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Mindy: Everybody talks about the beginning of your financial independence journey or the end where you’re actually retiring early, but nobody talks about the hardest part, the messy middle. It’s that phase where you’ve done everything right. You’ve already discovered financial independence, you’re earning more, you’re investing consistently, maybe you’re even hitting six or seven figures, but financial independence still feels years away. So today we are breaking down exactly how to navigate this stage, which is really the longest stage of your financial independence journey. We’re going to talk about what actually matters, what doesn’t, and how to make sure you don’t burn out before you ever reach financial freedom.
Mindy: Hello, hello, hello and welcome to the Bigger Pockets Money Podcast. My name is Mindy Jensen, and joining me again while Scott is off playing hookie is my husband, Carl. Hi, Carl.
Guest: Hello. So, I admit when I saw the title of this, I was a little bit afraid because I thought you were talking about me, the messy middle. I have a lot of white shirts that are now..
Mindy: Living in the landfill or the walls of our house as noise suppression because um, I’m pretty messy.
Guest: Yeah..
Mindy: Yeah, literally, we stuffed these shirts into the house that we are building right now. I saw a tweet, it said, “Bad news, I forgot to put on my spaghetti eating shirt. Good news, now I have a new spaghetti eating shirt.” That’s Carl. But that is not what we’re talking about. Carl has a lot of spaghetti eating shirts, but we are talking about the segment of your journey where you are just doing the slog.
Mindy: Let’s define what the messy middle actually means. It is not your shirts. It is the portion of the journey where you are already started. You have begun investing, you’re doing everything right.
Mindy: But you’re not there yet, and you’re not really even close. Out of a 10-year journey, this is year like two or three. You’ve still got a long way to go before you reach financial independence. It can be a little psychologically demeaning or damaging to be like, well, I’ve done everything right. I’ve started, you know, saving. I’m I’m I’m on the path. Why am I not even close? Maybe you have had some setbacks. You know, your emergency fund is to be used for emergencies, but right after you deplete it for an emergency, it feels like you’re back at stage one. No, you’re not. You’ve used an emergency fund for what it’s for. So, now you build up your emergency fund again. And this phase can feel awful, but it doesn’t have to be awful.
Guest: Before we get into that, I think we should be the poster children for this. Yeah.
Mindy: Uh, we discovered financial independence, uh, when I was 37. Do you remember the house that we lived in before we discovered financial independence? Describe that house really quick, the other one South of Denver.
Guest: So when we discovered this, we were living in a city South of Denver that shall not be named. And
Mindy: we lived in a neighborhood where conspicuous consumption was the theme. Everybody had newer cars than we did except for the one kid down the street who had like a collectible truck from the 50s. The twins across the street had brand new cars and we had a car that was like 12 years old and another one that was two years old. And then one of the twins destroyed their car. So their parents went out and bought them another new car like the next day. And everybody had so much stuff. Our oldest daughter was five at the time. She went over and played at a neighbor’s house and then came home and I remember she said to us, why do they have more toys than I do? And I’m like, well, because their parents never spend any time with them so they, you know, buy their love. But I you can’t say that to a five year old.
Mindy: And what was our house like specifically? I’m where I’m getting at this is I want to describe the house pre financial independence and the one we moved into after we discovered post financial independence because, um, we should play those those sounds from horror movies with the because, um, the house we moved into after when we went into our messy middle was drastically different.
Guest: Yeah. So the house that we were living in in the city South of Denver was four bedrooms. It was completely finished, big ceilings, what was it, like 3500 square feet without the basement, a full basement, corner lot in a neighborhood filled with other houses just like this. And what did we pay for that? Like $400,000?
Mindy: Yeah, it was a little bit over 400. And then we moved into something completely different. Yeah, so then we discovered financial independence and we moved to the great city of Longmont, and we bought a house that was 140,000, two bedrooms, one bathroom, and we proceeded to add a second story to that house and change it to a four bedroom, three bath house, all while living in there with two small children and Carl was working full time.
Guest: Yeah, and that house came with bonus ants and mice. So at that time, we discovered Mr. Money Mustache, financial independence and we went into full on optimization mode. We need to sell this nice house by the cheapest one we can in the nicest neighborhood and then fix it up to put sweat equity into it and build up our financial independence number.
Mindy: How much money did we put into that house?
Guest: Oh, I don’t even know.
Mindy: Let’s ball park it at like 200,000.
Guest: The the real question, the more important question is, and that relates to the Messi Middle is how much time did we put into the house?
Guest: And how much of my blood, like real blood. Remember that one time I plunged a knife into my hand in the crawl space? That was unpleasant.
Mindy: Yes, yes, we had to go to the emergency room.
Guest: A lot’s of tetanus shots. Um..
Mindy: Yeah, you got two tetanus shots when we lived in that house.
Guest: So we went full on into the messy middle because all of a sudden we wanted financial independence and and that was it. Nothing else was important.
Mindy: Yeah. And what was our happiness level at that house?
Guest: I don’t know. I don’t want to say I was unhappy. I think when you’re in the trenches fighting, you don’t realize that you’re in the trenches and you only realize once you’ve climbed out of there, what you were doing and how it might have been a suboptimal idea. I mean, it was a really good idea from a money perspective, a really bad idea from a life perspective.
Mindy: Yeah, we sold that house for almost $600,000.
Guest: Yes.
Mindy: And that part was great, but the slog to get there was not. And I think that there’s a lot of people who discover financial independence and make their lives suboptimal, to use your favorite word, in the pursuit of financial independence. What we should have done is incorporated joy, incorporated happiness on purpose into our journey so that perhaps our journey would have been a little bit longer, but the entire thing would have been far more enjoyable. I’d rather have a fun 11 years than a really hard nine. Okay, so this show is not just about us, we also need to share some lessons that we’ve learned. So let’s talk about some of the levers that still matter on the journey to financial independence when you’re in that messy middle. So number one is going to be income growth. You want to be pursuing a higher income, not so you could spend more, but so you can save and invest more.
Guest: Yeah, absolutely. increase that savings rate as much as you can, within reason, within happiness, but that’s what you should be working on. In the shockingly simple math behind early retirement on Mr. Money Mustache’s blog,
Mindy: he’s got a great chart that talks about your savings rate and how many years you’ll have to work until retirement. So, if you’re saving 20% of your income, you are going to be working about 37 years. If you flip that and save 80% of your income, you’re going to be working five and a half years until you reach retirement. There’s, of course, there’s all sorts of levels of savings rate between 20 and 80%, but that’s a huge difference. 20% is 37 years, 80% is 5 years. So every percentage point that you can increase your savings rate, you are exponentially reducing your time in the workforce. So focus on getting your income as high as you can and saving as much as you can.
Mindy: I think you should ask Scott for a raise after we’re done recording.
Guest: Yes, Scott’s gonna love having you on the show.
Mindy: This would be my last show. Thank you. It’s been great. But while you are focusing on saving as much as you can also keep in the joy, keep in the things that you enjoy. Cut ruthlessly when there’s something you don’t care about, Carl doesn’t really care about his clothes. That doesn’t make him a bad person. That makes him somebody who doesn’t care about fashion. So he’s not out there buying really expensive clothes because it doesn’t matter to him.
Guest: What are some things you do spend money on?
Mindy: Wait, you don’t think my style’s awesome? You don’t think this is like
Guest: No, I think your style’s great.
Mindy: I could be in Milan on one of those like fashion things, right? I could be on the runway right now. Did you know what a runway is?
Guest: Um, so what was your question? What do I really care about?
Mindy: Yeah, what do you care about that you will spend money on?
Guest: Ooh, I care about maximizing joy with the family. So the way we travel is different. I don’t want to spend a lot of time commuting once I get to a place for example. So now, I like walking a lot too. So now when we travel, we’ll pay up to get a a nice Airbnb or hotel in the center of town where we can walk or take public transportation. I I’m trying to think of times we’ve clearly done this wrong before. New Orleans we did it wrong where there was a big walk to get anywhere. Well save a little bit of money though, especially on a vacation because your time is limited, you’re only gonna be at that place for a short amount of time. So pay money to, I’m gonna use the O word again, optimize the time that you have there.
Mindy: Yeah, I think that’s that’s a acceptable use of the word optimization even though Carl me told you never to use it again.
Mindy: What one other one is, I can’t work on cars, I built engines, but I really, really despise it. So I’m happy to pay other people unless you want to take up auto repair.
Guest: You could do that as a 10th career. Yeah, I think you’d be great at it.
Mindy: Yeah, I would be awesome, but I’m not gonna do it.
Guest: Okay, we’ll start with an royal change after the podcast is over. No.
Mindy: So you want to focus on income growth. you want to focus on your savings rate, you want to focus on investing consistently. When you are saving a lot of money, you aren’t putting it into a savings account because that is not where the growth comes in. Putting it into solid investments like index funds or heavily researched individual stocks or into a business that you’re starting, into rental real estate, whatever you’re investing in, invest consistently, invest a set amount every single week or every single month, every time you get a paycheck, every quarter. Whatever your investment philosophy tells you to do, make sure you’re following that as closely as you possibly can.
Guest: And I think this next one is pretty important. You don’t have to make big moves, especially when you’re young. Like, don’t feel bad if you don’t feel your portfolio doubling every year. I remember I was thinking about my first job. I would, uh, check my investment balance every day. I don’t do that anymore, do I?
Mindy: Yes, you do.
Guest: Yeah, I probably do it multiple times per day. But I remember one day my portfolio had gone up like $100 and I was so happy about that and now that would not make me nearly as happy.
Guest: But the beauty of this is you don’t have to make big moves because allowing your money to grow, give it enough time, your money will make the big moves for you. So you don’t have to. And this goes back to your consistency point. As long as you’re putting the money in there, it’s gonna snowball. It’s the magic of compound interest. before you know it, the money’s going to be making more money than you ever could at your job, which is a a pretty magical thing.
Mindy: Yeah. And all of this, as much of this as possible should be set it and forget it. So your savings rate, your consistent investing, set it and forget it. Make the decision to do it and then set it up so it’s automatic and you don’t have to make that decision because let me give you an example. So I have a salary of $2,000 a week and I have decided I’m going to put $500 a week into my investments. I put my $500 in, but I haven’t automated it. The next time I get a paycheck, I have to make that decision to put that $500 into the investments. And the next time I get my paycheck, I have to make that decision again, but maybe I was online and I found a super cute dress and I don’t have that $500 anymore. I only have 400 because I already spent 100 on it. I wouldn’t have that $100 to spend if I had taken that 500 and automatically set it up with HR so that it doesn’t even hit my bank account, it automatically goes into my investment account. That’s what I’m talking about with automation and with making the decision once. I have decided I want to put $500 in. So I talked to HR and they do it for me. I would have to make another decision to not do it in order for that to change, as opposed to every single week making the decision so that it stays consistent.
Mindy: What is number three?
Guest: Number three,
Mindy: avoid the optimization trap. So this is right there headed towards you.
Mindy: What is the optimization trap?
Guest: Oh, the optimization trap is when you let efficiency rule your life. I I’ve never done that, have I?
Mindy: Only every single day.
Guest: we should think of a new example. I’ve got plenty of them. like, um, I still over optimize.
Mindy: Yes, you still over optimize.
Mindy: Case in point, the electricity for the other house. You have the ability because your father was an electrician. You have the ability to wire an entire house. You could have done that and saved us $20,000.
Guest: Yeah. I was just thinking of the small particular ones. like I want to be at Lowes at 6:00 a.m. when it opens or like 8:59 when it closes because there’s no one else there and I won’t have to wait. So that’s that’s pretty silly to wake up at 5:30 to avoid two other humans in front of you in line.
Mindy: Remember that time you saved $20 and costs us several hours of layovers flying from Denver to Jacksonville and stopping in Minneapolis and Chicago?
Guest: So, I’m one of those people who like to sit have a window seat and look out the plane. I remember that flight. I remember looking at the beautiful snow out the window. So I think that flight was worth it for me.
Mindy: Well, it wasn’t worth it for me and also you could have seen the snow if we flew from Denver to Jacksonville.
Guest: I I’m just kidding, it was not worth it.
Mindy: There’s no need to be overly frugal. And I think one of the points about the optimization trap that people fall into in this community specifically, is, well, I could say $5. Sure, you could, but it’s going to cost you hours of time. Look at the time value of the money as well as the money value of the money. The plane trip that I love to tease Carl about, we always had one stop. It was not a nonstop flight. But adding a second stop to save $20 cost us, I think an hour and a half or two hours. My time is always going to be worth more than $10 an hour. You don’t need to be overly frugal, but, you know, don’t spend a
Guest: Sounds like you almost said a naughty word though.
Mindy: I did. You were going to say
Guest: You’re going to say you almost spent a Scott ton of money.
Mindy: but that kind of throws Scott under the bus too. I don’t know, that’s a
Guest: Scott is much better at not being overly frugal than we are.
Mindy: Do you have a blooper reel? Can all this go in the back of the podcast? No, they’ll just leave it in.
Guest: Oh, man. Okay, good.
Mindy: Sorry, Scott, I didn’t mean to throw you under the, uh, podcast. Yeah, the ultimate optimization should always be for happiness and ease of moving through life. Yeah.
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Mindy: Number four.
Mindy: Design the life that you want to retire to. The messy middle is a nice long section of time. You have time to think about how you want to be spending your days. And sure, going on vacation and sitting at the beach sounds awesome for a couple of days. I don’t want to live on the beach and go and lay on the beach every single day, but what I do want is to be relaxed. So I’m not taking on more hassle. And that’s something that we have learned rather recently with the building of the house and the finishing up of the house that we are still in right now. It’s a live in flip. We’ve lived here for six and a half years and we’re still not done yet.
Guest: Almost.
Mindy: Almost. Yes, we’re always almost done. We’ll be done right before we put it on the market.
Guest: Yeah, and I would take this designing word. I would take this to the next level and I would say start living the life you want to retire to. You might not have time to live in Portugal for a month, your boss might get angry with that. You might not have time to pursue all your hobbies, but you can start doing it on a small scale, and what that’s going to do is it’s going to make the transition to retirement much less abrupt because you’ve already been doing it. Now you can just expand those things.
Mindy: What are some things that you would have done during our messy middle if you had taken the advice and designed the life that you wanted to retire to?
Guest: No, this first one is huge. It sounds so simple, but I was not in great physical shape when I retired. I had a desk job. I sat around all day and the easiest thing to give up when you’re busy is going to the gym. Hey, it’s busy. I got to go pick up the kids, worry about dinner and all that. So I’m just going to cut that out. What’s more important than health? If you don’t have your health, nothing else really matters. So I should have emphasized that first and foremost and mental health as well. I wasn’t happy with my job. I should have addressed that and considered a different job even if I would have had to stay in the messy middle a little bit longer.
Mindy: This is actually a really common theme that I see. We have a lot of friends who are retired early and most of them are in very good shape and the ones who aren’t in very good shape are pursuing healthy lifestyles and getting themselves in very good shape. I think that that is one of the top priorities once people retire early. Now I’m going to get fit. If that’s going to be your top priority, oh, once I retire, I’m going to go to the gym every day, figure out a way to incorporate going to the gym now and it doesn’t have to be every day. Maybe it can be every other day to start. Find a gym you like. Oh my goodness, I have so many past gyms that I don’t like that I never went to. Now I go to a gym and I go five times a week, and I wouldn’t say I love it because I still don’t like working out, but I hate this gym the least and that is a very big compliment for me.
Guest: You are kind of addicted, but I admire you for going there because I went to a couple of the workouts with you and um, it’s one of the, it’s like a guided workout and it was um, tortured for like an hour. so, yeah.
Mindy: 45 minutes, it’s called F45. You can get the whole workout done in 45 minutes and I like that too.
Guest: Yeah, good job you.
Mindy: Number five, what I want everybody listening to do is to start surrounding themselves with like-minded people. So, we live in Longmont. Longmont is kind of like Flandia. We are surrounded with like-minded people. In the messy middle, this is so, so, so important is to have people who are helping you stay on the track. You’ve got people in your life who are not on the path to financial independence. Those are the ones who are questioning what it is you’re doing. And if you get enough people questioning what you’re doing, you’re gonna start questioning it yourself. I promise you, being retired is awesome. She said, as she still works, but I see my husband is so much more relaxed on a day-to-day basis when he’s not in this stressful job. All of our friends are so much more relaxed when they’re not doing these stressful things, or they’re working because they choose to, because they like what they’re doing, not working because they have to do it in order to put food on the table. And having a community of support is going to help you stay the course, help you figure out how to get over the hump when you have a setback, and just be supportive. There’s always going to be people in different parts of their financial independence journey. They’re going to be ahead of you, so they can tell you, yeah, I did that too. And here’s how I got through it, where they’re going to be behind you, and you can, I mean, I don’t really want you to compare yourself to people, but you’re like, oh, well, I’m in a better position than Bob. just having a community of support is gonna be so helpful.
Guest: Absolutely. I think you should find people who reflect and reinforce the values that are important to you. if you know you’re gonna be led astray or you’re gonna be pressured to do things that you might not want to do. And I would also say find people who want to do the things that you want to do post fight too, and maybe they’re already retired and you’re not. I’m looking at you here, but we have a hiking group every Thursday. Uh, you don’t know about this because um, you’re probably right here in this room. But we go hiking and some of the people are retired, some people have work and they can take a little bit of time off or they have a flexible schedule. These are the people who are going to make you more excited for financial independence and um, give you nudges along the way. Um, yeah, we’re so fortunate to have that community here. So if you need help, it’s as easy as moving to Longmont. Or
Mindy: going to a local ChooseFi group and start attending a meet up and connect with other people who are in a similar position. Having negative commentary from friends and family who don’t understand what you’re trying to do can help derail your path. You don’t want help derailing your path. You want help staying on the path. So surround yourself with people who understand what it is you’re trying to accomplish.
Guest: Yeah, and to rephrase this or to approach it from a slightly different viewpoint, you read about these blue zones where people live longer than average and I think the most important thing is having a good community and having a good social network and even if you’re a a weird abnormal introvert like me, the people in the FI community are..
Mindy: filled with people like you. Yeah, they’re filled with people like me. Exactly. Like nerds who like to talk about nerdy things.
Guest: And it’s because if you’ve passed through that money filter, you’re gonna have a lot of other things in common naturally. It’s very weird. Maybe we’re living in our own um. Our own simulation? Yeah, reality distortion field, reality fi field, but we go like we were just on this river cruise with like uh, 38 other FI people and, I don’t know, you sit down at dinner and you feel like you’re friends almost instantly where there’s people I know outside of this community who like I don’t really get into hockey or the weather or celebrity gossip, all that, and I just have nothing in common with those people. So after knowing them for 10 years, it still feels weird and awkward, but after knowing some of these people who came to the community through money, I feel okay after like five minutes. I mean, still a little awkward and weird, but better than the the hockey sports, um, fashion celebrity people. Not that there’s anything wrong with that. If that’s your thing, um, find your tribe. That’s just not your thing.
Mindy: Yeah, it’s just not my thing. It’s great. Everyone should find their tribe and this is how you find your tribe.
Mindy: So Carl, when you are getting towards the end of the messy middle, how are you starting to transition out of that? How are you starting to think about life after retirement?
Guest: Ooh, I have two different answers for this. The the first one is pretty hard. There there are a couple of people I know and very few, but they’ve built a really optimal life. I think we’re going to get to this with the next point, but they don’t really have a transition because they were doing it right all along, but most people, especially us did not do it like that. and the issue with this is retirement, quitting your job is a huge, huge, huge change. Uh, you might know your co-workers or spend more time with them than your spouse or kids. Uh, that’s just how life works out if you have a demanding job. So you need to start preparing for this transition so it’s not abrupt and so it doesn’t give you anxiety and um so you don’t feel lost when you left, which is I think is a little bit how I felt. and we just hit on the big one with the last one, build up a friend network so when you leave work, you’ll you’ll probably just be spending more time with the same people that you were talking to before you left, work on that before then. I don’t think we knew a lot of people yet, we didn’t focus enough on that, probably because we were so busy with the messy middle.
Mindy: Yeah, we were so busy. The end of the transition or the beginning of the transition, the most successful transition will be no transition. You’re already there. You’ve got a good chunk of time to start thinking about how you want your life to be, then start living that life. And as you are living that life while consistently investing and focusing on retirement, it just sort of transitions itself. Successful transitions. What was your transition like?
Guest: It was abrupt because my job was very intensive. I thought about it all the time, even when I wasn’t at work. So when I left, it was like being released into the void or something like that. Uh I kind of did not know what to do with myself and it might have been even a little bit depressing, kind of sad. What happens now? Yeah. And you were writing a blog, you were writing your blog um, about your journey. So you had conversations with other people in the space, but I mean, you left work nine years ago.
Mindy: What did you do that first year?
Guest: I don’t even remember.
Mindy: The dentist app? He was a computer programmer. So he stopped working as a computer programmer and then was an unpaid computer programmer.
Guest: Yeah. I think a valid exercise for everyone to do to close off this segment is to make a list of your core values and also the things that you need to work on. And then think about how having a surplus of time is going to help you address these. And I’ll just throw one out real quick. I talked about how I wasn’t so healthy because the first thing I would give up was my workout. But now I’m retired, I’ve got my mornings free. I can drop the kids at school and the gym is even on the way home from school. So I have absolutely no excuse. So I need to work on my health. I need to get that in order. And here’s specifically what I’m going to do. I’m going to stop at the gym on the way home. I’m going to stay there for two hours. I’m going to get a trainer if I need to or find an app or whatever, I’ve got an app that helps me with my workouts. So make a list of that stuff and then figure out how your time is going to help you accomplish those things.
Mindy: One of the things that really helped me get into the habit of going to the gym is putting it on my calendar and I have my work calendar is my official calendar. So, I make sure that nobody schedules any meetings or any recordings or any anything while I’m at the gym because it’s already blocked off on my calendar. If you live by a calendar, start incorporating things into your calendar that help you lead a less messy middle. If you think you have a messy middle, you should rethink how you’re living right now. You should be living a life that lights you up all the time, not focusing on what you’re going to do once you reach financial independence.
Guest: Yeah, the whole point of financial independence is to increase your level of happiness. and if you’re sacrificing that just to get to that point, you’ve you’ve missed the whole point because you’re giving up happiness to get to happiness. So you need to find a way to get there and have the least messy middle you can. and I don’t think it has to be a sacrifice either. You might not be able to do all the big things you want to do after you’re done, but you can do them on a smaller scale. If fancy hotels are your thing, you might not be staying at the four seasons in San Francisco, maybe you’re staying at a lesser hotel or whatever, but there’s ways to do most of the things you love while you’re still living this life unless you like race horses or race cars, then you’re probably out of luck and you maybe you should just stay at your job because those things are very expensive. But yeah, you got to pursue happiness the whole entire time, um, wishing your days away for a better day is not the right way.
Mindy: I like the way you phrase that. Don’t give up happiness now so that you can be happy later. Incorporate happiness the whole time.
Guest: Yep.
Mindy: Yeah. All right. Carl, thank you so much for joining me today on The Messy Middle. I appreciate you stepping in when Scott stepped away. You still don’t get to take over my position though.
Guest: I thought you said there was a chance of that.
Mindy: There’s zero chance.
Guest: Do you think uh, I could take over for Scott then it could just be you and me?
Mindy: No.
Guest: Okay, Scott probably wouldn’t like that either.
Mindy: Scott doesn’t like that either. He loves doing this show. I was happy. He’s not today while he’s out gallivanting around.
Guest: Yeah,
Guest: I was very happy to fill. this was super fun.
Mindy: Yeah, this is super fun. Thank you, sweetheart. All right, would you like more financial independence information, hop on over to biggerpocketsmoney.com and sign up for our newsletter which I send out only once a week on Wednesdays giving you information about financial independence, ideas to be thinking about, even some recaps of what we have been talking about on the show, just in case you missed it. You can also find free resources, calculators, and templates to help you on your financial independence journey. So hop on over to biggerpocketsmoney.com. All right. Carl, thank you again for joining me. That wraps up this episode of the Bigger Pockets Money podcast. Oh, where can people find you?
Guest: Um, in Longma.
Mindy: Yeah, just stop on by.
Mindy: I have a blog called 1500days.com, just a number 1500days.com, which is how long I thought it would take me to retire and uh, boy, those days have been over a long time, but I still enjoy the writing, so I have not hit the delete button on the blog quite yet.
Guest: All right, thank you so much for listening and we will see you next week, Geek.
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