Reflecting on FIRE: How Our Approach Would Change If we Began Again in 2024

2013 was a pivotal year for our hosts. Scott was fresh out of college and just beginning his journey to financial independence, while Mindy and her husband were well on their way to FIRE and had just launched their blog, 1,500 Days, to document their progress. But if they were starting over today, would they change anything?

Welcome back to the BiggerPockets Money podcast! In today’s episode, Scott and Mindy are winding back the clock ten years and sharing what they would do differently if they were beginning their FI journey in 2024. Spoiler alert: they wouldn’t have changed much regarding the fundamentals of frugality, saving money, and investing. But, as you’re about to find out, they would make some MAJOR tactical changes, and they even have a few regrets about not spending money!

Whether you’re brand new to FIRE or are already on track for financial freedom, you don’t want to miss this episode! You’ll learn about the real estate investing strategy Scott would prioritize in 2024, the stock investments that helped Mindy overshoot her FI number, and the lifestyle changes our hosts wish they had made along the way!

Scott: And Mindy, let’s start the conversation from there. So what I’ll do is I’ll go back to set for life the beginning of my journey, which is someone who’s starting from scratch, no debt, no assets, median income, right? Perfectly average from the beginning of that and say, what changes from my journey to 2024 starting today and how does that approach begin, right? If I’m starting my job now in 2024, 11 years ago, and let’s start your journey from that when you started 1500 days point and you said, okay, here, we’re going to finish out the play here from this portfolio and let’s talk about what we would do differently there. Do you want to go first or do you want me to go first?

Mindy: I’ll go first because what I would’ve done differently is focus more on index funds. So we first 1500 days the website with a net worth of $586,043 I think. I don’t know why he’s got that $43 in there, but full transparency. So we started about halfway, a little over halfway to our financial independence goal, and this was when we discovered Mr. Money Mustache and discovered the concept of financial independence. How old were your girls at that point?

Scott: Our girls in 2013 were six and four.

Mindy: Okay, so this is probably like a lot of BiggerPockets money listeners, let’s call it seven 50 to adjust for inflation. So you’re starting from seven 50 in 2024 with two girls, a good high paying job and $750,000 in cash, which you can distribute across retirement accounts or whatever as you wish. What do you do? Go.

Mindy: Well, I would first max out my 401Ks, any 401Ks that we had access to, I would max out the Roth IRAs if we were allowed to. And remember, there are income limits for your contributions for Roth IRAs. I don’t think we would’ve maxed them out at that time. I wasn’t working. I was a stay-at-home mom and I think Carl’s salary was such that we could contribute to the Roth IRAs. Here’s something I didn’t do. I was a stay-at-home mom for eight years and I did not contribute to my Roth IRA for those eight years because I wasn’t aware that there was a spousal IRA. So that’s something I would definitely do differently. Taking that $750,000, I would max out my HSA because the HSA is triple tax leveraged, tax-free going in tax-free growth and tax-free when you pull it out for qualified medical purchases of course. And my family is in this really great position where we don’t need a lot of healthcare. We need more of a catastrophic plan. So I would absolutely have a high deductible plan. Let’s see. That is, let’s call this 50 or $60,000 that I’ve gotten rid of and now I have another $690,000 that’s going into a brokerage account.

Scott: And what are you investing in? What are the stocks that you’re investing in this or is it still the fangs right now, even after the big dropoff this week, it’s the first week of August here with the big selloff and a lot of tech stocks, the

Mindy:Big sell-off, it was the biggest sell-off. I want to quote Morgan Housley. He’s like, this is the biggest sell-off since that last sell-off that you can’t remember. It was not a huge sell off. And at my age, I have been through multiple of these big selloffs. I was a sophomore in high school during 1987 when that huge drop happened. I happened to have an economics class, so we spent an awful lot of time talking about that. That was a 500 point drop and yesterday’s was a thousand point drop or yesterday’s was a thousand point drop, but it was 20% in 1987 and yesterday was like, what, 3% or something.

Scott: Well, if you could forgive me for calling it a big drop, would you still be investing in FANG stocks today with your 750,000?

Mindy: Not all of it. We had not traditionally invested in index funds, and that’s something that we’re starting to now. I would probably put out of that 690,000 ish that I have left over, I would probably put 600 into index funds and I’d probably use the 90 to play in the FANG and individual stocks because it’s not such an enormous part of my investment portfolio. I would not put $690,000 into an individual stocks Before we get into how we’d adjust our retirement strategies today, a word from our sponsors,

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Scott: Welcome back. Okay, and what about live in flips? So remember, I think my understanding of your journey is that you crushed the play from that 580 to, what is it, millions of dollars in net worth over the next, can I say the number that’s on your site? Sure. The 5 million plus net worth that you guys have today because of the combo of live-in flips and the stock market returns well, the income actually didn’t continue flowing in after a few years because Carl retired, I think from the software engineering role fairly shortly there. But so it was those two items, the FANG stocks and the live-in flips, that really seemed to be a huge driver for your portfolio. And it sounds like you would do some of that, but really wait much more to index funds. Would you still pursue a live-in flip strategy here in 2024, and you are very close to the market as a very active real estate agent. Do you see those opportunities for live-in flips in the same way that they were available to you in the last 10 years?

Mindy: I do with a little bit of an asterisk. So right now we have very high interest rates and by very high, I mean like six and a half percent. They’re not super, super high. But I got a text message from my favorite lender yesterday saying, Hey, if you have clients that are sitting on the fence, tell them to start jumping back in. Now I predict September is going to have a 0.5 rate cut, and they’re already saying there’s going to be three rate cuts this year. So I would absolutely be doing live-in flips because I always need a place to live. So if the market doesn’t change, if the Fed says, you know what, we’re not going to do anything and the market just tanks, I still need a place to live so I can always live in the house that’s flipped. I just now live in a nice house instead of an in construction house. But if I have just moved in here, I’m absolutely buying a garbage house and making it better because there’s so much upside. The house that I’m sitting in right now, having taken advantage of the last few years when prices went way up, I am going to have to pay taxes on the gain because I’m going to realize such a big gain. So there’s a lot to be made in real estate. Scott, I don’t see myself not doing a live and flip. If I was starting right now, how about you Scott? Would you live and flip?

Scott: Would I live and flip? Well, look, let’s set the scene here. It’s 2024 and I’m getting started as a median income earner. So I was earning about $48,000 a year when I started my journey, let’s call it $65,000 a year. Now adjusting for inflation there. So I’m earning $65,000 and I have no assets and I have no liabilities. Maybe like two or $3,000 my bank account left over from summer jobs in college. How do I proceed to financial independence? Well, I would attack the same themes, the same fundamentals, but I would use probably different tactics. So let’s start with fundamentals, right? It starts with low expenses. The big three expenses remain unchanged for Americans across the decades. They are transportation, housing, and food. So if anything, the biking to work and driving a paid off economy vehicle are even more powerful in 2024 than they were in 2013-14 when I was getting started because that of that inflation factor, gas is even more relatively expensive today than it was at that point in time. And so a bicycle is about the same cost. I could probably buy the bike that I rode to work for many years for three, 400 bucks today just like I did at that point in time. So if anything, that would be even a further emphasis on that, making my own food, those types of things. And then the housing piece, renting with a roommate or keeping that expense low in the first year, obvious move that is timeless. But once we get that first year of runway, the first $25,000 accumulated. I think it starts with the frugality component and accumulating cash and getting some flexibility into my life. No changes fundamentally to what I would’ve done in that first year as I start racking up that cash and I would still rack it up as cash. My journey is fundamentally different from yours, Mindy, because if I was starting over as a college graduate with no family and no obligations and those types of things, I would not be maxing my HSA, I would not be maxing my 401K, I would not be maxing my Roth IRA I would be accumulating liquidity because I think that that $25, $30, $40,000 for someone at that point in their life is so much more valuable outside the retirement accounts for things like a live and flip, a house hack, a small business venture, those types of things.I wouldn’t do that forever, but for one, two or three years, I might emphasize that more than putting it into the retirement accounts because I’ll have the next 35 years to catch up to the retirement accounts. This is not for blowing it, but this is for taking a few calculated bets. So I would’ve still done that as well. Fundamentally might’ve taken a match if I was getting a really good match from an employer and that’s it. Everything else is cash in the bank account. Okay, so from there, what do I do with this $25, $30, $40,000? Well, I would not have bought the same duplex that I bought in 2014 as a house hack. That duplex I purchased for $240,000. My mortgage was a bank $1550 between principal interest, taxes, insurance and PMI with a 5% down payment. And my rents, if I rented it out and did not live in it would have been $2200. So there’s a spread there of 600 bucks, probably break even or better even at high leverage on that property on day one. If I sold that property today to somebody for $550,000, which would be a bargain for them, they would have a $3,600 principal and interest payment alone in that same situation and the rents would be $3,200 in aggregate. So it just wouldn’t have worked the same way. So I would’ve had to find a new tactic to make the house hacking work. I might have gone with the live and flip. I really like the A DU strategy. Colorado has recently introduced some laws that make a DU permitting much more favorable, and I’d be definitely looking for a lot of opportunity there. I think there’s a lot of creative folks who are able to do that. That’s essentially a live-in flip, right? You’re moving into a property and building an A DU Outback on there, which drives the value up.Fundamentally, there’s a lot of similarities between that. I would’ve really liked that approach and I might’ve coupled that with a short-term rental or rent by the room strategy because the owner occupant advantages of a short-term rental strategy are very favorable. So I think that would’ve been a really good risk adjusted bet That would be one of the best risk adjusted bets I think I would be making in today’s environment if I was getting started over, started over. And I think that there’s a lot of really good opportunity to add value to drive cash flow from a strategy like that. And I think that there’s an off chance that legally they’ll allow folks to separate those parcels and sell off the A DU and the house as separate items within the next few years. I wouldn’t bet on it, but I would certainly factor that upside as a possibility into my analysis on a project like that.So that’s probably how I would attack the housing problem of that being such a huge expense in my life on there. And then once I got that settled, I would do the exact same thing that I did, which is look for an opportunity at work, whether joining a startup, becoming a real estate agent, becoming a mortgage broker, buying a small business. I love the stuff that Cody Sanchez and Alex Ozzi are talking about nowadays. I love those items. I would definitely be doing the exact same thing I did 10 years ago looking for that opportunity, something like that in a field that I was passionate about. And then once I got bearings under me and kind



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