In just five years, they’ve snowballed out of student loan debt and toward their long-term goal—retiring in their 50s. Now that this power couple is nearly debt-free, they’re focused on saving for retirement. Tune in to learn what they still need to do to reach their (high) FIRE number, why they refuse to downsize their dreams, and how they plan to spend their retirement!
Mindy:
Imagine being asked on a first date how much student loan debt you have while still trying to make a good impression over dinner. For our guests, this unexpected question became the catalyst for a complete financial transformation. What would you do if you suddenly realized you were about to graduate with $275,000 in student loan debt and your future spouse was bringing an additional $230,000 into the mix? Most couples might panic or avoid the topic altogether, but our guests took a different approach together. They developed a strategy that eliminated over half a million dollars in student loan debt in just five years. Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and as Scott is out on paternity leave, Amanda Wolfe is stepping in and filling his shoes. Amanda, thanks so much for joining me today.
Amanda:
Thanks for having me. I’m excited to be here. Give Scott A. Little rest.
Mindy:
Yes,
Amanda:
BiggerPockets has a goal of creating 1 million millionaires. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting. Today we’re joined by Amirra and her husband Mazi and I am so excited to hear more about their money story today. Hello, hello, hello and thanks for being here.
Amirra:
Hi. Thank you so much for having us. We are pumped to do this episode together.
Mazi:
So excited.
Mindy:
Okay, I want to know which one of you asked the other one about the student loan debt on the first date?
Mazi:
That was me. I was the one who brought that conversation up on the first date. We were having lunch
Mindy:
On a lunch date. It wasn’t even a dinner
Mazi:
Date. There were no dates section on this first date, so I think it was a Sunday brunch kind of thing, and we were getting talking, getting to know each other. The question I understood she was in school, but she was in school doing a clinical rotation outside of the state that she was in school. She was in school in Boston, but she was in Houston doing this clinical rotation and I was just like, wow, that’s a long ways from home. I was like crunching the numbers in my head. I was like, wait a minute, so you’re paying for housing and travel living outside of a place where you’re not at school at? I just imagined. I was like, man, that’s a big undertaking financially, especially living off of student loans. So mentally I was running the numbers in my head and that’s how we got to wait a minute. So how much did loan debt you going to have after all of this?
Mindy:
Did you not want a second date? It was a good test. I think my response was
Amirra:
A get test.
Mindy:
Yeah. Well, and I want to know how you felt when he asked that because the money nerd in me is so proud of Ozzie for asking that like, wait a second, what kind of debt are we talking about girl? But also the romantic in me is like, come on Mozzie, that’s not the first date question.
Amirra:
Full transparency. I was older, but I was still pretty new to this concept of dating honestly, and so I had never been on a first date and had someone ask me anything financially related, so I was like, is this normal? I know I’m a little inexperienced with dating, but is this normal? And so I don’t know. I was so taken aback. I was so caught off guard, but it really did kind of give me insight into who Mozzie was as a person on that first date and I was like, I don’t mind it. I like that he is straightforward. I like that he likes transparency and so I was like, these are all qualities that I would enjoy in a partner anyways. But it definitely took me back a little bit, but it wasn’t a deal breaker obviously because here we are married five years later before
Mindy:
We get all on Amira’s case. Ozzy one of you had $275,000, one of you had 230,000, so it’s not like you’re coming in here all innocent.
Mazi:
Fair, fair. However, I didn’t start my debt journey until after we’ve been dating for about, what was it, eight months.
Speaker 5:
So
Mazi:
I was going to graduate school. She was on the tail end of graduate school and we met right before I started about six months before I started and about six months before she ended. So I didn’t have that much debt yet. I knew I was going to, but I didn’t have that much debt yet. I knew the ROI on what I was going into debt for was kind of worth it, so I wasn’t too concerned.
Mindy:
Okay. What did you study?
Mazi:
I studied anesthesia. I went to nurse anesthesia school. I was a registered nurse prior to that, so I was working in Houston as a registered nurse in the ICU, and then I decided to get into graduate school and studied, it’s called certified registered Nurse Anesthetist.
Amanda:
Freaking Power couple. Yeah.
Mazi:
So yeah, I got in. I knew about eight months before that I was going to graduate school and then we kind of met when we were about, was about six months out.
Mindy:
Okay. So you are starting to date, you’re realizing that you’re going to have a large amount of student loan debt when you are both done with school. How did that feel? I see this number on the paper and I am kind of sweating and it’s not even mine.
Amirra:
I think that we knew that the debt was kind of looming while we were dating, but I will say we didn’t really have a ton of conversations really about my debt in particular until we were thinking about marriage. So then we were like, okay, obviously we love each other, we want to get married, we have to talk about finances. And so that’s when Mozzie kind of re-brought into the conversation, Hey, you’ve graduated now you’re in a lot of student loan debt. And I think that when we realized how much we were going to have collectively, I don’t know, I was a lot more, we’ll deal with that when the time comes. We don’t have to talk about that right now. Whereas Mozzie was very much like, no, we need a plan of action immediately today. And I was like, I don’t even know my total numbers. I don’t want to log into my student loan account. I don’t want to look at this thing. I just want to ignore it. I’m probably going to be in debt until I die. That was very much my mindset at the time, and it wasn’t until we started having those conversations right before we got married that it was like, no, we have to actually come up with a plan to get rid of the debt.
Mazi:
When we first met, I mean we both knew we dated for those six to eight months. It was kind of like, all right, we’re going to put a pin in this
Until you start working and we figure that out. It was always in the back of my mind, but as we got closer to getting married and everything, that’s when it was like, okay, realistically this is a big number that we’re bringing in to both sides of the marriage. We needed to have a plan of action because most people, I don’t think she logged into her student loans until I remember sitting in my little apartment for graduate school and I was like, you need to actually just log in and see what it is. She was already graduated. I was like, you need to know what just a base payment is for these before we get too far here. So that was kind of an eye shocking moment honestly. Once you logged in and we saw the interest that AC cured and the actual
Mindy:
Number, were you taking out student loans simply for your student costs, like housing and food and school and books and all of that, or were you taking it out for other things as well?
Amirra:
So Max borrowed, I took everything out to cover housing my car, all the things that happened during the three years that I was in OT school. And so the loans paid for me to live basically for those three years. So I came out with significantly more than I should have because I wasn’t watching my living costs. That was the biggest thing. I didn’t have a lot of roommates. I lived in a really nice apartment as a grad student. I had a car leases, I took vacations and I’m super open about admitting all of the mistakes that I made to get to this point. And so it was a massive number, but it’s not every OT is in this much student loan debt. I just made a lot of mistakes because I just lacked the financial literacy and the money didn’t feel real as I was taking it out. I was like, oh, I got a refund check. Great. This is income. And it’s like you don’t think about the fact that no, actually Amir, you have to pay that back later. So I wasn’t thinking that way, but to answer your question, yeah, the money that I took out was to do all of these different things while I was three years without really having a real job. I was like a nanny and I didn’t newborn care specialist, but I didn’t have an actual job job while I was in OT school.
Mindy:
I think that’s really important to note. You just said something that’s like the million dollar quote of this show. You said the money didn’t feel real. It kind of isn’t real because it’s this on paper money, it’s on the internet money. It’s not in your hands that you are then paying to somebody. You’re just transferring from here to here. It was never yours to begin with. So what is something that you think you would do differently if it had felt real or what’s a way that it could have felt more real to you? I’m not saying, wow, Amira, what a big mistake. You’re not even close. The first person I’ve heard say this,
Amirra:
The first thing I would’ve done differently is think about the actual school I was enrolling in. So I went to a private school that was out of state in a very high cost of living area, which made all of my groceries, rent, everything go up. So I would not have, it was a great school, don’t get me wrong, but I wouldn’t have chosen that school because I couldn’t afford to have gone to that school. If I think about it on paper, it was a really expensive school. The other thing I would’ve done differently is the type of degree that I got. So I went for an entry level doctorate, which is really, really expensive, whereas I could have gone and gotten a master’s and then maybe taken a year and done the doctorate program later. At the time, I thought that our profession, it’s very similar to pt.
There’s some differences there, but PT is a required doctorate, and I thought that OT was moving towards a required doctorate, and so that’s why I went and got the really expensive degree. So those were definitely the big two factors. I think for me, I should have just went to a cheaper public school, got a master’s degree and kind of went from there. But yeah, that’s a big part. I would’ve done differently I think. And then there’s the small things, maybe not gone to every single brunch that I was invited to and maybe not gone on a trip to the tropical overseas. Little things that I did that I was like, I probably couldn’t really, I probably couldn’t have afforded to do that if I think about it
Amanda:
Or even not taken all the loans. You also said something earlier that was like, I took out the max amount. And I think that a lot of people don’t realize that while you’re in that application phase and you are offered these loans, you can decline a couple of them because usually several coming in at once. And so I think that’s something that people don’t realize too, is that you don’t actually have to take every dollar that’s offered up to you at that time.
Mindy:
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Amanda:
Thanks for sticking with us. So my next question then is around what your finances looked like before even meeting and going into school. So what did those look like? It seemed like mozzie was a little more proactive, if you will, when it came to his finances and you were more maybe focused on the end goal of getting your degree, but what did your finances look like before that?
Mazi:
Well, to be fair, she never actually started working. She was undergraduate graduate school, no break in between, so that’s that seven years and that’s when I’m nurse. So she didn’t really have the chance to be a working adult where me, on the other hand, I was a working adult. I, I’m a little bit older and I was working as A-I-C-U-R-N for probably five years when I met her. So I already had bought in my first house, I already had a paid off car and I already drained down. I think I only had 80,000 coming out of undergraduate and it was at 20,000. So I’ve already had, I was making money, paying for things,
Amirra:
Investing,
Mazi:
Investing, traveling. I was doing all that. I was already full adult at the age of 23. I had a little bit more of a head start to be fair.
Amanda:
So you were already investing then Mozzie?
Mazi:
Yes.
Amanda:
Okay. And then what about you, Amira?
Amirra:
No, so like he said, I came straight from undergrad, so I honestly still kind of had college girl mentality. I wasn’t thinking about the big girl things. I wasn’t thinking about investing for retirement. I wasn’t thinking about any of that. But I also didn’t have a real job. I was doing nannying work, but that’s babysitting, and so that was helping fund some of my stuff in college, but I didn’t have an actual professional career, so I wasn’t really thinking about that kind of stuff. Honestly, very much in goal. I was like, well, once I become an ot, once I have the degree, then I’ll think about all of these different things, but I didn’t have the income to even sustain thinking about my finances. There’s things I should have been doing and I could have been doing, just tracking my spending, just watching my overall spending, thinking more about saving.
The one thing I will credit myself, I was never into credit cards, so I had a credit card, but I used it very responsibly, so I never got into credit card debt. I always make sure to paid it off that month. So that was a big thing. The only thing I really thought about was, oh, I can’t go into credit card debt. I know that’s really bad, but to me student loan debt and credit card debt were two very different things. And so it made no, I didn’t bat an eyelash taking out over 200 grand of student loans, but if I had $200 in my credit card, I would be like, oh my gosh, I can’t have that. So I just think we were in two very different seasons of life. Like you said, we’re about four years apart, so we were just in very two different seasons of life. So I think that is why we approached our financial situations so differently.
Amanda:
I do want to talk a little bit about your actual debt payoff journey. So you had mentioned that you were getting pretty aggressive in the last couple of years paying off the debt. So what specifically changed in your approach during that period that accelerated your progress?
Amirra:
I think it starts with the birth of Jaden.
Speaker 5:
Yeah.
Amirra:
Yeah. So we had our first baby. So Mozzie had just graduated. We had our first baby and I decided I wanted to become a stay-at-home mom, and we made the decision together. We talked about what would that look like financially for me to lose my income. I wasn’t making as much as mazie, but it was still a significant amount to the household. And so we were like, okay, what does that look like? And so we were like, well, if I don’t want to work, then we’re going to have to replace my income. And so we started thinking about how can Mozzie replace his income without necessarily having to work more, because at the time, we were living in a place where it’s super busy, it was a big city and he was doing 24 hour shifts and he would be gone for two to three days straight.
And we had a new baby, we had a newborn. He did that one time and I was like, oh no, I’m going to lose all my marbles if you do that again. So we got to figure something else out. And so we started thinking about, it’s called locums, which is very similar to travel nursing. And so you go to high paying locations and you’re able to make significantly more without necessarily having to work more. And so we decided to move about three hours from where we were living at the time. We’re very far from our friends, our family. I would say that was the biggest sacrifice when it came to our debt payoff journey. And it was so that Mazy would be able to quickly increase his income without necessarily having to be gone more and still give us a really healthy work-life balance now that we had a baby.
But I think it was definitely having a baby. I mean, having a baby just makes you think about everything differently. And so that was for sure kind of the catalyst with being like, okay, let’s figure out how to increase your income. And then in terms of when we decided to get aggressive, it was really, Mazy was just so tired of the loans, which I’ll let you talk more about why you decided to, because we met with a financial coach, shout out to Shung. She’s from Save My Sense. And we met with her and she combed through all of our finances and she had put us on a plan to pay them off at the end of this year, and we paid it off at the beginning of this year. So we were pretty early in her plan that she made for us. But I guess I’ll let you share why you decided to get aggressive.
Mazi:
So you kind of start obsessing over it when you’re paying these, at least I did. I would log in and look at the balance three or four times a day. It was becoming obsessive to the point where you knew down to the scent how much you had, you knew down to the scent how much interest secured from the last time you logged in and you knew, Hey, when I get paid, I’m going to put this much on it. And it became a little bit of an addiction, honestly. You wanted to see the number gone and you really gain some steam when you saw that principal balance going down because most people, when they pay the loans off, they do maybe once a month payment interest takes a big chunk and then the rest goes to principal. But when you see that principal number going down in big chunks, mentally it feels your fire or you try to at least make it seem like it does, it makes you want to do it again and again and again.
And it almost becomes like a game like, oh wow, I see it went from 60 to now 50 and that just makes you sleep a little better at night and less interest is being a cured and you just get the steam and you just go after it. So I had to obsess over it for a good two years, and I really started the last year just like nothing else mattered other than getting that balance to zero. I really wanted to be done before beginning of this year, but we had another baby and we slowed down a little
Mindy:
Bit. I hear babies are expensive, huh?
Mazi:
Yeah, they’re not cheap.
Mindy:
Okay. So I hear the obsession. I understand where you’re coming from, and I had a similar obsession. Don’t think that I’m perfect in every way. Not my whole PHI journey was very much head down, nose to the grindstone, do it, do it, do it. And we didn’t take time to stop and smell the roses. How do you balance the immediate goal of debt payoff with living your life with investing for the future? How did you specifically balance it or did you not? I mean, I didn’t balance it at all. We saved for the future and did nothing fun.
Mazi:
No, we definitely saved for the future. So a little background, I chose a place where they cover my housing, they pay a higher rate, I could work a little bit more hours, and I had a pretty cool schedule where I’m home during the mornings. I just go in the evening so I could help out with breakfast and lunch with the babies. So we had to move far away to find this location that had hit all those boxes. They paid me enough where if I worked, I couldn’t do the student loan journey, however, I could not make a student loan payment. And then that was our payment for fun. So for example, for her 30th birthday, we went to a Caribbean island and hung out, got to take a week off. I just didn’t make a student loan payment that, and that extended it out a little longer. But I did recognize you got to take your smell, the roses moment, especially after two years. And then having the kids too, you had to enjoy and smell the flowers. However, our baseline would have moments of joy, but our baseline was still very low housing, housing debt or cost to live. And when we’re just doing our regular day to day, most of our income went to the loans
Amirra:
Because we kept our expenses so low, so we didn’t pay expenses, pay housing, both of our cars are paid off. I think our biggest, it’s probably groceries and Pilates, honestly, that’s our biggest expense expenses right now. So we definitely budgeted for those. But I think our income was able to support, like you said, those little moments of joy. I was not going to let him just obsess over the loans and then not have any fun for several years. I was like, we can’t do that. So I think I brought a little bit of the balance too to Mazy because I wasn’t quite obsessing over them. I definitely wanted to see them gone too, but I was also like, we have to enjoy life at the same time. I don’t subscribe to just eating off.
Amanda:
What did your saving and investing look like during that debt pay down journey? So did you guys take a pause during that? Were you doing little bits?
Mazi:
I did the bare minimum just to reach whatever the maximum retirement for the 401k was. It wasn’t a ton. We didn’t do any extra investing. We didn’t do any saving really other than just we kept a three month emergency.
Amirra:
We have a eight month emergency fund that we saved a long time ago before we even had our first. So we didn’t prioritize saving money necessarily because we already had an emergency fund. So any extra money really went towards investing. But we did already have, I just want to be clear, we did already have a healthy emergency fund, so that’s why we weren’t needing to necessarily save money. And we did investing for 5 29.
Mazi:
We did five
Amirra:
HSA. Yeah, those
Mazi:
Things, we maxed out the accounts that would make sense, but we didn’t do anything extra like a tax brokerage.
Amanda:
But you do have a tax brokerage.
Mazi:
I do now,
Amanda:
Now that the debt has been paid down. So yeah, what is, because the debt pay down journey is very recent, so now you guys probably feel like you’re just flush with cash, I’m guessing. So what does it look like now? How are you saving and investing now that the debt’s paid off?
Amirra:
And you also did an add that you’re an independent contractor. And so one of the big pieces to the puzzle, we have an amazing tax team who’s really good at tax strategy. They don’t just input numbers and that’s it, but they actually help us save most of the money that he makes, which is massive. When you’re trying to pay off that much, you have to be able to actually save money and not owe so much in taxes. So I think that was a big part that maybe Mozzie didn’t say yet was he’s a contractor. And so saving on taxes allowed us to put big chunks to you.
Mindy:
I want to point out that you are using a tax strategist. I love that so much for you because you are in a higher income bracket. You could just have a lot of money going to the government. And I always want to pay all the taxes that I have to, I never want to pay any taxes that I don’t have to. And there are these, they’re not even loopholes. They are strategies that you don’t know that you don’t know. So if you find yourself in a similar position, have a conversation with a tax strategist, whatever your tax strategist is costing you, they will almost always save you way more than that because they introduce you to these concepts. You’re like, I didn’t know that was a thing. I didn’t know that I could deduct this from my taxes. I didn’t know I could alter my income in this way.
And then all of a sudden all of these doors open up. So clearly I’m making a lot of that up. I am not a tax strategist, but if you find yourself with a lot of income, don’t jump over dollars to save pennies by not going to the tax strategist and having a conversation. I mean, you don’t have to do this all the time. You do this at the beginning of the year and they’re like, Hey, look at all these things you could potentially do, which ones work for your mentality, your goals, your strategies, your income, et cetera. And you can pick and choose from multiple. So yeah, if you don’t have a tax strategist, you need to find one like a CPA or I mean just Google tax strategist in your area. Ask your friends. Ask your rich friends.
Amirra:
Your rich friends. So I mean, that’s where we are now. We do have this influx of cash every month that’s not going to the loans, and we don’t necessarily have all of the deductions that we had before when we were paying off the loans. And so I think for us, we’re trying to be very strategic in our spending so that we don’t owe so much in taxes next year. Yeah, I think that’s a big thing. And also we’re going on a vacation next month.
Amanda:
Oh, there you go. So more vacations too.
Amirra:
Yes, for sure. Yeah, more vacation. Yeah,
Mazi:
This will be the first time that we actually have this much money coming in without necessarily a huge debt payment that we’re attacking. So we’re starting, we’re just in the beginning stages of living it right now.
Amirra:
It’s mostly just going towards retirement I think at this point.
Mazi:
Yes.
Amanda:
Well and hopefully a little living today, like you mentioned. So some vacation. Yeah, a little bit of balance. I was wondering earlier hearing mozzie if you thought you had overcorrected in life at all, and it sounds like maybe there were some blips there, but you guys are bringing really good balance to each other’s lives I think when it comes to all the money stuff. Even if the conversation on date one started a little in your face kind of situation, but it sounds like you guys brought really good balance. So then my question would be to you Amira, what role did your partnership with Mozzie play in your own success and what advice would you give to couples who might be avoiding some difficult money conversations?
Amirra:
That is such a good question. So I will say he was truly the catalyst for me getting my act together when it came to money. I stopped being so afraid to have those conversations and I did a complete flip. And now I do financial coaching for other OTs and other healthcare professionals because I’m so passionate about just increasing financial literacy and not making the same mistakes. That’s why I’m super, super open with my mistakes on my financial journey because I think that if I would’ve had someone like me in my life, maybe I wouldn’t have done some of those things to land in so much debt. And so I think that I really credit him with pulling me out of my little turtle shell and being like, okay, we can talk about money in a really healthy way. I think a lot of times you think of talking about money in a marriage is just fighting about money, but it can be really, really healthy to have those conversations.
And so we didn’t mention this, we eloped. So we got engaged and then we eloped, I don’t know, three weeks later, it was less than a month later, we decided we went to Sedona and we eloped under a rock and it was the best decision ever. But we knew going into marriage that because it was so quickly that it happened, we were like, Hey, money is one of the top things that people fight about and we don’t want to fight about money. And so we had just really, really open conversations. And so I think it’s helped overall to our communication because when you’re so open talking about one of the most uncomfortable topics, money, it makes communication in a marriage, I think so much easier. I can go to him with really anything and not feel that discomfort because we have tackled one of the most uncomfortable subjects in a marriage.
And so I think it has helped just our overall communication as husband and wife. And then I think my biggest piece of advice to couples would really just be to have those conversations. It is uncomfortable, but it’s also really uncomfortable to be fighting about money. And so you rather have those discussions and being able to just align with your financial goals and the dreams that you have for yourself to support the lifestyle that you’re envisioning for your family. So it’s almost like rip the bandaid and I think I get this mentality from him for sure with rip the bandaid off with things and yeah, just know the first few conversations. It might be a little uncomfy, but eventually you’ll get on the same page and also seek out outside support if you need it. Like I said, I was doing financial coaching and I still hired a financial coach because I wanted a different lens, a different perspective on our situation, and she really helped us to ask the right questions to each other like, Hey, Amira is okay with prolonging the student loans for a little bit more, maybe investing more. Like how do you feel about that, Ian? So she kind of helped guide that conversation too. So if you need to have an outside person come in, there are so many people within the financial coaching space and personal finance that specialize in talking to married couples and helping you to have those conversations, but they have to be had, they’re so important. And I think it makes, I know I’m not even, I think I know that it makes for a very, very healthy partnership.
Mindy:
You have now paid off all of your student loan debt. What does your current debt picture look like? Housing or anything else that you’ve got? Is it just the mortgage?
Mazi:
So the house I owned back in Houston where I turned into a rental, so that’s still the only debt we have. And that’s it. That’s it.
Mindy:
Wow. Okay, great. So from 500,005 years ago to a mortgage where I’m assuming the rent covers the mortgage,
Mazi:
The rent covers the mortgage. I think it was back in the day when $300,000 could get you a house. It’s a townhouse in the medical center in Houston, and I think there’s maybe like two 20, but the interest rate’s like 2.9%, something unheard of. And yeah, the renters have been renting consistently since I started school and have never left. So it’s been great.
Mindy:
Okay. So where is your money going specifically now, and let’s look at balances. What is your net worth and where is all that in your portfolio?
Mazi:
So the market has taken a turn in the last couple months. That’s why I was like, do you want to talk about this? Are you sure? So before we had some things implemented nationwide. We were seeing at a net worth of closer to around 700,000.
Mindy:
Wow, that’s awesome.
Mazi:
Yeah, so honestly, back when, like you said, when I was a young pup and one told me to put 10% of when I was working as an ICU nurse into I’ll never see it, I’ll never worry about it. I did exactly that. And when I started graduate school, I think it was like 200 or 300 just sitting in a 401k. And of course it grows over time. I’ve added more to it since I’ve started working. It just grew with the s and p. I didn’t do anything fancy, just put it in the s and p and just let it ride. So it’s grown up to about that. And I had a tax broker’s account I started dumping money into, and I still just invest in the s and p. So all that together collectively with the house was around 700, give or take, the downswing we’ve had.
Mindy:
And what is your timeline for retirement? Are you on the early retirement path or are you just amassing savings for the future?
Mazi:
Right, so that’s what the coach was that we got wanted to, my fire number was 10 million
Amirra:
Is you haven’t changed. It
Mazi:
Is 10 million and I wanted to obtain fire by the age of 52 is what we marched out. So we have to start aggressively pretty much the loan, the money that I was putting towards my student loans now be going towards investing in retirement.
Mindy:
You’re hoping to spend $33,000 a month in retirement?
Mazi:
Yes.
Mindy:
Okay. And what do you spend this money on? And I’m just asking, I know that nurse atheists, which is such a hard word to spend, it’s a hard word to say.
Mazi:
It’s a tongue tie. It’s a tongue tie. You can just say CRA.
Mindy:
Yeah, my uncle is one of those. So I’m familiar with the term, I just can’t say it, but where is 33,000 a month going, which is your, if $10 million is your fire number and you get to that, you can absolutely, per the 4% rule spend, the 33,000. I know that people listening are used to that number being a little smaller.
Mazi:
Well, I’m assuming with inflation, 10 million today is not going to be 10 million tomorrow. So I would imagine 33,000 a month would feel more closer to like 25,000. And based off what we’re spending now a month, we’re around about 20, 25,000 give or take. Given what we make and how much we spend on months housing probably won’t be a factor. Hopefully not a factor come that time. But we also are active. We like to travel, we like to do things. So I just to base it off of what I’m doing now. Now of course if we fall a little short, that number, it’s not the end of the world. It’s still a healthy amount, but I was kind of just shooting for the moon on that one and trying to replicate our current living situation.
Amirra:
A lot of it honestly goes towards travel. So if we think of it like a travel sinking fund that we contribute to each month and then we take maybe two trips, but we take big trips, like a pretty significant travel trip. So I would say a big chunk of that spending is going towards saving for travel because we also do things where we bring in our family and we don’t want to have to burden them with paying for a bunch of stuff, and so we’ll get just a massive Airbnb or something like that. So we do a lot of traveling, but we love to bring our family with us.
Mindy:
Okay. Can I be your family is my first question, but also how much are you spending right now? Do you track your spending at all? Do you know how much you’re spending right now?
Amirra:
Yes, so it’s a little complicated because we have the personal side and the business side. So personal side hovers around eight to nine K per month, and that’s everything from, honestly, we spend a lot on wellness. I’m not going to lie. We spend a lot on I self-care wellness and by we, I mean kind of mean me. Mozzie also is really into gym memberships and training and things like that. And so that’s a big chunk of it. Also, groceries, where we live, it’s really expensive for groceries and we’re the type of people we love steak, we love lamb, and that’s an area that we’ve tried to cut back in so many times, but Ozzie’s like I don’t want to go to the grocery store and not be able to get my steak if I want to have steak. And so we could be probably a little bit more cognizant, but just given his income, it’s something that we’re comfortable splurging on groceries to be able to get whatever snacks or food that we want to get and not have to worry too much about it. So I would say wellness, groceries.
Amanda:
Well, and it’s also you have two kids, so it’s like
Amirra:
I was going to say, and the kids. Oh yeah, those the kids. Yeah.
Mazi:
Wheel guys. Yeah.
Amirra:
Yeah. We do a lot of activities with the kids. We have our toddler and a mountain biking program right now here, so swim lessons, all these, it’s like the little things kind of add up. So on the personal side, yeah, I would say about eight to nine KA month. And then on the business side, what would you say?
Mazi:
It’s mainly just taxes.
Amirra:
It’s mainly, but you have to pay taxes every month,
Mazi:
So
Amirra:
That’s a big chunk.
Mazi:
Taxes eat a lot
Amirra:
And paying yourself.
Mazi:
I pay myself, which isn’t a ton, but taxes, paying myself, that’s about it. It used to be the student loans, but now
Mindy:
That’s
Mazi:
Gone.
Mindy:
Okay, so when you stop working, then your taxes go away. I’m assuming that your business income covers all of your business expenses, so I would even push that to the side. I did quick math. I rounded up for you to $10,000 a month, which is a PHI number of $3 million per the 4% rule, which is a very different number than 10 million. That’s going to be a lot longer timeline to amass, and I’m just wondering if there’s any way you can shorten that a little bit. I have reached financial independence. My husband and I did it seven years ago, eight years ago, maybe nine years ago. But then, oh, well one more year, we’ll just work one more year. I’m not sure if the numbers work. And then the market continued to go up and number our net worth continued to go up. He finally quit his job when we had two x our fine number, which was based on our spending at the time.
That spending has gone up a little bit because our fine number has actually increased quite a bit more just because we had such a great market. I have seen the last couple of months, just like you have Ozzy, I have not been a fan of the down market that keeps going down and goes, I am combating this by just not looking at it because I’m not pulling out of the market right now. So it’s an on paper loss, but I just don’t want to look at that paper. That loss is real hard to watch. So I just threw out some numbers at you where what you’re spending now is more of a $3 million PHI number.
Amirra:
It doesn’t take into account. I think the travel,
Mindy:
Have you listened to our episodes 606 where we featured the points guy talking about how he’s opening up credit cards to get these travel rewards so that he can then spend it that way. He gave us lots of tips on different cards to open up in different ways to travel without spending all the money that you’re traveling.
Amirra:
That was my goal last year was to get into travel hacking. I had a whole plan, then I found out I was pregnant again, and I was like, that plan has gone out the window and I just haven’t picked it back up. And so Mozzie has told me so many times, he’s like, you really have to out this whole travel hacking thing. I have friends who do it and are very successful. I think we played around with it. We went to Hawaii maybe a year ago in December, and I think we used our Amex cart to travel hack and get a room upgrade and free breakfast, some little things like that. But I have not gone all in just because I am overwhelmed by it. But I will definitely check out that episode. I think it’s good. I need to get back into my goal of figuring out travel hacking.
Mindy:
Yeah, 100% right there with you. I am super, super busy and I have done the most bare minimum travel hacking that I have ever been able to do.
Speaker 5:
Alright,
Mazi:
Question, Mindy. When you and your partner were planning for your fire, were you planning 20 years in advance in accounting for inflation or were you planning what I’m spending now? Like you said, we’re spending 10,000 a month now, but 20 years from now, how much is $10,000 worth?
Mindy:
So we didn’t do that kind of math. We read the Bill Benen article, the original 4% rule article that he published in 1996 or 1998, and we’re like, oh, okay, this makes sense because he lays it all. It’s a really long article, very in depth. If you don’t have a copy of it, I’m happy to send it to you. It’s kind of hard to find because it was only in print back in the 19 hundreds when they didn’t have the internet. But it’s a great article where, you know what? This makes sense based on a 30 year timeframe, when you are spending this much, you can have this much money and it’ll last you for 30 years. So we’re like, that’ll totally work. We’re totally going to do that. We didn’t think about inflation, we didn’t think about lifestyle creep. Our original 4% rule, you’re going to laugh at this, was based on spending $40,000 a year. Oh, we spend $40,000 a year at that time. We don’t anymore. We spend, you’re going to be camping. It sounds like you retired.
Mazi:
Well, it’s a tent only.
Mindy:
No mattress pad at the time. My house costs me $176,000. You can’t get that here anymore.
Mazi:
The way we’re going now, I mean even a vehicle these days is anywhere from 60 to $70,000. Now our average house is roughly around $500,000 now, and that’s right now, 20 years from now, I can only imagine what the average cost is for lifestyle, which is why, although 3 million would be sufficient for us now, 3 million in 20 years might be a little less.
Amanda:
We have to take one final ad break and we’ll be back with more from Amira and Mozzie,
Mindy:
Welcome back to the show. I just want to propose thinking about the number because you don’t want to continue working for 20 more years, then retire, then discover. Oh, inflation wasn’t as bad as I thought it was going to be. I really did only need three or 5 million. I worked too long and I didn’t incorporate all of this stuff into my life. Now, if you are more of a Ramit sat fan and you are continuing to enjoy your rich life while saving for retirement, that’s really different. But I’m going back to Mozzie who was obsessed with his money and nose to the grindstone and focusing and checking it four times a day. I hope you’re not checking it four times a day. Now,
Mazi:
I only log in once a week just to make sure it still says zero. Okay,
Mindy:
Once a week is great. But yeah, I want to make sure that you have a realistic number or you are continuing to think about it. Oh, now we’re at 3 million, I still feel like I need a little bit more. Or now I’m at 5 million. You know what? Aren’t increasing our spending so much. Maybe it is a good time to rethink what I’m doing. Or you know what? You hit 3 million and you’re like, I really like my job. I’m going to keep working one day a week or one week a month, or however you can do it. Once you have a lot of experience and there’s still a shortage of healthcare workers, once you have this experience, you can kind of dictate your own schedule or more so than fresh out of college person. So more I just want to plant a seed like, hey, maybe 10 million doesn’t have to be the number. Revisit it once a year or once a quarter, not four
Amanda:
Times a day.
Amirra:
That’s good.
Amanda:
I think that’s good. We were on an episode together, Mindy, where you said that that was one of your, I don’t know if financial regret is the term that you used, but I wish we had checked in on it more because we worked far longer than we needed to, and it was just unnecessary and we missed out on some more leisure time, if you will. So I think that’s good advice. That being said, to kind of piggyback off of that, so obviously the road to 10 million is probably a little ways away here. So what are you going to do to stay on track for that goal? And have you considered potentially reducing that number and then maybe just working on the business, not working full-time. Have you explored or thought about any other avenues or is it going to be kind of like head down, let’s get to 10 million. What is that going to look like?
Mazi:
Well, I don’t think it’ll be nearly as aggressive as it was when we were paying off the student loans. That was much more head down. Nothing else matters other than this. I think on the road to 10 million, it’s definitely more of the journey. And like I said, 10 million was more of a, it’s a soft number that we threw out there. Just I think spending roughly around 40,000 a month is like, we’re good. We’re comfortable. No matter what the circumstances have, we should be a okay how we’re going to get there. That’s what our financial coach Shung laid out for us. It’s still a heavy investing amount in a tax account, pretty much throwing it into the s and p expecting closer to seven to 8% returns. And what it looked like is roughly about 15 to $20,000 a month that we would be investing. And that should roughly get us there by the age of 52.
Amanda:
And so not knowing how old you are now, so how many years away is that?
Mazi:
34 now.
Amanda:
Okay. 34 now. Because I’m already thinking the kids will grow up at some point those expenses will go away.
Amirra:
We also are thinking about our parents as they get older and being in a position to comfortably take care of them, which is a conversation we don’t love to have, but it’s a conversation we have to have. And so I think too, Ozzy had kind of built in a little bit of a buffer to be able, whatever that ends up looking like for our parents. But knowing that although we have siblings, it likely will be us as the ones who are making those plans for our parents. So I think adding that into why that number. Maybe he wanted to go larger,
Amanda:
So this is the whole family retirement fund.
Amirra:
He didn’t really mention that, but it’s not just us. It wouldn’t just be for taking care of us. It’s our kids, our parents. Yeah,
Mindy:
That makes more sense. Yeah, I appreciate the context in that. And that makes that number more understandable. More reasonable because it isn’t just you guys. So that’s cultural thing. I’m not planning to support my parents in their age, but they also have taken care of it themselves.
Amirra:
No, we’re first generation investors, I feel like. I think
Mazi:
Just financial mindset.
Amirra:
Yeah,
Mazi:
Both our parents. Retirement wasn’t a thing that they really thought about. Finances wasn’t a really thing that they planned for. All the above it. It was more of just work, get paid, pay your bills, repeat. Not a, oh, I’m going to be 65. What am I going to live off of? None of that. Luckily, my mom house is paid off. Other than that, she doesn’t have much of a retirement.
Amirra:
We just want to be able to comfortably
Mazi:
Social security is it, take care of it. Social security will be there. And that’s the extent of their retirement planning.
Mindy:
That is a lot more understandable with this $10 million number, 20 years, it sounds like you’re definitely adding stuff back into your life now that you’re not paying down the debt anymore. You’re adding in the enjoyment and the fun and the travel everywhere. So yeah. I’ve got just a little bit of homework for you, Amira, to go and listen to episode 6 0 6. So you can start learning about travel hacking without having to do all the work a lot. I have done none of the work. I opened up two credit cards. That’s my travel hacking. It’s your travel hacking. Perfect.
Amanda:
Learn more from Mindy on travel hacking to,
Mazi:
I’m curious, what is the average number of people are putting for their fire, or what is a more reasonable number that people kind of shoot towards?
Mindy:
$1 million was the number for the longest time. And then people are like, I would really rather have a more robust retirement. So I hear 3 million, I hear and 3 million. You’re spending $10,000 a month, $120,000 a year. I hear 5 million kind of on the outside. I’ve heard people say 10 and 20 million counting only for themselves. And the way they say it a lot of time just sounds like I just threw a number out there. Sure, I’d love to have $10 million. If anybody wants to write a check, that’s J-E-N-S-E-N. Send me $10 million. I’m totally cool with that. I’ll even pay all the taxes. I also see people working far longer than they had to because they had this number in mind that either didn’t come from doing all of the math or they were like, well, I want to have this big lavish lifestyle in the future.
Well, you could have a lavish lifestyle now. Oh no, I don’t spend money now. And I know from personal experience, if you don’t spend money now, you’re not going to spend money later. I spend a little bit more than I used to, but I don’t spend a lot because of the way I was brought up. We didn’t have any money. My parents are children of the depression. My dad’s one of seven, my mom’s one of eight. There was never enough money for anybody, so they never spent money. And they took that to heart and they’re like, well, now that we have money, we can’t spend it. And I am following along in their footsteps. So it’s difficult. It doesn’t sound, and I don’t mean this in a bad way, but it doesn’t sound like you are having a hard time spending the money. So you will be able to enjoy now and in the future.
Amirra:
That makes sense. And there’s all kinds of fires now. There’s lean, fire, fat barista fires, like a new one. I heard there’s, I’ve not heard of Barista Fire. Bara Fire. There’s all these different ones that you can,
Mindy:
Yeah, there’s all different flavors. You can choose your own adventure. It’s awesome. I just want to make sure that you are working long enough, not too long. Because one more year syndrome is absolutely a incurable syndrome here in the fire community.
Mazi:
Yeah, I mean, we’re definitely get a sense of how much is enough, even when it just comes to income and hours of working. We’re kind of hitting that road, that crossroad of like, all right, we’re not in debt anymore, so we don’t have to stay making or doing
Speaker 5:
What
Mazi:
You’re doing to claw out of debt. But I also have this sick syndrome of wanting to make more than that. Well, yeah, I’m not in debt, but I’m also now at zero. Essentially. I finally clawed out of the pit and now I want to see what it’s like, oh, maybe making this sort of money and getting to do more beneficial things or enjoying it a little bit more.
Amirra:
Whereas I’m like, we can take a pay cut, move back closer to family, settle down, stop this whole travel thing. So think that’s definitely where we are now, is just determining what direction we want to go and do we want to stay at this income and being able to aggressively invest in all these different things, or can we slow down a little bit and make different lifestyle
Mazi:
Changes? That’s currently the crossroad we’re at right now.
Mindy:
Okay. Well, I think let’s say it’ll come in time as you’re now paying attention more to where the income is going, how much extra savings you have. Once you have hit your number and stopped retiring, you’re also not going to be saving anymore. So that’s income that you don’t need to account for. So I just think there’s a lot of moving parts and you’re conscious of it, and that’s the best of all of this, is that you’re thinking about it. Okay. Amira and Mozzie, this was such a fun conversation. I’m so thankful for your time. Where can people find you online?
Amirra:
Yes. So Ozzie’s not online, so if you want to find something, it’ll be with me. So I have a podcast called The Money Matters in Occupational Therapy Podcasts. And so that’s a really fun place where I bring on guests and we have all the conversations about money and finance that we should have had in school, but we never did. And so that’s a really fun podcast to listen to if you want to check that out. And then on Instagram, I’m at Marvelous Miracles with two Rs dot ot. I’m sure everything will be in the show notes, but that’s where I share more about just finances and life as a stay at home mom, being an occupational therapist, all that. And then we have a really exciting new project coming up that we can’t share too much about, but just know it’s a platform that we’re building to help connect healthcare professionals with the financial support and literacy and resources that they need. So we’re super excited about that, where we’ve just hired all the business consultants, branding coaches, we’re going through the trademark process, all that fun stuff. But it’s really going to be centered around being able to just have specifically healthcare professionals have that support that we don’t really get in school. And so be on the lookout for that. And I’m sure I’ll mention it in my podcast and on my Instagram page as well.
Mindy:
I was just going to say, can I go to Marvelous Miracles with two Rs and find out information about that when it’s been announced?
Amirra:
Yes. Yes. Yeah. Yeah. And we’re planning to be at FinCon this year to be able to chat more about that. So
Mindy:
I’ll meet you in real life. Oh my gosh. Yay. Okay, wonderful. Well, Amira and Mozy, thank you so much for your time today. I really appreciate it. And we will talk to you soon.
Amirra:
Thank you so much for having us, Mindy and Amanda.
Mindy:
Alright, that was, and Mozy, and I loved their story, Amanda. I loved how he wasn’t afraid to ask in an open not accusatory way about her student loan debt on their first date. I mean, that’s quite the bold move there, but it clearly worked out because it set the tone for their entire relationship. We are going to be conscious about our money. The answer that she gave also set the tone, oh, well here it is. Not being defensive, not being offended that he asked. It was just a get to know you question and she gave him a matter of fact answer. And I think there’s a lot more great money tips from people just when you have this mindset of, I’m going to ask a question openly and I’m going to answer the question honestly, as opposed to getting all up in your feelings about it. What did you think of the show, Amanda?
Amanda:
I totally agree. It was a bold move to ask that question on date one for sure, but I also felt like it was so refreshing to hear how their relationship had kind of evolved over time, having two completely different spending, saving and investing styles. He was kind of like nose to the ground right from day one. Whereas she’s more like, oh, this is Monopoly money. Let’s, I’ll worry about this later. But then it seems like they’ve really just kind of became their best selves coming together and balancing each other out. And now that they were able to pay off what, half a million dollars worth of student loan debt build their family travel, I think that they are just a really beautiful picture of what can be when you start those money conversations really, really early because money is the thing that fuels all the other things in
Mindy:
Life. Absolutely start those money conversations early, especially because if you’re listening to this show, money, conversations, money topics, finance in general is important to you. So don’t partner up with somebody that it isn’t important to. Or if you are already partnered up, start having these conversations so you can get on the same page. Alright, Amanda, should we get out of here? Let’s do it. That wraps up this episode of the BiggerPockets Money podcast. She is the Amanda Wolf, she Wolf of Wall Street. I am Mindy Jensen saying, got to go Buffalo.
