Refusing to Retire at 65: How a Couple in Their 40s Managed to Hit FI in 12 Years

Mindy:
Welcome to the BiggerPockets Money Podcast, show number 130, where we interview Susan and Norm, a couple who started in a new marriage, basically, from zero, at ages 43 and 47, and still managed to retire early in about 12 years.

Susan:
If you’re in a relationship, and you’re at opposite ends of the spectrum as far as finances, somebody is a big spender, and somebody else wants to save money, you’re both never going to change to meet that other person’s expectations, so really think before going much further, because you either have it or you don’t, and people don’t change.

Mindy:
Hello, hello, hello. My name is Mindy Jensen, and with me as always is my dynamite cohost Scott Trench.

Scott:
Wow, that’s an explosive introduction, Mindy. We’re getting better and better at this.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else, and show you that by following the proven path, you can put yourself on the road to early financial freedom, and get money out of the way, so you can live your best life.

Scott:
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 are just getting started on the financial dependence journey a little later in life, we’ll help you build a position capable of launching yourself towards those dreams.

Mindy:
Scott, I am super pumped for today’s show. We get a lot of questions in our Facebook group and emailed directly to us. One of the recurring themes is, “Can I still reach FI if I’m getting started late? If I’m not in my twenties? If I’m in my thirties, or forties, or fifties, is it a lost cause?” And, of course, the answer is no, but I haven’t really had anybody to help illustrate this until today. Today we chat with Susan and Norm, a couple who met later in life, got married, and were basically starting from a dead stop. They had debts about equal to their assets. They discovered financial independence, and decided not to let the fact that they’re 43 and 47 stop them from retiring early. Susan worked a W-2 sales job while Norm owned his own painting business. Starting from a deficit in relationship to an early retirement, they knew they had the buckle down, and hit it hard, so they did.

Scott:
Yeah. In today’s episode, you’re going to hear a lot of common themes that we’ve talked about before; expenses on the housing, transportation, and food side of things, a aggressive grind moving toward financial independence, and then, the expanding income, and I would even say sophistication around how they’re thinking about investing and building income streams over this journey, and a lot of the concepts are familiar. They are just so real, and honest, and transparent about how they were approaching these problems, the mistakes they made along the way, and the successes they had, and their low risk conservative approach applied over 12 years. I think, if you listen to this, you’re going to hear that 12 years, the grind, but when you listen to this story, I think you’ll learn from them, and see some ways to maybe even repeat their results at a faster clip.

Mindy:
Yup, and they do acknowledge that they had to make some sacrifices, because they had started later, and the way they did it may not be the right approach for other people, but the way they did it is successful, and that’s what I took away from this. They have a wonderful marriage, which is only going to help them on their path to financial freedom.

Scott:
And, total control over their lives, and they love every minute of it, and that came through so clearly.

Mindy:
Yup.

Scott:
Wonderful.

Mindy:
Absolutely. Susan and Norm, welcome to the BiggerPockets Money Podcast. I am so jazzed to have you on the show today, because one of the questions that Scott and I will get very frequently is, can I still retire even though I’m not 20, and I’ve just discovered financial independence? I’m 35, I’m 40, can I still do this? And, I don’t have a lot of people that I know that I can say, “Hey, let’s tell this story.” And then, Fritz from the Retirement Manifesto who was on our show a couple of weeks ago, told me about your story, and I thought, “Wow, I really need to get them on.” Let’s get a quick overview of when you started saving for retirement? How old were you when you discovered financial independence?

Susan:
Now, you’re asking a hard question, how old we were. We’ve been married for 12 years, and it started right about that time. We didn’t have this lofty idea that we are going to be financially independent. We just didn’t want to have debt. We wanted to pay off debt, meaning not have a car note, not have a mortgage. Those were our aspirations, help our kids get through school, and let them not have debt. Those really were our aspirations.

Norm:
And, to begin to prepare for retirement.

Mindy:
Yeah, you read all these stories online that say, “Oh, Americans are never going to be able to retire, because they don’t have any money.” When you got married, what was your net worth?

Susan:
I mean, it was like not a lot-

Norm:
Less than a-

Susan:
Maybe 18, 000.

Norm:
Yeah.

Susan:
I don’t know. It was really low. It was really low. I never had the opportunity to save in 401K. Even though I worked for companies that offered it, I couldn’t have… I was a single parent, and all of my money went to support, so I just couldn’t do that. Norm had been married previously as well, and we just didn’t have the ability to save before we were together.

Scott:
Did you bring in some debt into the marriage either of you guys?

Norm:
We were pretty close to even.

Susan:
I had some student loan debt. I had probably 18,000 in student loan debt, because I was a returning student, adult student. I had never gotten my degree when I was younger. I didn’t have the opportunity, so I went back to school, and in doing that, I did accumulate debt. Again, I was helping my daughter through school, and what else? I had just sold my house when we moved in together. We met, and pretty quickly after we got engaged, we were married within 10 months of meeting, so everything kind of happened quickly for us. We sold my house, but we held that money aside. We didn’t spend that money, and we just kept chipping away at what we needed to do.

Scott:
How did you guys approach the conversation about money? Do you remember maybe who instigated it, or how you began kind of framing that? Was that before, or after the marriage? What’s the general context around that?

Norm:
Well, it was before the marriage.

Susan:
It was well before the marriage.

Norm:
And, I remember we sat down with a piece of paper, and wrote all our assets, and all our debts down on a piece of paper, and shared them together.

Susan:
So that we knew exactly what we were getting.

Mindy:
And, neither of you were scared off by the other?

Susan:
No.

Norm:
No.

Mindy:
I think that’s really important.

Susan:
I’m laughing because, we tell this funny story about when we decided that we were going to move in together, and I was going to sell my house, I said to him, “Whatever you do, the gas better not get shut off, the phone better not get shut off, the electric [inaudible 00:07:05].” And, he’s like looking at me like, “You’re crazy. Why would that happen?” And, I’m like, “Bad experiences.” Suffice to say, here we are today, still happy.

Scott:
Well, I think, I bet you that a lot of people don’t do that particularly far in advance of getting married there. I think that’s a really, really strong, healthy dynamic that you guys put in place right up front in the beginning. Around that time, was that when you kind of began discussing bigger money goals around savings or retirement, or did those kind of evolve later?

Norm:
We just both had the understanding that we were behind as far as retirement, at least that’s the way I felt about it, and we needed to do what we could to try to catch up.

Susan:
And, I love to see money. I love to see money in the bank. I love to see an account grow. For me, that’s really huge, and for me, that’s comforting to have an emergency fund, to know that there’s nothing that can happen that we can’t handle at this moment in time. That was really important, and I think that, that really set the stage for the rest. Once we’d save up some money, and we felt good about it, we could then tackle something else, and we were fortunate in a lot of ways. He took on a second job the year that we got married.
The economy had tanked, his business wasn’t doing well, and just to bring in money, he took a second job, which was huge. It was kind of a game changer for us that year. It was really hard, because I was working full-time and traveling, and he was working the business he owns, plus more than a 40 hour a week job, and we grew a humongous garden, and so, it was hard. We worked a lot, we sacrificed a lot to get through that year. It was a hard year.

Scott:
And, this is the first year of the marriage, or is this the year following, you’re sitting down with, and putting up the list of assets together?

Susan:
This is our first year we’re married, and I want to say it was the month after we got married.

Scott:
Fantastic, and the reason I’m asking so many questions about this, because I feel like this is like the foundation building part, where you felt like you hadn’t made much progress to this point, and then, it sounds like you jumpstart your drive to retirement right here in this first year after you get married, is what I’m gathering. Is that correct?

Susan:
I would say so-

Norm:
Yes.

Susan:
Yes, definitely.

Scott:
Awesome, and so, with that, it sounds like you guys put in a lot of time, and extra hours at work, and with all of this kind of stuff in trying to increase the income front, what kind of decisions did you make on the housing? You said you sold a house, right? I picked that earlier?

Susan:
Yes.

Scott:
What kind of decisions did you make on the housing, transportation, and food side of things? And then, anything else related to kind of your ongoing lifestyle expenses?

Norm:
Well, on the housing, we sold Susan’s house, and downsized to one house, so that’s what we did on that front.

Susan:
But, his house was much bigger than my house, and in retrospect, we maybe should have kept my house, because it was smaller, and we did enter that recession, and then, we couldn’t sell that big house. We had a hard time when we wanted to sell that big house, we had a really hard time selling it. In fact, we ended up renting it out for maybe four or five years, which for us, that was not a good situation. I mean, it wasn’t just terrible, but it just wasn’t the best decision, or situation for us to be in. In retrospect, we probably should have kept my house, and sold his, but we didn’t. As far as food goes, we grew a huge garden. He’s a hunter, so he puts basically all our meat on the table. We buy very little meat at the grocery store. We do a lot of home preserving, so if we grew 30 plants of tomatoes, we would stay up at night canning til like 2:00 in the morning, and that was very normal for us, and thankfully, [inaudible 00:11:04] back then, when we had the energy to do it all.

Mindy:
Yeah, well, I think that really speaks to your mindset. There are so many people who say, “Oh, it sure would be nice to retire. Oh, well, here are some things you can do. Oh, I could never do that.” Well then, you won’t retire early. Retiring early requires some sort of sacrifice, and the earlier you start saving for early retirement, the less of a sacrifice it is, but it’s not like you were going hungry. It’s not like you were just eating beans and rice. You had food, you just grew it yourself, you canned it yourself, you hunted it yourself. I don’t hunt, but I’m assuming that if you do that’s something that you enjoy, so that’s not even a sacrifice there, but what is the quote, Scott? “Do what others won’t do now so you can live like others don’t live later.” Or, something I just mingled that.

Scott:
Yeah, it’s something that’s awkwardly phrased, which is why we can never remember this quote. It’s something like that though, yeah, but it sounds to me like-

Susan:
We heard that, and it’s absolutely true. You’ve got to live below your means now, so that you can live how you want to in the future, yeah.

Scott:
What I’m detecting from you guys is a really an all out grind approach here where you guys are working tons hours and really cutting back on the expense side, and do it as much as you can in house, with the food side of things, which is something that a lot of people don’t consider as a part of it. The big three in American household expenses are housing, transportation, and food, and then, the other stuff makes up the remaining third of most spending. Could you give us a little quick overview of what you did for transportation in this year, if you made any changes there?

Susan:
Yeah. Let me go back to something of food first, because you’ll be able to slip it in there. We eat at home almost all the time. We have date night in… back then, I don’t even think we were doing date night.

Norm:
No.

Susan:
We ate… because I love to cook, and he’s become a very good cook since we got together, so we enjoy cooking at home together, and we enjoy the food that we cook more than we enjoy eating out, and spending quadruple what you need to do to have a meal, so that kind of puts the bow on the whole eating situation. As far as transportation, I was driving a 2002 Toyota Corolla, even when we met, and so, that was 2007.

Scott:
I had a 2003 Corolla for a long time.

Susan:
We kept that car, I want to say until four years ago. We kept that car, I want to say until 2016. I drove that car until we were working with a financial planner, and he’s like, “You are up and down the highway in Atlanta every week, a number of times.” He’s like, “You need to get a different vehicle before you get killed in that thing.” Don’t put that in the video, but you know what I mean? He was like, “You can afford a decent car. I don’t know why you continue to drive this car.” Well, I stopped driving it, and he started driving it for work, because the gas mileage is so good. Today we drive Prius’s. We have three Prius’s. Two of them are his company cars, but even my personal car is a Prius, because it’s awesome on gas mileage, and it’s, I want to say my favorite car I’ve ever owned.

Mindy:
That’s awesome.

Scott:
Awesome.

Susan:
Yeah, so we’d like drive them till they’re about to die, and then, we sell them, or whatever, give them away.

Scott:
I love it, and in my experience talking to a lot of people about this, when you go all out like this, it’s a grind for a couple of years, but there’s some phenomenal results at the end of the rainbow that a lot of people have realized, so I’m very excited to get to that part, because I’m sure it’s coming in a little bit here, but in the meantime, in this first year, as you’re going all out, what are you doing with the excess cash that you’re accumulating? What’s your kind of thought process, and approach to applying that to advance your position?

Norm:
I think the first year, I think we set aside an emergency fund, and then, it was paying off the small… We didn’t have a lot of debt, but paying off the little bit of debt we had, and getting both our daughters through college. We had two daughters to get through college, so that’s where a big part of our money went that first year.

Susan:
I think that first year I still owed maybe a thousand dollars on my car, and I paid it off, and then, after that was just socking it away. Just every penny that didn’t go [inaudible 00:15:32].

Mindy:
You owed a thousand dollars on your car, and you paid that off, and then?

Susan:
And then, we just socked money away. We just were fiends at saving money.

Mindy:
Okay. I’ve got to interrupt your story, because you just said you put two girls through college, and retired early, and started with nothing, and did all of this in 12 years.

Susan:
Well, let’s be fair to everyone, so his ex-wife paid part of his daughter’s tuition. He paid another part, and his daughter got tons of scholarships, so that was a package. My daughter got a lot of scholarships, and I helped her with whatever the balance was, so neither of them went to Harvard or Yale, where it’s extensive fees. My daughter went to state schools, and so, it made it much more affordable than private.

Mindy:
Okay, but allow me to congratulate you, because that’s just another facet of the story. You didn’t just retire early, starting with a position of not that much. You retired early and did college too. That’s awesome.

Scott:
And, it sounds like you have some great daughters who contributed, and did their part on the scholarship front there.

Susan:
They’re awesome, and they have always done their part. They’re great. They’re very fully responsible.

Scott:
So, when you say socked away the money, did you put that into a savings account, and what does that mean?

Norm:
Well, early on it was the savings account, and then, it was maxing out Susan’s 401K, and I will tell you this, at one point we had no debt except the house, and Susan was doing really well at work, and I was working really hard, and we were making a good living, and we were making a lot of money, but we put every penny on the house, and we just felt poor.

Susan:
Yeah, so once we moved out of his big house, and we rented it, we went north from where we lived to have a little bit of land with a house.

Scott:
Sorry, can I just go one step back here [crosstalk 00:17:37] just so I have a chronological timeline here? At first, it sounds like you pay off college, and you pay off a little bit of remaining debt, and then, you get to this point where you feel like things are starting to snowball, you’re accumulating money in the 401K, and you’re [inaudible 00:17:51] to make the next set of moves. Around when is this? Is this about a year after you got married, in the context of your marriage?

Norm:
Probably.

Susan:
We got married in 2008, so 2010, we moved into another house.

Scott:
This is after a couple of years of grind, and accumulating and those types of things?

Susan:
A couple years of grind, yeah.

Norm:
Yeah.

Susan:
Paying off the debt, helping the girls. To answer your question, we’d open CDs. Ally at that time had great rates on CDs. We had some IRAs, and some Roth IRAs that we’d put money into, and at that point, like he said, I was maxing out 401k. I wasn’t maxing it out at 24,000, but I was doing like six or seven, 12%. I’d always go in, and play with it. I would always like to play around with how much money was going into the 401K, for whatever reason. If I knew that I was getting a bonus, I’d go in, and I’d put it up to 20%, and you have like a ton of money to go into 401K for that one check. Then once I got that money, I put it back down to like a livable amount, like 7%. I was always just kind of playing around with it, if that makes sense.

Mindy:
I do that same thing.

Susan:
Yeah. I love doing that. It was always fun. It was like a little game I played with myself. We moved to the other house, and had a little bit of land, so we had about an acre and a quarter. We planted fruit trees, had a big garden there, started having chickens free range in the yard, he was still hunting, and we were still doing our same thing, but at this point, like he said, we started taking every single penny. Well, first of all, the house needed renovating when we bought it. Thankfully, he’s a very resourceful person, and knows a lot of people. We did a lot of work ourselves. We were still in the recession time, so there were a lot of contractors that weren’t working. He had contacts, and he’d say, “Hey, I need some plumbing work. Are you busy tomorrow?” “Nope.” And, they’d come over and help, and it helped them stay afloat. It was a mutual thing.
We helped each other and we still do. He still has great contacts, and when we need something, we reach out to the people that he knows to help us out with things. We renovated the house, and after the renovation was done, that’s when we started getting dead serious about paying that house off, and we paid that house off in less than five years, and that was after we renovated it, and then, every single extra penny went on that house, and I’m not joking when I say penny. I would send the mortgage company crazy checks like, okay, I have, $1,325.59, that’s what they got. What [inaudible 00:20:40] about doing that is you have to track it, and hold the bank accountable. I always looked for whatever payment I gave, whatever extra principle I gave, and I would always log into my account, and make sure that it was applied right, and more than a handful of times I misapplied, and that only hurts you in the end. You’ve got to call them, and get them to correct it.

Scott:
Okay, so a few years after you got married, you moved out of the house, and you bought this other house to rehab it. You kept the first one as a rental. Is that right?

Susan:
Yes.

Norm:
Yes, out of necessity.

Scott:
Did that first one have a mortgage on it as well? Which mortgage were you paying off aggressively? Was it both?

Susan:
It was our primary residence that we were paying off.

Norm:
So, that first house did have a mortgage. We were renting it out, and we were using that money to pay the mortgage, and we were paying off the house that we were living in.

Scott:
Got it, and everything was going towards that, the mortgage pay down. Love it. So, that took you what? It sounds like four or five years?

Norm:
Right.

Susan:
Yeah, right at five years we paid it off.

Scott:
Wonderful, so it sounds like that’s the next milestone, so now you’re grinding for six, seven years, but you got a completely paid off house, and what sounds like snowballing accounts in your 401k, I’d imagine, and those types of things. Is that reasonably correct?

Norm:
Correct.

Susan:
Yes, so at that point now we have no house payment, and now I start to completely max out my 401K, so whatever the max is, I started putting that in, and we started, again, heavily saving money. We didn’t say, “Oh, we have a lot of extra money. We’re just going to go spend it needlessly.” We have never been like that. Just every extra penny, which is, you pay the lights, the heat, and whatever’s extra got saved.

Norm:
And then, probably [inaudible 00:22:29] four years into that new house we sold the house that we started out in. We made a little bit of money, or came out with a little bit of money, but the market had came back by that point, where we could at least break even and not lose money on it.

Susan:
Yup.

Mindy:
What did you do with the money that you made from that house? Did you put that into an investment?

Norm:
I think we bought land with it [inaudible 00:22:50].

Susan:
Oh, I don’t think we did. I think we saved it, and I think, it’s so hard to remember that far back.

Scott:
But, it also sounds like it wasn’t a huge chunk of money, because you were just ready to get rid of it.

Norm:
Yeah, [inaudible 00:23:04] $2,000, but-

Susan:
Yeah, I mean, it was good, but it wasn’t something to retire on, but it was something that could go towards something. At this point, we were on a business trip in Florida, and I was driving him to the airport, because he had… actually, that was 2013. We were in Florida. We were on a business trip, blah, blah, blah. I’m driving him to the airport, and he sees this little town, and he says, “When you’re on your way back, you need to stop here. You’re going to love this beach. It is the most beautiful beach you’re going to fall in love.” So, I did. On the way back, I stopped, I had some time before I had to literally be at work. We stopped in, and I fell in love. Well, the next year we had to go back to the same conference, and I said, “Geez, can we go to this beach, and rent a place for the weekend after we work?” And, [inaudible 00:23:58]said, “Sure that’s be great.” So, that’s how we found our first condo.
We were on the beach one day talking to another couple, and they were talking about how they had just bought a place down there, and it was really reasonable. We went back to our condo, and called a real estate agent, and went looking at properties, and he found one on Craigslist for sale by owner. That’s how we ended up having a condo down there, but all of the savings that we’ve been doing paid off, because you have to put down, I think it was 30%-

Norm:
It was 30%.

Susan:
… we had to put down, because it wasn’t our primary residence, and we needed to get a mortgage on it, so all the savings that we’ve been doing paid off. We now could take that money and put it into an investment, and that we did, and we didn’t necessarily start out thinking, “Oh, this is going to be a great investment.” I thought, “Well, the lady that owns it, she was managing it.” And, I said, “Well, she can keep managing it for us, and it will help pay for it.” I just kept thinking, “Oh, this will be a great place for us to come to.” But, it’s turned into a business, and it’s been really great for us.

Mindy:
You rent that out as a short term rental?

Susan:
Yes.

Norm:
Yes.

Scott:
And, this purchase is around 2013, is that correct?

Susan:
Exactly, yeah.

Scott:
Excellent.

Susan:
[inaudible 00:25:08] 2013.

Scott:
So, at this point, I think at one or two years you moved from [inaudible 00:25:13] down the mortgage of your place, and continuing to apply pressure to just in general, around building wealth, and you’re increasing your savings buffer. Is that right?

Norm:
Yes.

Susan:
Yeah. We hadn’t paid off our primary residence yet, but we were working towards it, and yes-

Scott:
Got it, okay.

Susan:
… this was just another avenue.

Scott:
What comes next? How does that turn out, and how does the portfolio continue to build?

Susan:
It worked out great. From the day we bought it, she had it rented. The lady that we bought it from, she was a property manager, so she had already booked out stays, and so, the day that we bought it, we just started making money from it, which was great. It’s just been a great investment. Probably the best thing we ever did with our money was buy that condo.

Norm:
And, we’re very fortunate in the timing, and of course, a lot of times that’s just luck, but the condos in this complex are all the same size. They’re very similar, and the one before ours sold for more than ours, and the one after ours sold for more than ours. We bought it at the absolute [inaudible 00:26:14].

Mindy:
Wow. That’s awesome.

Susan:
Right, but we never could have without having that nest egg sitting there waiting, and if we had been impulsive people, I always like to say, don’t spend any money on Starbucks. You’re going to drink two or three Starbucks a day. That’s $10,000 a year. If you save $10.27 a day, that equals $10,000 at the end of the year. That’s pretty powerful.

Scott:
You guys spent five years working double shift, and growing your own food, and driving older cars. You’re not going to blow it on an impulse purchase at that point, and that’s something that I think there’s like all of this stuff, I think in personal finance ties together, because making a good investment becomes so much higher stakes when you’ve put in the grind that you guys did going into that, I think, and it gives you that much higher of a probability of success, because it’s got to matter, because so much went into that to putting yourself in a position to make that first purchase, right?

Susan:
Yeah, definitely. I mean, we really did sacrifice a lot. Once we paid off our primary residence, then we focused on paying off that condo, because we didn’t want to have a mortgage. We started tripling up on the payments for that, and I don’t even remember how quickly we paid that off, but it was pretty-

Norm:
It didn’t take long.

Susan:
It was pretty quick, it didn’t take long, because any proceeds from the rental plus all the money that we weren’t putting into our primary, we then put onto that condo, and then, as soon as that was paid off, we still retained our emergency fund. That was something that wasn’t negotiable. It wasn’t going away.

Scott:
What does an emergency fund look like for you guys in terms of maybe months of spending or how did you kind of think about that?

Susan:
I always just think of it as a huge lump sum of money. I know that a lot of people say have six months of an emergency fund. I totally agree with that. What were you going to say?

Norm:
I was going to say six months.

Susan:
Yeah. You can have six months. I just always think in terms of like a large amount of money.

Scott:
Would it be fair to say it was…?

Susan:
We would have 20 to $50,000 in an emergency fund.

Scott:
Got it. Okay. Very good. You have that, and you pay it off, and you’ve got an emergency fund. What’s next there?

Susan:
What’s next there?

Norm:
Maybe about that time I was self employed, and we realized that I could set up a 401K as well. We had known that in the past, wasn’t knowledgeable in that area. Susan was already maxing out her 401K, and then, I started maxing out my 401k. That was probably the next major thing I would think.

Susan:
Yeah.

Mindy:
And, what year was this?

Norm:
That was probably only four years ago.

Susan:
Four or five.

Norm:
Yeah.

Mindy:
Okay, so 2015, 2016. Now we’re maxing out two 401Ks, and you have a company. You’re self employed, what does your company do?

Norm:
We paint houses.

Mindy:
Okay, so that seems like something that would be humming right along in the 2016, 2017 area of time.

Norm:
Yes. We had a very hard time when we first got together. That’s when the economy, especially, building had a very hard time, but by that time it was much better.

Mindy:
Okay.

Scott:
Can you walk us through what that discovery process was, and what you learned about the 401K benefits from a self-employment perspective? Because, I think a lot of people are surprised by what they find with that, and how much it differs from an employee?

Norm:
Yeah, well, actually I was at a person’s house painting, and she was in the business of setting people up doing payroll, and she explained how it could be done.

Scott:
That’s awesome. What are the limits on a self-employment 401K contribution?

Norm:
There’s a lot of different things, and a 401K would be the same as like with an employer, depending on your age, I think around 24,000, 24, five or something. There are other ways where the [inaudible 00:30:18]. There’s some other things you can do to get it up around 52, but I haven’t done that. I’ve stayed at the 24.

Susan:
But, I will just say this, self-employed people need to be cautious of what they do with their 401K, because in his situation, he had an employee that didn’t take 401K, even though it was offered to him, and so, when they did the testing, he ended up losing out on that, and so, the contributions that he made were actually sent back to him the next year, and had we known that the employee wasn’t going to take the 401K, we would have done something different with that money. We would have put it in an IRA, or some other means.

Norm:
There’s actually something called a safe harbor 401K, that I should have been in, and I am now. The first few years I didn’t have an employee, all my labor’s contract, and so, the first few years, it wasn’t a problem. Then when I added my first employee, then that created a problem.

Scott:
I have a little bit of experience with this through BiggerPockets as well, and there’s a lot of longterm and short term considerations with these types of things. The message is if you own a business with employees, and you’re thinking about setting something up like this really kind of do your research, and maybe talk to a couple people who have been in business for a couple of years to take away the learnings, because there’s a lot of big opportunity to contribute a lot of money to these things, but also, some mistakes you can set yourself up for a downstream.

Susan:
Yeah. I’d say it’s very important to have a good CPA. You need to [crosstalk 00:31:51].

Mindy:
… have a degree [crosstalk 00:31:52].

Susan:
… very knowledgeable on your side.

Scott:
Better even if they’re a customer. All right. Well, excellent. I’m sorry, I keep derailing the story here, but there’s just a lot of interesting tangents I’m finding here. Where were we? At this person’s house, you’re painting it, and you set up your 401K, where do we go next in the story here?

Norm:
We continue to do the same thing until the next condo probably. Is that the next major thing?

Susan:
I think that was the next major thing. We just kept plotting along and working hard, and man, when was that?

Norm:
I don’t know it was the book that I read first or the second condo first?

Susan:
[crosstalk 00:32:36].

Mindy:
What book did you read?

Scott:
Oh, a book.

Susan:
Yeah, I think he read a book.

Scott:
What’s the guy’s name?

Susan:
Wes Mos.

Norm:
Wes Mos, You Can Retire Sooner Than You Think. We were on vacation, and I read that book, and just started thinking. His idea is developing these different income streams, and that’s when the thought dawned on me, “Hey, we’ve kind of already developed these income streams.” And, that’s why I’m having a hard time remembering whether we had the second condo first or not, but I think maybe we did.

Susan:
I think you read the book first, and I’m going to tell you why, because we only got the second condo two years ago, a little over two years ago. I think that he read the book first.

Norm:
But, we got the idea, “Oh, if we can set up these different streams of income that will help us get to retirement.” We have saved a lot of money, but it’s not so much the money we had saved, but it’s the strings of income that we have coming in as well.

Susan:
And, I would say that, that was the tipping point of us thinking that we could retire early. I think that was the light bulb, aha moment. Even though we had come so far, I don’t think either of us had that on our minds until he read that book. It was like, “Wait a minute, we’re doing all this stuff. Why can’t we retire early?” And then, I think we got really dead serious about it, and I want to put in something in here. It just came to me while he was talking. Something that we do, that’s very interesting is, every year, at the end of the year we take vacation together, because I was in sales for a number of years, and I was constantly traveling, and my phone rang all the time, and we didn’t have like time together, alone time.
At the end of the year after we’d been totally stressed out all year working so hard, we would take a very nice vacation, and we’d have the vacation paid before we ever went on a vacation, so no matter what we did on vacation, we could have the best time, and we knew we weren’t coming back to debt, so that’s a very good point for people, but what we would do on this trip is set aside a number of hours where we just sat down together, and we went through every aspect of our finances, and we set up financial goals for the next year. We set up personal goals for the next year. Like, if I want to lose 10 pounds, it got written down. If I want to start exercising four times a week, it got written down. If we wanted to save $40,000 before July 1st, it got written down, so in this meeting, we’d look back at the year, and we’d see, what did we do? Well, how many of these things did we accomplish? And, it was pretty amazing.
We accomplished, every single year, almost all of the goals for that year, every year, and we just continue to do that, and I think it’s something that really strengthens our relationship, because we’re on the same page. We agree to what gets written down. If I say, I want to save X amount of dollars, or X amount of [inaudible 00:35:36] and he doesn’t want to do that, or he thinks we can do more, we talk about it, and then, whatever we agree upon gets written down, so that’s something that we do that I think has been incredibly beneficial to us. Even today, we do it.

Norm:
We were on a cruise ship one time doing that exact thing, and I guess somebody was overhearing us, and the man said, he was a, what did he say he was a?

Susan:
Marriage counselor.

Norm:
He was a marriage counselor, and he said, “That’s one of the healthiest conversations I’ve ever heard.”

Scott:
That’s awesome.

Mindy:
That is so fantastic. I love that, and that’s a recurring theme with many of our guests who are married. They have financial dates, and some of them it’s every week, it’s every month, it’s every quarter, it’s every year, it’s whatever works for you, but being on the same page, and just coming back to that, “Hey, let’s make sure that we’re on the same page.” That’s so powerful, because what’s the number one thing that couples fight about? It’s money, so let’s take that fight out of the equation. There’s a lot of other things you can fight about. Scott isn’t married yet. He’s going to get married in October, so [crosstalk 00:36:41].

Susan:
Congratulations.

Scott:
Thank you, yes.

Mindy:
Scott’s learning all of these things, but you have to have regular money dates. You have to talk about your goals, and I love that. Good job, he’s right.

Scott:
Yeah, it sounds like you guys have been really on the same page this entire journey from what I can tell from this, is that how you’d characterize it?

Norm:
Definitely.

Susan:
Yeah.

Norm:
Yeah.

Susan:
A hundred percent?

Scott:
Yeah, [crosstalk 00:37:04] that’s good. A lot of couples aren’t that we’ve talked to over the last couple of years, or at least not at first, not at first.

Susan:
And, that’s a very difficult place to be in. We have friends that have that situation, where one of them wants to save money, and the other one wants to do nothing, but spend money, or one of them hides things from their spouse that they bought. There’s none of that in our relationship. I just don’t see the point in it. That’s deceitful.

Mindy:
There is no point in that, that is the quickest way to divorce court, or at least fighting all the time court. Yeah, and you know what? My husband and I don’t have a lot of fights, but when we do fight, I feel like crap. I don’t want to hide things from him, so that now we’re having, I mean, that’s a fight. Here’s a pro tip Scott, she will always find out. Whatever it is that you’re hiding, she’s always going to find out, so tell her right when it happens, if it’s a thing, or discuss it in advance. I think it goes back to them talking about money. Before they got married, they sat down, “Here’s all of my assets, here’s all of my debts, here’s my financial picture.” What is, Erin Lowry calls it, getting financially naked with your spouse or with your fiance.
Have that money conversation. If you can’t have that painful or apprehensive money conversation with your spouse, you have no business getting married, says the girl who never talked about money with her spouse before she got married. Do as I say, not as I do.

Scott:
Well, one thing, and correct me if I’m wrong in this here, but one thing that it sounds like is you guys just both had very good instincts about what you wanted, and how to go about it, but you hadn’t really like consumed a lot of formal knowledge on the subject perhaps. It sounds like you read a book on this many years into the journey, and discovered kind of what you could do with the 401K type of thing. Is that correct?

Norm:
That is correct, and I believe, like we weren’t looking at a longterm vision. It would be great to have that. It was more like we were looking at this next week, and the next step, and just putting ourselves on the path to getting to a great place that wasn’t so much that we had that plan to retire. I had no idea that I’d be able to retire early. Since I was older than 40 and had nothing saved, I just assumed that I would be working until I was 70. My dad’s in great health, and I hope to be the same way, and I just always assumed that I’d be working way up to my seventies doing something, because I would have to be.

Scott:
Do you think if you were to go back, and when someone’s listening, who finds themselves in a similar position to where you were, when you started out, right around when you got married, do you think if you had the playbook that you’re sharing with us right now, at that point in time, would you have been farther along today?

Norm:
I think so. I think that would have been helpful.

Scott:
Yeah. That’s what I think is so awesome about your story is, you guys just figured this out for the most part, on your own, and grinded it out, and I think that’s just remarkably impressive, and very hopeful for the person listening to this, because I think that they can make a lot of the progress you’ve made and catch up even if they’re starting from a farther behind position, maybe a couple of years further along than where you guys started out. Anyways, going back to your story here, it sounds like you read this book and there was a big mindset shift, and what did that look like? Did that change your income? How you’re approaching earned income? How you’re approaching spending? Or, how you’re approaching investing and business?

Norm:
I think, it changed more on investing than anything else, because, before I had just thought about retirement as you needed this big pot of money, and I didn’t know how long I was going to live, and I didn’t know how big the pot needed to be, but when I started realizing if you set these things up when you had income coming in, that was just an easier concept for me to grasp, that if you had X amount coming in, and you had it coming in perpetuity, that you could get to the point of retirement.

Scott:
What was your plan? How’d you go about approaching that?

Susan:
Well, we kind of already had that ball rolling.

Norm:
Yeah, quite a few of the pieces were in place, and I think the second condo was-

Susan:
The icing on the cake.

Norm:
Yeah. That decision was made directly, because of that. We didn’t just stumble into that one.

Scott:
What did that look like? Was that a plan to buy it, and pay it off similar to the first one? And, that will get you to certain numbers that you needed?

Norm:
Actually, we had the cash for that one. We paid cash for that one.

Susan:
But, we had to scrape, because we tried to get a mortgage, and you just can’t always depend on the banks to do what they need to do in a timely fashion, and we had a date we needed to have a closing on, and for whatever reason, the bank kept not coming through for us, even though I kept calling, and saying, “Hey, what’s going on with this?” When it came down to what? Probably four days before we were going to close, we realized the bank’s not coming through. We’re going to have to scrape, and there went my emergency fund, and it’s the only time, well, not the only time, but there went my emergency fund, because we needed that money to help pay for that condo, and we like literally scraped out of every account as much money as we could possibly take out of the account to buy a second condo. We didn’t start out with a mortgage, which was nice, but it put us in financial straits for a little bit, and that makes me nervous.

Scott:
I love how you consider that financial straits, because yeah, you got two paid off houses-

Susan:
Three.

Scott:
… and a third paid off house now, yeah, and you could easily get a line of credit I’m sure on one or multiple of those properties, [inaudible 00:42:48] what I assume credit, but I love it. Like, hey, your mentality is, if I don’t have all these assets, and an emergency cushion, and what sounds like extra income streams, I’m not comfortable, which I think is, I like as a healthy mindset, I think.

Susan:
Right, and I’m not comfortable. I get very stressed out. He can tell you. That is something that really [crosstalk 00:43:06]. I know it’s funny to other people, and I know that we could take a line of credit, but number one, you have to pay that back, and if you sell your house within a certain amount of time, you have to pay the closing costs back, so it’s not like it’s easy, free money, and he and I, we play a little game with credit cards. Don’t tell any of the credit card companies, but we like taking credit cards out, just probably like you guys, and using them, getting our points, maybe keeping it if it’s a good card, maybe not, and using our money to work for us. We’re getting pay back from all the years when we paid credit card interest.

Norm:
Yeah, that is my goal. My first marriage, I was married 20 years, and then, I can’t imagine how much money we paid the credit card companies, and my goal was to get every penny of it back.

Mindy:
Good.

Scott:
All right. How are you doing that specifically?

Norm:
Well, because of my business, our painting business, I buy a lot of supplies, so probably buy 15,000, $20,000 worth of paint a month, so that all goes on credit cards, and I’ve watched the best ones, you’re getting 2% back, but then, I’d probably take out six credit cards a year, or we’ll get a hundred thousand bonus points, or 60,000 bonus points, and lots of times I’ll charge it, so you have to charge $5,000. I’ll charge $5,000, pay off the card, keep the points, and we just do it over, and over until the credit card companies won’t [inaudible 00:44:40] credit cards anymore.

Scott:
You’ve got some awesome vacations going.

Susan:
Yes, we do and that [inaudible 00:44:45] everything [crosstalk 00:44:47].

Scott:
All right [crosstalk 00:44:48].

Norm:
… vacation on the points.

Susan:
We took a two week cruise in December, and we didn’t pay for it.

Scott:
Love it.

Mindy:
That’s fantastic.

Susan:
Yeah.

Mindy:
And, you’re absolutely right. You do that, and the credit card companies, you know what? They’ll be okay. Don’t worry about them. You get what you get [crosstalk 00:45:06]. They offered it to you. You didn’t hold them hostage for that. You didn’t say, “Oh, if you don’t give me this money, or these points, I’m not going to open up the card.” They’re like, “Hey, if you open up the card, we’ll give you these.” Great. That’s what I did, and now I have amazing vacations. That’s awesome. Let’s look at these multiple income streams. You have a rental condo, you have a second rental condo, you have the painting company right now.

Norm:
Yes.

Mindy:
Are you going to keep the painting company?

Norm:
That is something we’re wrestling with right now. We will see. Possibly, I will hire somebody that’s already has a painting business to manage my business along with theirs. That’s something I’m looking into right now, but we’re not a hundred percent sure how that’s going to end up.

Mindy:
Okay. Are there any other income streams that I have missed?

Norm:
Yes.

Mindy:
Oh, good.

Norm:
Susan, when she was in sales, part of her pay was that she gets residual incomes for life, on her sales.

Mindy:
For life?

Norm:
For life, as long as those sales stay in place, so it’s not enough money to live on, but it’s another stream of income.

Mindy:
You can send it to me if you don’t want it.

Scott:
Absolutely, yeah.

Mindy:
I’ll take it.

Norm:
I like [inaudible 00:46:25].

Mindy:
I bet you do. That’s an awesome setup. Did they offer that to you? Or, was that something you negotiated in your employment contract?

Susan:
No, that’s something that all the sales members were offered, that came onto the company within a certain timeframe, or before a certain date. All the people that came on before a certain date were offered that in their contract.

Norm:
We have that stream of income, the two rental houses. Another income stream would be the money we make from our investments, and then, at some point we’ll both have Social Security as two more income streams, so there’s five income streams.

Mindy:
Okay, and what are you invested in? Is it like stocks, or [crosstalk 00:47:09] index funds?

Norm:
We have quite a few different investments, but we have mutual funds. We also do some peer to peer lending. That’s been very successful for us through our financial advisor, so it’s a group of things.

Susan:
Right, we’re pretty well diversed as far as our investments go. We have a bunch of different things going on, and one thing I’ll mention is, I like to read blogs. A couple of years ago when we were first starting to think of retirement, and I found a blog called Cash Cow Couple, and I learned about Wealthfront, and so, I have some of my 401K money in Wealthfront, because it’s only 0.25%, which is fantastic, and it’s been a good investment for me. I’ve enjoyed having it there, and then, one other thing that I think I should tell you is that we track all of our accounts, and our net worth on Personal Capital, and that’s been huge for us. Number one, we forget some of the things that we have, and I think that’s part of old age, but it really helps us see everything.
We’re real big on not paying fees, and if a fee shows up on Personal Capital, it’s much easier for me to see than looking at different bank accounts. What happened? Why do we have this fee? And then, usually whoever the institution is will take the fee off, if you bring it up.

Scott:
We’ve talked about Wealthfront, and the low cost, those types of low cost investments before on the show, but we haven’t talked much about in the past peer to peer lending, very much. A couple of questions about that. How do you approach that, and then, do you do that through your retirement account, or do you do that after tax vehicles like bank accounts or those types of things.

Norm:
We’ve actually done both, but most of it’s in a retirement account, and it’s through our financial advisor. We do some peer to peer lending that is backed by stock, so they’re stocking an account that is the collateral, and it is usually old stock that has been in a family a long time. Coca Cola was one of them, and so, they put stock into a trust, and then we loaned them money, and we’d make a percentage off [inaudible 00:49:35].

Scott:
Yeah, and if you’re listening, one of the reasons why a lot of people do this kind of lending, peer to peer, and those types of things, through retirement accounts is because it produces simple interest income, which is a little bit more efficient to build through their retirement account than maybe outside of it like rental real estate, or those types of things. Well, great, so what’s next.

Norm:
Our next big goal is to find out about my business, is how we are going to handle that, because that will either be another amount of cash that we have if we sell it, or it’ll be a stream of income if we come up with another arrangement, so that’s really the main thing to keep us from both being fully retired.

Scott:
What will you do when you’re fully retired?

Norm:
We’d like to travel the country. We have a camper. We would love to go around the country, that’s something we would really enjoy.

Susan:
We like to hike, so we really want to hit all the national parks, and do as much hiking as we can, while we’re still young enough to enjoy it, and have the physical ability.

Norm:
There’s things that we do, like for instance, gardening and hunting, that I do those things, but I’m always in a hurry, and I’m always thinking my phone’s going to ring. If I turn my phone off, what am I going to miss? I really look forward to concentrate on gardening and concentrate on hunting when I’m hunting.

Scott:
Awesome.

Mindy:
That’s a nice a goal. You said that you track your spending through Personal Capital, which I love. I do a lot of, or you track your investments through Personal Capital, but you also said that you review them, and I think that’s a really important point to note. There are so many people that I know who are not in the personal financial space that they’d never look at their statements. They never review anything, so maybe you’ve got a bank statement that has the same charge every single month for the last seven years. If you’ve never looked at that, how do you know that you’re being charged this? And, maybe it’s just, “Oh wow. I was $35 off. I wonder how that was, whatever.” And, you rewrite your balance, and then, you’re done, and, no, look at your statements, review your statements, review your bank statements, your credit card bills, all of these investments and everything, because when you get this fee, and you call them instantly, they might be able to take it off, but, if you call them seven years from now, they’re going to be like, “Yes, sorry about that.”

Susan:
Yeah, that’s absolutely-

Norm:
That’s correct.

Susan:
… right. Yeah, you can’t expect the credit card companies to go back more than 30 days for you. If they do, then you’re fortunate, but they’re not going to go back a year for you.

Mindy:
Exactly.

Susan:
It’s important, and Personal Capital gives you the tools to, I want to say that you can see a graph of where your spending was, and it will show you fees. It will show you what percentage or what dollar amount was fees, and that’s real important. You don’t want to waste your money paying interest fees. That’s just money out the window that you’re never going to see again, and it’s not going to work for you either.

Mindy:
Exactly.

Scott:
I’ve got one more question here about [inaudible 00:52:39]. Over the course of your story, it sounds like, at least at first there was a tremendous amount of sacrifice, and hustle that went into your journey, and what I want to know is, are you expecting to reap that all, as rewards of that effort, all at once, once you fully retire, or did you begin to realize that in terms of quality of life, and how you felt about your position with each passing year, and at various milestones?

Susan:
That’s a great question for me anyways, and then, I’ll let you speak. I started to feel it once our primary residence was paid off. The amount of stress that we put on ourselves to pay that off, it was worth it, but it was hard, and in fact, we used to sit at night and say, “Oh my God, why do I feel so poor?” We had these really hard, like emotional conversations, because we were making really good money, but because we put every penny on the house, it was really trying sometimes like, okay, everybody’s doing this, but we’re not doing that with them, because we don’t want to spend $400 on something that really is kind of meaningless. I’m just throwing that out there as an example.
But, I think those years were hard. They were hard to do, but once we got beyond that, there was just this instant, like we could breathe again, and we just still kept up our way of life. We didn’t start spending more, because we had money that we could save. We just started taking all that money, and saving it, or putting it into other areas that were going to just help us down the line, but I’d say, yeah, at this point we have a really nice, comfortable way of life together.

Norm:
And, I think it’s really nice, and I think people should think about like, what would it be like to get a paycheck, and not owe any of it to anybody? I understand you have your likes, and you have this, and you have that, but once that’s out of the way, you don’t have a car payment, you don’t have a house payment, you don’t have any payments. You get to decide where your money goes.

Susan:
And, that’s powerful because most people don’t get there, and they’re always robbing Peter to pay Paul, and they feel like they have no choices, but they did have choices. They just made poor choices.

Mindy:
You think you’re stressed out, making good money, and throwing it all on your bills. What about being, not making good money, and trying to figure out, “Oh, which bill am I going to pay this month? Or which bill am I not going to pay this month?” Because, that’s stressful.

Susan:
And, you know what? I’ve been there. I was there earlier in my life, and I was there for a long time, and I think-

Mindy:
And, it sucks.

Susan:
… that’s why, it’s horrible. That could actually bring me to tears.

Norm:
And, the other part of that is, I understand what Susan is saying, and I totally agree with it, but the other part of that is, there are a lot of people that make really good money, and they’re still not in a good financial place, and that’s even harder to fathom.

Mindy:
When you spend every dime that comes in, you live paycheck to paycheck, no matter how many of those dimes are coming in, and in one of my Facebook groups, somebody said something about, “I have these friends who make enormous amounts of money, and they spend so much money, they’re always broke, they’re always feeling like under the gun, always living paycheck to paycheck, and it’s like, it doesn’t matter how much you make if you’re spending it all?” That’s still paycheck to paycheck.

Scott:
I see that as giving way too much power to your boss frankly.

Norm:
Right.

Scott:
If you’re an employee, why would you allow someone to have that much power over your life? Because, you’re so dependent on that for every need and part of life, and why wouldn’t you fight the way that you guys fought to make sure that, that’s not the case any longer, and just to kind of, what I observed about your story is, you said the word powerful, Susan. I almost shortened it to power. Your power increased dramatically, it seemed like right after that first year, and it seems like that translated to a lot of benefits, including not having to pay the mortgage, and then, being able to start your own business, and buying properties with all cash. Those are incredible milestones that give you complete control over your life, I think.

Susan:
Yeah, they definitely do, and I think that it’s available to people if they want it, and I understand if you’re making $20,000 right now a year or 30,000, it’s hard, but even as a single parent, I was making like, it’s pretty hard to say, but in the thirties, and I was able to have a house, and I would tell him, about that time in my life, when I finally could buy my house, my first house, I said, “I didn’t get the biggest house. I got the least amount of house that I could afford in the best neighborhood, so that my daughter would go to a good school.” And, it was a house that I could afford if I had to take two crappy jobs. If I had to [inaudible 00:57:40] McDonald’s and Burger King, I could afford the house. I wasn’t going to lose my house. That was the most important thing to me, and so, that’s where I was coming from, like my mentality, and that’s really kind of how we’ve continued to live together. Is this thinking, okay, what do we do to not lose it?

Scott:
I don’t think you’re going to lose your house now.

Susan:
You’re right, right.

Norm:
But, I think another thing that’s powerful as far as retirement is if you do live below your means, and you have things paid off, then you don’t have to have as much to retire. If you have a $2,000 a month house payment, and a $800 a month car payment, you have to have a lot of money saved to live for 30 years, but if you have your expenses under control, then the number you need to get to retire becomes more attainable.

Scott:
The denominator is so powerful in this equation, because it increases your ability to accumulate capital, and like you really well point out here, it decreases the amount of income you need to sustain your lifestyle once you retire. It’s double whammy.

Susan:
Yeah, we know people that, they’re in their seventies, and they buy a house, and they mortgage it for 30 years, but I don’t know what you’re thinking. It’s your choice to do that, but why would you do that?

Scott:
I just wanted to really highlight that point, because well, it can sound like you just grinded it out, and sacrificed for many, many, many years. The point is though, you reap those benefits incrementally throughout the journey. It’s not like you just have to be miserable for 12 years, and then, reap through all the rewards at the end. You guys got your, what it sounds like an increasing amount of power, and satisfaction, and the way you felt about your financial position throughout the journey.

Norm:
Absolutely, and we-

Susan:
Definitely.

Norm:
… we took fantastic trips Susan would win through sales. We would get [crosstalk 00:59:31] Presidents Club, we would get one really nice trip a year, and then, from the points from our credit card, we would get one or two more nice trips, so we enjoyed it. We enjoyed the trip.

Susan:
We sure did, and we still are.

Scott:
You’re really painting a great picture of these vacations.

Susan:
[crosstalk 00:59:49] together. I’ll just say this, he and I, we have chairs sit next to, like all evening long, and every morning, the internet. “Hi, or is better?” I will say this every evening and every morning we sit together, and we talk about finances, just about every single day, twice a day, and it’s not in depth. It might just be one small aspect of [inaudible 01:00:23] on, but it’s something we do. We just constantly check in with each other. Yeah, it’s good stuff.

Mindy:
That’s excellent stuff. I do that with my husband too. We talk about finances a lot, “Oh, did you see the stock market today? Hey, let’s talk about this. Let’s talk about that.” And, not talking about it doesn’t make it go away. If you’re not in a strong financial position, not talking about your finances with your spouse doesn’t make them great. The ostrich syndrome is really real, and you need to have the conversations, and if you’re listening to this, and you want to be in this position, but maybe you’re not sure how to approach this with your spouse, just take a page from Susan and Norm, and sit down, and list your assets, and list your liabilities, and just talk about it. “Here’s where we are. Here’s where we want to be. Let’s make a plan to get there.” It doesn’t have to be judgmental. “Look at all these bills you owe.” That’s a bad way to start off that conversation, pro tip, but just, “Here’s the facts of our financial currently, and here’s where we want to be. Let’s make a plan to get there.”

Scott:
And, I do the same thing with Virginia, my fiance.

Susan:
I would highly recommend anybody in that situation that you just described, Mindy, do Dave Ramsey’s, financial independence university course [crosstalk 01:01:46].

Mindy:
Yeah, Financial Peace University.

Susan:
Yes, highly recommended. He will teach you in baby steps how to do it. He’ll teach you in baby steps how to start having an emergency fund. He has a great, great program. We kind of did that. We didn’t really need to do it, but I was reading the book, and I was like, “Oh, let’s just follow along.” And, just to see other people’s perspective on it, and to hear somebody else who’s successful talk about it is very helpful. [crosstalk 01:02:17] it kind of let’s you know [crosstalk 01:02:18].

Norm:
… aspects to it.

Susan:
Yeah. When we first got together, this is actually kind of funny. I probably had five different accounts, like savings accounts, because when I got paid, the money went into this account for the mortgage, and this account to pay all the utilities, and this account to pay for the car, and insurance, and I didn’t want to like commingle the money. It was almost like Dave’s envelope system that I didn’t know about back then. I just kind of made up my own thing, and he’s like, “Oh my goodness, you have so many accounts. How do you deal with this?” And, I’m like, “Oh, it’s so easy.”
But, it worked for me. I could compartmentalize everything, and at the end of the month, I knew what I had that I could spend, and that was in another account, and once that money was gone, there was no extra money anywhere. I didn’t have an emergency fund. I had nothing to back me up, so it was super important that I stayed on target.

Mindy:
You said, “It works for me.” That is the only person that it has to work for, is you, and Scott, we just had this suggestion from Tiffany Aliche on last week’s episode. She said, “When you get paid, have HR split it out into these different accounts if you need to.” Exactly, if you only have $5 in your spending account, that’s the only account you’re looking at. The mortgage account is for the mortgage, and the utilities account is for the utilities, then if that works for you, good. Whatever you can do to make this easy on you. Norm, that doesn’t sound like that’s your plan, but that’s okay, because it doesn’t have to work for you. It wasn’t your system.

Norm:
That’s right.

Susan:
And, it’s okay because as we’ve grown together, our financial accounts have changed in certain ways, and they’re different than they were 12 years ago, so they’ve matured as well as we’ve matured together.

Mindy:
Yes, and now there’s the two of you, so it has to work for the two of you together, so you come up with your own system, but whatever works, it doesn’t have to work for me or for Scott. It only has to work for Susan and Norm.

Susan:
Right.

Mindy:
Okay. Is there anything else that we want to cover before we move to our Famous Four?

Norm:
I guess, one thought [inaudible 01:04:35] cross my mind, and I don’t know if it really fits into what we’re talking about, but you can take it out if it doesn’t, and that is, I think a lot of people would have a challenge in the business that I have because the business that I have has a lot of cash that comes through it, and a small percentage of that’s mine. The vast majority of it’s either the paint stores’ or my worker’s and a lot of people in my type of business have a problem, because they have tens of thousands of dollars in an account that’s not really theirs. It looks like it’s theirs that day, and they have a hard time not spending that on toys, and trips, and this and that, and I think [inaudible 01:05:06] business like that, it’s so important to think whatever percent is yours, 18% or 4%, whatever percent is yours, is yours, and the rest of that money is actually not yours, and you can’t ever start using that money, because it’s so incredibly hard to catch up.

Mindy:
That is a really good piece of advice. Yeah, it is. It can be really, really hard. This is completely unrelated to, but sort of the same. I am the Girl Scout troop cookie manager for my daughter’s Girl Scout troop, which means all the money comes to me, and all the cookies come to me, and that is hard to not eat 500 bucks of cookies. During quarantine I had 15 cases of Girl Scout cookies in my house [crosstalk 01:05:45] but anyway-

Susan:
[inaudible 01:05:47].

Mindy:
The Girl Scouts have this program in place where, you’re not collecting money, that’s the troops, that’s the Girl Scouts of America, and a smaller portion goes to the troop, and you have to pay the Girl Scouts. You can’t just keep it in your troop, so they will come in, and they will sweep all the money out, and there are some moms that get in a bind, and, “Oh, I’ll just borrow $20.” And, you better pay that back, because I need to have all that money. If you can’t pay me, then I have to go to the Girl Scouts of America, and say, “This is the issue that I’m having.” And then, they’ll take over, thank goodness, because that would really be difficult for me to hound somebody for money, but it’s the same principle. When it’s not your money, don’t spend it.

Norm:
That’s right.

Scott:
Norm, one thing I’ll point out is the points are yours on the credit card fees that go to buy a paint, right? But then, if you’re giving advice to somebody who’s starting a business like this, and is having trouble with that concept, where can they go besides hiring maybe a CPA, if they’re still too new to justify that expense at that point in their journey?

Norm:
I don’t have a good answer to that. I think the important thing would be that for them to understand what percentage of what dollars are theirs to spend, and then, you just can’t go beyond that, and if that means you have to get a second job to keep your business, then you get a second job, but you can’t spend Sherwin Williams’ money on your lifestyle, because it won’t last, and one other thing I’ve thought about is it’s funny through Susan and I’s time together, when we first got together, I made significantly more money than she did, but it was [inaudible 01:07:29] as the economy was crashing. Maybe a month or two I made significantly more than [crosstalk 01:07:35]. She did better in sales, she’d made tremendously more than I did, and then, there was a leveling out as my business came back, and now she’s retired, and I make more than she makes, so we’ve had-

Susan:
He makes all the money.

Norm:
… these ups and downs, and it hasn’t created any issues whatsoever, and the other thing I’d like to say is that when my business was doing so poorly, and I went back to work full time in retail, after a year we decided that I was going to stop retail, and go back to my business full time. Most people would not have made that decision, because I was making such a small amount in my business at that point. Most people I think would have wanted their husband to make X amount of dollars I was making working in retail, and not give that away, and if we’d had done that, then we would never be in the position we’re in today, so her allowing me… When the economy came back, it didn’t come back all at once. There was quite a few years where I wasn’t even busy all the time. I cleaned the house, and clipped coupons, and did whatever I could to help us, but it gave my business, and the economy to come back, and now we’re really reaping the benefits of that.

Scott:
I love how much of a partnership it is for you guys, and how aligned you are, and I also speculate that the fact that you guys were so clear on your expense side of things, and brought in more than you needed in order to sustain your lifestyle, so you could have that surplus, probably, also contributed to your ability for you Susan to support him with that.

Norm:
Yes, definitely.

Scott:
Absolutely.

Susan:
Yeah. We used to do no spend months. We would just arbitrarily pick a month, and just say, you can’t spend any money other than this $150 and that’s for gas and the car. Of course, we paid our gas and our electric in the house, but as far as any excess spending-

Norm:
Going out to eat.

Susan:
Look, you can’t buy a shirt this month, you can’t go to the yard sale this month. I love yard saling. Another great place to save money is go buy what somebody has bought, and buy it for pennies on the dollar. Love yard sales, but we were dead serious about not spending the money, and man, what an impact it makes on your life when you do that. We were [inaudible 01:09:51].

Scott:
It’s a little funny that your idea of a low cost month is not going to the yard sale. I’ll just [crosstalk 01:09:58].

Mindy:
Well, that’s a spend. You know what I’m hearing from Susan and Norm is, we are partners, we are in this together, we are going to have open conversations, and that’s how you get a successful marriage. Somebody had just posted on Twitter, “What are some of your financial suggestions or wealth building suggestions?” And, I’m like, “You know what? Don’t settle on your spouse. Like, when it comes to a spouse, don’t settle. Make sure you have somebody who shares your goals, and your dreams, and likes you for who you are, will have open and honest conversations.” Because, it doesn’t sound like it’s a wealth builder, but how expensive is divorce?

Norm:
You’re right.

Susan:
Right. I mean, sometimes it saves you money [crosstalk 01:10:49]. Yes, choose wisely, choose wisely.

Mindy:
Choose wisely, yes, and it also doesn’t sound like you keep score, which is hugely important. If you’re going to keep scores-

Norm:
No we don’t keep scores.

Mindy:
… no.

Susan:
No we don’t, and actually that was a conversation we had early on, something happened, and I think Norman thought I was going to be upset by it, so he was like going overboard trying to make sure I was happy, and when I realized what was happening, I just said to him, I said, “Hey, let’s just talk about this.” I said, “I’m never going to throw something in your face. Like, stuff happens, and we just have to deal with it, if stuff happens. Like, I’m not going to bring this up to you in two months, or in five years that this happened.” I do remember that conversation, does that sound familiar?

Norm:
Yeah that sound familiar.

Susan:
Ever since then, like there’s never been any of that, so it’s good.

Mindy:
Yup, that’s the key to success in a relationship, don’t keep score.

Susan:
Yeah, oh there’s so many good keys here.

Mindy:
Yes.

Susan:
So many good keys.

Mindy:
I think it’s time now to move on to our Famous Four. These are the same four questions that we ask of all of our guests. Susan and Norm, are you ready?

Susan:
Yes.

Mindy:
Okay. I think we’ve probably already answered this, but what is your favorite finance book?

Norm:
Wes Moss, You Can Retire Sooner Than You Think.

Mindy:
Yeah. That is not a book that somebody has suggested before, and I’m super excited to check that out.

Susan:
Oh good.

Norm:
And, it’s a quick read. It’s simple. It’s not laborious to get through it. You can read it probably an afternoon.

Scott:
Or, on a vacation.

Norm:
Yeah, that’s right. You can read it by the pool.

Scott:
What was your biggest money mistake?

Norm:
Probably our biggest money mistake was keeping the larger house when we first got together, and we should have sold that larger house. The market was still fairly good at that point, and moved into Susan’s smaller house. It would have been a lot easier to pay off, that would’ve made a big difference.

Susan:
Yeah.

Mindy:
What is your best piece of advice for people who are just starting out, or just starting out a little bit later in life?

Norm:
I mean, the advice I would give somebody is to really spend some time thinking about what your life is like, and what your life could be like. Spend some time thinking about what it would be like to get a paycheck, and not have a bill to pay, and you get to decide what to do with it.

Scott:
Love it. You guys do that, and then, I love those yearly meetings that you have during your vacation to, it sounds like really just move towards that dream life every year, and then, you do it.

Susan:
Yeah. I would highly recommend that for people that are even dating. Do that every month. Get a feel for your partners methods, get a feel for their ways, really talk about it, because they might be [inaudible 01:13:51] and you might not know it, and you guys might realize, wow, we really connect on this. One bit of advice I’d give people is, if you’re in a relationship, and you’re at opposite ends of the spectrum, as far as finances, somebody is a big spender, and somebody else wants to save money. You’re both never going to change to meet that other person’s expectations, so really think before going much further, because you either have it or you don’t, and people don’t change.

Scott:
I think a wise man once said that the concept is called a cashflow negative spouse. Be wary of that. What is your favorite joke-

Mindy:
Hold on.

Scott:
… to tell at parties?

Mindy:
Hold on, hold on. I’m going to call you out on this. Scott is quoting himself.

Scott:
No, I wouldn’t do it. What is your favorite joke to tell at parties?

Susan:
His mother tells jokes all the time. She loves jokes. I can’t remember punch lines to jokes to save my life, so I don’t tell jokes. I just act funny.

Scott:
Well, you remembered that one.

Susan:
What’s another one?

Mindy:
What is blue but smells like red paint?

Norm:
What?

Mindy:
Blue paint. I looked at painting jokes, because you’re a painter.

Susan:
Okay [crosstalk 01:15:12].

Scott:
All right, where can people find out more about you, or connect with you? Are you active in any online communities, for example?

Susan:
Well, we’re really kind of private, so I would hope that people aren’t going to reach out to us. Is that terrible?

Mindy:
No, that’s not terrible at all. I will say if you would like to send a note to Susan and Norm send it to me, [email protected] and I will forward it on to them, because yeah, you are private, and you don’t need to give out your email address to everybody. That’s okay. I just am super excited that you came to share your story today, because this was really, really great. I think a lot of people can listen to this, and say, you know what? I can retire early even though I didn’t start when I was 21.

Scott:
We get a lot of feedback about this. People are struggling to go through what you guys just went through, and they feel behind, they feel like they’re not doing a good job, they feel like it’s, whatever they’re feeling there. They see younger folks kind of coming in, and getting really far ahead, and this is really important, and this was just so perfect. [inaudible 01:16:15] guys’ story, how you approach the problems, how you started around zero, and got to there, and walking us through the emotions, and all the big milestones. Just thank you. This is so helpful, this is going to be so helpful to so many people.

Norm:
Well good.

Susan:
Yeah, you’re welcome. I hope it does help someone. I really do, because it’s so doable. You just have to put your mind to it, and start whittling down the debt.

Mindy:
That’s perfect.

Norm:
[inaudible 01:16:41] reach us through Mindy, we’d be happy to respond back to them, and give them the advice, or help in any way we could.

Mindy:
Perfect, perfect.

Norm:
Awesome.

Mindy:
Yep, so if you would like to talk to Susan and Norman, send me an email [email protected] and I’ll make sure it gets to them. Susan, Norman, thank you so much for your time today. This was fabulous, and I know that people are going to take you up on that, so I’m very excited for that. Thank you again, and I hope you enjoy the rest of your day.

Susan:
Thanks-

Norm:
Thank you very much.

Susan:
… you too. Thanks for your time.

Mindy:
Scott, what did you think of today’s episode? I loved Susan and Norm’s story.

Scott:
I thought it was fantastic. They are so clearly on the same page. They’ve really got a great dynamic as a couple, and they clearly have worked so hard, and are rightfully proud of the incredible life they’ve built, and an optionality that they’ve got, especially, in the context of starting fairly a little bit later than a lot of folks that we’ve heard from.

Mindy:
You said they’re a great couple, and that’s really, really important. When you are trying to do something odd, something that everybody else isn’t already doing, you need to have somebody in your corner. You need to have a very strong partnership, and I said it near the end, they don’t keep score, and that is so powerful in a relationship. When you are married to somebody that keeps score with you all the time, it really, really, really starts to get tedious and painful, and you don’t want to tell them anything, because you don’t want them to throw it back in your face later, so the fact that they’re both on the same page, and they’re committed to working towards the same goal is so huge.

Scott:
Absolutely. This is a topic that has been brought up a lot in our Facebook group within the last couple of weeks. There’s been a lot of people saying, “Hey, we’re not hearing enough stories.” Or, “We want to hear more from folks who are getting started a little bit later.” Because, let’s be frank. It seems like there are some advantages to starting this journey, and maybe things like house hacking, and avoiding credit card debt, and student loans, or big expensive car loans, or leases, those types of things, can really be a big boost to get things started, but a lot of people have already made those decisions, or are past that point, and need to deal with the starting point that they’re in currently.
And, I think they’re a great example of folks who didn’t have [inaudible 01:19:03] to propel them toward financial independence late in life, and still obviously have had a wonderful outcome, and have a very strong financial fortress and position.

Mindy:
One of the members of our Facebook group named Richard said, “I’m curious about other late blooming FIRE folk and your progress. I got out of debt in my late thirties, but I didn’t figure out FIRE until my early forties. I didn’t pass $100,000 in net worth until 44 [inaudible 01:19:29]. Now, I’m 45, I’m at 180K, still [inaudible 01:19:33], making progress, but getting old just as fast.” Well, so what I say to Richard is, in five years, you’re going to be 50 if you save or if you don’t, so what we heard from Susan and Norm today was, multiple income streams. What was that book? You Can Retire Earlier Than You Think You Can. I recommend that Richard check out that book, and we’ll have links to that book in the show notes, which can be found at biggerpockets.com/moneyshow130.
But, just looking at different ways to generate income is going to be huge. You don’t need to get all the way to a million dollars if you have something generating $10,000, $20,000, $30,000 a year. There’s different ways to combine different financial aspects to kind of, cobble together isn’t the right word, but fashion your own retirement, because you’re the only one that this has to make sense.

Scott:
Yeah, absolutely, and as aggressive, and on the same page, and aligned as Susan and Norm were, they again, were not optimally efficient in some cases. There’s other choices that you may able be able to make on your journey that may help you make up lost time, even if you’re starting even later than Susan and Norm, and those are the kinds of discussions, and things that we need to talk about more on the BiggerPockets Money Podcast, so if you’ve got stories, or friends, or family that have achieved those things, and feel that other people could benefit from hearing those stories, we’d love an introduction to meet more folks who started on this journey late, to have them here on the show, and we want to talk about that a lot more in the Facebook group, especially, here at BiggerPockets Money.

Mindy:
Yes, so if you are not a member of our Facebook group, we would love it if you joined. Please answer the questions, because that way we know that you will promise to follow our rules in our group, but they’re super easy rules. Don’t spam the Facebook group. I think it’s basically just don’t spam [crosstalk 01:21:32].

Scott:
Mindy, what’s it like to be on your bad side when you break the rules?

Mindy:
If you are a spammer, I can tell, because you’ve got your WhatsApp link in there, and “Ooh, call me and you can make $5,000 in a minute.” You know what? I’m going to remove you from the group, but if you make a mistake, and you post something that you shouldn’t, I’ll just remove it and say, “Hey, you shouldn’t have done that.” Because I’m not a horrible person, but I am very strict, because I don’t want scammers and spammers in my Facebook group. I want people who want to come in, and talk to other frugal weirdos like myself in the group. If you are interested, if this is something that appeals to you, go to facebook.com/groups/bpmoney, answer all the questions, I will let you in, and then, you can talk to us. You can tell us your stories. You can ask questions, and get a response from people who are doing this just like you.

Scott:
Awesome.

Mindy:
We have a new caller in line. Would you like to tell Scott a joke? Would you like to ask me a question, or would you like to ask Scott a question? And, you don’t need to tell me a joke, call 877 BPM show, that’s (877) 276-7469, and we listen to all of our messages, so please give us a call, and let us know what you think.

Scott:
Awesome. Well should we get out of here Mindy?

Mindy:
We should Scott. From episode 130 of the BiggerPockets Money Podcast, he is Scott Trench and I am Mindy Jensen.

Scott:
And, I have one last thing before we leave, which is the ultimate paint joke, Mindy. What happened when the ship carrying red paint collided with the ship carrying blue paint?

Mindy:
What?

Scott:
Both of the crews were marooned? All right, from episode whatever number this is of the BiggerPockets Money Podcast, 130, I am Scott Trench, she is Mindy Jensen, and you won’t get jokes like this anywhere else.

Mindy:
No you won’t. That’s a good thing. Thank you for listening. Bye