rental properties. And there are certainly our pros in rental properties and there’s certainly a pros in REITs around there. But I think, I think at the highest level where I landed on REITs versus rental properties are, I believe that US publicly traded stocks will outperform REITs over a very long period of time. And if I’m going to take an index fund like exposure, I’m going to put them into um, publicly traded index funds or like large scale low cost index funds. And if I’m going to make the investment in real estate, I’m going to go for the concentration and leverage that is provided by owning duplexes, triplexes, and quadplexes. He will argue that I’m nuts and that those trade-offs are not worth it and that I’m not putting in, not factoring in the costs of self-education, of dealing with the 2 AM toilet, of dealing with the property manager, of all those types of things. But I believe that I’m getting the advantage of leverage. I’m getting the advantage of control um, and the inflation adjusted income streams that I have the option to manage myself over a long period of time.
Mindy Jensen: I think that real estate is a good investment, the way that I do it. I move into a property that is very ugly. I make it look beautiful over the course of at least two years, and then I sell it, and then I go do it again. I buy another property that’s very ugly. I take all of my gains and put them, put most of them into the stock market. And I put 20% down on the next property to not have to pay PMI. I make a lot of money when I sell these houses because people don’t want to live in ugly houses. They want to live in beautiful houses. So my house is an investment because it is my primary residence, but it’s very ugly and I am forcing appreciation. I am forcing it to be worth more. Now, should the market collapse and my house isn’t worth what I put into it, what I put into it plus my projected profit. Uh, if I just don’t want to sell it, I’m going to stay there. It’s a, it’s a safe way to invest in real estate. It is not a scalable way to invest in real estate. Uh, anybody listening to the show has heard me talk ad nauseum about this Section 121 exclusion. I’m not paying taxes on this because it’s my primary residence, but I can only do it once every two years, and I have to live in the house for two years, at least two years before I can sell it. So you can’t scale this up, but it’s a great way to get started. Uh, it’s a great way to buy a house when you can’t really afford anything else. That’s how I got started in the first place. I couldn’t afford anything else. The only thing I could afford was a very ugly house. And I said to myself, I am not living in this ugly house. I’m going to make it look nice. And then when I sold it, I was like, how much did they pay for this house? I’m going to do that again. And I did, and I did, and I did. So is real estate a good investment? Yes, it can be. Um, it is work to buy and maintain rental properties, and it is far less work to invest in REITs, and it’s a definitely do a lot of research and choose your own adventure answer. I wish I could give you a better one.
Scott Trench: Awesome. So I also want to cite some research I did on the Motley Fool for this one. There’s a um, an organization called the National Association of Real Estate Investment Trusts, investment trusts called Nareit. Uh, and this tracks the performance of public REITs since 1972. And public REITs from 1972 to 2023, which was a down year for REITs, was 12.7% from a total annualized uh, percentage of return, which beat the S&P from a total return perspective over that time. So if you reinvested your returns from these REIT investments, you would have done better than the S&P 500 on that. Um, and I also think that another good kind of counterpoint to my own argument in favor of real estate here, um, is that REITs are actually a little down still versus their previous highs from 2022. And that’s not true with the public market index. So I think there is something, that’s why I invited Jussi on um to the podcast and why we’ve invited him to write more for the BiggerPockets blog and go check it out at biggerpockets.com/blog. Um, is because I think there’s something there. I think there’s something worthy of consideration in that REIT sector. And I think if you’re kind of nervous about real estate but want some diversification to the stock market and want some exposure to real estate. Now is not an unreasonable time potentially, um, this is for entertainment purposes only, to put some diversification and potential exposure to REITs. And I like the idea of an index fund uh, style investment in the REIT sector that can tra, that can attempt to pick some of these averages. There’s reasonable, um, there’s a, there’s a reason to be fairly bullish, I think, about real estate. Or at least there’s a, a contrarian play there where real estate’s not been having a good couple of years and those indexes are down from their peak, their their peaks a couple of years ago.
Mindy Jensen: Yeah, I think that with any investment, you need to do your research and understand what you’re getting into. And real estate isn’t an investment for everyone, but if it, if you are intrigued about real estate and you want to learn more about all the different types of real estate, biggerpockets.com is the place to go. Oh, oh, and Passive Pockets, Scott, we have a new podcast out called Passive Pockets, which is talking about syndications and the different aspects of investing in a syndication, which is about as passive as you can get.
Scott Trench: And that’s that kind of in-between play, right? So we have our duplex investment, we have our public REITs. If you want to be a partner on a large like a large apartment complex deal. That’s what Passive Pockets, the idea is, here’s a large number of deals that are presented. And over time, as you look at more and more of them, you’ll get more comfortable with the ones that make sense for you. Um, there are higher fees associated with passive investments than things like REITs, um, around there, and less control than with rental properties, but if you’re looking for a passive option that has different types of returns, um, that’s what we’re excited to explore with passive pockets. And I believe that the like multi-family apartment sector and office sector right now, in particular, are two very interesting parts of the economy for me because they’re trading at such depressed multiples from their peak a couple of years ago. So much money has been lost, and there’s been such a huge crash in those areas, that I think 2025 in particular could be a very interesting time to buy in that private private sector. The thing about REITs is they don’t trade quite in parity to the net asset value um, of the underlying assets. But the real deals can be found and the real disasters can be found in the passive investing world. Um, and I’m excited to learn more and dive into that with Passive Pockets.
Mindy Jensen: Awesome. Yeah, I am very interested to see where the commercial and multi, large multi-family space goes in 2025 and 2026. I think it’s, it’s an interesting time to be watching the market.
Scott Trench: Mindy, I’m getting pretty serious about buying an office building here, so I have to fill you in on that when I actually start making offers.
Mindy Jensen: Ooh, I would love to hear about that. All right. Number five, I am worried about burning out before I hit my FI number. I think this has a couple of different connotations. So I’m gonna, I’m gonna send us back to question number one. I’m wondering if a changing jobs and taking a pay cut would be worth it for more personal time, or if I should grind it out a little longer. Uh, Scott, how about you? What do you think? I’ll get back to you in 10 years on that one, Mindy. Well, I also knew that you were going to say that. I have taken a pay cut for more personal time. I went from five days a week and 100% salary to four days a week and an 80% salary, and it was the best decision I ever made because financially I was in a position to do so, and I wanted more personal time. Having Fridays off is awesome. I can do all of the errands that I didn’t get through Monday through Thursday, but I don’t have to do them on Saturday and Sunday. I can go hang out at my kid’s school when they were little. I just have more time back. I could do laundry. So I’m not doing laundry all weekend. It’s 100% worth it so long as financially you can withstand it. And if that’s the option for you, do it, do it, do it a hundred times, do it.
Scott Trench: And did you guys know that 32 hours is a minimum requirement in many states to be considered full-time employment and eligible for benefits as well? Which is a wonderful option in that cutting off, cutting a little bit of hours back. I bet you that many employers out there would take the call and say, yes, we would reduce your salary by 20% and move you to four days a week and keep you on full-time. Not everybody, but I bet you that’s an option for a good percentage of the people listening, um, out there if if that’s something of interest to you.
Mindy Jensen: Yeah, especially if you’re an awesome employee. Your boss doesn’t want to lose you just because you don’t want to work on Fridays or Mondays or whatever. So, yeah, absolutely ask the question, but be prepared for them to say no, and then what are you going to do if they say no? All right, Scott, I have a question for you. What is a podcast or a book that isn’t BiggerPockets related that you’re reading or listening to right now?
Scott Trench: I’m listening to The 1% Rule, um, by Tommy Baker, which is another one in my endless uh, onslaught of personal development and self-help books, uh, that is talked about 1% improvement on a daily basis, the the commitment to just getting a little better every single day at something or other. So I’m really enjoying it. The framework is highly motivating and it’s just another reminder of the importance of that um, of of constantly pushing forward and getting just a fraction better, hopefully in each area of your life every day.
Mindy Jensen: I love that. The 1% Rule by who?
Scott Trench: Tommy Baker.
Mindy Jensen: Awesome. We want to hear from you in our Facebook group, or if you’re on YouTube, leave a comment below. What podcast or book are you listening to or reading right now that you want to share with us? All right, Scott, this is a fun episode. I can’t wait to do this again down the road. But that wraps up this episode of the BiggerPockets Money Podcast. He is Scott Trench and I am Mindy Jensen saying, see you around, hound.
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