The New FIRE Movement That Includes Rentals w/Paula Pant

There’s a new FIRE movement—and this time, it includes real estate. You’ve probably heard of the FIRE movement before (financial independence, retire early). It’s a strategy that combines frugal living, saving as much money as possible, and investing everything you can to retire early. The problem? Not many people we know want to “retire early” just to be stuck in a coupon-cutting life for decades. What if you could achieve financial freedom while still traveling, going out to eat, buying the things you want, and not optimizing every single cent in your life? That’s where Afford Anything’s Paula Pant comes in, with her new “FIIRE” movement. Paula tried the FIRE movement and accomplished the goal—ultimate time freedom. But, contrary to much FIRE advice, she built a small, powerful rental property portfolio, paid it off, reduced her risk, and now lives a wealthy life traveling the world, running her own business, and doing what she wants. Today, Paula shares her new FIIRE strategy for financial freedom, why rental properties (preferably paid off) should play a part in yours, and why penny-pinching and saving as much money as possible will not get you the lifestyle you actually want. In This Episode We Cover Paula Pant’s new (upgraded) “FIIRE” movement for those who want to live a richer life How Paula used just seven rental properties to make herself work-optional Why your idea about “money” probably needs a rewiring before you can build wealth You cannot save your way to wealth: how to increase your income so your life gets bigger Why index funds and real estate deserve to be in your financial freedom portfolio Do you need to pay off debt before investing in real estate? And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠h⁠⁠t⁠t⁠ps://www⁠.biggerpockets.com/blog/real-estate-1349. 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.

• 0:00Dave Meyer?

  There's a new FIRE movement, and this time it includes real estate. You've probably heard of FIRE before. It stands for Financial Independence Retire Early. And it's a strategy for frugal living, saving as much money as possible, investing every extra dollar, and finally, somewhere along the way, retiring early. But here's the thing, that doesn't actually sound like fun. I don't want to live on nothing. I don't want to never go out to eat. I don't want to not go on vacation for years. And I don't want to only invest in index funds, checking my stock portfolio, to give me the green light on financial freedom. I want to decide my financial freedom, and I'm guessing you do too.

• 0:45Dave Meyer?

  Paula Pant, host of the Afford Anything podcast, was on that FIRE track. But she did things a little differently. She bought a handful of rental properties, paid them off early, even though she had low mortgage rates. She took a risk, worked for herself, and now is 100% in control of her own time, traveling the world while working. From her own experience, she created a new type of FIRE movement, F-I-I-R-E. It fixes your financial psychology, gets you to earn more income, has you invest beyond stocks with real estate, and finally, gives you the choice to build something bigger than yourself, all while achieving financial independence. If you use Paula's framework, you can afford anything.

• 1:35Dave Meyer?

  What's up, everyone? I'm Dave Meyer, Chief Investment Officer at BiggerPockets. Our guest today is Paula Pant from the Afford Anything podcast. Let's bring her on. Paula Pant, welcome back to the BiggerPockets podcast. Thanks so much for being here.

• 1:49Speaker 01

  Thank you for welcoming me back on.

• 1:51Dave Meyer?

  I don't know, Henry, if we've talked to anyone this OG of a guest on BiggerPockets before. You were episode 35. We're on like 1,400 now. You were on the show in 2013.

• 2:06Speaker 01

  Yes.

• 2:06Dave Meyer?

  I hadn't even heard of BiggerPockets back then. That is awesome.

• 2:10Speaker 01

  I have a distinct memory of recording episode 35. I was house hacking at the time, so I was house hacking in this triplex. And I was in this room that had formerly been an outdoor, like it had been a porch. And we'd built some exterior walls, but not that well. And it was on a noisy street. And as the cars drove by, like, the whole place kind of shook a little bit. And I remember it was Josh and Brandon who were interviewing me. And I remember multiple points during that interview, they were like, I'm sorry, are you in the middle of an airport runway? Are you on a highway? Do you need help? Should we call AAA?

• 2:51Dave Meyer?

  Well, that's what being a real estate investor is. Sometimes you're in a noisy, shaky house hack, and that's just how it goes.

• 2:57Speaker 01

  Exactly, exactly.

• 2:59Dave Meyer?

  Tell us a little bit about yourself, who you are, what you do, how you're involved in real estate.

• 3:04Speaker 01

  Sure. So my name is Paula Pant. I host a podcast called Afford Anything. And the podcast was really inspired by my early adventures into real estate investing. It started with that house hack, on a shaky house hack, and grew from there. And rental property investing for me became the genesis of what turned into a nuanced philosophy that's more broadly about money and life. So the idea of affording anything is that you can afford anything, but not everything, which means that every choice you make is a trade-off. And so the core question is, what are the trade-offs that you are willing to make? What are the trade-offs that you want to make?

• 3:47Speaker 01

  Which is just another way of asking, what's the most important thing to you? What do you value? What do you prioritize? And that's different from, you know, there are some people who are hyper-focused on tactics, or they're hyper-focused on returns. I think that that's, it's asking the wrong question. Like, when you're solving for what before you solve for why, then you might spend years, you know, climbing the wrong ladder.

• 4:11Dave Meyer?

  That, that makes a lot of sense to me. I mean, we hear this in real estate all the time. People who start going into deals and trying different portfolio strategies without really considering where they're trying to get to. And it's exciting to jump into real estate, but you can get lost easily that way. I think you can find yourself either exposing yourself to too much risk, or just doing deals that you just straight up don't like, which is not fun either. So I think it's a great philosophy, and we're going to dive into the philosophy a lot on today's episode. But before we do, I just kind of wanted to hear a little more, like, what was your real estate journey?

• 4:44Speaker 01

  Today, I have seven rental units, residential rental units, all free and clear, 100% free and clear.

• 4:51Dave Meyer?

  Amazing.

• 4:52Speaker 01

  The philosophy that I came to, where I was like, I don't want to grow to 25 or 30 or 40 properties. I want enough properties that if they were all paid off free and clear, that money could cover my baseline cost of living. Nothing fancy or extravagant, but just, I want enough money that work becomes optional. And once I have that, then I'm good. And so that was what I grew with my rental property portfolio.

• 5:18Dave Meyer?

  I think it's the best goal out there. Like, if you can have no debt, and that income on those properties pay for your lifestyle, that's freedom. I think that's like the ultimate good feeling that people want from real estate. They think they want a thousand doors, but I think, I don't know, Henry and I were just at BPCon. I think everyone really wants what you're describing right now. It's like actually the goal that most people want.

• 5:42Speaker 01

  Well, and what's tricky about that is that, you know, when it comes to the question of your lifestyle, like, there's never any ceiling to it. You could, if you wanted to, infinitely inflate your lifestyle. And I certainly live much better today than I did, you know, in 2013, in the middle of an airport. But that, that was for me why I anchored my real estate goals around, kind of, how do my parents live? You know? Because they actually do a really good job of sort of finding a status quo and staying there. You know, like, how do they live? What is their baseline? And they are not like fancy designer cars, designer handbags people. They're not, they're not even really restaurants people.

• 6:25Speaker 01

  They're like, we want a home that's safe and clean, and we want a life that's respectable and modest and comfortable. So to me, that's, that was what I sought to build with, with specifically residential rental properties.

• 6:38Henry Washington?

  That is the dream. And that is essentially what a lot of people get into real estate for. But what happens, there just becomes this aspect of, you know, growth and scaling and more. And people often go beyond those goals and end up building substantially more. I think part of it is because real estate is fun, right? Finding a good deal is like exciting. You get that dopamine rush when you sign the contract on a good deal. You get that dopamine rush when you finish the renovation and you get it rented out, or you get it sold. But a lot of investors end up not having the discipline to stop when they hit that

• 7:22Henry Washington?

  goal, because they see the potential in the money that could be made if I continue. So like, what gave you the, the, the discipline or the peace of mind to say, you know what? This is, this is enough. I hit my goal, and I'm going to chill out here.

• 7:37Speaker 01

  Well, I think it is a very human drive to build, to build, to create, to aspire, to strive, to do better, you know, to, to at least set the goal that each year you build more, make more, do more than you did the year before. I haven't shed that. I simply don't use real estate as my path to that.

• 8:01Dave Meyer?

  It sounds to me like what your advice is, or maybe the way you did it, is like, you're not quitting to do nothing. You're just being content with what you have, and then taking your energy and finding something else to do. I've tried to do this, and I'll just be honest, it's hard for me, because you spend so much time as an investor getting good at it. Like, sometimes like your hobbies, other hobbies fade away. And it takes a little bit of work to try and figure out, like, what else do I want to do?

• 8:32Henry Washington?

  All your friends are investing and growing.

• 8:35Dave Meyer?

  It's tough.

• 8:36Henry Washington?

  Very hard.

• 8:37Speaker 01

  You know, and I've got to say, so the reason that I, that I stuck to residential is frankly, because that was the first thing I learned. The financing, the insurance, just like when you're, when you're brand new, doing your, your first deal as a house hack is kind of this, one of the simplest ways to get in. And it was after I started that, that I looked around and all my friends were like, we're buying mobile home parks.

• 9:01Dave Meyer?

  Right? Yeah.

• 9:03Speaker 01

  And I thought about it because I mean, doing, you know, four or fewer units, I was like, well, then the next obvious step would be to do five or more units.

• 9:12Dave Meyer?

  Yeah.

• 9:12Speaker 01

  Um, you know, do I want to do small apartment complexes? And then from there, do I want to go into mobile home parks or storage units? Or all of these things that my friends were all doing? And again, you can learn anything, but not everything. So is the skill that you want to learn, uh, how to invest in a different category of real estate, right? Because investing in storage units is very different than investing in triplexes. Um, so is, do you want to learn how to invest in a different category of real estate? Or do you want to just stick with the category that you're in? Even if it may not provide the best returns, but it's the category that you know, it's where you've already developed your expertise. So you're just going to continue doing that because like swim in the waters where you're

• 9:57Speaker 01

  already warm.

• 9:58Dave Meyer?

  Totally. I, I have this debate with people at events all the time. People always say, you know, I have this portfolio of X number of units and it's doing great, like what should I do next? Like the same thing you were doing before? Like if it's working, like, why do you have to do anything different? I'm curious for Paula, what has having these seven paid off units done for you? Like what other avenues have you been able to explore and grow in?

• 10:25Speaker 01

  A few things. I host a podcast, um, so I spend a lot of my time doing that, like trying to get better at YouTube. Um, you know, we, we recently went from an audio podcast to a video podcast and YouTube is a very different skill set than just audio podcasting. So growing the audio podcast as well as growing the YouTube presence, trying to crack all of the various social media algorithms. So, and then outside of that, uh, I love to travel. So, uh, this year I went to Singapore, France, Germany, Italy, Spain, London. I guess it was, it was a lot of Europe this year.

• 11:02Dave Meyer?

  Amazing.

• 11:03Speaker 01

  Plus Singapore. Um, you know, next year I'm heading to New Zealand, uh, going to Egypt next year.

• 11:09Dave Meyer?

  Nice.

• 11:09Speaker 01

  Yeah.

• 11:10Dave Meyer?

  Well, I want to talk more about your big picture philosophy, Paul, because I think there's a lot that our audience can learn from, but we have to take a quick break. So stick with us, we'll be right back. Before we go to break, if you're someone who's bought a couple of deals and you're looking to scale up your portfolio into something bigger, I have a really exciting announcement for you. BiggerPockets is hosting its first ever conference focused just on scaling up. It's this December, it's coming up soon, this December 5th through 7th in Phoenix, Arizona. We're going to have a full day of programming with speakers like myself, James Daynard, Kathy Fecky, and Devon Kennard, talking about how to scale up and build a sustainable business. Tickets are on sale now, but there are only 100 tickets.

• 11:54Dave Meyer?

  So go to biggerpockets.com/conferencesnow and get your ticket today. A lot of insurance companies compete on one thing, speed. But if you're protecting an investment property worth hundreds of thousands of dollars, should speed really be the priority? NREG believes strong coverage starts with understanding the property, the risks and the realities of ownership. That's why they don't rush the process. Their policies are designed for real world claims, not just quick quotes. If you want insurance built to protect your investment when it matters most, visit nreg.com/bpllc and learn more today. There's a point where basically every investor realizes traditional financing stops scaling with you.

• 12:38Dave Meyer?

  At first it works, you qualify with your income, your job, your tax returns, but as you grow, that model starts to break. Now, it's not really about your personal income, it's about the income from your properties. That's where DSCR lending comes in. And it's why a lot of investors end up working with lenders like Host Financial. Host Financial qualifies deals based on property income, not personal income. So you're not dealing with W2s or tax returns or DTI constraints. And with 80 to 85% LTV, you can stay more flexible as you scale. It's just a different framework, one that tends to align better with how investing actually works.

• 13:18Dave Meyer?

  If you're buying rentals, refinancing, or growing your portfolio, go to hostfinancial.com. That's H-O-S-T financial.com and see what you qualify for.

• 13:28Henry Washington?

  Here's a strategy that most W2 employees have never heard of. Normally, if you want to write off a rental property against your regular income, you need real estate professional status. That means tracking hundreds of hours a year. Rent to Retirement just launched a program that skips all of that. It's called the STR loophole tenant placement program. Here's how it works. You buy one of Rent to Retirement's Class A new construction investment properties. You set up an Airbnb listing and self-manage it for the remainder of the year. Rent to Retirement then rents the home as a short-term rental to establish it as an STR for the year, no furnishing required, making this the easy button to save five or six figures in taxes this year.

• 14:10Henry Washington?

  And because you're the sole manager, there's no hourly minimum to meet. That lets you use a cost segregation study to accelerate the depreciation and potentially write off over $100,000 against your income, even on your first rental. Add in cash back up to 13% of the home price, which exceeds $60,000 on some properties. With this massive cash back incentives, investors are seeing total returns up to 126%. New construction, A-class properties, and inventory is limited. Learn more at biggerpockets.com/retirement or text REI to 33777. Again, text REI to 33777.

• 14:53Speaker 03

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses, setup required, compatibility and availability varies, 18 plus.

• 15:21Dave Meyer?

  Welcome back to the BiggerPockets Podcast. Henry and I are here with podcast host Paula Pant, talking about all things from real estate investing to exploring your passions outside of real estate. But Paula, you have a philosophy about personal finance that you've cultivated over many, many years. Can you tell us what it is?

• 15:40Speaker 01

  Sure. So first, I think of personal finance in terms of five pillars. I have this acronym, it's FI, it's the word FIRE with two I's, F-I-I-R-E. And of course, you're familiar with the FIRE movement, the, you know, financial independence, retire early. With the FIRE movement, the FI, the financial independence part is critical. That's the piece where your work optional. The retire early part is like, I take it or leave it. And so I've tracked along that same philosophy in double I FIRE, F-I-I-R-E, where the FII is critical, but the RE is optional. And so here's the philosophy. I'll explain FII and then we'll go into each one. So financial psychology, increasing your income because you can't shrink your way

• 16:24Speaker 01

  to wealth, and investing, FII. And that is the foundational framework of personal finance that I think everyone needs. You need to be aware of your money mindset and really work on your money mindset and work on your relationship with money. That's financial psychology. You need to increase your income, particularly if you are a low income earner, as I used to be. My first job out of college was in today's dollars, I made around $45,000 a year, in speaking in today's dollars. So if you are a low earner, frugality is not the answer for you. You need to make more. So financial psychology, increasing your income and investing. Those are the foundational elements.

• 17:06Speaker 01

  And then the RE part in double I FIRE, the RE is optional, R, real estate, and E, entrepreneurship. Uh, and what I actually love about that framework also is that the R for real estate, it's, it's sandwiched in between the I of investing and the E of entrepreneurship, because I really view real estate as a hybrid between

• 17:30Henry Washington?

  It is.

• 17:31Speaker 01

  investing and entrepreneurship. So, um, those I believe are the five pillars of personal finance.

• 17:37Dave Meyer?

  All right. So let's break them down, because what, what do you think the big challenge with people's financial psychology is?

• 17:43Speaker 01

  So there's a few things going on. Number one, there are lessons that we learn about money from early childhood that we don't, that we're not even necessarily conscious of. So for example, if mom and dad always argued about money, then as a kid, you pick up the lesson that money is a source of conflict. And that might make you money avoidant because If money is a source of conflict, of course, you want to avoid this thing that causes conflict. And you may not even consciously be aware that that's, you know, the idea that you've carried. But if you grew up knowing mom and dad are always fighting about money, then that has imprinted on you. And that's something that you have to actively unlearn. Similarly, we receive all of these social messages in media, in

• 18:25Speaker 01

  movies around money. So if you think about almost any movie or TV show that you watch, the villain, the bad guy is the rich guy.

• 18:34Henry Washington?

  Always.

• 18:34Speaker 01

  And when you see like piece after piece after piece that has that character set up, what I think unconsciously you learn is, um, rich people are evil. And if you have internalized that message, then there is going to be a part of you that thinks, I don't want to be rich because I don't want to be evil. And that won't necessarily come out consciously, but you might start to self sabotage as you watch your net worth grow. And the other piece of it is that your net worth doesn't have to objectively be large by, you know, somebody else's measure. If your net worth feels large relative to

• 19:15Speaker 01

  what you always thought your own net worth would be, then as you approach a bigger number than you ever thought possible, as you approach the number that creates a sense of imposter syndrome inside of yourself, you might start to self sabotage in these small unconscious ways. Like, maybe you're a little sloppier at your renovations. Maybe you're a little sloppier at your flips. Maybe you're slower at getting back to your property manager. Maybe, um, maybe you're kind of an absent landlord. In all of these little ways, you, you might start to subconsciously sabotage the wealth that you've built because you don't feel like you've earned it. You don't feel like you deserve it. You associate success

• 19:58Speaker 01

  with, uh, being bad or being evil. And you need to, you know, those are all of the things that you need to work through in order to heal yourself of some of these lessons.

• 20:08Dave Meyer?

  You know, it's super interesting what you're saying and sort of contrasting that to what we were talking about before, where having enough, because, you know, I think a lot of people, you're totally right, Paula, see success as bad or money as bad. But then also, like, in some pockets of our culture, we just glorify wealth at all costs. And so you're like, oh, I gotta keep going. I gotta keep going. I gotta get more. We're like, the middle ground is what most people are really looking for, but it's a hard place to, to get mentally. All right. So that's the F in your acronym. All right. So the next I was increasing income. Tell us about that.

• 20:45Speaker 01

  Right. So increasing income, the reason that I include it is because I think that one of the big mistakes that you see in the personal finance community is an overemphasis on frugality.

• 20:56Dave Meyer?

  Agreed.

• 20:57Speaker 01

  Yeah. So fundamentally, what you care about is that delta between what you earn and what you spend. And, and I don't want to use the word savings because savings has a connotation of frugality. So that's why I'm intentionally using the, using the word delta or difference between what you earn and what you spend. And I call that the gap, right? The gap between earning and spending. And there are only two ways that you can increase the size of that gap. You can earn more, or you can spend less, or you can do some combination of the two. But you can't shrink your way to greatness. Like, once you frugal down to a certain extent, you really can't go any further. So assuming

• 21:39Speaker 01

  that you're not a crazy spender, um, assuming that you are living a reasonable life, the, the lever that you really pull is on the earning side of the equation. And that might come from negotiating a raise, that, you know, it might come from working, you know, making a career change. Like, these are the things that people, you know, when you talk about a career change, these are things that people don't often like to talk about because people like to focus on low friction, um, easy to implement advice, even if that's the peas and not the steak. And so what I mean by that is like, okay, when you talk about saving money, people will rush to stop going out to dinner because it's a discretionary

• 22:22Speaker 01

  expense that happens frequently. And so not going out to dinner is extremely low friction versus if you're a renter, sublet your current three bedroom apartment, find a subletter who will take over that and move, downsize to a one bedroom, right? That's a really high friction ask. But it's the type of thing that in one fell swoop, you might save, oh, $1,500 a month in, in the difference between those two. And that $1,500 a month over the span of a year is $18,000. And boom, now you've got, you do that for two years, you've got $36,000. Now you've got a down payment on your first rental property, right? But, um, but it's such a high friction ask that you don't hear people talk about it very much.

• 23:07Henry Washington?

  You know, I, I like this concept of like, increasing your income, because I think you're right. When people think about personal finance and saving and paying off debt, they immediately think about shrinking. But I think there's value in both, which is, you know, kind of what Dave was saying. You can save some money by shrinking and you can help yourself by making more money. So how does someone who's listening to this, who's like, I want to get my finances in order? How do they know if they have a, I need to make more money problem, or if they have a, I need to spend less problem?

• 23:36Speaker 01

  I'd say the majority of people have an, I need to make more money problem. Um, because if, if you really are an excessive spender, I think you already know it. I think if you're asking that question, like, do I spend excessively? You know that you do. And the cuts that you need to make in your life are obvious.

• 23:58Dave Meyer?

  All right. So make more money. That's, I know it sounds like ideal, but you know, we've had other guests recently. We had Scott Galloway on here the other day was talking about that as well. It's just like, it's gotten lost to just like, get good at your career. I think, or, or if you want to go into real estate investing, get really good at flipping, get really good at wholesaling, or whatever the active ways of being a real estate investor are. But man, it gets a lot easier if you can, if you can increase your income. So we've done F, we've done I, we have I R E to go. We gotta take one more quick break, though. We'll be right back. For my wife's birthday, I wanted to make her a new website for her landscape design business. So I researched a lot of different options. I tried out a couple, but honestly,

• 24:42Dave Meyer?

  it was really overwhelming. It was pretty time consuming. And still, the site wasn't coming out the way I wanted it to. Then I tried Hostinger and everything was super simple. I asked Hostinger's AI to build a clean site for her business, and it had a working version up in minutes. No coding or designer needed. Plus, its AI agent helps with SEO, website copy, and email marketing after launch. You get domain, website, email, all in one account. And right now, you can get Black Friday and Cyber Monday pricing through December 14th. So snag Hostinger services at their lowest prices before the sale ends. Create your website today for just $1.99. Go to hostinger.com/realestate

• 25:27Dave Meyer?

  and use code REALESTATE for an additional 10% off Black Friday and Cyber Monday pricing.

• 25:33Henry Washington?

  Buy smart, drive for less, and trade for more. That's Toyota Ford ability. And it all starts with a great deal from your local Toyota dealer. Make a smart buy on an all wheel drive Camry, Corolla Cross, or get a Corolla sedan packed with the latest features, advanced tech, and head turning style. Take a test drive in two of Toyota's most popular SUVs, the spacious, family-friendly Grand Highlander and adventure-ready RAV4. And with so many hybrid and plug-in hybrid models available across the lineup, plus efficient all-electrics like the BZ, BZ Woodland, and all-wheel-drive CHR, you can drive your way and skip the pump. And long after you leave the lot, your Toyota keeps delivering with legendary resale value built on a reputation for quality and reliability.

• 26:17Henry Washington?

  So when it's time for your next Toyota, you could trade in for more from a great deal today to a great value tomorrow. A Toyota is right for you. Shop toyota.com for deals and details, or stop by your local Toyota dealer today. Toyota, let's go places.

• 26:33Dave Meyer?

  I just booked a ski trip to Park City, and I've already got the whole thing planned out. Five days, first tracks every morning before the crowds show up, my knees reminding me I'm not 25 anymore by the second run, and an embarrassing number of overpriced burritos at the lodge. I don't even care. This is the trip I look forward to all year. But here's the part I actually appreciate. The practical side of my brain kicking in is that my place doesn't have to just sit there empty the whole time I'm away. I can list my space on Airbnb and bring in a little extra income while I'm out getting humbled on a mountain. And with the co-host network, I'm not the one handling all of it. You can

• 27:15Dave Meyer?

  partner with a vetted local co-host who can create your listing, manage reservations, message guests, and even handle the styling. So I get to fully focus on my trip and my place is still working for me the whole time. Find a co-host at airbnb.com/host. Investing in real estate has always been smart, but it hasn't always been simple. Now it's both, thanks to the Fundrise Flagship Fund. The Fundrise Flagship Fund launched more than five years ago with a mission of delivering low fee access to blue chip private market real estate. Today, the Fundrise Flagship Fund has grown to manage more than $1 billion of real estate on behalf of hundreds of thousands of investors, making it one

• 27:57Dave Meyer?

  of the largest funds of its kind. For those who believe real estate has an important role to play in their portfolio strategy, the Fundrise Flagship Fund has positioned itself as both a simple and a smart option. Whether you're starting with $10 or $10,000, the Fundrise Flagship Fund makes adding real estate's unique potential for both passive income and consistent growth. Just visit fundrise.com/pockets to make your first investment today. Carefully consider the investment objectives, risks, charges, and expenses of the Fundrise Flagship Fund before investing. This and other information can be found in the fund's prospectus at fundrise.com/flagship. This is a paid advertisement.

• 28:41Speaker 03

  This episode is brought to you by Google Chrome. You think you know a browser, but Gemini and Chrome, that's new. It can help you with practically anything on the web, like restoring a vintage motorcycle from a 50-page restoration block, or finally break down that long article you've had open for weeks. Gemini and Chrome is here for it. Ready to make anything online make sense? There's no place like Chrome. Check responses set up require compatibility and availability varies 18 plus.

• 29:09Dave Meyer?

  Welcome back to the BiggerPockets Podcast. Henry and I are here with Paula Pant, talking about her philosophy and framework for financial independence, which is her own acronym, F-I-I-R-E, two I's. We've already done F, we've done I, what's her second I?

• 29:24Speaker 01

  So, the second I is investing. And in this context, and again, I sandwich R for real estate in between investing and entrepreneurship, because I really see it as a hybrid between the two. So, in this context, I'm referring to investing as index fund, primarily index fund investing, market investing, public markets investing. I do think if you're a little bit more advanced and you can deal with a loss of liquidity, some private investments, maybe you become a hard money lender, maybe you invest in a small handful of private businesses. I do think that that can be interesting, and that's also kind of under the investing

• 30:07Speaker 01

  umbrella, but for most people, this is going to be index funds. It's going to be stocks and bonds.

• 30:12Dave Meyer?

  All right, so just be in the market is basically this part of it, like just be in the market in some way.

• 30:17Speaker 01

  And I think that with real estate investors in particular, you know, when I started talking about rental property investing, a few things struck me right away. One was that particularly when you're first starting out, there's so much to learn as a real estate investor, that you are reading about it, talking about it, thinking about it, listening to podcasts about it, like you're absorbed in this rental property investing world, or real estate investing world. And because of that, it can be easy to assume that people are not also investing in a total stock market index fund. I had a number of people ask me, like, hey, does it ever worry you that all your money's in real estate?

• 31:01Speaker 01

  And I'm like, only 50% of my net worth is in real estate.

• 31:04Dave Meyer?

  Right, yeah.

• 31:04Speaker 01

  You know, and people are shocked when I say that, because if you think about it, it's a little bit bananas, that I spend all my time talking about 50% of my net worth, and I spend almost 0% of my time talking about the other 50% of my net worth. And that's the thing about index fund investing, because no one really talks about it, because like, what is there to say?

• 31:31Dave Meyer?

  It's just like a box to check.

• 31:32Speaker 01

  Yeah, to the auto enrollment box in my 401k. Like, there's just, there's nothing to talk about, there's nothing to say. And so, because no one talks about it, a lot of people have the mistaken impression that, that real estate investors are not doing it. And I want to really correct that, because if you actually talk to people like you and me, like, you know, again, 50% of my portfolio is index funds, and the other 50% of my portfolio is paid off rental properties.

• 32:02Dave Meyer?

  Not Henry.

• 32:02Henry Washington?

  No, not me, not me.

• 32:05Dave Meyer?

  Henry's all real estate. But I think it makes a lot of sense. I, particularly in this world we're in right now, I study economics and talk about it all day, and I have no idea what's going to happen next. I mean, I have a good idea with the housing market, but like, with the broader economy, who knows? You know, it's like, I think diversification at this point is the only logical path. So, I'm talking to you, Henry.

• 32:31Henry Washington?

  I hear you.

• 32:32Dave Meyer?

  Looking at you, man.

• 32:33Henry Washington?

  I'm listening.

• 32:34Dave Meyer?

  Okay, so we've done three, now we get to the big one for us, which is real estate.

• 32:39Speaker 01

  Yes, real estate. So, as you know, I've got seven residential rental properties, all paid off, free and clear. They all had low interest rate mortgages, and it was a very controversial decision for me to decide to pay off mortgages that were at, you know, the lowest one was at a three handle, the highest one was at a five handle. So, the reason that I made the choice to pay off all of those mortgages is because, or jumping ahead a little bit, but because of that letter E, entrepreneurship, what I do, how I spend my time at a day to day level, is I actively am an entrepreneur. You know, I'm self-employed, I've been self-employed since 2010, I don't have the security of

• 33:22Speaker 01

  a regular paycheck, I don't work for anybody else, I have employees who work for me, and so I am responsible for their paychecks. Because of all of that, I sat and thought about risk, not confined to the domain of real estate, but risk across the entire spectrum of my life.

• 33:42Dave Meyer?

  Yes.

• 33:43Speaker 01

  You know, what is the risk that I carry, not just, not just in my rental properties, but the risk that I carry in my day job? What's the risk I carry in my company? What's the risk I carry in my rental property portfolio? What's the risk I carry in my other investments? Like, what's my stock bond allocation? You know, what's, what's the risk I carry, even in home and family life? The risk that you carry, if you are a dual income couple with no kids, is very different than the risk that you carry if you are either single or a single income couple, and you have multiple dependents. And by the way, when I say dependents, it could be kids, it could be elderly parents or grandparents who depend on you, it could be a sibling who's struggling with addiction

• 34:28Speaker 01

  who depends on you, so I don't want to limit it to just kids alone, like, how many people rely on you? And all of that put together is the mosaic of how much risk a person can take on. And so, when people come to me, you know, and they're like, should I pay off my mortgage? Or should I borrow against my home equity in order to make the next down payment on the next rental property? I'm like, how's your mom and dad's retirement plan?

• 34:52Dave Meyer?

  Totally, yes, exactly.

• 34:54Speaker 01

  Because if your mom calls you and says, hey, I need money for groceries, you're not, you're not going to be like, well, sorry, mom, screw you.

• 35:02Dave Meyer?

  That's why, you know, I wrote a whole book on this, because I wanted to explain people the question, when people are like, should I do this in real estate? Like, it is such a personal question. It is not like checking the box on your 401k. This is, there are so many different ways to invest in real estate, from high risk, high leverage, to low risk, low return, and everything in between. And it's not a lazy answer to be like, it depends. It really does depend. It really does depend in terms of risk, not just in terms of financial risk, but time. How much time are you willing to contribute to your portfolio if you have dependents is going to be very different. When I was 23 and single and started investing in real estate, I had nothing but time.

• 35:43Dave Meyer?

  I was useless, no one would pay me to do anything, so I could just go and do my portfolio. Now, I have a family, it's a totally different situation, right? Like, these are the things you have to consider, and there is no right answer. And I actually think, I hear this a lot, Paula, from investors who are our age or older, that paying off debt is just what you want to do. Like, I think it's also, as you age, like, your tolerance for risk tends to go down, especially if you've been somewhat successful. Like, you only have to get rich once, so you just kind of have to protect yourself a little bit. So, I think paying off the, paying off your rental properties is awesome, you probably sleep great, which is what everyone wants.

• 36:23Speaker 01

  Yeah, yeah, absolutely.

• 36:24Dave Meyer?

  All right, let's round it out with the last one, entrepreneurship, which is the E.

• 36:29Speaker 01

  Yeah, the E for entrepreneurship. So, first of all, I believe that all real estate investors are entrepreneurs.

• 36:34Henry Washington?

  Whether they believe it or not.

• 36:35Speaker 01

  Yeah, yeah. Whether, whether you know it or not, if you're a real estate investor, you are an entrepreneur. And I, I want to break this down as well, because there are different gradients of entrepreneurial work. So, first of all, I think a lot of people conflate self-employment with entrepreneurship. Self-employment, like, getting out of the W2, not being beholden to a boss, it's cool, but you are fundamentally cobbling together work, maybe contract-based work, in order to, to pay yourself. And it's great that you have like, that a bunch of your meals can now be tax deductible, that's a nice fringe benefit, but there is fundamentally a difference between being self-employed versus building something that is scalable.

• 37:18Speaker 01

  And either one is fine, but I think you should be conscious of which one you're doing, because the two can get conflated quickly. So, the question that you want to ask yourself, if you do decide to go down this road, is, do I want to own my job? Or do I want to build something that will outlive me? And building something that will outlive you, that is a very different type of undertaking. So, that's, that's like an, an early orienting question, and you don't, when you're at the beginning, you don't have to have the answer right away. It might be an answer that changes or evolves over time, but that is, I think, one of the fundamental orienting questions. Do you want to own a job, or do you want to own an institution?

• 38:02Dave Meyer?

  That makes a lot of sense, and I love the idea of ownership, and, you know, it does really benefit you in so many different ways. Do you think entrepreneurship is right for everyone, though?

• 38:12Speaker 01

  Well, again, if you are listening to this, then you are likely a real estate investor. And if you're a real estate investor, then, then you are already an entrepreneur. Because if, if you own real estate as an investment, something outside of your primary residence, then you do own the upside. Now, real estate investing in general is, is not for everybody.

• 38:36Dave Meyer?

  Yeah, that, I think that's true. Entrepreneurship, you have to be willing to take ultimate accountability for your own performance, your own life. You know, I've talked to a lot of people who are new to investing, and they're frustrated that their agent didn't do this, or their contractor, their property manager, like, it doesn't matter, you're an entrepreneur, like, it's your job, it's always your job. And I think some people excel at that, and for some people, it's not right, and that's okay, like, it's not a judgment. But that, that's why I was curious, because I think for some people, like, they just don't want that, they want to show up and just get a check, and that's okay. But I think there are huge benefits if you have a personality and a drive that are, that

• 39:19Dave Meyer?

  will allow you to sort of work through the, the real challenges that come with entrepreneurship, but the benefits. For me, have very much been worth it, and I think for a lot of people are.

• 39:29Speaker 01

  You know, and what you're talking about is having a high degree of agency, right? A really strong locus of control. And to round it out, back to the psychology piece of it, one of the, I think, the beauty of real estate investing and entrepreneurship is that you learn to become a high-agency, strong internal locus of control type of person. You learn to become somebody who radically accepts responsibility for everything that happens, because anything that unfolds, you can always ask the question, what could I have done? You know, even if it's a, you have a misunderstanding with your property manager, okay, what could you have done to make that conversation go more smoothly?

• 40:08Dave Meyer?

  All right. Well, Paula, thank you so much for being here. This has been a lot of fun. Any last thoughts or advice to our audience before we get out of here?

• 40:14Speaker 01

  I would say for anyone who's listening, the, of everything that we've talked about today, so we've talked about the framework that I refer to as double I fire. We went through a lot of concepts, we went through a lot of tactics, but the most foundational piece, and where it starts, is with that letter F. That financial psychology, I think it's often overlooked, but grounding yourself in what are my assumptions about money? What are my mental hangups about money? What are my emotional hangups about money? Like, with the double I fire framework, take it one step at a time and really work through each of those, like, one at a time, because the financial psychology piece in particular, people often want to skip over that, because it's not quantifiable.

• 40:55Speaker 01

  But sometimes, like, that is the foundation that you need in order to build the rest.

• 41:01Henry Washington?

  Is there, like, some books, or references, or someplace somebody could turn to if they, like, want to dive into learning more about their psychology of money?

• 41:11Speaker 01

  Yeah, yeah, there's, so there's a few. So, uh, so we have a free workbook. Um, it's at affordanything.com/F-I-I-R-E, F-I-I-R-E, uh, totally free. In addition to that, because I don't just want to plug my own stuff, I also want to, like, make sure I highlight, uh, other people who have done great work in this field. Morgan Housel is one of the preeminent voices on the psychology of money. Uh, Dr. Brad Klontz is fantastic. So he, it is from him, he, he has this framework that people are either money avoidant, money anxious, or money vigilant. And it was from him that I really learned about that oscillation between avoidance

• 41:56Speaker 01

  and anxiety that many people go through when it comes to their money. And there's also, I will say, uh, there's an entire association of financial therapists.

• 42:06Henry Washington?

  Whoa.

• 42:07Speaker 01

  It's really cool, because historically, in the field of therapy, most therapists are not cross-trained in how to talk about money. And if you think about that, that's, it's a little bit nuts, because most people cite money as one of their top stressors, and most couples cite money as one of the top things that they argue about.

• 42:28Henry Washington?

  Yeah.

• 42:28Speaker 01

  And so despite the fact that both individuals and couples cite money as one of their number one problems, traditionally, in the field of psychology, therapists are not trained to talk about money. And so what's cool is this, this emerging field, it's, it's still a very, very new field, financial psychology, you have people who are classically trained as therapists, and also then have, uh, a certified financial planning license. And so you get these people who are really heavily cross-trained in both domains, and are well-positioned to help you work through those mental and emotional hurdles that cause you to hold yourself back.

• 43:06Dave Meyer?

  Mm-hmm. Well, thanks again, Paula. It was great to have you back on the show. Thanks so much for sharing with our audience. It was great to have you.

• 43:13Speaker 01

  Thank you. Thank you, Dave. Thank you, Henry.

• 43:16Dave Meyer?

  And you can check out her podcast. It is called Afford Anything. It is available on podcast and on YouTube, as we found out today. Thanks to you all for listening to this episode of the BiggerPockets Podcast. I'm Dave Meyer, he's Henry Washington. We'll see you guys next time.

• 43:31Speaker 04

  When you shop Kroger delivery, you can expect the savings you love and fresh groceries delivered right to your door. From delicious produce to everyday essentials, enjoy the convenience of delivery and the trusted selection you've come to know from Kroger. Because bringing you fresh, quality groceries is what we do best. Right now, enjoy free delivery on orders of $50 or more with your digital coupon. Restrictions apply. See site for details. Kroger, fresh for everyone.

• 44:02Speaker 05

  With Quicken, your finances can stop feeling so complicated. You save, you invest, you keep an eye on spending. But what next? Quicken helps you put the whole picture together and make sense of your options. Connect accounts from more than 14,000 financial institutions and see how all the different pieces of your financial life fit together. Quicken, know what to do next. See how at quicken.com.