Mindy Jensen: Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and today I have a very special episode for you, my dear listeners. Today we’re going to share another episode from the YouTube series on the BiggerPockets Money YouTube channel that I host that features stories of people that are either on their way to or have already achieved FIRE. Today we’re featuring my friend Eric Peterson’s financial journey. Eric was able to reach financial independence and retire early in just a decade. After reading Mr. Money Mustache’s famous FIRE blog, Eric quadrupled his savings overnight and started investing all the money he had into those boring investments most Americans don’t pay attention to. Don’t miss this episode to find out how. Before we get into the show, we want to thank our sponsor. This episode is brought to you by Connect Invest. Real estate investing simplified and within your reach. Now, back to the show. Eric, I am so excited to talk to you today.
Eric Peterson: I am super happy to be here.
Mindy Jensen: So Eric, how did you discover the concept of financial independence?
Eric Peterson: That’s probably like a decade old journey. I was in the investments management side of things, so I made mutual funds in my corporate job, and one day I was just scrolling through doing some research on something and I came across an article and I I want to say it was in Barron’s that there’s this guy that retired when he was 29 and his name is Mr. Money Mustache. And I read the article and I’m like, wow, this guy’s got it figured out. And he’s a similar age to me. So I went to his blog and just started consuming it as much as I could. Like I read it, I think I read his whole blog in like a month or two. He just opened up my eyes. He said, you don’t have to do the 9 to 5. Well, you don’t, nobody does 9 to 5. You don’t have to do that until you’re 65. Luckily, I was in a position where I was making decent money and I could start super saving. And before that, I always knew I should save, but he just kind of was like, well, you can live a little more frugally and save a lot more, and then your age of retirement drops dramatically. Given all that, I was just like, hey, my wife’s name is Shelly. I said, Shelly, let’s let’s go after this and see if we can’t do it. And she’s like, yeah, this sounds like a good idea. And so here we are.
Mindy Jensen: What was your life like before you discovered financial independence and before you started pursuing it?
Eric Peterson: I think the key thing is I was stressed out. The corporate job was working with C-suite people and there’s just a lot of pressure behind delivering and getting things done and playing all the politics and all those things that go along with corporate America. And a lot of stress. To me, I mean, my wife would say it impacted my, my home life too because if you’re constantly thinking about your job, you’re not thinking about the things that are really important, like your family and taking care of yourself and all that stuff. I think it’s kind of that typical story of you’re living for your job and then you try to squeeze in fun things to do on the weekend or maybe a show or two at night and just kind of trod along.
Mindy Jensen: You know, I don’t think we ever really dive into the stress levels that a job takes on you on the BiggerPockets Money podcast. But when you said that, I was like, yeah, of course. Your life is usually really stressful. Yeah, there’s the unicorn person who works at a job they love and you’ll never work a day in your life when you do what you love, and it’s still stressful. I mean, there’s always something happening at work that you carry home with you and, you know, it does take a toll and you remember, oh, I’ve got to work on that project or, oh, I hope I, you know, make it into the office on time tomorrow so I get that project done so it’s on my boss’s desk or, you know, whatever it is. And your mind isn’t fully or at all in the conversation that you’re having with your family. Yeah, that’s not all the time, but that can happen a lot and that starts to erode your relationship with your kids and, you know, it can get really, really, really difficult, especially if you’re in a job that you hate. Or you’re in a job where you’re making mutual funds and everybody’s money is riding on whatever you decide to put inside your fund and you know, one bad stock and everybody hates you, I’m assuming. Is that what happens when you make, I’ve never made mutual funds, clearly.
Eric Peterson: Yeah, you know, it’s kind of funny because I wasn’t running money. I was kind of the research and development guy. And I made this big spreadsheet that evaluated our own internal stuff. I was known as the Grim Reaper when I came to meetings sometimes because I had the evaluation on, hey, this fund is not doing what it’s supposed to be doing and we need to talk about killing it. That was a main a big stressor. It’s funny, like you’re talking about how you don’t forget about it, but I remember I was so proud the day that I earned a BlackBerry at work. I was like, oh, this is so cool. And little did I realize, I’m like, oh, now I’m tethered to my job 24/7.
Mindy Jensen: Yeah, now they can get in touch with you anytime. When you said Blackberry, I’m like, is that like an award? Like a little berry? Oh, you mean the old school.
Eric Peterson: Yeah, that that shows uh how old I am.
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Mindy Jensen: So what was the most significant change that you had to make once you discovered this concept of I don’t have to work until I’m 65.
Eric Peterson: The most significant was thinking about savings more. Like I said, I was saving at a good rate and I went back and calculated, and it was like before I figured out the FIRE movement and stuff, uh, it was like 17% a year, which is pretty good for your average American. But once I discovered, hey, there’s another way, we basically ratcheted it up. We were making decent money and we’re saving about 70% of our income. Living on a very frugal, you know, lifestyle. I think we dialed it into like 44th of grand a year for a family of four. And you know, this is in the Midwest, so it was pretty cheap living. But it just allowed us to save so much more, so much faster. We didn’t cut back significantly, I mean, we still felt like we’re living our lives, but we didn’t feel super deprived. Now that we’re on the flip side, living in Colorado now, which is awesome. That’s part of the whole FIRE thing too. There’s more to that. It’s just a, it’s a beautiful thing. When you have money, you have options.
Mindy Jensen: Love that quote. When you have money, you have options. What was something you thought was going to be hard to give up but ultimately wasn’t?
Eric Peterson: In terms of the biggest thing to give up in that situation, and a lot of people say this, but it’s the relationships at work. I mean, you make some good friends, you make neat connections, and when you’re no longer there, you don’t talk to them as much and they’re still, they’re still great people.
Mindy Jensen: That is one of the downsides of FI, is losing the, the work connections. Although you then make different friends, at least I have, we live near each other and, you know, I live in Longmont, it’s kind of this mecca for FI and I have a lot of these retired friends in my circle. So it’s, it’s a different, the transition has been different for me. But yeah, that can be tough. Have you been able to keep anything in your life that you thought you would have to give up?
Eric Peterson: Well, I just bought a really expensive mountain bike. We’re, we’re kind of the same. I mean, honestly, we’re still frugal. We’re not like penny pinchers and full disclosure, my wife still works part-time, so there’s income coming in that way. And it’s you just dial it in more and that’s what, that’s one thing to, I think that’s one a big takeaway from FIRE is when you kind of do this subculture or you start thinking about it differently, you have to really examine your own values. And it sounds cool. It’s like, oh yeah, what do I really care about? But there’s a big responsibility there too. Am I being true to myself? Am I being truing to my values that I’ve reflected on? And sometimes when you’re just working all the time, you don’t have time to think about that. It’s a bigger responsibility than I thought it would be.
Mindy Jensen: Yes, it’s so easy to get swept up in other things when you can’t focus on yourself. Like when you go for a walk and you have your phone with you, you don’t have to be alone with your thoughts. You can, you know, check out, oh, what’s on Twitter and who’s texting me and maybe I’ll take a phone call. When you go for a walk by yourself and you’re alone with your thoughts, depending on how long that walk is, you can get into some really deep conversations with yourself. And the same is true when you don’t have work distracting you all the time. You’re thinking about yourself, what do I truly value? Having that conversation with no distractions can be eye-opening. It can be eye-opening that you don’t know what you truly value. You know, it’s not necessarily a bad thing that you don’t know. That just means you have a homework assignment. Let’s go figure out what I want to be when I don’t have to work anymore.
Eric Peterson: Yeah, yeah. What do I want to be when I grow up? Because you’ve had all these inputs from your parents and from culture and from school, it’s really a truly a point where you’re like, okay, I can actually think for myself and I can actually figure out what I truly value.
Mindy Jensen: Did you track your spending prior to retirement? Like did you have a good handle on what you were spending or like an amount or where it was going?
Eric Peterson: Oh, yeah. So I was kind of like thinking back on stuff preparing for this. I was obsessive. I was to the point where I would check sometimes daily on what my net worth was. And it’s so funny because once we hit FIRE, that all went away and I I remember saying one time, I’m like, I obsess about money so I don’t have to obsess about money. And that’s what, that was during my working years. And it’s funny because I just looked at my net worth this morning and the last time I updated it was in March of 2022 and then the prior to that was another year. So I’m like, I don’t care. I know generally where we’re at, but it’s, it’s a beautiful thing.
Mindy Jensen: I should redo that intro. A recovering money obsessor.
Eric Peterson: Yeah, big time.
Mindy Jensen: That’s awesome. Can you teach my husband how to not track those? So do you still track your spending?
Eric Peterson: No. We’ve done a lot of the different things. We’ve done a spreadsheet budget. We’ve done a cache budget in the past. We’ve just kind of like generally tracked it and right now we don’t. You’re kind of like in this area where you know where you’re at. If you go over on a month, you just take some from savings and take care of a credit card or whatever. And you know, if we’re going to do it like a big trip, we’ll be like, oh, we’re going to take the money from XYZ and do it that way. So we’ve really cut back on the tracking and all that stuff. And in full disclosure, we’re not super wealthy by any means. Like we’re probably right on the cust of FIRE. Between the FU money and FIRE. So we don’t have unlimited resources, but we still have a, I would say a fulfilling life.
Mindy Jensen: So let’s look at your money, where it’s parked. What are you investing in? VTSAX gets the J. L. Collins stamp of approval, but where you’re putting your money?
Eric Peterson: I was in the business. I know how the sausage is made. Ew. And it’s kind of insane where everybody gets paid. So I am a big, huge believer in index funds. I’m a huge believer in asset allocation. And I think that’s sometimes gets overlooked in terms of 92% of your returns come from your asset allocation. So that means that little 8% really matters on what funds you picked. I do like individual stocks because I do like the possibility of hitting a home run. I’m fine with, you know, the fluctuation and the risk and all that stuff. One little tidbit is I always say, put your risk in your Roth. And the reason why that is is if you do hit a home run in your Roth, the government can’t tax it. So if you turn your whatever your Roth is, your 100 grand into 1.2 million, that’s a beautiful place to have it.
Mindy Jensen: Or your PayPal stock into five billion.
Eric Peterson: Yeah, well. Yeah, yeah. I mean, you can always dream, right?
Mindy Jensen: You can always, that’s the best story ever.
Eric Peterson: Yeah, but I mean it’s, it’s it’s out there. And so why not take advantage of it?
Mindy Jensen: Put your risk in your Roth. I love that. I don’t think I’ve ever heard anybody say that. But that’s such a great idea because, yeah, if you’re going to put that kind of risk in there with all the rewards, I mean, your Roth is, it grows tax free. You withdraw it paying no taxes because you paid the tax up front. What a brilliant, why is nobody saying that?
Eric Peterson: Coin, coin today. And you know, like beneficiary things, like it’s so well protected. And that’s the other thing too. Like I grew up through the whole financial services and I I read Ed Slott’s book on taxes and like, that’s only half the game is accumulating your wealth. The other half, and I mean even more important, is figuring out your tax strategy. That’s probably something and maybe that’s a another discussion is figuring out how should you spend your money once you are retired and how do you keep the government’s fingers out of it as much as possible? All on the up and up obviously, but there’s a lot of loopholes. There’s a lot of things.
Mindy Jensen: They’re not loopholes, they’re tax strategies and yes, you should absolutely pay every dollar of tax that you owe and you should absolutely try to pay as few dollars of tax as possible by taking advantage of these tax strategies.
Eric Peterson: 100%.
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Mindy Jensen: Eric, you said that you’re on the cusp of financial independence. I’m assuming that you used the 4% rule to determine your number?
Eric Peterson: I don’t know about the 4% rule. I get it. I understand it. I think it’s more of the, let me back up. I want to have diversification in terms of how my income comes in. So as I check these off, then that just makes me feel better. So it’s not, we don’t live off of our investments at all. We live off of my little income doing handyman stuff and my other projects, and then we live off my wife’s income. And those are just sources of income. So in the future, because I’m listening to BiggerPockets and what not, we’ll have a rental and in the future, my side businesses, my little side hustles, those will produce income. So it’s less about the 4% rule. It’s more about what does our lifestyle require in terms of income. It’s kind of answering the question.
Mindy Jensen: Okay, so you have a nice nest egg and then you are looking for sources of more passive income.
Eric Peterson: Yeah, and fun income. Fun income, I think. Fun income. It’s not passive, but I’m fine with that. Yes, for all of you out there listening or watching who think that real estate is passive, you’re wrong. I’m sorry. All those people who tell you real estate is passive, they are incorrect. There’s an element of passivity, passivist, that’s what, I don’t know, that maybe, there’s a new word. There’s an element of passivity with real estate because technically, you’re doing nothing. They give you a check at the beginning of every month, but then things break. Eric, walk me through your FI timeline. How old were you when you discovered Mr. Money Mustache? How long did it take you to become comfortable with the amount of money that you had so you could quit your job? And how old were you when you finally quit?
Eric Peterson: Yeah, that’s a good one. I was probably around 34 when I found that article on Mr. Money Mustache and then it took about a decade. So at age 44, I had a beautiful moment at work and it was called getting laid off. I was smiling in the whole meeting. And luckily I prepared prior to that. So that kind of sparked me getting into the true FIRE thing and maybe I would have drugged it out longer, maybe I wouldn’t have, I don’t know, but it was it was a it was a good perfect perfect timing. So my first year, I literally just decompressed. Like, I went fishing, I went biking, practically every day and just took in the beauty of not having that job. And it was a lot of, yeah, this is how I thought it would be. But then at some point I was like, hm, I should probably start doing something. And year two is when I started to kind of take off and like start helping friends with, because I’m relatively handy, so helping friends with like home improvement projects and that kind of stuff and the word kind of got out. I was like, oh, well, kind of accidentally started a handyman business. At some point I was like, well, I should probably charge these people something for it, have some type of value, you know, exchange. And the other thing I did too was something I’m really proud of and I think this is like my little my little legacy thing is I started a comic about being a dad. I’ve had so much fun with that. And that’s that’s one of those things that’s a labor of love. I’ve had a lot of connections because of it and you can probably see so my wife did this for me for Father’s Day a couple years ago or she printed out some of my comics. And I’ve actually started to, I’ve done those, like I have like 80 of them out there now, and I’ve started to ramp it up because these people are coming back and they’re like, hey, you need to make a book and you need to do this and I was like, oh jeez, um, didn’t really think I’d go that far with it, but another beauty of being FIRE, right? Like pursuing something just for the fun of it and then this might be one of my, you know, semi-passive income streams. And then the other thing that I, I really got to do a lot of was just, this is funny because I was, I just got back from a Moab trip, a mountain biking Moab trip, and we were talking about the crazy big lottery of a billion dollars or whatever and people like, oh what would you do? You know, that kind of stuff. And I’m like, well I would just build cool stuff. I didn’t say stuff, I said something else. And that’s kind of what I do too. Like, we’re talking about bikes, like I’ve built an electric bike and next week I’m going to do a three day fast but to keep my mind busy, I’m going to build a bike out of wood. You just don’t get those options when you’re working 9-5. It’s just, it’s just a beautiful thing to have that time.
Mindy Jensen: Eric, you’ve mentioned your comic strip, Dad’s Are. Where can we find this comic?
Eric Peterson: I love hearing comments of my comics because a lot of them are really good and some of them are really funny. It’s on Instagram at dads_r, a r e, not not R. And then on Facebook, it’s just DadsAre. And hopefully someday you see a book published. I’ve been talking to some people and there’s definitely some interest there. So again, you just don’t know where you can go when you don’t have to do that 9-5 and you’re stressed out. So one of those cool, cool options.
Mindy Jensen: Eric, I love your Dad’s art comic. They don’t all relate to me, but many of them do to me, my husband, my dad, and I can see those on t-shirts, hats. I’ve already harassed you about this. I can’t wait for the book to come out, and since I have your phone number, I’m going to keep asking until it does.
Eric Peterson: Sounds good. I like it. It’s good to, good to have an accountability buddy.
Mindy Jensen: Eric, I really appreciate your time today. This was so much fun. Is there any place else that people can find you online besides your Dad’s art comics?
Eric Peterson: I have a Live Long, Live Often website and it’s basically just, it’s it’s merchandise, but it’s like, do what you do and do it often. Like here, here’s so Live Long, Fish Often. Live Long, Ride Often. Live Long, Quilt Often. Do what you want to do. And do it often because it just makes you happy. So that’s another little tangent that I’ve been able to start up too since I don’t have to work all the time.
Mindy Jensen: Live long, draw often.
Eric Peterson: Yeah, yeah. Oh, it’s a beautiful one. Yeah.
Mindy Jensen: Eric, thank you again for your time. It’s always lovely to talk to you.
Eric Peterson: Thank you. I appreciate it and uh, this was great. Awesome time.
Mindy Jensen: If you like this video, please click the thumbs up and don’t forget to subscribe to this channel for more videos with inspiring five stories just like Eric’s. This is Mindy Jensen signing off.
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