The 4-Year Journey That Made Early Retirement a Reality

Mindy:
Eric Reinholdt built an architectural design business over the past 10 years. He’s the face of the brand. He built the core products and he makes all the content. His business would be hard for him to sell, but he was able to leverage the business to achieve fire anyway and is now set to travel the world in 2025 at the age of 50. Today we are going to hear his story, how he pivoted to achieve Fire, built a portfolio that comfortably sustains chubby fire and now runs his business on 10 hours a week or less. A very nice cherry on top. Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen, and with me as always is my Phi, like Eric and me, but not yet. 50 Co-hosts Scott Trech.

Scott:
Thanks, Mindy. Great to be here and love the main streamway that you and I achieve Phi different than Eric’s. Alright, BiggerPockets is 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, including if you want to build a so-called lifestyle business to help you dramatically accelerate that path to fire. This episode is brought to you by Connect, invest real estate investing simplified and within your reach. Now let’s get into the show.

Mindy:
Eric Reinholdt, welcome to the BiggerPockets Money podcast. I am so excited to talk to you today.

Eric:
Likewise. Thanks Mindy. It’s good to be with you and Scott and I’ve listened to you guys for years, so it’s super fun to be here.

Mindy:
I love when we talk to people who have listened to us before then all the jokes and all the questions we’re going to ask. So let’s jump right into it. Eric, how did you first discover the financial independence movement?

Eric:
So I was on a phone call catching up with a lifelong high school friend of mine and he mentioned we were 46 at the time and he mentioned that he was getting ready to retire in a few months. So when he was 47 and my jaw hit the floor, I was like, I can’t believe this because for a 46-year-old retirement seemed like this far off destination. It wasn’t even on my radar screen. And so when I learned that fire might actually be an option, I was all in and my wife can attest to this because it’s kind of all I could talk about for the next three or four months. And then I just started kind of running some rough numbers, and I think this is probably similar to you, Mindy, you and Carl, where we looked at what we had accumulated at the time, which I think was our liquid net worth at the time was kind of a little under a million dollars and we started rank some numbers and set two and a half million as our fine number.

Eric:
And so I thought, okay, well this isn’t like 20 years in the future, maybe we could pull that in quite a bit. And so over time we adjusted that number up pretty significantly. So that’s not where we landed on, but I think what we generally agreed on, my wife and I was kind of a number in the chubby fire range, which is between two and a half and 5 million for our FI number, which sets it in context of we can do almost anything that we want, but we can’t do everything that we want. So once I made up my mind that PHI was the, and retiring early could be an option, I just treated it like you guys did death march to phi. Here’s the date that I want to reach PHI by and here’s the number that I want. And if you guys remember that kind of long slide down in the markets in 2022, I was like, I was getting pretty miserable.

Eric:
I could see the date coming and I could see the portfolio even though I was investing religiously, it was just dropping and dropping. And so finally I just kind of had to step back and accept the fact that I really needed to just focus on fundamentals. And that was just keep investing, be mindful of our expenses and then just try and continue to grow my income where I could. And eventually we did hit our PHI number in June of this year, so 2024. So it actually worked out in spite of all my anxiety and hand wringing.

Mindy:
So you just dropped, I love all those PHI Community Easter eggs that you dropped there. Thank you. I think I got most of them. You seemed to be saving for something before you even heard of financial independence, which is very similar to Carl and I. We were saving for the future. What were you saving for?

Eric:
I mean, retirement was felt important, but at some very far future date, and I think maybe a lot of people can relate to this, you’re in the messy middle. We have two boys and at the time I found the fire movement, they were teenagers, so we had just come out of the messy middle where you’re done with the daycare costs, you’re done with all the kind of sports things and camps and all that kind of stuff, and you’re finally earning more. And we saved for retirement and we loaded up our pre-tax accounts every year. But beyond that, we were spending whatever we were earning more, we were just spending it. We got more spending with vacations. We started, we bought vehicles and it was a little bit of lifestyle creep, but we weren’t saving with the express intent to retire early. So it was just like retirement’s important, but also let’s have some fun now.

Scott:
So you used a bunch of fun phrases earlier, like death March to phi, which we’ve covered in previous shows here. But what I want to understand is there’s this pivot point in your journey where you discovered the fire movement from your friend and what changed? How did your lifestyle change in a more tangible way that we can understand before and after that? Aha.

Eric:
I think what we were doing, we were smart. We were always saving for retirement. So I think we were pretty good with finances, we were making smart financial decisions. We didn’t carry a lot of debt and we had been saving since our first jobs out of college. And so I don’t want to pretend like I hit our FI number, this debt march to fi, it didn’t happen in four years necessarily. It did take a lot of time and accumulation over those other years. But we did make some pretty aggressive changes once we found the PHI movement. And I would say knowing that most of our net in 2020 when we found it was in pre-tax retirement savings account, I had a solo 401k through the business. My wife had a 4 0 3 B, but we weren’t saving outside of those. So we made too much to contribute to a Roth directly.

Eric:
So that was kind of a mistake. We didn’t know, we weren’t savvy enough to know about the backdoor Roth. So that was an option that we weren’t taking advantage of and we didn’t even have a taxable brokerage account for savings. We just, like I said, max out our retirement accounts every year and then we’d just spend the rest on our life. So once fi became the goal, we really started about what it would look like not only to just reach fi, but maybe retire early. That was more my idea than my wife’s idea. So the first change we made was just recognizing we need a bridge account to cover expenses between when our early retirement date was and when we could access our pretax pretax funds. So we just ended up using a taxable brokerage for that because at the time our income just didn’t make sense to do Roth conversions.

Eric:
We weren’t going to even consider that. Second thing we did was my wife had access to a 4 57 B plan, which is basically deferred compensation plan. And that made sense for us to take advantage of that because of the tax bracket we were in. So we started taking advantage of that. Next thing we did, which a lot of people criticize is we paid off our mortgage. And I know that wasn’t really an optimal financial move necessarily, but for us it just made it possible for us to be really aggressive savers from 2020 to 2024, which is when we hit our FI number.

Scott:
Eric, you mentioned a chubby fire range of two and a half to $5 million, which I think is a great definition of chubby Fi on there. Do you include your home equity, your paid off home in that number?

Eric:
No, I don’t. No, because we need a place to live and so no, we do not.

Scott:
So it’s two and a half to 5 million in assets that are liquid investible assets, not your home equity. Awesome.

Eric:
Yeah. Home is in addition to that, we consider that in our total net worth, just like our vehicles and things like that, assets that we’re not going to liquidate our home to fund our lifestyle because we need a place to live.

Mindy:
We need to take a quick ad break while we’re away. We want to hear from you. Do you either already have or have an interest in starting a business answer in the Spotify or YouTube app?

Scott:
Alright, welcome back to the show. Not a lot of people pull the trigger on fire in a situation like yours. In my experience, without paying off the mortgage, the folks who have the mortgage usually are way beyond what they need for their fire number. So I’m not surprised to hear that. Even though you said it’s not a controversial point in the fire community, I think you’re going to find that that’s very common.

Eric:
Yeah, it’s nice not to have to include that fixed expense in your FI number. So that’s kind of why we did it. And then from there we looked at the delta and we just set up some monthly savings goals, like pretty aggressive savings goals. We spreadsheeted out what it would take to reach our number. We looked at our current expenses and that was our investment target each month. And this was, we haven’t talked about this. I started a business back in 2013 and that’s really where we took most of the earnings from the business and used that to kind of supercharge our savings. We ended up just kind of living off of my wife’s salary because we could do that, but then we had the discipline to say, okay, every year at the beginning of the year we’re going to do our backdoor Roth and then we’re going to work through and fully fund our pre-tax accounts and then everything else we’re going to put into a taxable brokerage account and just keep building that bridge so that it’ll last longer.

Eric:
And then the last thing that we did, the last kind of aggressive change that we made was I was sitting on a lot of cash for the business in 2020 and I was doing that because I was so fearful of having to go back to work for an employer. I didn’t want to do that. And so I built this kind of excessively long runway that just was not serving us. And so part of this kind of financial awakening and learning about personal finance was like, Hey, cash is, if you want to have a 40 or 50 year retirement, cash is not your friend. You really want to be in equities. And so we started moving cash into the market on a regular cadence and just having a monthly financial check-in my wife and I would say, okay, how are the savings targets this month? And we would just have that as a regular part of our discipline.

Mindy:
Were your savings targets a percentage of your income or were they a dollar figure?

Eric:
A dollar figure.

Mindy:
Okay. And would you say you hit it most months or exceeded it?

Eric:
We did, yeah, but that long slide down in 2022, and I describe it as a long slide down in terms of market corrections, it wasn’t that long obviously, but just looking at those numbers, the further you get away from that number and the closer the time horizon is the bigger those numbers get. So it’s a really unhealthy way to do it, I think because what I ended up doing was the death march defy aspect was I was probably sacrificing things in service of getting to a FI number. Every dollar that didn’t go into an investment account I looked at as taking me further and further away from fi. And it’s a pretty toxic mindset and I think it’s easy to fall into when you’re extreme focus is just on a number and a date. And so I wouldn’t recommend doing that.

Mindy:
I second that, not recommending doing that. That’s exactly how we did it. And you get there but you don’t enjoy the journey. So you said this was a really unhealthy way to do it. Knowing what you know now, what would you do differently? Starting four years ago you discover the PHI movement. What would you do differently so that somebody who’s listening who isn’t quite PHI yet can learn from your mistakes?

Eric:
I mean, I like coming up with the aggressive savings target and I like giving, I think one of the healthy things we did was giving every dollar a job, but I think what was unhealthy was I didn’t plan for spending in the same way that I planned for saving. I think a lot of people don’t consider that in the fire movement. It’s easy to save, but then you reach this FI number and now I’m facing this myself in another couple of months I’m going to start potentially drawing down the portfolio. And if you haven’t built the spending muscle, it puts you at a disadvantage. I would design the kind of life that I want to have between now and the future and you have to make space for all of those things. There has to be room for saving, but there also has to be room for a life that you’re designing, that you’re excited about and that is fun for you and your family at the time that you’re living it.

Eric:
Because that space, and I’ll talk about the messy middle again because I found that hard for myself was the space between here and your fine number is that is your life. It’s not the death march to five, that’s the most important thing. It’s designing a life that you care to live with your friends and family and enjoying the time that you have now because we’re not promised that future PHI date necessarily. And that’s a hard thing to come to grips with if you’re someone who’s a really aggressive saver and you get into that habit of it. But I would encourage spending as a muscle to flex too.

Mindy:
Absolutely agree with you. So it took you approximately four years from the time you learned about financial independence and were intentional about reaching it to the time you actually reached it. How long do you think it would’ve taken you if you would’ve exercised your spending muscle and loosened up a little bit instead of this death march?

Eric:
Oh man, I haven’t thought about that really. Certainly if I could have rewind the clock and started investing more aggressively when I first started my business back in 2013, even if it was a quarter of what I was doing between 2020 and 2024, that would’ve been a much longer lever. So time is really the lever that I wish I could go back and change, but I would probably stretch it out maybe eight years because it got pretty aggressive there for a while and I developed some pretty unhealthy habits. So it’s hard to go back with hindsight. It’s easy to look back and say, oh yeah, I’d started investing 11 or 12 years earlier, but you just don’t get that luxury.

Scott:
I got two questions on this. So this death march to fi concept, this grind I’m gathering that this coupled a large amount of income that required an intense amount of work to drive and a very modest level of spending in tandem for a very prolonged period of time, which results in tons of work and no enjoyment around this. Can you confirm whether that’s true and then give me some details if so on what your lifestyle actually looked like during this time period from an expense standpoint and what your business income look like?

Eric:
I would say yeah, it would probably look like that at the outset to someone on the outside, but my wife was running her own research science lab. She had NIH funding. She was, I would say she’s highly compensated. So that bought us freedom to be able to have a lifestyle that we were comfortable with. We agreed, and I think part of her getting bought in on financial independence retire early as a concept was that we weren’t going to change our lifestyle a lot. We knew we had a limited time with our boys in the house, so they were both teens at the time. Our oldest was getting ready to go off to college in two years and our youngest in four years. So we knew we had a limited window of time that we could make memories with them. And prior to that, we had always spent on vacations and experiences.

Eric:
We prioritized that. So that was important to us enough to preserve. But I will say at a time when our friends were looking at expanding their house and going on, even spend year vacations than we were, we didn’t do some of those things. And now that we have an empty nest, I’m kind of glad we didn’t do those things, but we’re still in our same starter home. We still have a lot of the same furniture that we had when we first built it in 2007. So I think to an outsider, our lifestyle doesn’t look like we expanded that, but to us it doesn’t feel like we scrimped on a lot. So our living expenses are between 10 to 12,000 a month in terms of just operating a basic lifestyle. And during covid, we haven’t talked about me starting my business yet, but during covid, the course side of my business, which ended up really taking off in 2020, was making about 50 KA month. So that’s a pretty big shovel to be able to save.

Scott:
That was just one component of your business. You had other components that were generating on top of that too.

Eric:
Yeah, exactly. I had a client services side of the business and I had a whole product side and the bulk of the product side was the course and digital products business.

Scott:
So we’re talking 600,000 to a million dollars at least in income from the business during this period.

Eric:
So it’s significant. That’s a big shovel. So you can do a lot with that

Scott:
Was the business and also creating an asset. Did you sell the business?

Eric:
No. Nope. We’re going to continue to run the business into retirement. And that’s another kind of controversial thing. We’re going to be recreationally employed is the idea, but my wife will be stepping away from her job in January of 2025 and we’re going to change the way I run the business right now. The business used to take clients and build products and services on top of that client work, and we are no longer taking clients in the business. It’s purely a products business. So we’re going to change the number of hours. Like you said, it does take a huge time investment to build up all the content for the YouTube channel and make the products and courses and also work with clients. And I didn’t want that kind of lifestyle heading into a retirement or post buy at least I wanted to redefine what work was going to look like. And so all of that investment is going to pay hopefully for many years and we’re going to continue to ride on the back of those investments for at least five years is my hope.

Mindy:
So how much time do you spend in the business currently and how much time will you be spending once you change and pivot?

Eric:
Yeah, the current business, I would say I probably can run in 30 hours a week. I’ve stopped working with clients individually and I’ve just really, I hired an agency last year to help me reinvent and design marketing and automation systems so that in preparation for us entering early retirement and wanting to be able to travel around the world yet still operate this business, I hired them to say, okay, let’s turn this business from an active time investment into something that we can run in let’s say 10 hours a week. So my wife and I would be combined total working on this each working 10 hours a week, which feels like such a change from the 50, 60, 70 hours a week that we might’ve been running it from 2020 to 2023. It’s been quite a dial back. So I’m trying to transition so it’s not falling off a cliff here, but 10 hours a week is going to feel that’s definitely going to feel retired to me.

Scott:
Open the conversation. We’re talking about chubby fire, but you also have an asset that you have chubby fire just in your stock portfolio. You’ve got another asset here that’s worth hundreds of thousands or millions or maybe even eight figures. We have no idea because we don’t have the income numbers here on top of that. So you’re really in this way into this fat fire or obese fire range when you really think about it in that context.

Eric:
Yeah, it’s weird to think about that though because the business itself is a personal brand, so you can’t sell a personal brand in the same way. I mean you can certainly value that even on an annuitized basis. Is that kind of what you’re talking like if we’re thinking this thing is throwing off $600,000 in passive income a year, you put a multiple on that and say, okay, this is part of your net worth. Is that what you mean?

Scott:
I guess there’s the component of it’s not actually worth a multiple of income if the business is truly valueless without you behind it. But that’s another component here I think. How do we define that? I think most people who are thinking I want to be chubby or fat fire, I think most people who are chubby fire are probably thinking, oh, I’m a higher income earner. I’m going to amass enough amount of assets, pay off the house, do a lot of the things you talked about, but then there’s this kind of fat fire world or obese world that’s more around the concept of owning a business like this or selling a very large business, for example. And getting into that, I would imagine, let’s use a $600,000 market. It sounds like there’s a different number there around that, but 600,000 plus a two and a half million dollars portfolio is going to generate $700,000 in ability to spend on an annual basis. And so I just want to think about how do you bridge, you are obviously approaching your spending and your situation from the concept of thinking about chubby fire and you have this huge other asset at play. So how do you bridge that mentally and think about your position?

Eric:
I think it’s important to say that we never included the business cashflow in our projections. So if this business shut down on January 1st, 2025, our fire plan still works. So we always wanted to design a plan that wasn’t contingent on me working in the future or my wife working in the future. And so is it great, is it a great buffer to have passive income that is going to help minimize sequence of return risk? Yeah, it’s an amazing thing. Can we let the portfolio season more if we are not drawing down on any of those assets and we have some kind of asset which is producing cashflow to fund our lifestyle in the present? And to me, I look at the business as a buffer. I never looked at it as an asset that I was going to sell because it’s connected to a YouTube channel where I make videos and it’s me, it’s my name connected to it. So I think that as an asset, it’s not the kind of thing that you look at and say, this is an easy thing to sell, but in terms of a cashflow buffering our cashflow, yes, it’s huge. It gives a lot of security and confidence to the number that we set, but it is not reliant on that cashflow to make our retirement work.

Scott:
Well, you got to take one final break and then we’ll be back with Eric.

Mindy:
Let’s jump back in. Do you consider yourself retired if you’re still working 10 hours a week?

Eric:
Yeah, this is a big on my YouTube channel. Two sides of fi. When I mentioned that I was going to be making this transition into retirement or we’d hit our FI number, but I was not going to be stepping away or closing the business, people gave me a real hard time about it. There’s a lot of pushback. Oh, I knew he’d never retire. And for me, reaching FI is just I get to decide what retirement looks like for me. And if you transition from working 50 hours a week and you have all these demands from clients and outside actors on your time, and then you move into a space where you’re making all of the decisions and you have all of the agency for what the next business moves are, and it doesn’t have to be about money, that feels a lot like retirement for me.

Eric:
And retirement doesn’t just have to be about not working. It’s about choosing the things that you want to work on that excite you most and bring you the most joy. And I expect that to change. I don’t think anyone is going to step into retirement that has one singular definition. I could see if for certain people who want to get away from a job and it’s a true grind and it’s boring and you’re not excited by the work, but I don’t have that. I designed myself a job that I’m pretty happy with. And so I think the challenge for me is just kind of transitioning that away from having to earn into other creative endeavors. And yeah, it’s hard.

Mindy:
So I asked that on behalf of the internet, retirement police who can stuff a sock in it, but I think you hit that right on the head, you’re not doing things you don’t want to do. It is really rewarding to create something that people comment on and say, Hey, this was so helpful. This changed my life. I learned something new. Great. And all I did was open up my computer and talk into my camera. So how hard is that? If you stop making videos, your channel will continue to go on for a long time. You could even release if you decide I’m going to go travel and I’m not going to do anything for a month, you could re-release some of these older videos that your newer viewers haven’t seen yet. I’ve seen it done and it works great, but retirement isn’t just about not working.

Mindy:
I don’t think that the majority of people who get themselves to the point of financial independence can be comfortable. Just their personality can be comfortable not doing anything. And way back in 2018 when we started this podcast, Scott said, when I finally retire, I am going to play video games for six months straight. And I’m like, well, maybe, but I bet he doesn’t. And I think he’s altered that comment. Now, I’m sure he’ll play video games more than he does now, but I think that Scott Trench would be bored silly sitting in front of a computer and playing video games for six months. And maybe I’m just projecting my own self because that would really be my definition of hell.

Scott:
I don’t know. A lot of good games come out in the last six years. Apparently

Mindy:
Not, according to me,

Scott:
Especially if I lived in, where is it in Maine, Eric, that you live?

Eric:
Mount Desert, desert Island. Yeah.

Scott:
Yeah. I dunno, as long as there’s a good internet connection there, the four months of winter or six months of winter or whatever,

Eric:
Long

Mindy:
Cold winter, yeah, maybe I would get invested in video games if I had a six month winter. Probably not though. There’s other things to do.

Eric:
Yeah, the retirement police is just an interesting discussion because even when you tell people you’re thinking about retiring early, everyone wants to project onto you what their vision of their own retirement is, and it doesn’t have to be mine. And I’m really comfortable with however you want to define it for you, and if that involves a little bit of work and a lot of play, cool. And it’s going to change over time. I know I’ve seen my co-host who retired five years ago, he’s changed a lot in what he’s done and he’s been able to just kind of follow the threads of interest that he has that aren’t beholden to the work schedule, which is what most of us have to live the majority of our lives doing.

Mindy:
So let’s talk about what you’re investing in. You discovered financial dependence in 2020. You were already investing in some things. What are you investing in? I’m not looking for stock tips, although if you’ve got a hot one,

Eric:
No, we’re boring investors here. We had been a hundred percent equities up until about 20, 21, and then we’re just doing our research thinking probably makes sense to get maybe a little bit more conservative. And I know there’s lots of differing opinions on that, but for us, we just thought that would made sense to kind of dial it back a little bit. Presently, it turned out it was the worst time to get into the bond market probably in history, our current asset allocation is just 80% equities, 15% bonds, and 5% cash. And that’s just for the cash is just in a money market fund. The bonds are split between VGIT and BND and the equities are all in VTI. So it’s just like boring bogle head investing stuff. But having the business here, I can’t ignore that in this whole equation because having the business income helps us just manage our cashflow here, allows us to be a little more aggressive with our asset allocation than if you read like Kitsis or something, he would say Make a bond 10, and we didn’t make a bond tent.

Eric:
And there’s a reason that we didn’t do that is because we can use some of the cashflow that’s coming out of the business to help mitigate some of this sequence of returns risk that you face in early retirement. So yeah, that’s all we have. Like I said, we don’t have credit card debt. We had a little bit of student loan debt from my wife and our mortgage, which we paid off in 2020. And yeah, we kind of talked about that. I think it’s nice not having the mortgage. The additional benefit of not having the mortgage in early retirement is if you ever wanted to kind of game your magi for qualifying for a premium tax credit, you could do that. That’s going to be hard for us to do, I think, given what the business is earning right now. But that’s another advantage to having that taxable account that you can control income that way.

Scott:
Awesome. And do you withdraw anything from the portfolio at this point, or is it all just allowed to continue compounding because of the business income?

Eric:
Yeah, we, as long as the business income supports our lifestyle, that’s kind of how we’re going to approach it. I don’t think I mentioned this, but we have kind of a 60 40 split between pre-tax and taxable assets. So we do have some flexibility in there and at some point we will probably do Roth conversions in the far future, but that won’t be for a while.

Scott:
And nearly all of the after tax position has been built in the last four years. Right.

Eric:
Yeah, totally.

Scott:
What about cash? How do you think about cash in terms of annual or monthly spending?

Eric:
In what way?

Scott:
How much cash, cash relative do your monthly or annual spending do you keep on hand as part of your portfolio?

Eric:
Yeah, we keep 5% of the total portfolio in cash and we just do that. So it’s just kind of dry powder, it’s take care of, we can have some opportunity. If there’s an opportunity there, we can do it, but we’re not stock picking or anything like that. I’m not big into crypto. We have a small crypto position, but it’s not really even an emergency fund. And maybe you’ll tell me, Scott, that that’s kind of a dumb idea. If the business is my cash position, I should have the rest of that in the market.

Scott:
Oh, there’s no dumb or right or wrong answer for cash. I have found that entrepreneurs and folks who own businesses tend to have a very large cash position in a relative sense, and often there’s this complete, yeah, so lemme just make sure I hear what you said. 5% of your portfolio is in cash and how much is in the business in cash?

Eric:
It’s one in the same for me. I’m a sole prop. Yeah,

Scott:
Okay. One and the same. Yeah, so a lot of auto folks seem to separate the two in their minds, so I’m glad you combine it. That seems like super reasonable. Many entrepreneurs seem to have a lot of cash relative to other investors.

Eric:
If you’re buying Facebook ads for example, or you’re paying an agency, you really need that and you’ve got taxes that you’re saving for. So that’s just something I’ve always held.

Mindy:
Yeah, Scott, you just said there’s no right or wrong answer for cash. And I want to clarify or ask you to clarify. If I consider it cash, then it’s not in the market. It can be in a high yield savings account. I might even say it could be in bonds, but I don’t consider money in the stock market to be my cash because let’s say that I put money in there and I don’t know, it’s 2022 and every time I put money in the next day, it’s worth less. That’s not what I’m thinking. Cash is for, cash is for, I need to pay something now and it could be in a, I can’t get it for a month account, but I don’t think it should be in an account that’s flexible like that. What’s your definition of cash?

Scott:
Cash is for me, money in a savings account, a checking account, or in a money market account, something like that, that is really intended to be a cash position. And to be clear, a 5% cash position for Eric is a pretty conservative position. Let’s use that two and a half to $5 million range. You’re talking 125,000 to $250,000 in cash in this particular portfolio, depending on how that range shakes out. So that’s a big cash position, but that’s not incongruent with what I’ve seen from a lot of entrepreneurs here. It’s somewhere from one to two years expenses based on his 10 to $12,000 expenses there. That’s right on the money for what I would expect based on what we’ve talked about from based on a previous interactions with entrepreneurs like Eric in the past, but I think that’s what you mean by cash, right, Eric?

Eric:
Yeah. I keep that in a money market fund. It’s just right in my taxable brokerage and I have it in one or two days and all the spend for the business goes on just a business credit card so we can get all, we’re gaming the points there, but yeah, the cash sits in a federal money market fund.

Scott:
You don’t meet a lot of people who have more than about $250,000 in cash because then you start bumping up against the FDIC limits. So that’s another reason folks start moving that into more high, more illiquid investments at that point. There’s kind of a forcing mechanism there because you’re like, okay. So Eric, thanks for sharing all this. This has been a really fascinating window into your journey and congratulations on all the success in the retirement. Kind of, can you give us a preview of some of the things that you’re going to be on that journey? What do you think you’re going to be doing next or what is the next year going to look like for you?

Eric:
Yeah, the next year, my wife and I mean, I was just talking about this with my co-host of my show that I’ve kind of taken work out of my schedule and I’ve filled it in with travel, so I don’t know if that’s a good thing or not, but we have a very aggressive travel schedule for the next 12 months, and my wife kind of referred to this as the period of hedonism, so we’re going to probably blow it out for the next 12 months and see where we land. We have a lot of big trips. We have our 25th wedding anniversary coming up, so we have a big trip to Japan that we’re planning and lots of other fun things that we’ve been delaying because I mean, we came back from this trip from Europe in the fall here, and this typically for my wife would’ve been, I wouldn’t have seen her for the next four months and because she’s doing the off-ramp from her job, I’m able to spend time with her and we’re able to go hiking together and biking and all these and traveling. And so that’s kind of what I’m filling my time with. I’m looking for the next project. I’m probably going to continue the podcasts that I’m doing and continue making some videos for my own business without all the financial strings attached to it and kind of see where it leads me.

Scott:
There’s a high synergy between owning a business and traveling a lot given the amount of money that goes through a business on a credit card, for example. Have you found that that is aiding in your travel plans for 2025 at all?

Eric:
Absolutely. Yeah. I mean it’s one of the great things about the government incentivizes running a business. There are all kinds of tax advantages to running a business. And so if we can run this from anywhere in the world, I’m probably not going to choose to stay in Maine for the next six months where it’s going to be snowing hard. I’m going to prefer being on a beach in Southeast Asia. So we’ll see where that leads us. But yeah, that’s a great benefit to having a business and being able to have your wife be your copilot there.

Mindy:
How frequently are you checking in on your investments and your net worth and your position?

Eric:
A lot less than I used to. So I think I developed, as I said, some unhealthy habits on the death march defy there, and it was a daily thing and I think probably a lot of people do that, and it felt like I could control what was happening just by checking more. And what I realized was I have zero control over that. What we tried to do was just put a really solid plan in place and just focus on the things that we could control, which was earning more and investing what we could. And so now I try and resist that urge honestly. Do I do a monthly check-in with my wife? Not as much as we used to. I would do it probably more regularly than she would want to, but as you get to that point where you’re going to make the transition and my wife leaves her job and the health insurance there goes away and we have some things to figure out. Yeah, I’m probably checking in maybe more than I have for the past year or so, but it’s, it’s not a daily occurrence. It used to be.

Mindy:
Oh, daily. Gosh, you are just like my husband. I

Eric:
Know. I was going to say, you can relate to this, right?

Mindy:
I can. He still kind of does, but he also enjoys it, so I think it’s a little different. If you don’t enjoy checking in on it, then

Eric:
I mean it depends when the market’s going up. It’s a lot of fun when it’s taken a slide. You’re better off just going out for a hike. That’s what I found.

Mindy:
Yes, that is a two statement,

Eric:
Eric, where can people find out more about you? Two sides of fi.com is where I share my journey on the path to financial independence and retiring early. Yeah, it’s been great speaking to you guys. You have been part of, you probably didn’t know this, but you’ve been part of my virtual personal finance MBA that I’ve gotten, so I appreciate all the content over the years and this can be a real thankless job and you don’t get to hear from people all the time, especially in a positive light. And so I just appreciate you guys sharing your experiences and all the detail you have and the advice over the years. It’s helped me get to where I’m at now. So thank

Scott:
You. Thank you so much for sharing your story. Congratulations on the success. I hope you enjoy the next couple of years and make the most of it. It’s an awesome situation you’ve put yourself in and yeah, look forward to hearing about your adventures.

Eric:
Cheers, thanks. Thank you.

Mindy:
Thank you so much Eric, and we’ll talk to you soon.

Eric:
Sounds good. Bye.

Mindy:
Alright, Scott, that was Eric and that was a really, really fun story. I wouldn’t call his story a repeatable story, but it’s definitely worth listening to. I think a lot of us have this idea that we want to create or start our own business and you have this pie in the sky dream that it’s going to generate all of this income for you. And Eric actually did it, so he kind of won life.

Scott:
Yeah, I mean, got a wonderful business that seems largely automated. He cut back all the pieces. He didn’t like a business like that. I have a little bit of skepticism that it’s as dependent on him as he said it is. And I think that he might have a very big payday coming in the couple of years if he truly is able to automate the business and it keeps growing in this way. So I think that he’s going to have a huge cherry on top and that this guy ain’t chubby fi. He is way past that into the world of fat fire. And I think that he’s going to have a wonderful, wonderful situation bring over the next couple of years. And I think that it’s just another vote in favor of thinking about that business component, especially if you can do what he did and have one spouse generated income that you can live off of and the other spouse can focus on building a business.

Scott:
I mean, it’s just a cheat code on the path to wealth if it works because producing income that whole time and it’s producing this enormous equity value that can be coming up or an annuity that can be built. So super powerful and there’s a whole bunch of other advantages besides the ability to set up your retirement plans that credit card points. I mean, only imagine the amount of money that guy spends on credit cards and the amount of travel miles that racks up to allow him to probably travel the world for free. He’s probably going to have money piling up and he’s going to be spending nothing because he is got all these credit card points he’s racking up. So just a wonderful situation. Hopefully it sparks some ideas for folks, although of course not everyone is going to be able to build a business like that. Even if they do go at it for 10 years. Like Eric, there’s a little bit of skill, a lot of luck, and a really good opportunity that needs to be combined.

Mindy:
A little bit of skill, a lot of luck, the opportunity and also the taking action. He could have just sat there at his day job and never decided to go out on a limb and see if this online thing works. I know so many people who are making so much money online, there is absolutely a ton of money to be made online providing information about the stuff you already know. So if you’re thinking about starting your online business, this is your money Mama Mindy saying do it. And to the internet retirement police, please email me your thoughts at tell someone else that I don’t care. Dot com.

Scott:
Well, Mindy, should we get out of here?

Mindy:
We should. Scott, that wraps up this episode of the BiggerPockets Money podcast. Of course, he is the Scott Trench and I am Mindy Jensen saying we can’t linger humming singer.