Hello my dear listeners and welcome to the Bigger Pockets Money Podcast. Today, we talk to Wes Moss about the common traits of people who are able to retire early and the ones who are able to maintain a happy retirement.
Scott: Yeah, you’re going to learn from Wes here, an expert who has worked with thousands of retirees. And in addition to his game plan for getting to retirement, we’re also going to get a deep dive on maybe the more important work that he’s done in the research that he’s conducted unto what makes retirees happy and unhappy. So lots to think about there.
Mindy: This is a great show. Hello, hello, hello. My name is Mindy Jensen and with me as always is my 4% rule loving co-host, Scott Trench.
Scott: Awesome Mindy, great to be here with my always banging on about the, uh, validity of that 4% rule co-host, Mindy Jensen.
Mindy: That was awesome, Scott. That was the best one ever. Always banging on. I love it. Oh Scott, you’re so good.
Scott: Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.
Mindy: That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or cultivate today the things that will take decades to bear fruit, but lead to ultimate happiness in retirement, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.
Scott: Scott, I am so excited to talk to Wes Moss today. He is fabulous and this show is awesome and I don’t want to wait another minute to bring him in.
Mindy: And without further ado, let’s bring in Wes Moss.
Scott: Wes Moss is a seasoned financial educator and a certified financial planner. He is the host of the podcast Retire Sooner and the long time host of Money Matters, a weekly call-in financial show on 95.5 WSB Atlanta’s News and Talk. Wes is also the author of four books, including bestsellers, You Can Retire Sooner Than You Think and What the Happiest Retirees Know. Wes, welcome to the Bigger Pockets Money podcast. I’m so excited to talk to you today.
Guest: Awesome to be here. Thank you so much for having me.
Mindy: Wes, you write a lot about retirement. What got you so interested in it?
Guest: So early retirement is something that I think that I’ve always thought about this relationship, Mindy, between money and happiness. So, you know, what’s enough, what is enough money to be able to stop working? And I’m always fascinated by Gallup does this, there’s there’s a bunch of other there’s a bunch of research firms that do research around job satisfaction. So how much do people like working in America? And if you look at, if you look at LinkedIn, you think that everybody loves their job in the United States, right? And the reality is as much as we’d like to say we are the best working culture and I think we are, by the way. Most people just don’t like their work. They hate it. And or or they could take it or leave it. And the Gallup poll that originally opened my eyes to this was, I don’t know, 15 years ago, and they’ve continued to update this research and it’s still similar to this. But it’s essentially such that of one in five people in America, so 20% do love their job. They’re totally engaged, they’re good at it. And then three in five Mindy are are they don’t hate work, but they don’t love it either. They’re just take it or leave it. It’s okay. And then one in five dislike their work so much that they’re they’re trying to bring their company down. They they they would like to see their company do poorly. They’d like to see their boss get fired. They they they’d like to see their co So, think of it, think of how how that is in the in the world that we live in, 80% of people don’t love work. But 100% of people want to get to economic freedom. 100% of us want total economic freedom. So, to me, this idea around just shaving off a year of retirement or two years or or five years for the retire sooner podcast and the books I’ve written, is really about helping that 80% of people in America just get to financial freedom a little bit sooner than they otherwise would have here in the United States.
Mindy: People in the personal finance space mean all sorts of different things when they say retire. What does retirement mean to you?
Guest: So it I think very simply it’s economic freedom. It’s not having to work at the job that you don’t love.
Mindy: Okay, so it sounds like you are defining retirement as synonymous with financial independence.
Guest: Correct. Okay. For the most part. Okay. You know the other thing too that I’ve written more about in the last year is un- unretirement. This to me is I I discovered this in two different ways. One the the the our mission statement for the retire sooner podcast is to help a million people retire at least one year sooner. I thought oh that what a million people one year sooner. That’d be a million years extra economic freedom. And then if you look at the 55 plus civilian labor force, it dropped by about two million people in in that year and a half of in the early days of COVID. So essentially, I I was I remember checking in with this a year after we started the podcast, I think, wow, we just we did it. We helped way more than a million people retire early because the civilian labor force of 55 plus dropped by almost two million people. And you can make a case that obviously not all of those people retired but they did leave the labor force for one reason or another. And a lot of those people were what I think of pull forward people where they weren’t quite ready to retire, but COVID kind of rocked everyone’s world and they said, ah, I I was pretty close to being able to retire. I’m just going to pull this forward a year. There were a lot of people that just kind of said I’m going to I’m going to retire sooner than I maybe had planned. And and then here as we sit here today, a couple years later, almost all of those people have unretired and they’re back in the labor force in the 55 plus. So there is there’s been a movement in the last year and a half to two years of people that said, wow, maybe I retired a little bit early. Some of it could be, some of it is that we’ve had massive inflation and people that thought they were ready for retirement weren’t quite ready for prices to go up by 20% over the course of a couple years. And they decided to go back. In addition, we have a really strong labor force right now, it’s a really tight labor market. So that that experienced group of people the 55 plus have been coaxed back into the labor force because people want them to work. And they’re entering back into the labor force, this unretirement, much more on their terms as opposed to working the job that they may not have loved.
Scott: So that that leads me into a question I wanted to ask here about you said one in five Americans loves their job, three is indifferent and one five actively hates it so much they’re trying to bring the company down. Woof, interesting stat there. Um, there’s an interplay with this. you keep using the word economic freedom and the way you’ve used it implies your belief that it is just a broad 100% universal wish for Americans. I I’ve wondered in the past, if as folks progress towards that journey, let’s say they’re they’re most of the way there getting close to this point of economic freedom, financial freedom, um, is there a relationship between the way they feel about their job and the gradual attainment of that goal? So for example, do the one in five Americans who love their job are they disproportionately folks who have good savings habits, wealth, uh wealth, optionality to leave if things got back if got get bad, ability to speak up and say no, I’m not going to take on that responsibility or I’m not going to do it that way if you want me to work here. Is is that relationship correlated in your mind?
Guest: Yeah, so so say that again. So correlated in that they are there’s a group that doesn’t they do love what they’re doing, they do have good savings habits and they’re and they’re not trying to run from work. Is that what you’re
Scott: Is is the fact that I hate my job, if I’m one of the Americans who hates my job, uh is that directly related to the fact that I’m totally dependent on my job? And is the fact that I love my job uh likely to be related to the fact that I don’t really need, I don’t I I like it, but I don’t need it to sustain my lifestyle.
Guest: Yeah, that’s an aweso- that’s a really, I think that’s a smart question. I I think that to some extent, and again I I I see this not just through these Gallup polls, um, but just in in the real world. It is, it’s it’s hard for people to land in a spot that gives gives them both, which is this this career they really feel like they’re contributing to the world and they’re they’re they’re being paid well to do it. That is that’s a really it’s kind of a hard thing. I wish we could all do that, right? And you get out of college, your graduation speaker kind of tells you that you can do that. It’s like go out, save the world and you’re going to follow your passion and the money’s going to come. Like that A, it does happen for a fair amount of people and B, we want it to happen for everybody, but it’s just the reality is that’s hard to land. And then you end up with having people that they get into a career, America’s expensive, the career’s kind of paying for everything they that they’re paying for life and then they kind of get they get a little bit trapped into it and it’s hard to jump out of it. So I think it’s it’s a really good aspiration. A fair amount of people can do it, 20 maybe 30% of Americans find that perfect balance between I really do love this and I’m making money, but it’s just not as easy as we’d like it to be. And may and maybe, guys, it’s because this economy evolves so quickly. The army of American productivity is is great, but it also can quickly leave people behind.
Scott: That was that was gonna be another question I was have here is, you know, we talk a lot about financial freedom. I love the the term economic freedom, that um, you know, same same thing here. Um, whenever Bigger Pockets’ content or financial, you know, financial independence retire early content seems to get, you know, outside of the bubble of the financial independence community, it’s immediately shot down by a horde, it seems, of naysayers who say how ridiculous it is, how unattainable it is, how it could never get started, how the folks that are pursuing financial independence can’t seem to relate to normal people who would never be able to possibly get ahead. You you’ve said 100% of Americans would take economic freedom and I believe you, but I don’t think 100% of Americans believe it is attainable or realistic in any sense. What what’s your take on that that problem set?
Guest: It’s Suzy Orman’s fault. And here’s why I say that. Because Suzy Orman says that you need at least five million dollars to retire and you need to work till you’re at least 70. A, very few people can even conceive saving $5 million in after tax, after tax money, number one. Number two, not all Americans want to work till they’re 70 unless you’re in that group that really loves work. And again, I wish we were all there, but not we we as we we know that not everybody’s there. A lot of people, a half, two thirds, I don’t know what the exact number is. I don’t know if Gallup’s totally right on that, but I know and I can just think about the client base that I’ve worked with over so many years. Most people, by the time they’re ready to stop working, they It’s pretty rare that people are like, oh, I really love it. The other thing is that you’ve got even someone that does love their job after 30 years of it, they’re like, I’m I’ve done this for 30 some years, like I want to do something else. So that’s the first step. It’s it and I’m not I’m joking about Suzy obviously, but the the financial what whether it’s Wall Street, whether it’s someone like a a financial pundit that says you need X amount, it it makes it seem totally unattainable, right? To most people say, look, go just get to $5 million dollars. Okay. Uh talk to a 30-year-old about is that really going to work? And see how and after a year come back and say, are you on path to save $5 million? Not many people are able to do that. So here’s here’s my answer to that is that I the world propagates numbers that I think do seem pretty unrealistic. Then I published a book 10, 11 years ago, you can retire sooner than you think and the median value, median, not mean, but the median number to jump from the unhappy to the happy retire e camp is 500 grand. So wait a minute, that’s attainable. Now, it’s only one of a couple financial things you need to do, but think of it this way. 500 grand, pay off the mortgage, multiple streams of income and you can live in America. I at even to this day, now it’s been 11 years, you can still make that work if you don’t have a mortgage and you live I I see people doing it every day. I’ve got clients that are I’ve that worked with many families over the years that that spend a their monthly amount of spending is really low and they can to some extent live on that because they have a really good social security payment and they may have a little bit of a pension and they’re married so they have two social security payments. Now, I will say those numbers have gone up. If you were to adjust that guys today for inflation, that median number looks more like 700,000 in liquid retirement savings, not that worth liquid retirement savings. And about one and a quarter million for the average of of that group. I those are those are still big numbers, but they’re also not, I think, inconceivable as if you give yourself 20, 30, 40 years to do it.
Scott: Awesome. So, so one one and a quarter million includes the paid off house, right?
Guest: It it does. That’s a big part of it. Yep.
Scott: You know, because because I I was my I was setting up for a question around what is enough because that was the word that was a word you used really illuminatingly in the very early part of this interview. And is that is that your definition of enough for the median uh uh American who’s looking for a comfortable retirement um here and do you think that most people would agree with that definition of enough?
Guest: And it’s tight, no question about it. But if 11, if 10 or 11 years ago, you had $500,000 and you had a balance 60/40 S&P 500 and bond portfolio, which has been it’s been a terrible couple of years for bonds. But that 500 using the 4% rule, so taking out 4% plus inflation every year would be over $800,000 today. So that worked over the last decade even with the crazy inflation that we’ve had. And and let me do let me just do a quick math on that. Imagine you you have that million and a quarter. Some people say that’s too low, some say it’s I can’t even get there. That’s a crazy high. At four and a half percent, and I know there’s a debate around the 4% role. I think Dave Ramsey came out the other day and said 8%’s cool. You make 12, inflation four, you live on eight. Are there a lot of YouTube responses to that? I think Mindy just summed up succinctly the the tone of of many of those responses there.
Mindy: I am going to throw out there, if you have not yet read through the original Bill Bengen article in the Journal of whatever from 1994, I have a copy of that article. Email me mindy@biggerpockets.com. I will send it to you. It is fascinating. You can do 4%. 8%, don’t bet on it.
Guest: And Mindy, I’ll offer this up too. I did Bengin had not updated his study for like 30 years or it’d been like 25 years. And we had our team just I just we totally recreated it and the 4% rule absolutely works. So I actually think of it as the 4% plus rule because it it makes it so that you know it’s a little it’s a dynamic rule of thumb to follow and it’s really it’s really more like 4 to 4.5% and that’s a range that you always want to come back to. Anyway, I don’t know of a more important number in all of financial planning because it solves for all the things we’re looking it solves for not running out of money, that’s like kind of important. It’s the number one thing. I kee- I always say number I keep saying number one. It’s a super important thing. It’s a fear. It harkens to your allocation, says you need at least 50% in equities because that’s where you get your inflation protection. So it’s it it also solves for that. And then it solves for inflation. It raises your with what the dollar amount you’re withdrawing every single year for whatever inflation is. It so it checks all those super important boxes. Yet we have an industry that is totally at war over the number. Wade Pfau, foul says you can only do like 2.5%, Dave Ramsey says you can do eight. No wonder everybody’s so confused. Just get an email from Mindy. She’ll she’ll walk you through the num- the most important financial rule you need to understand in order to have the confidence to live on the money that you’ve saved.
Scott: I wonder what the $5 million and uh work til you’re 70, uh, advice from Suzy Orman implies. Was that like a 1%, half a percent withdrawal rate?
Mindy: And then you’re working until you’re 70 when you don’t need to. You’ll probably have all this money and then you’ll like never spend it because you’re 70 and you don’t have any place to go now. Not that 70 is the end all be all. I hope to still be kicking around when I’m 70. But, uh, Wes, back to what you said, your this $500,000, which was a few years ago and now it’s $700,000, that is uh including a paid off house. Having a paid off house is difficult if you’re constantly upgrading your house and you’re constantly spending all the money that you have in your account. But if you buy a good, solid house that’s going to fit your needs for ever and you don’t move, it’s very easy to have a paid off house and then retire on this 500, $700,000 that you were saying and you can still live a comfortable life. Can you go on extravagant vacations every single week? No. You’ll need more money, but you can have a very comfortable retirement. Yes, you can retire. And I the people that are arguing against this, I just I have to be nice because they’re probably listening, but I want to just shake them and be like, could you please listen to what I’m saying? I’m saying it’s possible. Let me show you how.
Scott: I agree with the, uh, 4% rule. I think we’ve we’ve talked about this at leng- We actually, Michael Kitsis, I think is, you know, taken Bill Bengen’s work and really evolved it even even further in a lot of ways with his studies. I, you know, if people are going to argue about the 4% rule, I think first they’re wrong and second, we’re not going to convince them with more discussions at this point. But where I think someone will argue with you, Wes, potentially, is saying is 700,000 enough at a 4% withdrawal rate even if I’ve got a paid off house, right? I just did some quick math here and 700 grand at 4% is $2,300 a month. And if 4.5% withdrawal rate is $2,600 a month. You know, could could you walk us through how you’d envision this, you know, median, you know, American, maybe maybe not living in one of the most expensive cities in the country, but you know, in a suburb that’s, you know, got a four or $500,000 house. How how do they make that work, that spending work? Or at least bridge it until the time where they can collect that social security?
Guest: So if you think let’s do the math on the 700, which again, I I think of this is a bare is a bare minimum in liquid retirement assets. That’s number one. Number two, we have to remember that we we do need a essentially to have a paid-off mortgage because then our living expenses are ultra low. And then the third really important piece to this is multiple streams of income. Now, if you have no other streams of income, then that combo doesn’t work. So think of it think of it this way, 700,000 at 4 and a quarter is about 30 grand a year. Right? doesn’t sound like a ton, but it’s 30,000 plus whatever inflation is over time. That’s one. Two, social security one, husband, social security two, wife. Now you’re talking about 3,000 a month for one, 2,000 a month for the other. That’s that’s $36,000 a year, then it’s $24,000 a year. That’s that’s $60,000. So people this is the other thing that gets a bad rap. Now you could also say those social security numbers sound a little bit high. I see social security numbers like this all the time for people that have had decent, pretty pretty good wages over time. Put those two together and now you’ve got 30,000 and 60,000 and that’s without even a pension. Imagine you worked for a utility company for 20 years or 15 years, then you could maybe have a and I see people that have, you know, $1,500 bucks a month. Oh, I worked for a little while for a with a a utility company. It wasn’t a lot, but I get $1,500 a month. 30,000 from your savings, 60,000 from social security one and social security two, that’s 90 a year. to to Mindy’s point, you’re not or to your point, Scott, you’re not maybe living extravagantly, but if you don’t, so you’ve got your 700 that lead plus your social that leads to 90,000, you’re going to be at a super low tax bracket by the time you get to retirement, extraordinarily low tax bracket. and with with with very minimal housing costs if if the mortgage is paid for, then that’s that’s a pretty that that’s enough to live even even in America. Now maybe not San Francisco, maybe not New York City, but there are a lot of great places in the in the United States that you could go live a really comfortable life on that. I’m not not saying it’s an extravagant existence, but it’s it’s more than and here’s the reality, it’s more than most retirees live on.
Scott: I think like like I buy that. I think that that that sounds super reasonable. I just checked in the median household income in 2022 was $74,580 bucks. So with a paid off house and the income streams that you just described, you know, this should be this this is not uh uh I think that yeah, plenty of people are listening to this are gonna say, no I want more than that. That’s totally fine. But this is a very reasonable bar to set for the median American as in terms of what enough is, I think. Um, and the next question is, you know, how realistic is it? How does somebody go about approaching that in in your in with the simplest way that, you know, you would give advice to somebody to approach that. Maybe they’re starting this at journey at 35, 40 years old and want to catch up. How do how do they get there?
Guest: I think that Scott, that’s the the reality here is that as long as you give it enough time, it’s super possible if you as long as you’re giving it 20, 25, 30, pretty much any any type of savings you put in a calculator at for 35 years at a 7% growth rate. And yes, the S&P 500’s been more like 11, 11 and a half, but let’s just call it seven. You’re going to get it’s not too tough to get to a million bucks in savings if you’re giving it 35 years. So if you’re 25 and here’s the reality, most people are not really thinking about saving all that much at 25. To go to 65, that’s 30 years. It’s a long time. My my math is right. 35, 45, 50. I’m sorry, that’s 40 years. That’s 40 years. So you could start at 35 and have you you still have 30 years to get to age 65. That’s a a lot of time for compounding there.
Mindy: Well, yeah, and if you’re starting then you don’t have to be putting away 50% of your income. It can be a nominal part of your income that isn’t really pinching. And I think that a lot of people don’t understand that. They’re like, oh, well I’ve got to, you know, really live like like a a miser in order to be able to retire and and I mean, Scott, do you remember? We had a a talk at work once where we were just presenting this idea to our co-workers and one of our co-workers raised her hand and she’s like, I don’t want to save for retirement right now. I’m young. I want to live. And it was like, oh, okay, I don’t have any comment for that.
Scott: Medium pocket.
Guest: I don’t have that pocket. The but the other thought is I think back to our conversation, Mindy when you were on the retire sooner podcast and in your expertise around real estate and how you do it with buying a property, fixing it up, selling a property, and doing that in a really constructive methodical way over time. I’ve had a lot of families I’ve worked with over the years that the the liquid retirement savings part of their overall plan is is not the majority of it. When I say multiple streams of income, I take that super seriously. It is social security, number one. It’s social security, number two. So you and a spouse, if you’re married and it’s obviously financially a little easier to be retired because you’re splitting costs if you if you have a partner or a spouse. But then it’s not just that. There are pensions are still a real thing. There’s not a lot of 25 year olds are going to have them when they’re 60, but they’re not they’re not die they’re not extinct. They’re they’re very real, number one. Number two, a little bit of real estate income can go a really long way. I’m not saying you need to be a land baron and have every green house on the Monopoly board, but one rental property, two rental properties, cash flowing a thousand, 2,000 bucks a month. I mean I’m not again, we’re not talking about you know, the Empire state building here, but but when I say multiple streams of income, that’s that is another one that can obviously be extraordinarily powerful.
Scott: I love it. I think that that’s that’s the key is, right, is these these additional streams of income and if you can, you know, we don’t talk very much about social security and pensions here on Bigger Pockets money because most, I think of the the folks listening are really thinking about how to achieve this goal early and you know, social security is kind of that that that uh, you know, it seems very distant to me sitting here at age 33 as an income stream. Um, but it’s super real and we had a big we had a discussion about this um uh a while back with Tom from The Motley Fool, uh and a great discussion there and and look, you know, that is going to be there for this generation. It’s not going to maybe 100% all be there for the millennials, but something north of probably 65, 70% will be there. And if you’re not factoring that into the planning here, that that’s a I think that’s a mistake because that absolutely will be I think something that that Americans can count on to some degree.
Guest: Scott, here’s a here’s a I’d say a broader example of that. When I hear pension, I think federal government, I think utility worker. We’re in the I’m in the south, so Southern company is the giant utility here and if you work for them, you’ve got a pretty serious pension. But think of how many teachers there are in the United States. There are think of how many teachers there are in every single state. I’ve been working with a teacher for the last 20 years who she was so young. when we would talk about her pension, it seemed like it was ridiculously far off. I just got an email two Friday nights ago. It’s like 6:30 on a Friday night. And she goes, I just I found out that I’ve only got like one, you know, 11 months left and I hit 30 years. She started teachers start early. She started when she was like 24, 34, 44, 54 years old, you do 30 years in in Georgia and this is I’ve looked I’ve looked at a lot of other states, Texas is almost exactly the same. You get 60% of your your highest three-year salary for the rest of your life. And social security to that, add another social security to that, add a paid off house. Pretty much game over. And you two can be on a private island like Suzy Orman.
Mindy: And this is, you know, this is coming from the book, you can retire sooner than you think. It isn’t coming from the book, you can retire and do round trip cruises, luxury cruises around the world every single day for the rest of your life. Think about having a basic retirement and then, okay, I’ve I’ve cemented that. What do we call that? Coast fi. Now I know that I can have a great basic retirement. I don’t want a basic retirement. I think I want a little bit more. Okay, then save a little bit more. Bump that number up a little bit more. Read my 4% rule article. Mindy@biggerpockets.com. I will send it to you. And just keep going up until you have the level of retirement that you want.
Scott: Wes, you you’ve done you you’ve done a great job walking us through kind of the basics around enough and and you know, how people feel about you know, retiring and moving toward economic freedom. But I think a huge body of your work has to deal with this concept of happy retirement. And so can you define happy versus unhappy retirement and what you’ve uncovered or thought through as it relates to that, whether it’s philosophical or practical?
Guest: Yeah, and I think that and I I’ve done this through a couple different means guys. I’ve done this through research trying to which is really kind of informed some of these areas of that are let’s say not exactly money based uh through I I did a survey I did my first research study back in call it 2013 around this and asked financial questions and lifestyle questions but then to separate the happy versus unhappy group, really I took the top two quintiles so I had five quintiles of of scoring if you will. and took quintile four and five, the the happiest group, the quintile one and two, throughout the middle and then compared those two groups. So so some of this is just through survey data. The the other is just seeing this now in practice because I did that 11 some years ago. And then seeing how that’s played out over the last 10 plus years, I can see how it works in practice and in in real life. So I think of that softer side of retirement guys as the one core pursuits which is you may not have to have this grand purpose. I I got an email from a listener that said, Wes, I feel like when you you talk about core pursuits, you’re putting too much pressure on me. Like you’re saying these need to be your life passions and he said, my only life passion is my family and my wife. And then he listed all these things he likes to do. like plays guitar every week. He goes to SEC football games every, you know, every weekend in the fall. He has a band, he’s he plays pickleball and tennis, he runs. I was like, dude, you got a million core pursuits. That’s, that’s all I’m asking. I’m not saying you need to have be the Dali Lama in retirement, but having three to five things that you you love to chase and that you love to improve on and take up time and give you structure, that’s all we need. Those are core pursuits. So that’s that to me is the first one. And then socialization and then family. Those are the three really big pieces of uh and health I which is kind of goes without saying. But that’s the softer side of retirement.
Scott: That is really insightful data here. What does socialization mean for what you were talking about? This is the second point there. How does one set themselves up for success in early or traditional retirement?
Guest: One organized social group at least. That that what is how do you actually what’s the rubber meet the road there? where’s the rubber beat the road? You gotta have one organized social group or more. And my only definition for that is that it meets once a month re- regularly. That’s it. And and that’s not if somebody doesn’t have an organized social group, then that I think is a pretty attainable goal and it sets the foundation for your socialization. Now, of course, you can do way more than that and I’m sure your your listeners are like, well I’m a church and Bible study and I’ve got a running group and a tennis team and my golf buddies. like for some people that’s no big deal. For some people it’s like, well what do you mean? Like how do I how do I do this socialization thing? All I was all I did was work. and a lot of entrepreneurs are like this. Like I made all this money. I all I did was really work though. How do I get how do I have friends outside of work? And work work friends are cool too and they’re fine, but they don’t know they’re not there forever, unless we work forever. So, that is one very practical thing that I think I’ve seen people do. It’s it that absolutely works to just to give you a social foundation.
Scott: This is all in your book what the happiest retirees know?
Guest: I believe so, guys, but I get it confused on which book is in what. I don’t even know. Okay. So you got to buy all the books, all all the books in order to get it.
Scott: I love it. I think I I think this is this is super fascinating here. And and I wonder how many of these patterns are set not in the years leading up to retirement but all of your adult life heading up into that point. Is that is that right?
Guest: I think of the word I didn’t use this in these books, but I as I write new things about this is that I probably missed the word cultivation. So a key we all know that like again we just talked about retirement, you you’ve got to have a really long runway to make it to get to the 700 to get to a million and a quarter to get to whatever it is. You’ve got to have 20, 30, 40 years minimum for most people. It it to some extent it is better and more helpful to do these other areas like socialization, like core pursuits, to cultivate them all along the way. So you’re doing them in your 30s. so important because it’s harder to just kind of reset and start when you are 60. And you’ve probably know folks, maybe your listeners can can visualize this where you have you you have friends, you have a couple where one of the the two says, they need to get stuff they need to have more hobbies. They need to have more things to do. I do a lot of things. I do this and I do that but Jim doesn’t do anything. He just likes to work and his he piddles around and has only his only one thing that Jim likes. And so Jim can go get a bunch of core pursuits and he can go start being maybe social if he’s not already, but it I think it’s really hard if you’re in your 60s and you’re kind of starting this. I think if you’re cultivating it in your 30s, knowing that it is absolutely 50% of the equation for a happy retirement, the money side’s one half, lifestyle is the other half and yeah, I think it’s much better to cultivate them over time.
Scott: Because this core pursuit and the socialization thing are obviously interrelated, right? I mean like what you just said it like here here are the socialization, one group. Well if that’s your pickleball group, then you’re good. if that’s the one of the, you know, whatever the court pursuit is. there there seems to be a really high overlap between those two things in my mind there. and then that leaves the family piece which is another one that’s cultivated over a lifetime of course.
Guest: One of my I think the most practical statistic out of that research and I see I see this in play over and over and over again is that there’s there’s we don’t we we want independent children. I think the millionaire next door book talked a lot about millionaires have independent kids. The along that same theme, if you if you you don’t want your kid you don’t want your adult children to live with you but you you want them to live near you. And those parents that live near half their kids, so let’s call it you got four kids, you live near two of them, and they’re in the in the same city let’s say or the same state, so you can you can see them on a relatively frequent basis. The happiness levels there are through the roof relative to someone that has three kids and all three kids live in a different state. That’s that’s not great long term for for the retire. and that’s not great. And and you don’t have a ton of control over that. And but it it’s something that I just think that it’s super important to be near your adult kids in one way or another.
Mindy: As an adult kid not close to where my parents are currently living, I agree. It uh has changed our relationship. It’s changed their relationship with their grandkids because you’re just not there to see them. Um, I I completely agree.
Guest: Mindy here’s the other thing, is it the question I have on all of this is it just a statistic or is it just prescriptive? Like can you do something about it? And the answer is on this this is one of the harder ones to do something about it, but it’s it’s not impossible. And I’ve I’ve seen families that are and I’ve seen I think about our our family, uh I’ve got four we I’m one of four siblings and one of my siblings just by work and school, he it he was pulled from the East Coast to the west. And once you go to California, you get like sucked in and it’s really hard to leave because you can surf and you can snowboard all in the same day if you really wanted to. And if you’ve married somebody from there, their family’s in there and guess what, you ain’t leaving. So it’s not like a, it’s not the parents’ fault that the kids just scattered all over the country, but I’ve seen, I’ve seen very often a a family in their 60s or 70s make the conscious decision to say, gosh, I think we really like, I thought we were going to like Florida, but I have three kids and six grandkids and they’re in Georgia and I’m going I’m going back to Georgia because that I that is that is home for me and it’s home because my kids are still there and my grandkids are there and that’s something you can do you can do something about it. You can move.
Mindy: Yeah, it’s it’s got to be a conscious decision and it has to be something that, you know, everybody’s on board with. And if you can’t be by all of your kids, maybe three of them are in, you know, a a certain location or close enough that you could be by most of them. Um, but yeah, uh it was not meant to be for me and my family and that’s, you know, that’s just the way it happens.
Scott: And you can pick your favorite.
Mindy: Exactly. Yes, pick your favorite kid. That always works out well. You have four kids, right, Wes? Which one’s your favorite?
Guest: They’re not adults yet. So I’m sure I’ll have a favorite the older they get. Right now they’re all they’re not super yeah, they’re still young enough that I would say I still love them equally.
Mindy: Yes, yes, I love my girls equally as well. Scott only has one, so he can have a favorite right now.
Scott: Yeah, I got a lot of I got a lot of work to do in pursuit of retirement here and and getting first those kids and then those grandkids and then, uh, you know,
Mindy: You’re baby’s one. You can’t have grandkids for a while.
Scott: got a lot of cultivation to do.
Mindy: Okay, Wes, this has been so much fun. I really appreciate your time. Do you have any final thoughts for our listeners?
Guest: I would just say that the theme today and I know that this is this is a theme for you guys, but it’s the this attainability that it’s not impossible to get to whether it’s financial freedom or econom- I don’t know why I call it economic freedom, but to me it’s that’s the term that that resonates. And all of it’s hard and it’s all and it takes a long time. And if you look at the wealth statistics in America, you can just there there there they’re pretty dour. You know, you can easily if you just scary retirement statistics and it’s 60% of people have not, you know, have one year of retirement savings. You know, uh so you you hear a lot of scary statistics and I think it knocks people down before they get started very often that that I can’t even I can’t even win at this game so I’m not even going to start the race. and I think the work that you are doing, we’re trying to do as educators is we’re trying to make it more attainable for more people. It’ll never be for everybody, but if we can take it from only 5% of people can really do this to 25% of people that can that can do this, I think that’s a good thing for the world.
Scott: Wes, I’m sorry, I know we just asked for a wrap up question, but I I do have one more here. You mentioned that there was the cultivation of core pursuits, the socialization, the family. Did wealth, the the number end up anywhere on the list and how far down was it?
Guest: Yeah. Okay. So the answer was yes, but then it plateaued. Um it absolutely was. It was it was a there was more there was absolutely more happiness per uh whether it was whether it was income, whether it was savings, liquid retirement savings, happiness levels rose, the more income rose and the more overall liquid savings rose. However, at a certain point there was diminishing marginal happiness per new dollar. That’s a fascinating topic and that’s what that’s what I found in my research. However, there’s research out of Wharton that that says that’s not true. And happiness levels just keep going up and up and up and up and up the more money we have. It sounds like it it’s going to be like the it’s the new 4% rule. Nobody will argue it forever. There’s no perfect answer. I don’t I I just think that it’s really just about getting to a foundational number and then beyond that, it doesn’t really increase your happiness. More money, more happiness? I guess we’ll have to be doing more Bigger Pockets Money here for a long time then if if, uh, that research proves out.
Scott: Well and that’s why and that’s why let me and I want to clarify this too. To me those happy versus unhappy that that inflection point that’s that that median of 700,000. And I think it’s in happiness may not be the perfect word for that. It may just be, oh, I’ve got enough financial foundation to not be I’m not worth I can make things work forever. I think that’s an inflection point. Awesome. Wes, where can people find out more about you and read these books and get access to some of the data and the research that you’ve uncovered in your awesome career here?
Guest: So just retire sooner team .com. Retire Sooner Team.
Scott: Thank you so much. Really appreciate it. Really enjoyed the discussion and um thanks for all the work you do.
Guest: Yeah, thank you guys. It’s so fun to be on a podcast. Um, thank you guys.
Mindy: Thank you, Wes. This was super, super fun. I always love talking to you and we will talk to you soon.
Guest: Thanks, Mindy.
Scott: Holy cats, Scott. That was Wes Moss and that was a fantastic episode. I loved hearing from him. I loved hearing the tips for what makes somebody happy. Absolutely agree 100% to sum it up, you need to have something to do in retirement. And if you don’t, you are going to have a very miserable and rather short retirement because, uh, can I be very blunt, Scott? You’re going to die.
Mindy: Right you are, Mindy. uh, uh, uh, yeah, on on that particularly dark note. Here Here here’s some things that I I that I took away from it though, right? Is you know, we we’ve talked extensively about the game plan to get there. I I love his definition of enough, right? I mean every retirement and every journey to financial freedom begins with defining the goal posts and setting achievable goals and getting them, knocking those out and not having them move and become more and more and more and more and more over time. And I thought his definition of enough was very carefully constructed, very thoughtful and very powerful. Now, an early retire, someone in their 30s, 40s or maybe early 50s, probably going to need to be a little bit pump those numbers up a little bit because social security is so far away um that they’re going to need other income streams and will probably be uncomfortable with diminishing net worth along that uh journey to traditional retirement age. But, um, the principles are are really helpful there. And I, I like I mentioned earlier, I got even more out of the what makes you happy in retirement discussion than I did about out of the game plan, uh peace. And lots to think about there in terms of cultivating, you know, I’m glad we had that last question about, uh, total net worth because there is a point to accumulating a little bit more and there is additional happiness probably that comes with having the more optionality with a bigger pile of money at the end of the day. But more important than that are the core pursuits, are the family dynamics that you start in your 20s, 30s, growing up, uh 40s, 50s, 60s, 70s, 80s, uh the friends and the social circles that you cultivate and you know that throws you light on the fact that, you know, um I’m glad I I’m glad I played uh more video games uh rather than going outside, growing up because that is a lifetime hobby. And rugby, while I loved it very much, is probably not something I’m able to do in uh uh retirement whether early or traditional. So what about you Mindy? What what what did you learn from today’s conversation?
Scott: Well I’m definitely not going to be playing rugby when I’m 70. Uh, but if you do, Scott, you should play a 70 and up rugby league. I bet there’s other ruggers out there that are that are wanting to play but
Mindy: You know there’s seven’s rugby so 70s. I I think they’re like that. Yeah. There you go. Um, I I could not agree more with his, uh, core pursuits. Yes, you need something to do in your retirement. And I have seen this, um, I I like that he says core pursuits. I have seen this in Carl’s early retirement where he is pursuing everything. He wants to do this and this and this and this and this and he is busier now than he ever was when he had an actual job and, you know, figure it out now what it is that you love to do because Carl has started to, he’s been retired for five years, he is starting to figure out what he likes to do and what he doesn’t like to do. But it’s been a process and he could have been paying attention to this a little bit sooner, but he was so focused on the end goal of retiring early that he didn’t he knew he had to have something to do in retirement, but he didn’t really focus on core pursuits. So, you know, just like you’ve got a bucket list, think about your retirement bucket list. What are the things that you want to spend your days doing? I just think that there’s there’s not enough thought given to actually what you’re going to be doing after retirement, um, especially in the early retirement community. So, uh, think about how you’re going to be spending your days, more so than just collecting the money.
Scott: Yeah, running to something rather than away from something, right?
Mindy: Exactly. That, oh wow. Thanks Scott. Succinct is has middle name. All right Scott, should we get out of here? Let’s do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott succinct Trench and I am Mindy not succinct Jensen saying see you around Hound. If you enjoyed today’s episode, please give us a five star review on Spotify or Apple. And if you’re looking for even more money content, feel free to visit our YouTube channel at youtube.com/biggerpocketsmoney. Bigger Pockets Money was created by Mindy Jensen and Scott Trench, produced by Calen Bennett, editing by Exodus Media, copywriting by Nate Winejob. Lastly, a big thank you to the Bigger Pockets team for making this show possible.
