Late Start, Early Retirement: A Step-by-Step Fast Track to FI

Got a late start on your retirement planning? Do you feel like you missed the boat and won’t be able to retire on your timeline? We’ve got good news for you in today’s episode—it’s never too late for retirement (and even EARLY retirement!). No matter what age you’re at, how much you have in the bank, and how much you make, you CAN retire on your terms, and our guests will prove it. The question is, will you follow through on their time-tested system for reaching retirement? Bill Yount and Jackie Cummings Koski from the Catching Up to FI podcast are here to show you that whatever your situation is, you can get on track for retirement. Bill and Jackie both were late starters, only taking retirement seriously decades after starting their working careers. Even with their “late start,” Bill and Jackie were able to massively multiply their net worths and retirement savings, allowing them to reach financial freedom on their terms. In today’s show, Bill and Jackie walk through the four steps that anyone can take to begin saving for retirement. You don’t need ANY money to take these initial steps, but doing so will change your entire financial future. Stick around for our next show as we get into the nitty gritty of retirement planning and put you directly on the path to retirement or early retirement! In This Episode We Cover: The four steps anyone can take to reach retirement Why it’s okay to be a “late starter,” especially when it comes to retirement planning How to do a “backward budget” to quickly and easily see how much you’re spending Why you MUST look back on the financial “lessons” you’ve learned to build wealth now! Getting clear on your goals and what you want to achieve so you can reach retirement The “trifecta of mistakes” Bill made and how even that didn’t stop his financial freedom journey! And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube The BiggerPockets Money Podcast BiggerPockets Money 314 - Finance Friday: How to Get to Early Retirement Even Faster BiggerPockets Money 422 - The Late Starter’s Guide to Financial Independence (Even in Your 50s!) w/Bill Yount and Becky Heptig BiggerPockets Money 527 - Retired at 49 on an Average Salary after Getting a “Late Start” to FIRE w/Jackie Cummings Koski Catching Up to FI Reach Financial Independence Faster with "Set for Life" Find an Investor-Friendly Agent in Your Area BiggerPockets Money 422 - The Late Starter’s Guide to Financial Independence (Even in Your 50s!) Connect with Scott Connect with Mindy (00:00) Intro (03:02) Late Start, Early Retirement (07:49) Before You Can Start (09:55) “Backwards” Budgeting (19:12) Make a Plan (30:41) Acknowledge Your “Lessons” (35:20) Stick Around! Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1063 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:05Dave Meyer?

  Well, this is it. We have reached the last full BiggerPockets podcast episode of 2024. So let me just take one quick second and thank you all so much for watching and listening and being a part of the BiggerPockets community in 2024. It means the world to me and the entire BiggerPockets team that you all come enjoy our content and apply it to your own lives and help pursue your financial goals. As we wrap up the year, we are republishing some of our favorite episodes from podcasts across the whole BiggerPockets network. The show we're playing for you today comes from the Money Podcast where hosts Mindy Jensen and Scott Trench talk all about optimizing your personal finances to reach goals like

• 0:48Dave Meyer?

  financial freedom and early retirement. And in the specific episode that we're sharing today, which was originally published back in June, it features Mindy and Scott interviewing Bill Yount and Jackie Cummings-Koski from the Catching Up to Five podcast. And this episode is a great primer for how to get started on the road to financial independence, especially if you're already in your 40s or 50s or even older and are realizing that you might need to make some changes in your spending or your savings and investing habits to achieve the retirement that you're dreaming of. But even if you're not at that stage of life, I think the advice that the hosts and the guests give in this episode, like creating

• 1:28Dave Meyer?

  a budget and giving yourself some grace can help anyone at almost any stage of life. So I really think you're going to enjoy this episode. And if you do, make sure to give BiggerPockets Money a subscribe on YouTube. We on this podcast will be back next week with more new episodes, but for now, here's Mindy and Scott.

• 1:47Speaker 01

  The financial independence community is filled with stories of young people who have reached financial independence and retired early. But what about boomers or Gen X? Today, we are going to arm you with the four steps you need to know when you're getting a later start. Hello, hello, hello, and welcome to the BiggerPockets Money Podcast. My name is Mindy Jensen, and with me as always is my young at heart co-host Scott Trench. BiggerPockets has a goal of creating 1 million millionaires. You are in the right place if you want to get your financial house in order, because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting, even if you're getting a later start on your financial independence journey. Today, we're joined by later start experts,

• 2:31Speaker 01

  Jackie Cummings-Koski and Bill Yount, hosts of the podcast Catching Up to Five. We'll be talking about everything from backwards budgeting to social security. This episode is the 101 level, talking about the foundations you need to support your later start when your runway is a little bit shorter. Jackie and Bill have so much to share that we're bringing them back on episode 538 to share 201 level, the tactics to help you reach your financial goals. Jackie Cummings-Koski and Bill Yount from the podcast Catching Up to Five, welcome to the BiggerPockets Money Podcast. I am so excited to talk to you guys today.

• 3:11Speaker 02

  Oh, it's great, Mindy. Thanks for having us on the show.

• 3:14Speaker 03

  Yeah, we're glad to be here. You know, Catching Up to Five is like been, uh, Bill developed it. We're making it even better because there's so many late starters. So we are thrilled to come and chat with you guys today.

• 3:24Speaker 04

  Gen X is behind on retirement. The average Gen Xer has something like $40,000 saved for retirement. So it seems like most people in that generation are getting a very late start. There's a lot of reasons for this, but Jackie, can you give us your thoughts on that stat? What is going on here? Why are so many people getting started late?

• 3:42Speaker 03

  Yeah, I think that that stat is right on. And it's not just, you know, the Gen Xers. That is the biggest chunk, but things like, uh, if someone immigrated to this country, that could get them a late start. Sometimes divorce, uh, even kids sometimes can cause people to get a late start. But we tend to end up in this, you know, uh, late 30s, 40s, and 50s when we're just waking up. Like for me, I just woke up at 38, and some people might not consider that. Late, but I knew I was way behind. So when you're finally waking up because you didn't get the stuff early on, that gives us a late start. And then for me especially, I was running really, really hard to try to catch up.

• 4:24Speaker 03

  And I ended up getting, you know, having a late start, but finishing a little bit early. So there's a whole lot of people in this bucket of late starters.

• 4:35Speaker 04

  Jackie, one of the things that we see in bigger pockets when we're talking to people about their money story to early financial freedom is this concept of the aha moment. Oh, I discovered that I could retire earlier and build wealth. And then a very dramatic behavioral change that incorporates saving, investing, building one's financial position. Is that what you mean by wake up in the context of moving towards retirement?

• 4:59Speaker 03

  Yeah, I do because for a big chunk, you are just sort of floating through and doing what you've heard other people say, or maybe having the wrong role models around you. But when finally you get curious, you start digging, you start educating yourself and things start clicking. You're like off to the races. And I know for me, once I found one nugget that was helpful to me, I wanted to keep digging and digging and digging and finding so many other things that helped me. And, and I'll tell you what, there's a unique type of motivation that you have once you get going. And so I tell people all the time, you will surprise yourself at how fast you move.

• 5:41Speaker 03

  Once you wake up and you start seeing that some of the things that you're doing different after you wake up, looking at the movement, that is so much motivation for you to keep going, to go faster. And before you know it, you're way further along than you thought you ever could be, even if you got a late start.

• 6:00Speaker 01

  Absolutely. I could not agree more with you, Jackie. And what I think a lot of late starters maybe don't know or don't really focus on is there are some advantages to being a late starter. There are some, uh, some opportunities that they have that their younger counterparts don't. And we're going to get into that a little bit later. But Bill, I've heard you say the average American is a late starter. And I love that because it's so inclusive. The, the, you know, you see these articles that are written about, you know, the 25 year old that got to financial independence in two minutes. Yay for him, but that's not the average person. That is absolutely the outlier.

• 6:43Speaker 01

  But when you see so many of these comments over and over again, you start thinking, oh, maybe something's wrong with me because I'm 50 and I, and I'm not retired. So I love that. I love that phrase, the average American is a late starter.

• 6:57Speaker 02

  Well, you know, I don't know how I came up with that, but it seems to ring true. You know, in our audience, in our show, in our podcast,

• 7:07Speaker 02

  they all wonder what happened. You know, you get caught up in life. You get caught up in the funnel of life. You come out of school, you come out of residency, you have big debt. You start a family, you buy a house, you buy a car, and then you get into this paycheck to paycheck lifestyle. And all of a sudden you're 50 and you've lived life, but you wake up and you go, wait a minute, nobody's taking care of me. I have to take care of myself and I better get started. And getting started is really the hardest part. And as Jackie says, once you dive in, it's amazing how fast you can turn your mindset around and turn your money around.

• 7:50Speaker 04

  So we haven't even gotten to the steps here to actually address going towards, you know, like catching up to retirement and beginning to move our financial position forward. But I think these are two critical precursors here. We can call them, you know, one A and one B on this journey. One is wake up and acknowledge like, hey, this is like an important part of life and nothing's going to come and save me. I gotta go and go after this and get this done. And two, um, you know, uh, like rationalize or understand or empathize that you're not going through this alone. This is a most people are kind of in the same boat as you when you're maybe weren't getting a late start and trying to catch up to retirement. How am I doing there? Is that, or do you agree with that as like step one A and one B here? Before we even get into the actual work of moving.

• 8:35Speaker 04

  Our financial position forward.

• 8:36Speaker 03

  Yeah, for sure. I think you hit the nail on the head. You know, it's just kind of, you know, waking up, acknowledging, you know, you didn't know these things and just moving on. The acknowledgement part is really important because, you know, if the mind isn't there, it's hard for you to get your feet moving.

• 8:53Speaker 02

  And then when you wake up, you feel like you're alone. I mean, you think you're the only person in the world that has done this. And, you know, that's why I call it the silent majority because we live in a consumption society. We live in a society that is not, you know, promote savings. It promotes consumption and spending. It's almost an afterthought in our society.

• 9:16Speaker 01

  Yeah, you are not alone. We are here with you.

• 9:21Speaker 03

  We need to tell Mindy not to give up her day job. Is that right? You're such, Mindy, you're such a great podcaster.

• 9:27Speaker 04

  That's the new intro music for BiggerPockets Money. We're putting that right in there.

• 9:31Speaker 01

  BiggerPockets Music, yeah. Not High School Musical, BiggerPockets Musical. But you aren't alone. And these headlines that you see, these sensational headlines, absolutely make you feel like you're alone, which is why I love the Catching Up to Five podcast so much because you're sharing stories of people who are doing it, who have done it with a later start.

• 9:54Dave Meyer?

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• 10:39Dave Meyer?

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• 11:28Dave Meyer?

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• 13:35Speaker 01

  What would you say, Jackie, to somebody who reached out to you and said, Jackie, I've heard about this concept of financial independence. I would like to do it, but I'm older. What is my first step?

• 13:48Speaker 03

  Yeah, to me, the first step, we talk about the psychological part. I like to say, give yourself a little grace is probably a lot of the reason why you're getting a late start probably is not your fault. We're not taught about these things. It's a taboo topic and even schools don't teach it. A lot of us didn't have good role models at home. So just give yourself a little grace. Okay. Once you do that, you have to know where you're starting. Like, how can you even decide, okay, should I start kicking up my investing first? Should I pay off my debt first? You don't know which piece is really more critical until you start laying out your finances and determining like what your numbers are. Things like, you know, your net worth, you know, maybe your F I

• 14:31Speaker 03

  number, which is 25 times your expenses. Um, you know, what's your true income? You know, what taxes are you paying? Uh, so all those things are important to see where you're starting. I know there's that inclination to, let's just do it all at once at the same time and just get it, get going so quickly. But just figure out where you're at and lay things out so that you have a very clear picture of where you're starting because as you see progress, it's going to be really, really valuable to you to see where you're started. Even if your first net worth is in the red, if you start to see it moving in the right direction. It's motivating and you can see that you're making progress. So that's how I would get it started.

• 15:11Speaker 01

  Yeah, even if your net worth is in the red, you need to acknowledge that. That is what I call a fact. It is not judgmental. It is. I have brown hair. Jackie has black hair. Those are facts. I have X number of dollars. I have negative X number of dollars. Those are facts. So, once you have an idea of where you're starting, that's so, I love that because then you can move forward. I don't know how much my net worth is. Well, then, how much are you spending? How much are you budgeting? How much, I mean, you don't even know how much you're budgeting. And so you start tracking your expenses and see where it's going. But yeah, so Jackie, this is awesome. I've given myself some grace. I have, I want to diagnose my starting point.

• 15:56Speaker 01

  How do I do that?

• 15:57Speaker 03

  Yeah, so as we, some of the numbers that I mentioned, you can't even get to until you do a budget. Now, that scares a lot of people. A lot of people hate budgeting. I personally, I have to admit, I'm not one of those that love budgeting. But you have to know how much your expenses are. So what did I do? I did the backwards budget, which I kind of think is better. Bill may disagree with me because I think he does a much better job of the budgeting piece. I do it backwards because I think that leaves less chance of something being left out. So here's how the backward budget will work. Basically, you take everything that you're saving and investing, and then you take everything that you're paying in taxes, and whatever's left, that's your expenses.

• 16:40Speaker 03

  Now, if you do it the other way, we're gonna forget stuff. Like, did you include the dog grooming? You know, did you include, you know, fees for this and fees for that? And I think it's so much more room to forget things in a budget when you're doing it the front way, sort of doing line item by line item. Inevitably, you're gonna forget something. By doing it backwards, you probably include it the most your budget can be once you subtract out the taxes and your investment and savings. So, I don't know, Bill, what do you think? You're pretty good with budgeting, way better than me.

• 17:13Speaker 02

  Well, I actually do it the exact same way. Uh, I, I, I save till it hurts. Uh, maximize my savings rate or the gap. And then, you know, everything else is spending, but I gotta spend on a value-based method. You do have to track your expenses because there's a lot of little things and big things that you can get wrong and you know, you can have a lot of holes in the bucket that you've got to plug as well.

• 17:38Speaker 04

  I, I, I just want to observe here that um, I've been, you know, tracking my finances and, and my net worth uh, for 10 years here, pretty regularly. And this is not a fun task for me. I don't enjoy it. It is a large amount of work to tabulate my expenses on a regular basis. Plan for consumption, investments, taxes, those types of things. It doesn't take me 10 hours a month, but it takes me two. Um, and it took me a couple to get it set up and it was confusing and painful and those types of things. Is that what you guys found getting this started and, and how you find it going forward? Or is there, is it much easier than that? Like, I guess I'm, I'm, I'm wondering, I think for someone listening, this sounds like a lot of work. It sounds very painful

• 18:22Speaker 04

  to acknowledge reality and it sounds like something I have to keep up with for the next 10 years. Is it really worth it, in your view?

• 18:28Speaker 02

  No, it's absolutely worth it and I made it easy for myself by using a couple of apps. And if I may, uh, plug them a little bit, I use Monarch Money and I use Empower. Uh, I use Empower to track my net worth and Monarch Money to track my expenses. It makes it easier. You gotta wanna plug your accounts in and you have to be comfortable with that. But you get reports and you can find the holes in the bucket. Uh, and you know, find a way to maximize your savings and the reports are very helpful. And I look at them on a monthly basis and I go, oh my God, there's an unexpected expense that may, I may have been hacked. And then there are ones that I'm like, I don't use them anymore. Uh, so, and then the net worth piece, Empower is really powerful.

• 19:12Speaker 02

  Uh, and it's fun to look at. I look at it more than I probably should. People talk about monthly, quarterly, or even annually. It's oftentimes you're better off stick, once you get your plan together, sticking your head in the ground and not looking at it. And then 20 years later, you have a massive amount of money, but. That's what my sister did.

• 19:30Speaker 04

  And just for the record, Monarch is about a hundred dollars a year as a subscription. So that would be an expense that one would incur, but I also heavily recommend Monarch. Empower is another great tool. I don't use that one personally, but that one I believe is free for users. Is that correct, Bill?

• 19:47Speaker 02

  That's correct, and you're correct on the Monarch expense as well. It's you get it back in spades if you spend that on an app like that. And they do sponsor our show, so maybe I can help you out.

• 20:02Speaker 04

  Oh, yeah. Please give us an intro because I love Monarch. Yeah, that's free. That's free for Monarch. Yeah.

• 20:07Speaker 03

  And another thing, you guys, like as far as like, you know, keeping up with your expenses, we've got the app, so technology's there in our favor, but remember it doesn't have to be anything complex. So you may use a yellow pad and paper. I use a spreadsheet for a lot of tracking, a lot of my, not just my expenses, but my other financial life. And I've been, I've been doing that for like, you know, 15 or 20 years and I've customized it like crazy. So I would be totally spoiled and anything else that I use, I don't know if it would, you know, be satisfactory enough because I've customized it so much. So no matter how you do the expenses and the budget, in particular, if you're just starting and you feel like you're going to have to make some adjustments,

• 20:50Speaker 03

  having that, those expenses and the budget in place is going to be helpful for you to identify areas that, and I say adjustments and not cutting, because you can save plenty just by making some tweaks here and there. You know, I did, like Bill was saying, you know, the value spending where you're like, you know what? Why am I spending, you know, this much on my Netflix? I am, you know, busy with my business. I haven't watched it in six months. So little things like that, up to the big things, like, you know, maybe not right now, but you know, back in the day, refinancing your house, you know, made a big deal. Or maybe you're in a position to pay your car off when it has a high interest rate. So there's so many, you know, changing insurance companies.

• 21:33Speaker 03

  So just don't forget about the ability that you have to. To make adjustments versus just cutting out things, you know, don't do things that are not going to make you happy. Don't do things that are going to make you miserable. That is huge because if it makes you miserable, you're not going to stick with it.

• 21:50Speaker 04

  Yeah, so Netflix just canceled their sponsorship.

• 21:54Speaker 04

  Based on this one. But I think, but the bottom line is like, there's all these tools. Spreadsheets, great. Pen and paper is great. Monarch's great. Empower is great. There's always a new one popping up that's got a new experiment. Just do the work, which is not fun work at first and will be very painful for someone who's starting out late to see bad numbers maybe on the page, but you gotta stare them down, do the work, get this thing, get it, get it over with, and then continue to do it and, and, and come back to it every month, every quarter, whatever the cadence is that's helpful for you because it's so critical to understand where your numbers are and where you're go, where you're at, where you're going at the highest level in order to get started here. All right, step 1A, wake up. Step 1B, give yourself some grace. Step 2 is diagnose.

• 22:39Speaker 04

  When we come back, we're going to talk about how to analyze those numbers and make decisions based on them.

• 22:45Dave Meyer?

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• 23:30Dave Meyer?

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• 28:01Speaker 01

  Welcome back to the show. Let's talk buckets and goals and how you can incorporate them into your journey.

• 28:07Speaker 04

  Jackie, Bill, now that we've got this analysis done, this slog of at least several hours and probably a few, you know, a month or two that's gone by for us to collect some data and understand our financial position, what do we do with this information?

• 28:20Speaker 02

  You know, first we pause and as I say, then we plan, and this is the planning phase. And after the plan, only after the planning phase do we pivot and take action. And as far as the planning phase, you've got to look at your cash flow is one of the first things I think you've got to know what's coming in, what's going out, all the categories. And you've got to start creating your cash flow waterfall. But to take a step back first, I think everybody should make an investor policy statement. They have to go through because your financial life isn't just the numbers upfront, your budget and whatnot. You've got to plan for insurance. You've got to plan for an estate plan. You've got to plan for several things in your financial life.

• 29:05Speaker 02

  And there are formats out there where you can go through this. You've got to think and you don't know where you're going unless you have a map and you won't reach your goal without a map. So I think the investor policy statement is important. And then I went into cash flow.

• 29:23Speaker 04

  Okay, so step three here is make a plan, map out a plan. And it makes sense why this is coming after the previous step because we need to know where you're at, you are here before you can make a plan to get somewhere else. Right. And so I love this. You said an investor policy statement, you said a will. What are some other components of this plan that you think are critical, Bill and Jackie?

• 29:45Speaker 03

  Oh gosh, there are so, and I don't want to say there's too much. And the whole key is that you don't have to do it all at once. You don't have to do it all in one day. Um, I like to be able to sort of take a moment to bring to dream, to think about like what you want your life to look like. Um, you know, sometimes we are in a terrible job where we just want to get out of it or whatever. And then maybe that's our reason for wanting to, you know, do something different. But you Think about things like, hey, I just want peace of mind. I don't want to punch someone's clock every day. I've always had a dream that I wanted to, you know, educate people on their finances or whatever that is because in your head, if you have some idea of what you want to move towards and the stuff that you're like, no more.

• 30:30Speaker 03

  That could be a lot of fuel for you wanting to make these changes. And sometimes it does help to write down these goals, not just the tangible goals, but the intangible goals. And that makes a difference as well. So I would definitely keep something like that. You know, some people call it a vision board or something like that, but, but kind of, you know, have your little dreams and, and the things that you want to move towards.

• 30:53Speaker 01

  So Scott said something that I thought was really important for people to hear. If you're on this later start journey, this is not a five minute exercise. Scott said this might be a couple of weeks or a couple of months that you have taken to start off looking at your starting point, diagnosing your starting point. This, this dream and plan and goal section is also not a five minute exercise. You want to take the time to really think about it. And this is, all of this is a fluid document. This is not, well, I said I was going to do this, so I guess that's all I get to do. If your goals change, if your dreams change, change your document too.

• 31:37Speaker 01

  But I love that you're writing this down. I love that, that investor policy statement. That's so important. And this, your dream statement, your, you know, all of these need to be, need to be written down so you can come back and revisit them. Cause I don't know about you, but I'm over 50 and things fall out of my head.

• 31:58Speaker 02

  I actually just brought up my written financial plan for Karen and Bill. And the components of it are fairly straightforward. You know, I, we outline our present nest egg and our present net worth. And then as far as the goals go, just like Jackie, you know, you have to have your personal goals first. And then as far as things like your financial goals, I mean, We said our investments will provide an income of $160,000 while still growing at the rate of inflation, providing us with financial independence by July 4th, 2028. I mean, you've got to be very specific and we'll reach a net worth of X.

• 32:37Speaker 02

  And then we talk about our savings goals and then all the insurances that need to be in place to protect you. You got to play defense before you play offense. Most people want to play offense.

• 32:49Speaker 04

  I love this and just to share how aligned I am with this. Every quarter, starting on our honeymoon, my wife and I have a little vision document. It's just, it's just a piece of paper. It's not, there's nothing fancy to this. This isn't part of my $500 goal-setting retreat summit program or whatever. This is just like a word document, right? And we write down 10 things we're grateful for after a cup of coffee and a workout. Within we write out what our life looks like at the end of 2025 and in this one and 2028. Just two, two and five years. And we say, we live here. This is what our day looks like on the weekdays. This is what our day looks like on the weekends. This is what our physical health looks like. This is what our family life looks like.

• 33:32Speaker 04

  This is what, you know, we do for fun here. This is what our career outcomes have been, those types of things. And we just write that down and we, we, we've edited it every quarter for the last eight years. Many years, basically, on this thing. And it moves a little bit. That's okay, but we know, we know where we're going and it stopped moving quite as much in the last couple of years as we kind of really glocked in like, yeah, that's what we want. That's what we're going to work towards. And that dreaming exercise for us works really well. There's so many different variations of that that you can do, but it's just a piece of paper. I would encourage you, if you're going to do this exercise, to do it when you're feeling good.

• 34:15Speaker 04

  This is not an activity to do, you know, after a really hard week on Friday, after four glasses of wine, when you're really beating yourself up. This is an activity to do on Saturday morning after you've had a nice workout and a cup of coffee and the weather is nice and the sun is shining and you're feeling good and your spirits are high. But I don't know. I don't know if you guys have any reactions to that.

• 34:35Speaker 03

  Yeah, no, I love all of that, Scott. I mean, all of that is so amazing. And you and Bill are making me realize I need to do more writing things down. But the whole key is, it's not written in pen, right? It's in pencil, where you can make changes, you can make adjustments, you can tweak it. We weren't taught how to put this stuff together. So give yourself a little bit of grace, a little bit of a buffer to be able to work and massage these to make sure that it makes sense. And I feel like the trial and error is really valuable as well, because you're going to learn something about yourself every time you make a change.

• 35:09Speaker 04

  Absolutely. And a quick tip here, if you have a significant other, it is always a good idea, and you come to them with this, it's a good idea to label it draft for the first time on there. That will, that will help a lot of things in that first conversation.

• 35:22Speaker 03

  Yeah. And just to be clear, so everybody here is partnered up and married. I'm the only single person here, okay? I got divorced, you know, and most of my fire journey has been since I got divorced, I have one daughter. So situation's a little bit different, but there's plenty of single people that are late starters. And part of the reason is they might be divorced, or they went through some relationship issues, or there's so many different reasons. But whether you are married, partnered up, or single, a parent, or someone with no kids, these same things apply.

• 35:57Speaker 02

  Yeah, I mean, in our community, and we have a large Facebook community, 75% of them are women. And a lot of them seem to be divorced, you know, financial catastrophe, and they're very engaged, very motivated. There is a large female component to this. Maybe men are more ashamed, and maybe the women are more able to embrace their mistakes or challenges and move forward positively. I don't know. What do you think, Mindy?

• 36:23Speaker 01

  You know what? I see a lot of women now taking control of their finances. And this has been a man's game. Oh, men take care of the finances. My husband does all the work. My husband, like, I hear that a lot. And I see a lot of women, either through divorce, or just simply wanting to do it. Being empowered to do it and say, I want to learn about this. I am going to fix my finances so that I'm not going to fall under that other headline that we see so much. Oh, you'll never be able to retire ever. And I think that ties back into step one B, which we kind of glossed over, and I'd like to focus on that for a minute.

• 37:04Speaker 01

  Give yourself some grace. I'm looking for tips for people to help themselves come to terms with the fact that they weren't perfect before. That is also a fact. We'll just put it over here. You weren't perfect before. Now we're going to fix that. How do you give yourself some grace?

• 37:23Speaker 04

  Awesome. So we've got wake up. We've got give yourself some grace. We've got diagnose your starting point, and we've got a dream. So we know our endpoint. We know where we're starting now. What comes next, Jackie and Bill?

• 37:36Speaker 03

  Yeah, I think two powerful things are curiosity and, you know, willing to, you know, shift and make some changes. So I say curiosity because it really, when I think about a lot of the mistakes that I made, some of them was either because of curiosity, or I solved those mistakes because of, you know, how curious I was about things. So just use that to your advantage. Like, for instance, if you are so confused about how, you know, Roth IRAs work, you know, what part is contribution? Do I have to wait five years? What are the nuances? You know,

• 38:15Speaker 03

  be curious about things and then start digging. It's a powerful thing. And then fear is another really powerful thing. For me, I had a big fear. I grew up in poverty. I had this big fear about being thrust back into poverty. So a big part of my wake up call was when I got divorced and I realized there was a huge disparity between what I had in my retirement account and what my husband had in his retirement account. And that was, that was a huge mistake that I didn't even know that I was making. We didn't talk about the money. We didn't talk about investments.

• 38:50Speaker 03

  But finally, you know, when the divorce was said and done, I said, you know what? I don't want to ever feel this financially ignorant again. And the main thought was in my head was that I didn't ever want to be back in poverty again. And I never wanted my daughter to know poverty the way that I did. So I became so curious. I was curious about the stock market. I was curious about how did that big disparity exist? And I started figuring some of those things out. And in the process, I'm getting my finances together. I'm, you know, I ended up joining an investment club to learn more about the stock market and investing. I started understanding how my 401K work, understanding compound growth, all these things, because I was really, really curious and I was very afraid of being in poverty again.

• 39:34Speaker 03

  So I was doing something about it. Um, you know, one of the big mistakes, you know, I made was, uh, you know, you guys are real estate guys. So you, you made this come into my head again. But, um, it was like around 2010 or whatever. I ended up buying a, um, a rental property. It was a condo near Charleston, a great area. You know, everybody had short sales and, and, you know, foreclosures and stuff like that. Well, I needed to get this, I wanted to get this property, trauma handed landlord, right? And it was a crazy time where they didn't even want to give me financing. So you know what I ended up doing? I ended up taking a loan from my 401K, the maximum $40,000. Again, I wasn't using it as a piggy bank or anything.

• 40:16Speaker 03

  I was just sort of in my mind, shifting the investment, came up with $30,000. I ended up buying this condo for $80,000. And I was a landlord for two years, learned something about myself, wasn't too crazy about landlord. And I sold it about two years later. I made money off of it. It was totally fine. But I found out that, you know, I wasn't too crazy about, uh, being a landlord. But the funny thing was a few years later, I'm like, you know, I wish I would have held on to it. Well, that $80,000 condo, I think I sold it for like maybe 140, 150, something like that. Well, I, right before I got on this podcast, I looked up that property to see what it's worth today. I got it back in 2010 and it's worth $345,000.

• 40:59Speaker 03

  And I'm like, oh my gosh, what is, that, that's a big mistake. But I learned from it, but it was just kind of crazy. I went and looked at it because honestly, if we ever had any kind of opportunity like we had in two thousand nine, two thousand ten, two thousand eleven, I would be willing to do it again. So just making those mistakes, it just, I don't even really call them mistakes anymore. I like to call them lessons. So I'm not, you know, beating up on myself by looking at how much this condo is worth now. It's a lesson to remind me that if the same opportunity came along, I now will approach it different because my head is in a different place.

• 41:33Speaker 01

  I think that's a really great point to acknowledge that you have made some mistakes. And then instead of calling them mistakes, call them lessons because that's what they are, especially if you actually learned something from them. If you didn't learn anything from them, then it is just a great big mistake. But having the, having, giving yourself grace is letting go of these things. I've made mistakes too.

• 41:58Speaker 04

  I, I also think just, just a couple of things, you know, for folks that are looking to learn from what you said, Jackie. I, I saw some tools in there that are really powerful for, that folks can use to repeat that, right? Acknowledging and thinking through these mistakes. Labeling emotions that you felt along that journey as well is really powerful. That's just a general psychological tip, right? If you ever feel like an emotion, label it, it helps you control it and react to it, write it down. And then using that emotion to inform the plan, right? Part of moving towards a brighter financial future isn't just moving towards your vision. It's totally okay to be like, I don't want to feel that pit of fear in the corner of my stomach all the time, whenever I think about money and the next decade or whatever as well.

• 42:43Speaker 04

  Those are all absolutely critical ingredients in being able to form a plan. Hint, hint, one of the next steps coming up that we're going to talk about here. So just some tools there that I think are really powerful that I, I observed that you used.

• 42:55Speaker 02

  I'd like to caution people a little bit because I made what I would call the trifecta of mistakes. Right around 2007, 2008, we had renovated a house to the nines, basically rebuilt a house. Soon after 2007, we were upside down in our house. We had a very low savings rate and our financial advisors that were not advisors at all, allowed us to sell out at the bottom of the market and go to a low risk. And with our low savings rate, being house poor and having sold out at the bottom, we didn't get in till much later and we missed out on, you know, two thirds of the longest bull market ever. So you've got to manage

• 43:37Speaker 02

  the big rocks and you've got to be intentional about these things. The first thing we did after, one of the first things we did after waking up was downsize, which is a very painful thing for late starters, especially with regards to housing. But it made all the difference. If you take care of these big rocks and get back to what's realistic, then you can, you know, increase your savings rate exponentially. We went from single digit to 10% savings rate to about 30, 35% savings rate within the first year of waking up. This is absolutely possible.

• 44:15Speaker 04

  Awesome. Well, this has been a really fun discussion here. I think this is a great stopping point. Jackie, Bill and Mindy, thank you so much for the good discussion. We have our first four steps here. Wake up. One A, wake up. One B, give yourself some grace. Diagnose a step two, dream and reflect. And this is all the soft stuff that absolutely has to be done before you can actually make a hard financial plan and start determining how you're going to allocate your capital that you have, if you have an investment portfolio or resources today, and how you're going to allocate the income streams that are going to come into your life, which is what we're going to really get into very prescriptively the next, on the, on the next show here, BiggerPockets Money Podcast 538. So, thank

• 44:59Speaker 04

  you so much. So we'll see you in a few days.

• 45:02Speaker 01

  This was part one. Make sure to listen to episode 538 where we'll be back with Jackie and Bill to talk strategy for later starters and some of those phi lovers you can pull, especially if you are getting a later start. My name is Mindy Jensen. He is Scott Trench, saying, later start? Don't worry, Pop-Tart. BiggerPockets Money was created by Mindy Jensen and Scott Trench. This episode was produced by Eric Knutson. Copyrighting by Calico Content. Post-production by Exodus Media and Chris McInnes. Thanks for listening.

• 45:54Speaker 06

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