They Want to Retire Early. Their Lifestyle Says Otherwise.

Money Guy Show

A high-earning couple, including a Nurse Practitioner and an HVAC technician, faces the challenge of lifestyle creep despite a $400,000 annu

Key takeaways

• The couple's income recently surged to $400k following a healthcare company acquisition.
• A significant portion of recent debt stems from an $85,000 master bathroom renovation via HELOC.

Main topics

• Lifestyle Creep
• Early Retirement (FIRE)

Notable quotes

I see what we take home and I'm like, where, how do we not have more money? Where is it? Because we, we blow it.

Conclusion

Achieving early retirement with a high income requires disciplined man

Transcript preview

Speaker 5 (0:00) But I say that to him all the time, like, I see what we take home and I'm like, where, how do we not have more money? Where is it? Because we, we blow it. Speaker 2 (0:05) I'm seeing y'all's income and then I'm seeing you lament that you want to pay off that debt. And I'm like, we're way too nice. I think if Dave Ramsey was here, he'd be like, what do you, what do you mean? You've got to take the kids on all these vacations and all this stuff. I should harness my inner Dave a little bit. No, you need to get serious about paying off all this stuff because it's crazy. Speaker 4 (0:25) You have a lot of money. You're rich. Speaker 4 (0:33) So have y'all been in Nashville before? Yeah. Years ago. Speaker 5 (0:36) Pre-kids, yeah. Speaker 4 (0:37) Pre-kids. How long ago was pre-kids? Speaker 5 (0:39) Well, we have a six-year-old. So probably like 10 years ago. Speaker 3 (0:42) Yeah, for New Year's Eve. Speaker 4 (0:43) Oh, you have six and a half. How many kids do you have? Speaker 5 (0:45) Two, a three and a six. Actually, she's going to be four tomorrow. Let's Speaker 4 (0:48) go. How long have you guys Speaker 2 (0:49) been married? It was 12 years in July. 12 Speaker 4 (0:52) years in July. Awesome. Speaker 2 (0:53) How's Speaker 5 (0:54) it Speaker 2 (0:54) been? Y'all took some time for each other before you decided to start doing the kid thing. Speaker 5 (0:58) Yes. Speaker 2 (0:58) Yeah, for sure. We had a Speaker 4 (1:00) really good time before we— Not Speaker 1 (1:02) that Speaker 5 (1:02) we're having a good time now. And a Speaker 4 (1:03) really good time after kids, Speaker 5 (1:04) right? Speaker 4 (1:04) Yeah, just a different kind of time. But when the kids watch this, they know that we're having a great time after kids also. Yes. So how did you guys meet? Well, give us a story. What's the background? How'd this all come to be? Speaker 5 (1:14) Playing Speaker 4 (1:14) soccer. Speaker 5 (1:15) And soccer? Yeah, we both played co-ed indoor soccer. Yeah, Speaker 3 (1:18) so mutual friends, got on the same team. Yeah, Speaker 5 (1:21) played together for years, and we were just really good friends, golfing buddies, and then— Speaker 4 (1:25) What were you guys doing when you met vocationally? Speaker 5 (1:29) I was a nurse. Okay. So I'm an NP now, so I hadn't done that yet. So I was a nursing director for an assisted living at that time. Speaker 3 (1:38) Okay. I was a HVAC technician. Okay. So I'm in the same field but in a much higher up position now. Speaker 4 (1:46) You're not having to actually go out and crawl on roofs. I Speaker 3 (1:49) still Speaker 4 (1:50) have to do that occasionally, but Speaker 3 (1:51) that's more— It means it's a bad situation. It means it's a bad day. Things Speaker 2 (1:55) have gone really sideways. Speaker 4 (1:57) Commercial HVAC or like residential? Residential. Residential, awesome. Okay, so you guys got married 12 years ago. And then—all right, so walk us through. Financially, when you guys got married, were you on the same page from— financial standpoint, talk about money a lot. I Speaker 5 (2:12) don't think we ever really talked about money because it just never was like, you know, I was a nurse. I was making pretty good money as a single person. So I was in the process of buying a home when we first started, or I just really wanted to buy a home when we first started dating, which was kind of an awkward thing because we weren't married. So we didn't want to like buy a home together, but we just started dating. So I actually ended up buying a house and he moved in with me. We just like paid everything together kind of right from then. So we never had like a weird money. We just sort of combined. Speaker 3 (2:40) Yeah, luckily she's always had more than me. So I was always all in like, yeah, you can have Speaker 5 (2:46) it. Speaker 3 (2:46) Whatever you Speaker 5 (2:46) say. This is awesome. Speaker 3 (2:47) You can have my scraps. Speaker 4 (2:48) I Speaker 5 (2:49) love it. Speaker 4 (2:50) So no real money struggle. Like you guys started both when y'all got married, you both were making like good household income. Yeah. And so no real struggles in terms of like, you know, you hear something like, oh yeah, I remember we were eating like beans and potatoes every night. That was not your story. No. Speaker 5 (3:04) Starting out. Our mortgage was based on just my income. So when the two of us got together, we were comfortable. More Speaker 4 (3:09) income. Yeah. We certainly never Speaker 5 (3:11) talked about the future or saving or anything in that nature. So we were just living, you know, getting money, spending it. So Speaker 4 (3:19) when did you guys start talking about like the future and saving and building? When did that conversation happen? Speaker 5 (3:24) Well, you kind of always have saved. Speaker 4 (3:27) I Speaker 3 (3:27) luckily, because I will, I would never say that I'm good with money by any means. I'm certainly better now. But at that time, I certainly wasn't. But I had a, I always had a. an idea like look to the people you want to emulate like for them like I'm not an innovator someone's already done it and they've done it better than me how they do it and so I had a friend who's his father owned a realty company and did really well and so he told me at 18 I was talking about my job offers this 401k and he was just like, get into it. Do as Speaker 4 (3:59) much as you can. Love that. Use the Speaker 3 (4:01) company match. He's like, pretend that money doesn't exist. And then even if they take it away, just save, just take that same amount of money away and save. So I always. And Speaker 4 (4:09) how old were you when you were given that advice? Speaker 3 (4:11) 18. Oh Speaker 4 (4:11) man. When I Speaker 3 (4:11) started out full time. Awesome. I did two years of college and it didn't, it really wasn't for me. My father was in a trade and. He was always looking for help. And so I went to work for him full time at 20 and kind of never looked back. Thought I'd like, I'll go back to school. And then, you know, 25 years later, here I am. So you've been saving since 18. Yeah, I had a 401k. So Speaker 5 (4:32) he had a pretty good 401k when we first met. I was putting peanuts in mine because I just, nobody, my parents, we never talked about money. Money was never, you got it, you spent it. My mom is a spender. So it was Speaker 4 (4:42) just, it was about making ends meet. Yeah, Speaker 5 (4:44) I wasn't worried. Yeah, no one ever talked to me about that. So when Speaker 4 (4:47) you got married, did y'all have that conversation? He's like, hey, I'm saving, you're not. Should we, or it was just like, I'm kind of doing my thing, you're doing your thing. Yeah, Speaker 5 (4:53) we just never. Speaker 2 (4:54) When y'all moved in together, Set up a joint account? How'd y'all pay the bills? Speaker 5 (4:59) I think so, yeah. I think we set up a joint account. So it was Speaker 2 (5:01) like you're checking, we'll get into emergency funds, checking, is that all joint right now? No separation on that stuff? Speaker 4 (5:07) Okay, Speaker 2 (5:07) okay. Keeps it simple. Speaker 4 (5:08) So, but you guys were kind enough to share a network statement with us. When we look at where you guys are right now, here you guys, and remind me how old each of you are. Speaker 5 (5:16) I'm 40. Speaker 4 (5:17) 40? 46. 46. So right here in our early to mid-40s. Just babies. Just babies, that's right. Speaker 5 (5:23) In my head. Speaker 3 (5:25) 46 with a new hip, so I feel a little older. Speaker 4 (5:27) A million-dollar net worth, right? You were officially in the Two Comma Club, which is amazing. We Speaker 5 (5:33) had champagne that Speaker 4 (5:33) day. Did you really? I love that. So obviously you've been doing, so you said, oh, I didn't really save a lot early on, but you must have done something right. So give us, how'd you get from like, I didn't really pay a whole lot of attention to it to here we are today with a million bucks. Speaker 5 (5:48) Dave Ramsey. Speaker 4 (5:49) Okay. Yeah. Speaker 5 (5:50) So I actually just had to reach out to the friend that introduced me and said, when was that? In 2022, I was at work and I heard Mike, one of the nurses talking about debt and how silly it is and how people spend. And we've never really had a lot of debt. My dad said to me early on once, if you don't have the cash to pay for it, you can't have it. So I never, you know, maybe a thousand dollars on a credit card here and there, but I've never, we both have never really been in debt. So I, he kind of just, I said, what? And he gave me total money makeover. And so I read it. And at that point I had student loans, a car payment, you know, all the regular things, a mortgage. And so I said, we started listening to the podcast, him yelling at everybody every day. And I said, like, this is it, you know? And so I just went down the rabbit hole. I read every finance book you can think of, every podcast. That's how I found you guys. He had a business. He sold it to a big company. So we got a buyout, not a ton, but enough to pay off my student loans. So I said, we're knocking them out. So we paid off my student loans. And from then on out, I opened a brokerage account, maxed out my 401k. Speaker 4 (6:57) So really starting in 2022, it sounds like that's when you started taking it seriously. Yeah. Speaker 5 (7:02) So Speaker 4 (7:02) over the course of four years, you've been able to cover a lot of ground. Obviously, there was a business sale that helped with that, but you've been able to cover a lot of ground in a relatively short amount of time. Yeah. That's awesome. Speaker 2 (7:11) What are y'all saving? Because I see that income is pretty big. And it's what I was curious about when I looked at the net worth. I couldn't tell how long y'all had that income, what the savings rate is. I'm just trying to figure out the health of living on less than you make is. Speaker 5 (7:26) Yeah. So we have not made that income. That's this year. Okay. Speaker 2 (7:29) So Speaker 5 (7:29) I, for the last eight years, have been working for a small private company as an NP. And I made $120,000 for probably the first five years of that. put a little pressure on them and got a raise to 140. And then last year we got bought out by a nationwide company. It's actually a year ago, like this month. So with that new company, there was a lot of room for a higher income because I get paid on based what I bill instead of a set salary. So I kind of put the pedal. Speaker 4 (8:00) So in the last year is really when this income's kind of blown up here. Speaker 5 (8:03) What Speaker 4 (8:04) do you think your savings rate is? Or even walk us through what accounts you save in and how much you put in those accounts. Speaker 5 (8:09) So we both, well, I max out my 401k. He puts, I think, $22,000 in his, so he's almost maxed. We put $320 a week into a brokerage account. And then I think like $150 a month into crypto. Speaker 4 (8:24) Tell me more about that. She's like, I don't really pay attention to finances, but let me buy some crypto. Where did that come from? They're Speaker 5 (8:32) going to Speaker 4 (8:32) hate that. Speaker 5 (8:32) I don't know where I got into it. My best friend's husband's a crypto, you know. So he introduced me, and I'm a very competitive person. So it was like something for me to just, you know, it's so volatile. So like the excitement of looking at it and trying to. So I kind of dove deep. We didn't go crazy. We got in. I've since backed out a little bit. You like Speaker 4 (8:55) going to Vegas? How much was it? No. I Speaker 5 (8:57) love to gamble, but I don't go to Vegas. Speaker 2 (8:59) You said Speaker 4 (8:59) how Speaker 2 (9:00) much you Speaker 4 (9:00) put in? Speaker 2 (9:00) I just saw the sparkle in your eye when you're like, I like the volatility. Most people don't like that, but you consider Speaker 4 (9:05) it a feature. Speaker 2 (9:05) If you put me at a Speaker 5 (9:06) blackjack table, it's hard to get me out. So I'm like, get away from me. I Speaker 4 (9:09) love it. Speaker 5 (9:10) And Speaker 4 (9:10) how much are you doing in crypto, you said? Speaker 5 (9:12) Like $150 right now. A week Speaker 4 (9:14) or a month? Speaker 5 (9:15) No, a month. A month, yeah. Speaker 4 (9:16) What about like... Roth IRAs, HSAs, any of that kind of Speaker 5 (9:20) stuff? HSA, I do $100 a paycheck, so that's $200 a month. Speaker 2 (9:24) So you save somewhere between $1,200 to $1,300 a month just into the brokerage account? Speaker 5 (9:28) Yes. Okay. Speaker 2 (9:29) We don't do anything consistent with the kids. Speaker 5 (9:32) Yeah, we have 529s for the kids. Okay, awesome. Speaker 3 (9:35) Are you putting money in there? Speaker 5 (9:36) $100 a month for each kid, yeah. Speaker 3 (9:38) that we're trying to get more outside investors to Speaker 5 (9:41) fund. Yeah, grandparents and things like that. You guys are interested. Speaker 4 (9:44) Crowdfunding. I like that. Crowdfunding the kids' education. That's great. Okay, so you said, what was it, $1,300 a month we have going into the taxable account. So that's 1,300 times 12. It's 15,000 plus 24.5 plus 22,000. That puts us at what, $62,000 annual savings, roughly. So if we do 62,000 and do a, $412,000 income. It's about a 15 % savings rate. Does that kind of align with where you thought your savings rate would be? Speaker 5 (10:15) No. Well, it was higher when I was making a lot less last year. So I felt like we were on track with like the 20 to 25%, but then this year has, yeah, really. Do Speaker 2 (10:26) you feel like you're ahead of the curve, behind the curve, or right where you're supposed to be? Speaker 5 (10:28) Every day I feel different. There's some days I say to him, like, look at us, you Speaker 4 (10:32) know, a Speaker 5 (10:33) million dollars. Speaker 4 (10:34) Champagne. Yeah. Yeah. And Speaker 5 (10:35) then literally two days later, I'm like, talk me off the ledge. We're doing terrible. I'm not saving enough. I have no idea. I take the food out and I'm like, where are we? I think we're at eight. And then I'm like, no, we're at three. We have a HELOC. You know, I know. I don't. I'm all over. Speaker 3 (10:50) I've like woken up in the morning and she's awake and she's like, I haven't even slept. We have twelve hundred dollars in the credit card. okay, let's just pay it. And Speaker 5 (11:00) yeah, I Speaker 3 (11:01) know, but we shouldn't even be putting it on it. And then Speaker 5 (11:03) we book a trip three weeks later. Like I can't, I'm all over the place. Do Speaker 3 (11:06) you Speaker 4 (11:06) carry a credit card balance or like when you have that 1200, you pay it off, right? We never Speaker 5 (11:10) haven't had a balance in five years. Speaker 4 (11:12) So one of the, it sounds like your question is, okay, are we doing the things we're supposed to be doing or are we not doing Speaker 2 (11:17) enough? Well, Speaker 5 (11:18) yeah. And Speaker 2 (11:18) bring it, bring it to begin with the end of month. How much longer do you want to work? Speaker 5 (11:23) Not long. I Speaker 2 (11:24) think that's another reason we're here. Speaker 5 (11:26) Yeah. Is to retire early. That's, you know, I found FIRE. Not that we want to do FIRE, but we've pretty aligned that we don't want to work. Speaker 2 (11:34) So 40, 46, you said? Our goal is Speaker 5 (11:37) like 10 years. 10 years. So I constantly run projections on him. Is Speaker 2 (11:42) that together or do y'all want to stagger the retirements? Speaker 5 (11:44) Stagger. I would like him to retire first and then I'll go part-time. Speaker 2 (11:48) So give me some ages. Put some details on that. So 55, 56? Yeah, ideally. How about for you? I Speaker 5 (11:56) can do part-time. I do a lot of remote stuff, so I could do part-time as long as I feel like it. So I think that's what we're trying to figure out, like how long would I have to do that? What kind of income would I need to? keep us alive. So Speaker 4 (12:08) 10 years from now, we're going to have a 16 year old and a 14 year old. When you think about like retirement and financial independence and not working anymore, what's that look like to you guys? You said you're gonna be working part time, but like, are you going to live where you're living now? Are you going to do the things that you're doing now? Are you going to travel? Like, what does the lifestyle look like at that stage? Speaker 5 (12:27) I think my main goal. The reason I want to retire is to be available for the kids. Those are tough ages. And I'm nervous, to be honest. You know, I have some friends with teenagers because we waited older in life. And I know what's coming. Speaker 1 (12:40) And Speaker 5 (12:40) I just think I want to be there as much as possible, at least one of us. And, you know, we have vacationed a lot recently now that we have more money. And that's really important to us. You know, kids are hard at three and six. Speaker 5 (12:56) They're the greatest when there's no schedules and we're on vacation and we're all having a really good time. So we try to reproduce that as much as we can. Speaker 3 (13:04) And they're already both at the ages where they're now referencing the trips we just went on. Speaker 5 (13:09) Making memories like that's huge for us. It's just Speaker 3 (13:12) great to hear. And like I said, we have friends with teenagers. So then you travel with teenagers and they don't tend to care as much and aren't as appreciative. So we want to do it now while we have the time. have to work. And one Speaker 4 (13:22) of the great things about traveling when your kids are young is you build this habit of, hey, this is what we do as a family. We spend time together. We go on place. We experience these things. It's not a bad habit to build so long as you're making sure you're doing it in the right order, at the right cost, appropriately,