The Late Starter’s Guide to Financial Independence (Even in Your 50s!)

Mindy:
Welcome to the BiggerPockets Money podcast, where we interview Becky and Bill from the Catching Up To FI Podcast and talk about getting to fire as a late starter. Hello, hello, hello. My name is Mindy Jensen and with me as always is my mainland co-host, Scott Trench.

Scott:
And with me as always is my wahoo co-host, Mindy Jensen. Are you on Oahu?

Mindy:
I’m actually on the big island right now, but I am flying tomorrow to Kawaii.

Scott:
All right.

Mindy:
Oahu. I get that joke now. There’s also a fish here called wahoo. I don’t know what kind it is though. It’s delicious.

Scott:
Well, I also hope that everyone else is ready to tuna in to a great podcast today with Bill and Becky.

Mindy:
Did you just say tuna in? And that’s the end of all the puns. Scott and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story and no puns because we truly believe financial freedom is attainable for everyone. For everyone. No matter what time of your life you are starting or where you’re starting from. And because we believe in this so much, we brought on Becky and Bill today, and they are going to tell you their stories of reaching financial independence from a very late start.

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 or catch up to financial independence, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
We have a new segment on the money show called Money Moments where we share a money hack, tip or trick to help you on your financial journey. Today’s money moment is stock up on gift cards when they’re on sale. Graduation, Mother’s Day, Christmas. Frequently there are rewards given to the card buyer. Buy $40 and get a $10 card for yourself. That’s an instant 25% savings, and you can use both of those cards yourself. You don’t have to give those away. Just because they’re on sale for graduation doesn’t mean you can’t have them. If you’re buying gifts for your grads, great. But if you’re not, if you’re just at a restaurant, ooh, cards are on sale, I’ll grab two for me.
So there’s a tip for you. Becky and her husband found themselves at age 50 with a net worth of $0 and no financial literacy. They made some big changes and retired 13 years later. Bill and his wife woke up at age 50, financially illiterate after a paycheck to paycheck inflated lifestyle and are about mid-journey on their way to financial independence. Becky and Bill, welcome to the BiggerPockets Money podcast. I am so excited to talk to you guys today.

Bill:
We are too, and thank you for having us today. This is an important topic we think.

Becky:
Yes. Thanks for having us.

Mindy:
You are right, Bill. This is an important topic. Becky, let’s start with you. Can you give us a little bit of background about you and your money story?

Becky:
Well, I grew up probably like most people with no money education. We learned from modeling whether it’s good or bad, but I still didn’t really see how my parents handled money. They were children of the depression so that puts a different spin on things. My mom was the main breadwinner and decision maker, and my dad just ran on emotion. So not a great modeling. Went to college, got out. I met Steven, my husband, while we were in college, and we got married as soon as he graduated. And literally, our first days on our new job, we were making more than our parents were making. So we had grown up with all of our needs met, but not a lot of extras. So we took these paychecks, which … Let me just give you a little perspective. This was 1979. My paycheck was $17,000 a year. My husband’s was $13,000 a year.

Mindy:
Oh, Becky’s making more.

Becky:
And that was in the oil and gas industry, and I was in IT. So it was a pretty decent salary for a college grad in 1979. Anyway. So we have a little bit of money. As everybody is told you should buy a house. That’s the first thing you need to do. So we bought a house. That was stupid. Because of the market at that time. But anyway, we just started accumulating things. New cars, a house, some hobbies, some expensive hobbies, and we just kept kicking the can down the road of our future. We never stopped to think about what are we going to do 10 years from now, 20 years from now? What are we going to do when our kids get to college? We didn’t save anything. That was our biggest mistake was we had no savings, we had no emergency fund. We didn’t have a safety net for when life throws you a curveball. And there was a point in mid-career for Steven where life threw us a really big curveball and we just fell off the cliff and it was extremely painful because we had no savings. And we had three kids that were within a few years at that point going to go to college. We hadn’t saved anything for that.
And the crazy thing is we knew all along he was not in an industry that would have any kind of pension. That our retirement was all on us, but we still didn’t do anything about it. We were just floating along. Letting the tide take us wherever it did instead of being proactive about anything having to do with money.

Scott:
So was there a curveball or was there an event that had you guys wake up or was this a realization that was more gradual in the making?

Becky:
There was an event. There was a point where Steven, my husband, was working for himself out of the house and the money he was bringing in was okay. It wasn’t great, but it was okay. And it was really nice to have him at home. He got to go to the kids’ track meets if he wanted to or whatever. It gave him a lot of flexibility, but it wasn’t a big income. And about nine years into that, we had one year where two different clients of his both for various reasons decided not to pay him. And so we found ourselves with no income. We were buying groceries with credit cards. I really didn’t have any idea how we were even going to pay that off. It became really painful really quickly because I didn’t see an end to it. We just kept digging a bigger hole every day and I couldn’t see how we were going to fix it.
And what turned us around initially was we found Dave Ramsey. And Dave Ramsey will tell you that in a situation like that, that the wife is afraid and that the husband feels helpless and hopeless and like a terrible provider, and that’s exactly what happened to us. And rather than fearful, I would’ve said petrified. That’s really what described where I was standing. And Steven felt … This was right before he was 50. He felt like a failure. He felt like I’m too old. Nobody’s going to hire me now. But then that’s how we did turn it around initially was a mentor of his came alongside him and helped him emotionally to realize that he did still have value in the workplace and he found a W2 job after that.

Mindy:
And what year was this that this big curveball was thrown at you?

Becky:
It was in the early 2000s. I’d have to stop and think about it. He first went to the first W2 job in 2006. So I’d say this was probably 2003, ’04, ’05, something like that.

Scott:
What changed as a result of this situation? What were things like before and what happened after and how long did it take to implement those changes?

Becky:
Well, like I said, the first thing that turned us around was finding Dave Ramsey and getting the W2 job. And the biggest change it made for us was our mindset. We realized we didn’t have to keep spending money the way we had been. I didn’t spend a lot of money on what I thought was frivolous things. I didn’t go have my nails done every two weeks or go have a $100 haircut. But we were still spending everything that was coming in and then some. So we started thinking about what was really important to us and realized that we had to set money aside for our future. We needed to set money aside for the kids’ college. And so we just started making different choices about what we purchased and what kinds of things we bought.
We didn’t move. We didn’t change our housing. But we changed … We had always bought brand new cars because my opinion was I don’t want to buy somebody else’s problems. And then I realized that you know what, the sky is not going to fall, the world would not end if I buy a used car. So there were some big rocks like that that we made changes on and we realized that, oh, we need to refinance our house and get the interest rate down. And so we tried to make as big a change as we could. And the job that Steven had in the last 10 years of his career, the vast majority of his income came in bonuses and his actual bimonthly paycheck was fairly low. And we made ourselves live on that. And then he was bonused four times a year, and every time a bonus came in, we already had planned out where we were going to put that money. We segmented it out for immediate needs, for college fund, for retirement fund, whatever it was. So we had a plan at that point where in the past we had no plan. We would just, if money came in, we spent it.

Mindy:
I think that’s very interesting. At the very beginning of your story, you said, “I grew up with no financial education.: And I was thinking to myself, you know what, Becky, you’re not special. This is everybody. Everybody listening, everybody not listening, everybody in America grew up with no financial education because nobody is talking about money. And when you don’t know what you’re supposed to be doing, you do what feels good, what feels right, what’s fun. And it isn’t fun to sit there and pay your bills and save money, but it is fun to be retired when all your peers are working. It sounds like in the beginning we had this enormous windfall of $30,000 a year, which Scott did the math and is actually like $125,000 a year in today’s dollars, which sounds a lot a better. And then you didn’t pay any attention.
You had this financial windfall and you’re like, “Oh, money’s here. I don’t really have to worry about it. Because I worried so much because I didn’t know what I was doing and we had enough, but we didn’t really have extras and now I have all this extra, I’m going to spend it because I deserve it, because I want that. Why would I buy a used car when I’m buying somebody else’s problem?” So this story, unfortunately, is very, very common. And I’m sure on the Catching Up to FI podcast, you have heard some variation of this story in every single guest. I had no idea what I was doing. I made money so I spent it and then one day I had a problem or I realized I have nothing in savings. What’s going to happen when I stop working? So you find Dave Ramsey and Steven gets a job. Were you working at this time?

Becky:
No. For the majority of the time I was a stay-at-home mom. And then in 1999 we moved my parents in with us. We built an apartment onto our house with the proceeds of the house they sold and moved them in with us. So I transitioned from stay-at-home mom to stay-at-home daughter, and I cared for my mom for 20 years.

Scott:
What was your household income at the time when you had this revelation and then how did that translate? How much were you spending? How much were you bringing in and did you actually get to FI?

Becky:
Scott, unfortunately, I don’t have those numbers. It was way too far back and I didn’t know back then that I was going to wish that I knew what those numbers were. I can tell you that when Steven took the W2 job, I was talking about how his bimonthly income was low, that was in the 70s, so that’s what we were living off of was something in the 70s. In the end, not at first with that job, but in the end then along with the bonuses it was probably a little over 200. So it changed drastically, but thank God we were smart enough to navigate those increases in income a little more wisely than we had in the past.

Scott:
Okay, awesome. So we’re spending about $70,000 a year or the take home pay on $70,000 a year as the baseline, and we’re continuing that for many years in a row, getting bonuses on top of that and just investing those wisely after this event. And that’s what carried you to FI. And what does your portfolio look like today?

Becky:
When we retired, it was a about 1.3. That does not include the house or the cars.

Scott:
Yeah. I was more asking about where you invested the money.

Becky:
Yeah. The spendable net worth was 1.3 when we retired at the beginning of 2019 and that’s about where it is now also. It changed obviously as we entered retirement for those first few years, but then of course last year everybody took a hit. So we’re actually about back where we were, even though we’ve been living on that money. We don’t have any side hustles. We’re living strictly off of our portfolio. I started my social security almost a year ago now, which I worked enough to get it. It’s not large. So I’ve got a little extra that comes in from that.

Scott:
Awesome. This is a fantastic story here, and I think really inspirational to a lot of folks that maybe are feeling like they’re getting a little bit later of a start. You were able to basically catch up before, during and after putting kids through college, taking care of your parents, having one household income earner and just investing wisely and figuring that out. This is remarkable and now you are financially independent millionaires on top of all of that. So thank you for sharing that. That’s incredible and I think really, really inspirational.

Becky:
One thing that I wanted to point out was, yes, we have a net worth that’s over a million and it took some hard work to get there, but I want people to understand that in order to have a comfortable lifestyle, you don’t need $5 million, which I think some people have that in their head that you need this enormous net worth. I mean, we’re in Colorado so we’re in a medium to higher medium cost of living area. We’ve got expensive hobbies. We have three grown kids that don’t live near us and six grandkids and we go and do. And so we’re not sitting here eating beans and rice in retirement. Now, I’m not traveling all over the world either, but gosh, we’ve got a very comfortable lifestyle.

Mindy:
And Scott, you said this is remarkable. What you didn’t say is another R word. This is repeatable. Becky’s story. Just like I said before, Becky, you’re not special. Nobody had financial education. Becky, you’re not special. Anybody can do this. This is absolutely a repeatable story.

Scott:
If you start at 70 grand with one income and it’s going up to 200 over 10 years, right? I mean that’s a repeatable journey for many folks.

Mindy:
And we’ve got another version of this story with Bill. Bill, what does your money journey look like?

Bill:
The numbers are different, but the journey is not so dissimilar. I was fortunate to be in an upper middle class home. My father was a physician, my mother was a stay-at-home mom. But I did go to private schools for high school and college. I came out of that debt free because they subsidized that. And I went into a year between college and med school where I lived abroad, I lived the student lifestyle and I continued for the rest of my 20s. I lost my 20s to med school and residency at incomes around $25,000 a year in residency in Chicago. So what happened there was I deserved vacations and so I lived off my credit card. I came out of residency with somewhere around $30,000 of credit card and believe it or not, student debt. Because when I went to med school, and this is very hard to believe, tuition was 500 bucks a semester.
It was completely subsidized by the state. And so educational costs have skyrocketed since I went to school. So I came out of residency and got my big boy income. And in medicine what happens is you go from nothing to really something and I hadn’t learned anything financial from my family, from education. And it’s really sad that you can go through all this education and have no financial wherewithal. Med school doesn’t teach it, and yet they spring you out into the world with a big boy income, say $200,000. And we started off there and we learned to spend it all very quickly. We bought the house right out of residency, we bought new cars. As far as my car story goes, though, I do have a good twist to it. I’ve only had three cars in my life. I may have bought a new truck, I may have bought an Audi sedan, but I’m still driving my Audi sedan at 170,000 miles and 12 years old.
So it’s not as bad as it sounds. And so we went on our journey there. My wife is also a high income professional. She’s a psychiatrist. I’m an emergency physician. We had a very treadmill oriented life. We didn’t know we were on the hedonic treadmill. We put ourselves there. We did not partition our paychecks into savings. What we did was, which is very common, we spent first and saved last. It was only what was left over after a year of spending at tax time, we’d say, oh, we got this to save. We were single digit savers. And I think that’s not uncommon. And it went on that way for years. There was a 20 year funnel where we didn’t figure out what to do at the beginning. We put our heads in the sand, we lived life, we got caught up in raising a family, and we had significant challenges along the way like a lot of people do. Unexpected monetary expenses.
And it just sucked everything up. Our money fell through the civ of life. We didn’t have any stops. So we woke up about 20 years into this, around age 50. Our kids exited the house, went on to college and we woke up at 50, said, “Wait a minute. Nobody’s going to take care of us.” We did not start from zero. I think we had investible assets at that point of around $700,000, but we had a lifestyle of spending of around $200,000 to $300,000. It was significant. And like I said, the numbers can be different, but the problems can be exactly the same. As physicians, we were typically stupid. We did the exact physician lifestyle inflation. Worst mistake ever. That was around the great recession. We were house poor. We had renovated a home and completely rebuilt it and put $600,000 in into a $400,000 house when we bought it.
So we were over a million dollars at the time of the house collapse. We were quickly upside down, had to infuse capital there, and we entered the great recession completely house poor with a high mortgage and single digit saving. And to compound this trifecta, we got scared and we sold a lot of our investible stock assets and went from a … I don’t even know what our portfolio was. I had no idea what net worth was, and I had no idea what our net worth was. We were upside down that way too. We had a negative net worth. Becky may have started from zero, but between our mortgage and our investible assets, it clearly was significantly negative when we started, and I don’t even think Becky knows this part of the story.

Scott:
This is 2008 that we’re beginning the next wave of your journey in?

Bill:
Right. And we didn’t wake up then. Like I said, we sold a lot of our investible assets. I know that our stock portfolio went about 30%. So we made, like I said, the trifecta of mistakes. House poor and no savings rate, and we missed a large portion of a bull market that set everybody free it seems in our community. So we ran out of target instead of running in and buying when things were low. So we got to about 2013 when our expensive lifestyle in Chicago in a big metropolitan center, we woke up to the treadmill and we realized we’ve got to make some drastic changes. Unconsciously, we actually geographically arbitraged from Illinois to Tennessee, which was a great beginning to unconsciously realizing that we needed to make major changes. So we did geographic arbitrage. We increased our income. We woke up at really about 2016 was the true wake up, which was about the time I turned 50.
And we realized we had to take care of ourselves. Fortunately, we had a big shovel. Our kids had exited the house. College was actually paid for. We had done that right. And we were able to escalate our savings rate from single digits pretty much overnight to 40, 45% of gross. And we’ve been there pretty much ever since along the way with some fluctuations. We’re very proud of that. It’s made a huge difference and it’s gotten us to the point where our liquid net worth is just shy of three million now. And our total net worth with house included … And I should mention that after our kids went to college, we downsized and the downsize was a big part of this. We took the big doctor house and shrunk it. We went from a 4,500 square foot house to 2,500 square feet and cut our mortgage in about half.
Soon after that, we paid it off. We are debt free and with the house included, our total net worth is around four million at this point. So we went from a negative net worth with a major savings rate change, major mindset change, and I wouldn’t consider ourselves painfully frugal. We didn’t have to go through that. We have a lot of memory dividends. I think for late starters like ourselves, regardless of the numbers, you can get there by increasing the gap dramatically. You have to do that pretty much overnight or quickly, and your savings rate is your superpower. We made it our superpower, but we didn’t change our lifestyle. What was amazing was our lifestyle didn’t change so much. So I was like, where the heck did all this money go before? And it did go into things, obviously. We have a travel habit and we still do. But we haven’t sacrificed lifestyle in order to increase our savings rate and to dramatically change our financial picture.
We are at a position now where we’re about five years away from my being able to retire. I think my wife will work longer. I struggled with burnout and I’ve actually cut back my work. I’m working less to have more time and some more time freedom. So we could have escalated our path to FI, but we chose to meliorate and balance out the journey. That’s where we’re at now. And like I said, five years from my FI, which will be around Becky’s time of FI. My wife will work her career a little longer so that’s going to help as well bridge the gap to full retirement age and Medicare and those kinds of things. And surely we have regrets of doing what we did, but if you really die with zero in the memory dividends, we definitely did that and we didn’t suffer a lack of balance like a lot of folks that are younger and want to earn money to the detriment of shared experience.

Mindy:
So you just said that your net worth this $4 million, including the house, three million if you don’t count the house and you’re halfway there. Have you done the 4% rule math to determine what your FI number is or are you shooting for spending like $800,000 a year in FI or whatever?

Bill:
No. Our spend at the present time is between 175 and $200,000 a year, which gives us a number of around five million, but we’re at three. And time may dictate where our number really is and we may be forced to a spend that is less than that because of the time to the finish line for my work, which is a high burnout field. So it’s a moving target. Those goalposts are not fixed. We don’t fix it on a number per se. It’s more managing burnout and getting to a comfortable finish line where yes, we can manage our lifestyle and we don’t need that number. It’s just that’s the number goal. But a time goal actually takes precedence.

Scott:
Bill, I got a couple of rapid fire questions here. First, what kind of doctor are you?

Bill:
Emergency medicine. So in that regard, I would say that I learned how to take care of medical emergencies for people, but I had no idea how to take care of my own financial health or financial emergencies. Now I can do that and we want to do that for others.

Scott:
Awesome. Did you have a financial advisor during any part of your money journey and how did they contribute or detract?

Bill:
Now you’re going into all the mistakes I made. So out of med school, we were sold a bill of goods. We had financial salesmen, as I know now, come to med school and tell us, “I can be your financial advisor. Buy this whole life plan.”

Scott:
These people repulse me and doctors are their primary prey.

Bill:
They still are. And thankfully there’s Jim Dolly, the white coat investor, out there changing this. And he was one of my mentors and changed my life as well as choose FI and other platforms that we all go down the rabbit hole on. But yes, we had the “financial advisor”. We went into a private bank, which became our financial advisors. Again, salesmen. Huge mistake. Paying all those fees and we didn’t put in our pockets what they took from us. Their kids went to college on what we paid them. So yes, we did that and we made many, many, many other mistakes along the way. Very typical of doctors. You can only imagine.

Scott:
At this point in the great recession, what was your primary emotion around money when you were in that period realizing you have a negative net worth?

Bill:
I didn’t realize we were a negative net worth. That’s part of the problem. I had no idea. And we had an abundance mindset, but it was a not pay yourself first abundance mindset. I mean our boat was named YOLO.

Scott:
Do you still have the boat today?

Bill:
No. That was part of the downsize. The only good decision we made there was we bought the slip and the equity increase in the slip paid for all of our boat expenses. So I guess you could say we accidentally covered the cost of a luxury item.

Scott:
Real estate investing. Love it.

Bill:
Exactly.

Scott:
Okay. And then what’s your feeling or sentiment towards money today now that you’ve enacted these changes and have multiple millions and are on the way?

Bill:
Well, you asked the question, what was my sentiment around? Well, when we woke up, it was scarcity. It was scarcity, regret, shame, isolation, loneliness. And these are the kinds of things we’re trying to combat for the Catching Up to FI population. We all have our heads in the sand. I think this is a common story. Some people say that it’s 40% of the population that wake up after 40. I think it’s probably more than that. And I think it’s the norm as opposed to exception to the rule, which is most of the stories we hear in the FI community. It’s the young success, the midlife success, the early retirement. You don’t really hear the stories that Becky and I lived and we’re trying to change that.

Mindy:
Why do you think people believe financial independence is unattainable?

Bill:
Well, if you’re asking me, I think it’s because of our consumer culture and our addiction to debt. We become numb to it and we’re taught to be numb to it. So as opposed to accumulating assets, we accumulate debt and we’re paying service to this debt. We’re owned by the debt. As opposed to taking control of our financial lives, realizing that debt can be a lever that increases our path to FI, we don’t use as a lever. We use it as our shackles, our ball and chain, and we don’t even realize it.

Mindy:
You both had a wake-up call, a curveball in your stories. Do you think people are waiting for that? Do you think people are, just like you, I’m going to just tootle on along, everything’s fine, everything’s fine, and then they need that slap to change their story?

Becky:
I think a lot of people live that way. Sometimes I look back and I wonder … What happened to us was a big deal and it was really painful, but I don’t know if something else would’ve done it. I think I almost had to have that pain to wake up and realize that I can’t keep going the way I am. I’ve often wondered how far down that road would I have gone before I decided that something had to change. So unfortunately, I think a lot of people do need some sort of wake up call because there are those of us in the FI community, there are those people in the FI community that are natural savers. I’m not one of them. I have become one, but I didn’t start out that way. And so there’s a few people that are going to save money whether they think they need to or not, but I don’t think that’s most people.

Bill:
I needed the wake-up call. I needed the slap of turning 50. I think that’s actually a common story after you exit the funnel of raising kids, for example, and realize that you’re empty nesters and you’ve got to get to 65. I mean, I had thought that it was 40 years of a work journey. I kind of had the boomer mentality. My dad worked till he was 80. I mean, this is where I came from. But I realized quickly that I had burned out on my career largely. And how am I going to get there? How am I going to bridge the gap between burnout and financial independence? There’s stages to this wake up that are different from the financial stages of early prudence with finances. There’s the shock and awe after you have the slap or maybe somebody takes you aside and says, “You can do this,” gently. You can’t lecture at us.
You can’t tell people this is what you need to do because we’re not going to hear it. And with our podcast, we’re trying to put the message out there so that people can digest it at their leisure, on their own in a non-shameful way. The other stages that I see happen to late starters are after the shock, you have the rabbit hole. The one that everybody goes down at some point in their lives, you consume everything. You become a consumer of financial information. This can lead to analysis paralysis, which is probably one of the phases of this. And people should reach out for help because a lot of people need a coach. And I’m not dissing financial advisors. I think a lot of people need one, but you just need to find the right one. You need to find the flat fee fiduciary advice only advisor.
You don’t want a salesman. And we almost succumbed to that again with a large financial firm. So you get through those first two phases, then you get to the phase where I’m at. You get into the muck in the middle as one of our guests called it, where you got to do the work, you got to do the time, you got to increase the savings rate and pay yourself the gap. And it’s hard. It’s really hard because you watch people like yourselves that have reached financial freedom, time freedom earlier. You watch people being retired. It’s really painful and you wish you were there, but you can’t wish yourself there. You’ve got to do the work. At some point in your life, you’ve got to do the work. So I’m in the mid phase. Then I think, and Becky can speak to this, you get to the, I can see the light at the end of the tunnel.
I haven’t gotten there yet. I can see that there is a finish line and it may be earlier than I think. And so you get excited again and then you go down the rabbit hole of learning about retirement and how to make the transition to retirement. And then you cross the finish line to your ultimate time freedom, your new life. The one where you can have the freedom to make choices that you couldn’t make before. So I think that’s five. I think there’s really five phases to late starting and everybody goes through it at different ways. What do you think, Becky? Do you think this is true?

Becky:
I do. I think that whether you had the big slap or you just more like you where you hit an age and go, “Hmm. What am I going to do now?” I think everybody experiences the shame and the guilt. And one of the things that I had to come to grips with was I had made a lot of mistakes and some of those mistakes spilled out on other people. I mean, I look back now and think about what did my children come to adulthood with as far as baggage from our poor financial choices? And they’ve all sort of gone in different directions with it. One of our kids had to make his own mistakes. He had to, as he said, burn it to the ground. But he turned it around a whole lot faster than we did. But I had to realize that I needed to forgive myself for the bad mistakes I had made or bad choices I had made.
And I also had to go to a few other people and ask their forgiveness too. Like I said, it had spilled out on other people. Because if you stay there, then you’re stuck and if you’re a late starter, you can’t be stuck. You’ve got to start and you’ve got to start today. And you’re not going to know everything when you start today, but you’ll figure it out as you go. And it is figure-outable. That’s one of the things I want people to understand is you can figure this out and you can make a plan that works for you and your family and your situation, but you’ve got to give yourself a little time to process what’s going on and then forgive yourself because you can’t live in the past. You can’t worry about what I did 20 years ago. I’ve got to think about what am I going to do today.

Scott:
Becky, you had a 13 year journey to financial independence after around age 50 that involved climbing subtly to this one 1.3 million net worth. And Bill, you are two thirds, three quarters of the way through your journey to financial independence after starting in 2013, 2016, a ramp there in terms of thinking through how aggressive you wanted to get about moving toward financial independence. Is there such a thing as too late? Someone who’s maybe closer to 60 hearing those stories, maybe they’re thinking, I don’t have enough time. What would you say to that person and what’s your thought on when you need to get started in order to achieve this goal?

Bill:
I’ll go first actually, and Becky and I disagree on this. Not fundamentally, but I woke up at age 50 and if I’d woken up later, I think it would’ve been too late. It would’ve been too late for our spend. We would’ve had to reduce our lifestyle more than was comfortable. So yes, I do think you can be too late for a lifestyle that you want to lead at least initially. However, I do think that it’s great to start. You can start now and you shouldn’t leave your head in the sand because you can make huge changes in your financial future. You can get there. You may not get to where you want to go, but you’ll get to a place of financial freedom and peace if you don’t start. So we want to get people to start earlier, obviously. I think you’re always 10 to 15 years away from financial freedom. If you start at 50, you’re going to get there at 65, invariably if you make these changes. You start at 40, you’ll retire early. So we’re trying to get people to start at 40 instead of 50. Becky, your thoughts are a little different, so I’ll let you go.

Becky:
Well, I do say that I don’t think it’s ever too late, but like you said, fundamentally we do agree. And the way I put it is you may not end up where you’d like to be given the time you have left, but every choice you make today is going to make your future self more comfortable, less stressed, and you can create a better life than what you have now. You can always do better than where you are now. And one of the things that I … And we may get into some more specifics of this later, but our generation, there’s a lot of people in our generation that they don’t include social security in their plan. And for those of us late starters, I don’t know what’s going to happen in the future. I don’t know what congress is going to do. But I don’t think that it’s going to disappear. So I feel like that those of us that are in our 50s and 60s, we’ve got a backstop in addition to what we can do for ourselves. So I think we have some levers to pull that people may not really even be considering. So is it ever too late? Maybe, but I say in general, no.

Mindy:
We did an episode 344 with Jeremy Kyle and Emily Guy Burkin talking about social security. Because I have not traditionally counted my social security in my retirement numbers because it’s not going to be there, they’re going to run out of money. And this episode explains how yes it is going to be there. No, they’re not going to run out of money. And explains how so the social system actually works. So Becky, I love these comments that you’re making. What advice would you give someone who is in their 50s with a negative or $0 net worth?

Becky:
My two pieces of information other than what we talked about already of processing those emotions and getting yourself to a place where you feel like you can start moving forward, I always like to have people look at where they are. When you’re talking about a late starter, we have some advantages actually over other younger people. We’ve got a lot of life experiences. We may have a larger income. A lot of people are in their higher earning years at this point in time. So look at where you are. Figure out your net worth. What are your expenses? What are your assets? It might not be as bad as you think it is. And then I would say to start learning, get a mentor, dig up books, podcasts, blogs, whatever it is. Because you may not know what you need to know today, but it’s out there and we can do this.
So I would say have the mindset of I can make a change. I can make some improvements in my life to accomplish the freedom that I would like to have. And in the movie … Is it Playing with Fire where they talk about the list of 10 things? That has stuck with me ever since I heard that. The list of 10 things is they suggested to sit down and make a list of what would your perfect day look like? What brings you joy? What would you like your life to look like if you could build what you wanted? And sometimes you realize those things don’t even cost money. That what you can add to your life isn’t going to cost you a ton of money. Some things are obviously. A vacation’s going to cost something. But figure out what works for you, what’s valuable to you, what’s meaningful to you. And then rather than focusing so much maybe on a number is what do I need to do to build that life for myself?

Mindy:
Oh, I love that.

Scott:
Bill, what do you think? What should someone who’s getting started from scratch in their 50s do first?

Bill:
They need to assess their risk tolerance. They need to accept the fact that they’re going to work longer. For us, we went to a 75-25 portfolio, if you want something tangible. We needed some security, but at our age we knew that we needed to take more risk.

Scott:
75% stocks, 25% bonds, right?

Bill:
Right. Not everybody’s going to feel that way. I think you can take on real estate if you’re willing to take on that risk. We’re talking on BiggerPockets, so if you want to escalate your path to FI, you can use levers like real estate and so-called passive income to create a base of income upon which you can put your portfolio. Second, you’ve got to create multiple streams of income. You can start your side hustle, you can do real estate, you can use traditional paper assets. Those are the three or four legs of the stool you need to create. You don’t have one lever to pull. You have a lot of options. And yes, the risk may be more initially and then you’ll downshift it for sequence of returns risk and into … You’ll do all the traditional steps. The plan is no different. The time course may be a little bit, but the plan for a 30 year old is the same as the plan for a 50 year old. It’s just that we’ve got to do it faster.

Mindy:
I love that. It’s the same plan. It is absolutely the same plan. After, what is this, 450 episodes of this show, Scott, I see the same thing over and over again. Spend less than you earn, save, invest intelligently, potentially start a business. There’s no easy button, there’s no way around it. You have to be conscious of your money. You have to save and invest in a way that is going to grow for your future.

Scott:
I’ll just chime in and think, again, I’m not there. I’m 32 years old, so I have a different viewpoint on a lot of things I’m sure. But it seems to me that the house hacking concept or housing decision is something that you can also look at with fresh eyes in these situations if for example, your kids have just left the house. Bill, that’s what you did. You didn’t house hack it, but you downsized your house and that was a major lever I imagine, in terms of being able to save more. Do you think that’s a potential place to start for folks in this situation?

Bill:
Oh, absolutely. Housing is one of the big rocks. You’ve got to address that. There is no option there. Somebody wrote a really good book called Set for Life.

Scott:
I’ve heard of this. Go on.

Bill:
You can follow that path too. That’s written maybe for a younger audience and thank you for that book. I recommend it to my kids. I recommend it to a lot of folks because I think it does lay out a path not too dissimilar from what older folks like us have to do. We may be gerrifi, but we can be FI.

Scott:
Gerrifi. I haven’t heard that one before.

Bill:
Well, you know.

Scott:
I’ll leave that one to be used by you guys.

Bill:
We like Catching Up to FI better. One of our guests mentioned, and this is important, it was a great quote, that the emphasis on late starter is often late, and that’s a negative emphasis. Our guest, Amy Corso, said, “The emphasis should be on starting. A positive forward thinking emphasis.” I’m addicted to saving and that’s where you want to get. You want to get to the point where you’re more addicted to saving than you are to spending.

Becky:
And we were talking about the path is the same whether you’re 30 or you’re 50. And like Bill said, we just have to do it faster. And sometimes doing it faster means sacrificing deeper. I mean, that’s where we’ve put ourselves. We can get there, but if we had started when we were 25, the sacrifice is sometimes barely even noticeable if you want to work until 55, 60, 65. But if you’re condensing the timeframe that you have to work with, it’s the same steps, but you’re going to have to make some big decisions. And like Bill was talking about the big rocks, you’ve got to think about those big rocks.

Bill:
Well, one of the things I point everybody to is Pete Adeney or Mr Money Mustache’s shockingly simple math of retirement. Look at that graph and realize that if you can go to a 40 to 50% savings rate, this is the amount of time that it will take you to get there. And that ends up being 12 to 15 years. So it’s entirely doable. There is no late start to financial freedom to choices that you want to be able to make with your time.

Scott:
I think a major takeaway for me from this is I think you’re right. I think that for the vast … There can be notable outlier exceptions, but for the vast majority of folks who prioritize the concept of financial freedom and do so in a somewhat reasonable way with middle, maybe upper middle class income in this country, it’s going to take you 10 to 15 years to achieve financial independence. Again, there will be some outliers on either one of those, or it’s going to take you the entirety of a 30, 40, 50 year working career a little bit at a time. But it’s going to be one of those two things and you’re going to pay that price, which comes with sacrifice and the hard work of self-education to get familiar and comfortable with these investment portfolio decisions and to take control of every part of that and to work the probably very long hours it will take to bring home the income, to make the gap between income and expenses large enough. And on top of that, to begin managing your portfolio. And again, it’ll take 10 to 15 years. You got to start now, but it’s just a reminder for everyone listening that starting now means you can reap the benefits of that for the rest of your life with that, regardless of where you’re at.

Mindy:
Yeah, if you continue to do what you’ve always done, you’ll continue to see the results you’ve always seen. If you want to have different results, then you’re going to have to make a change, and that is the bottom line.
All right, Becky and Bill, you have a podcast called Catching Up to FI. Where can people find it?

Bill:
They can find it everywhere on all channels. That’s the website address. It’ll pop up on all players.

Becky:
And you can also find us on our Facebook group Catching Up to FI. We’ve had some amazing community involvement there. Folks are posting their stories, their pictures, asking questions. So it’s a great place to just jump in and, again, feel like you’re not alone.

Bill:
Yeah, we like to say that we’re a mindset first, money second and life third podcast. We talk about all the aspects of late starting and we are enjoying the ride.

Scott:
Love it. Well, you guys are a fantastic duo. Thank you for sharing your incredible stories. Thank you for solving or working to begin solving this very tough problem for millions or tens of millions of people out there. And I look forward to watching your community continue to grow and help lots and lots of people. So that’s Catching Up to FI. Go check it out on Facebook group and go check out their podcast. They’ve got a lot of great content, Bill and Becky. Thank you so much guys. We really appreciate it and we hope you have a wonderful rest of your week.

Bill:
Well, thanks for the opportunity to get our message out there and thank you very much for having us on your show.

Becky:
Absolutely. This has been fun. Thanks.

Mindy:
Thank you guys for sharing your stories with us and we’ll talk to you soon.
All right, Scott, that was Becky and Bill from Catching up to FI, and I can’t even … Which story do we talk about first? I love Becky’s story. I love how she realized at age 50 we have a $0 net worth and we need to change that dramatically or we are never going to retire. And Bill falling into the traps of the physician lifestyle where, oh, now I’m making a lot of money, I can spend it with reckless abandon and you can, but if you want to retire, you’re going to need to make some changes. I love all of the tips they had for us and for their listeners too. You have to make changes in your financial life if you’re going to reach retirement at any age.

Scott:
Yeah, I thought they were fantastic. This is a real problem. I think there’s a lot of people out there who feel like they’re way off track for retirement and who are in their 50s and feel like it’s getting late, maybe even approaching too late. And I thought that one of the tough things that I really respected from Bill and Becky was, hey, if you want to achieve the concept of financial independence, yeah, you got to start in your early 50s, mid 50s, to really have a good crack at it by the time you reach traditional retirement age. And they didn’t hold back from stating that. It is possible in a 10, 12, 15 year timeframe for many, if not perhaps most Americans out there in that situation. Everyone’s circumstances are different of course. But you do need to put in those years and at that high savings rate and really go after it. But I did think that their stories were also inspiration for folks that it can be done. You don’t have to start at 30 or 25 or 18 or 40. You can start in your 50s and achieve success just like they have.

Mindy:
Scott, there is no shortage of news articles that say 40% of Americans will never be able to retire and all of these doom and gloom articles. Clickbait is clickbait. But also if you don’t make the changes, you won’t ever retire. And when you are age 50, you don’t have the benefit of time, the luxury of time to save. But like Becky said, you have different advantages. You have the advantage of most likely having a higher salary than these 20 year old kids that are out there doing it now with the advantage of time. Traditionally, you have lower or lowerable expenses because you don’t have kids at home anymore or they’re just getting ready to leave. You have a lot of different advantages and you just need to figure out what your advantages are and exploit them. But yes, it is absolutely possible to still be able to retire, probably not early. I mean, you’re 50. You’re not going to retire at age 25 if you’re starting at age 50. That’s just math. Unless you invent a time machine, in which case, email me because I want to go too. There’s some things I want to change.

Scott:
And then I’ll just reiterate what we talked about at the end with Bill and Becky here in that the path to financial independence can take place over decades or over a five to 10 year sprint, if you will. And that is reflected I think in the journeys that I’ve gone through, that you’ve gone through, Mindy, that Bill and Becky went through. And I just think that hearing this, it’s both inspirational in that it can be done. You can start at the age 50, and I hope that for our younger listeners, it also is inspiring to think about, hey, do that sprint now. Do that in your 20s or 30s and reap the benefits of that if you can, if that’s an option for you for the remainder of your life, and have that power accrue to you so that you can buy that boat YOLO with financial freedom dollars in your portfolio and enjoy it guilt free from then on. So get those memory dividends. But if you pay the price upfront, I think that there’s a lot of benefit to that throughout the many decades of your life, hopefully.

Mindy:
Yes. The bottom line from that is if you haven’t started your journey yet, start today.
All right, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
That wraps up this episode of the BiggerPockets Money podcast. He is Scott Trench and I am Mindy Jensen saying we got to go Buffalo.

Scott:
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.

Mindy:
BiggerPockets Money was created by Mindy Jensen and Scott Trench, produced by Calin Bennett, editing by Exodus Media, copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.