YFP 104: Jason Long’s FIRE Journey

Jason Long’s FIRE Journey

Jason Long joins Tim Ulbrich to share how he retired from his retail pharmacy job at the age of 38. Jason dives into what the FIRE methodology is and how he and his wife saved for retirement.

About Today’s Guest

Jason Long is a husband, former retail pharmacist, early retiree at age 38, self-made millionaire, distance runner, author of three books, and advocate of rational thought. He holds a Bachelor of Science cum laude in Chemistry from Middle Tennessee State University and a Doctorate in Pharmacy cum laude from Mercer University. Since retirement, he has volunteered as a tour guide at a natural history museum, a teacher for a non-profit ESL program, a marathon pacer at numerous charity events, and a voter registration assistant. He is the current state half-marathon champion and former state full-marathon champion. His interests include Japanese culture, classic cinema, classic music, astrophysics, running, cycling, swimming, traveling, reading, painting, and playing video games.

Summary

Jason Long retired from his retail pharmacy job at age 38. He was able to retire at such a young age by seeking out FIRE (financial independence, retire early). Jason shares that FIRE is a lifestyle choice that’s starting to spread to more people. This methodology is less interested in wealth accumulation and is more focused on leading a meaningful existence, in Jason’s opinion. Jason was able to save up enough money to where the revenue from his investments will provide enough income to live on, meaning he no longer has to work for money.

Jason shares the FIRE is based on the Trinity study which focused on sustainable withdrawal rates for retirement spending. If you have a million dollars, you can withdraw 3-4% a year, giving you an income of $30,000 to $40,000 a year. Jason says that you have a 95% chance to still have money left if you’re withdrawing this amount for 30 years. He and his wife have closer to a 3% withdrawal rate and he’s not worried about them running out of money.

In June 2017, Jason retired at age 38 after saving just over $1 million. He says that it’s still surreal that he’s been retired for two years as it hasn’t fully sunk in yet. Jason decided to pursue the FIRE route in 2005. He was in his last year of pharmacy school and had come to the realization that pharmacy wasn’t what he wanted to do in life. He became curious to know where he’d be in the future if he lived at the same standard of living as his parents did but earned a pharmacist’s salary. He used a spreadsheet to start calculating scenarios and found that if he was earning $105,000 but only spent $35,000 a year, around the age 39 or 40 a return on investment from his portfolio would exceed the cost of living. He didn’t realize that this was a methodology that others were using. In 2015 he found others who were also following this FIRE path.

To reach $1 million, which was in savings only and doesn’t include social security or home equity), Jason and his wife really stuck to only spending $30,000-35,000 a year. His starting salary as a pharmacist was $110,000. The first step they took was to buy a house, but not a mansion. Then, all their money after maxing out 401ks and IRAs, went into Vanguard accounts. They steered clear of getting caught up in big buckets that drive up expenses, like expensive homes and cars. Jason reminds listeners that houses depreciate in value and land appreciates and feels like viewing home ownership as an investment is a myth.

Jason explains that you have to shift your focus and remember that earning $30,000 a year gives you a better standard of living than 99% of people who have ever lived on this planet and to not compare yourself to others. He also shares that it’s necessary to invest beyond a 401k or IRA if you’re wanting to retire before age 59 ½ as there are federal limits to those accounts. Lastly, he shares that happiness doesn’t come from having material things, instead it comes from being financially secure, from having your life in order and being content with what you have.

Mentioned on the Show

• Refinance Student Loans
• NY Times: How to Retire in Your 30s With $1 Million in the Bank
• The Trinity Study
• Jason Long’s Blog: after the finish line
• Mr. Money Moustache: The Shockingly Simple Math Behind Early Retirement
• Walden by Henry David Thoreau
• Reddit: Financial Independence Thread

Episode Transcript

Tim Ulbrich: Hey, what’s up, everybody? Welcome to this week of the Your Financial Pharmacist podcast. Excited for this episode. I’ve been wanting to talk about the FIRE movement for some time, FIRE standing for Financial Independence Retire Early, and I’m glad to have the opportunity today to do that alongside of Jason Long, a pharmacist that retired at the age of 38. So Jason, welcome to the podcast.

Jason Long: Ah, thank you for having me.

Tim Ulbrich: Excited to be here, and I have to start by telling our listeners, which I think is just an indicator of what FIRE is all about, when we were trying to schedule this interview, you know, I think I first started out by proposing several dates and times, and your response was something along the lines of, “Hey, I’m retired. I can do this whenever.” So here we are, and obviously, flexibility of time and freedom of time is one of the positive aspects of Financial Independence Retire Early, and we’ll talk about that. And when I heard about your story, it was published in the New York Times, and we will reference that and link to that in our show notes, and that story from the Times mentioning your retirement at the age of 38, leaving a job making roughly $150,000 a year, I thought, we have to have him on the show. And I think that there’s many pharmacists that will not only be interested in your story but may have similar aspirations and want to know why you did it and how you did it and certainly what could be the path for them to move into that in the future. So before we jump into the specifics of your story and how you achieved early retirement, let’s talk about what exactly is FIRE. I think many people may not be familiar with that concept. So Jason, give us a summary of what is Financial Independence Retire Early. What is this movement all about? And what defines someone achieving FIRE status?

Jason Long: Well, I don’t know it’s so much of a movement as it is just a lifestyle choice that’s starting to grow. I think people, my generation, younger, are becoming a little less interested in wealth accumulation and just living a meaningful existence. And the whole thing with being financially independent, retire early is that you have saved up enough money to where the revenue from your investments will provide enough income for you to live on. That can be a small amount or that can be a large amount. It’s just up to the individual. But yeah, it’s basically just not ever having to work for money. That doesn’t mean you can’t work or that you don’t have something going on on the side, but in my instance, I don’t really have anything going on. I’m just living off the income from the investments.

Tim Ulbrich: So we’ll come back later and talk about your withdrawal and how you’re functionally doing this, but just to build off of what you said, is there kind of a specific rule of thumb in terms of, you know, x amount is needed to be able to draw this much so that you can live off the savings? Knowing that that could be different from one person to another. But what typically is that definition in terms of what is needed to get to that point of achieving FIRE?

Jason Long: Sure. There’s some debate around that. But the generally agreed upon amount is based on something called the Trinity Study. It was done a few years ago to see what percentage you could withdraw on a year-to-year basis. And the way that works is — we’ll just use some round numbers for example. If you have $1 million, you can withdraw something like 3-4% per year, that would be $30,000-40,000. The Trinity Study said that if you withdrew 4% per year and adjusted upward for inflation, and you didn’t adjust that $40,000 amount based on market performance, that you would have a 95% chance over 30 years to still have money left. Turns out the original researchers have amended that to actually be 4.5% because expense ratios have dropped. The cost of managing your money has actually decreased over the years. A lot of people will do it themselves or they’ll use fiduciaries. But for a longer timespan, a lot of people are looking at 4%, maybe 3.5%. In our instance, we’re actually a little closer to 3%. So there’s no historical precedent for a 3% withdrawal rate.

Tim Ulbrich: So just again, for our listeners to get a step back, the idea being here that you’re building up some type of nest egg, for lack of a better word, you know, it could be $1 million, it could be $1.5, $2 million. And then some percentage, you know 3-4%, which obviously what we’re getting to is that what you’re going to be living on and what you need in that nest egg is largely driven off of your expenses and that percentage and of course trying to maintain that amount so you’re not having to dip into that over time. So let’s get into for you specifically, June 2017, the day you retired at the age of 38. You noted on your blog it was the day before you’re 20th anniversary from high school graduation. And at the time, you had savings of just over $1 million. So talk us through what you were feeling at this point in time. I mean, obviously you made the decision that you were going to retire. Were you anxious? Were you excited? All of the above? Talk us through that situation.

Jason Long: Well, honestly, it was a little anticlimactic. You reach a certain amount that you want to get to, and that’s a great day. But it’s not like you’ve reached the finish line, you know? There’s a few things you have to brush up on. And I don’t know, I guess it was kind of surreal to realize that, you know, I had just called and put in my work notice. And two weeks from then, I would work my final shift and then never have to go back to it. There was a sense of relief, I guess, that I’m not — you know, it’s been almost two years, and I don’t think it’s fully sunken in yet. But anxiety, no. Like I said, there’s no historical precedent for a 3% withdrawal rate to fail. Now, that doesn’t mean there’s not going to be unforeseen expenses or that there couldn’t be some future event that might bring catastrophe. I mean, there’s always a chance of an astroid strike or nuclear war or what have you. I mean, but all we have to go on is historical precedent. And we have even a slight buffer above that, I think maybe 3.2%. If you were to have retired in 1968, I think is the worst year you could have picked due to a flat market and large inflation. But you know, even now, we’ve moved up to $1.2, so it’s so far out of the realm of danger that I don’t ever give it any thought.

Tim Ulbrich: Right. Which I’m glad you brought that up, Jason, because I think often, people hear FIRE, and they think risk and without really digging into the math and what do the numbers say, and I appreciate your comments around kind of the historical perspective and 3%. And I would argue, as I think you would agree with me, I mean, people who are $200,000 in debt that have no savings, that are spending all of their income working for whomever, that that job could change tomorrow, go away, whatever. Obviously, there’s a risk position in that that has to be considered as well.
Jason Long: Another risk that a lot of people overlook is that you risk wasting your life working 30-40 years in a job that you really despise. I mean, so is the alternative of going broke early really that bad?

Tim Ulbrich: Well, and I’ll talk about this at the end, but I’m grateful to be in a position that I love what I do each and every day, and I know many pharmacists do. Some do not. And so I think if for somebody for whatever reason does not and there’s not another opportunity that’s available or for whatever reason the transition can’t happen or maybe somebody has found themselves in a career path that wasn’t necessarily a great fit, then I think the FIRE option and really digging into the math, as we’ll talk about here in a little bit, is certainly a viable option. But if nothing else, as I think about the Financial Independence, Retire Early, I’m passionate about independence period, whether or not there’s the retire early component of it. As I’ve talk about before on this show, having options and having flexibility is always a good thing. You never know what’s going to be thrown at you in terms of life events, and you never know what may change over the course of time, either related to your interests or the profession or other variables. And so when did you, Jason, when did you determine that you were going to pursue this route? And talk us through not only when that moment was or roughly that moment was — because obviously, there had to be a timeline of planning to go to a place to accomplish what you did — but also what motivated some of that decision to pursue early retirement.

Jason Long: I think it was 2005, I was in my last year of pharmacy school. And I had kind of come to the realization that it wasn’t exactly what I wanted to do in life. And you know, how I got to that point there is a different story altogether, but I was putting some spreadsheets around, and I was just kind of curious — I was like, if I lived at the same standard of living that my parents had, but I made the amount of money that a pharmacist does, where would I be at financially at age 40, 50, 60, 65? Just running the numbers just to see. And I think I had assumed — I don’t know what pharmacists were making. I think maybe $105,000-110,000 a year. And you know, we grew up working class. Just my dad worked, and my mom took care of the kids, but made about $35,000-40,000 a year. And then I assumed maybe like 3% interest, which was pretty safe at the time, just based on a CD or whatnot. And I plugged those numbers into the spreadsheet, and I noticed a strange thing kind of happened around age 40. I was 26, so somewhere around age 39-40, I noticed that the Return on Investment from the portfolio exceeded the actual cost of living at that point.

Tim Ulbrich: Yes.

Jason Long: So I was like, this is strange. You could foresee, you could feasibly have the amount of money to live off of by not working. And being naive like I was at the time, I just kind of thought, well, hey, I’ve discovered something here. And I went all the way to probably 2015 never having encountered another person who had discovered this. And then I kind of did a Google search one day. I was like, well, yeah, that was kind of stupid of me. There were plenty of people. And you described it as a FIRE movement. So yeah, that was the day back in ‘05, I said, you know, I don’t think I really want to be a pharmacist. I was like, but you know, I’m three-quarters of the way across the street. I’m going to go ahead and cross it and put in 12 years, 13 years, 14 years, and try to make the best of it that I can. And then when that day comes, I can kind of transition over to something else if I want to do something else or if I just want to sit around and play video games and watch movies, I can do that too.

Tim Ulbrich: So I’m going to read something from your blog before we jump in and talk about the saving strategy and how you actually did it and how much you were saving because I think it resonated to me a little bit about your journey and put some life to kind of your passion and motivation. From the blog is, “It’s been said that retirement is merely a decision to stop trading time for money. Since I no longer need more of the latter to sustain my standard of living and since I do not enjoy, never have enjoyed, the primary method at my disposal to acquire the latter, I have decided that the former is of more value to me going in life.” So you mentioned, Jason, kind of your last year of pharmacy school, 2005, and then obviously you had a 12-year time period roughly to that point where you actually retired. And so we look at that point of retirement at the age of 38, you’ve got a little over $1 million, so that’s a fairly short runway to get to a net worth of $1 million or more. And to clarify for our listeners, we’re only talking here in terms of savings. So we’re not talking about home or other assets, and we’ll come back to that in the future. So we’re purely talking about savings that had been accrued over time. So how did you practically do it? For those that are listening, thinking, hey, maybe this is a path that I’m interested in in some shape or form, you know, what percentage of your income were you saving? And where did you put it? And how did you get to that point?

Jason Long: Sure. Like I said, I think I started out at about $110,000 a year and was spending $30,000 a year, not including the house payment I believe. It may have been $25,000 plus the house payment.

Tim Ulbrich: OK.

Jason Long: But my first step was to, of course, buy a house. And I say house, I don’t say mansion or McMansion, or something on a cul-de-sac near a golf course, you know. If you want those things, that’s great. But you really have to step back and ask yourself, is it going to make you happier? Is it worth trading perhaps 10 years of your life to have a nicer place, maybe even just to impress people that you don’t like? But you know, our answer was a 1,600-square foot house in a neighborhood in Ohio. And I think that house was $120,000 or $125,000. We paid that off in about two years, maybe. And after that, all the money went into — well, of course, at the time, we were doing the 401k, IRA, contributions. I think after that, it pretty much transitioned — well, after a few years, we had moved back to Tennessee and had gotten more land and we built another house here. But after all the house and real estate was paid off, which was maybe around 2010, all the money went into a Vanguard account. And there are a different number of companies you can use. I like Vanguard because they’re nonprofit, and they have low expense ratios. But yeah, you just basically open up an account and decide what you want to invest in. There’s, again, a lot of healthy debate about your asset allocation. But the main things that I look for are index funds. And that is basically just a — you can think of a mutual fund as being a collection of stocks. But an index fund is a collection of basically all stocks on an index, like an S&P or the Dow or the Nasdaq or whatever. Vanguard offers one called the ETSAX, or basically all U.S. stocks. So instead of trying to pick and choose or knowing or pretending that you know things about a company that you don’t, you can invest in the market as a whole. And there’s very little management that goes into that. Therefore, there’s very little expense that Vanguard charges you to manage that fund. I think it’s at least maybe .04% per year. But you open that up, and anything in excess of what you can contribute to your 401k and your IRA, we would put into that.

Tim Ulbrich: I love the approach of low expense. And you mentioned the advantage of those coming down historically. I mean, I personally have funds, .03%, .04%, .05%, .06%. And so you, I think from the blog I saw, you rep basically three major funds, roughly 60% in U.S. stock index fund, 20% in an international index fund, and 20% in a municipal bond index fund. So keeping it simple, keeping the expenses down. So am I correct, then, as I look back and hear you say making over $100,000 a year, obviously started at $110,000, that went up, your expenses roughly $30,000 a year. So you were saving north of 70% of income? Or were there other expenses not accounted for?

Jason Long: No, it was about 70% per year. I think it’s probably important — some people are going to be listening to this and pulling their hair out over $30,000 a year. That’s not probably feasible out on the Coast. If you’re in New York, LA, Silicon Valley, whatever, you’re listening to, you’re paying $30,000 a year probably in just rent. But the cost of living out in rural Tennessee is a lot lower. So yeah, I think I ended up — we started out maybe about $30,000. It may have moved up to about $36,000.

Tim Ulbrich: OK.

Jason Long: One of the things you have to watch out for is something called lifestyle inflation. You know, that’s where you’re starting to make more money, and then you start to get more tempted about buying things that maybe you want and don’t really need. So you’ve just got to make your choices there.

Tim Ulbrich: Yeah, and I know you’re very well, obviously, versed in this. And our community is as well, but I talk a lot about cost of living, as you mentioned, West Coast, Northeast, other cities, other areas, obviously even within Ohio, cost of living varies significantly from one part to the next. But pharmacists’ salaries don’t adjust accordingly, in terms of at least accounting or offsetting that. I mean, maybe slightly. You know, for example, let’s say an average pharmacist’s salary in Ohio, let’s say is $110,000-115,000, maybe that’s $120,000 to $125,000 to $130,000 out in California, but that percentage bump is nowhere near obviously the cost of living difference from rural Ohio, rural Tennessee to the West Coast. And as we think about retirement and what you need and coming up with that calculation, determining that number, that expense number is really what’s driving that. So if you’re making $100,000 a year, and your expenses are $90,000 a year, that runway to retirement and what you need obviously is much, much longer. If you’re making $100,000 a year, and you determine that you can swing it either through strategically cutting expenses, cheaper on home, cheaper on car, strategically choosing where you live, obviously, there’s some sacrifice here in the equation, although we talked about what you’re weighing that against as a potential pro, but that is a much different nest egg that you need. And obviously, your situation of what you’re living off of I think highlights that perfectly. So I do want to highlight, Jason, to just build off of what you said, I mean, buying a relatively small home, affordable home, $120,000-125,000, paying that off quickly, you know, for me — and I’ve seen this in my own life but also in working with many other pharmacists — home and cars tend to be, you know, probably the two big buckets that can drive up expenses. Certainly many other things that go into lifestyle creep, but you know, if a home is 40-50% of your take-home pay, it’s going to be difficult to keep these expenses down. So for those listening that have not yet purchased a home, I think strategically looking at the home buying, especially if this concept is a priority, and keeping the cars down, really focusing on money going into assets and things that are growing and not depreciating value is really important.

Jason Long: Yeah. You know, a lot of people don’t realize, houses depreciate in value.

Tim Ulbrich: I agree.

Jason Long: There has been a lot of research on this. Land appreciates, houses depreciate. There’s been a myth that home owning is an investment. And it’s just not. At best, you can probably hope to break even.

Tim Ulbrich: Break even, yep.

Jason Long: And you know, that’s fine. You know, I’m not judging how other people live. But to get philosophical about it, people need to ask themselves, like I said, are they going to be happier having a large house? You know, George Carlin, comedian, once said — and I’ll clean this up a bit for the podcast.

Tim Ulbrich: Appreciate it. We don’t have the explicit rating, so I appreciate that.

Jason Long: He said, “People buy stuff they don’t need with money they don’t have to impress people they don’t like.” And when you realize that happiness doesn’t come from having things, happiness comes from outside. It’s from being financially secure, it’s from having your life in order, it’s from being content with what you have. When you realize that, and you realize that you’re probably not going to be that much happier in a $.5 million home versus a $100,000 home, you know, that opens up all sorts of possibilities for you. The house and the car, you know, if you’re the kind of person who wants people to look at you and think highly of you and envy you because you’re driving the $50,000 Lexus, that’s fine. I’m not going to judge how that person lives, but I guarantee that the person driving that car is not any happier for having that car than someone who’s driving a dependable $10,000 car.

Tim Ulbrich: Absolutely. Great stuff there. I think a lot for our listeners to take away and reflect on there as they think about their future plan and what matters most. And I would reference to our listeners, and we’ll link in the show notes, you know, Jason, I mentioned earlier, often — before we recorded — I mentioned often when I ask a group, “Hey, have you heard of FIRE?” typically, I don’t get a whole lot of hands raised. But when I say, “Hey, have you heard of Mr. Money Mustache?” people are like, “Yes, I have!” So I’m going to link to an article back from 2012, I know it’s a very popular article but really highlights the importance of looking at the math on this, and that article’s called the shockingly simple math behind early retirement. And you know, essentially what Jason’s highlighting with his own journey, what that article highlights is that saving a significant percentage of your income and keeping your expenses down really changes the projected timeline to retire. And so, for example, saving 50% of your income towards retirement can move that timeline of retirement from 50 years down to less than 20 years. So again, for you, when you talk about your journey and putting numbers into a spreadsheet, whether it’s looking at an article like this, I think it’s a matter of doing the math, looking at the expenses, and asking yourself some more of those philosophical questions that you had talked about.

Jason Long: Yeah, let me say one other thing. People who question whether or not they want to live on a $30,000, $40,000, $50,000 a year or whatever, it’s good to remember that $30,000 a year is higher, gives you a better standard of living than 99% of people who have ever lived on Earth. And if you find that I don’t think I could live that cheap, then that statistic should probably tell you, it might be a good idea to reevaluate your position in life.

Tim Ulbrich: Yeah, Jason, I’m so glad you said that. One of the point of comparisons I often use because I think it’s helpful for pharmacists to shift the point of reference away from peers because it’s not a helpful comparison.

Jason Long: Comparison is the thief of joy.

Tim Ulbrich: Yes, yes. And often, I’ll talk with resident that, you know, residents’ salaries have actually come up, some in the mid-$40,000’s, low $50,000’s. And I hear things like, I can’t save anything, I can’t make any headway in my student loans. And I get it, cost of living is different, no judgment in terms of that. But if you shift the point of comparison to what you just mentioned or the median household income for a family of four in this country is in the low- to mid-$50,000’s. I think shifting that point of comparison can help put some of that into perspective. So one of the things I want to talk about, Jason, and you mentioned in your story, I read in your blog, is that you’re purely looking at the numbers based off of the investments that you’ve grown north of $1 million. And you’re obviously trying to draw that down — or not draw that down, I’m sorry — live off a percentage of the growth so that you’re not drawing from and letting that fall below $1 million. But you are not including any of your assets in terms of house or land or other assets, or you’re not banking on social security or inheritances, equity in the home, other types of things, correct? You’re purely just looking at the savings component?

Jason Long: Yeah, I would say equity on the home would be an absolute last resort, you know, absolute worst-case scenario, not even historical precedent but an unprecedented territory would you have to rely on house equity or social security or inheritance or anything like that. I fully expect those things to be there, but I’m just not going to rely on them.

Tim Ulbrich: OK. So in terms of the withdrawal plan, currently, you mentioned the numbers you’re working off of. So what does that practically look like month-by-month if you look at the percentage that you’re drawing from, trying to keep the portfolio above $1 million?

Jason Long: Yeah, so basically, just assume $1 million and assume $30,000 a year of living expenses. Quick, back-of-the-envelope math, that’s 3% a year. A lot of people may say, “Well, hold on. The average return on investment in the market historically, adjusted for inflation, is 7%.” And some people may say 10%. Dave Ramsey’s one of them who greatly overestimates what the market returns. But the reason you can’t withdraw 7% a year is something called sequence risk. And that is when is the bad year going to come?

Tim Ulbrich: Right.

Jason Long: And these scenarios, these simulations, you can play out basically shows that if you get the bad years up front, it’s going to have a lot more impact than having the bad years toward the back.

Tim Ulbrich: Right.

Jason Long: So you have to put that extra buffer in. You can’t just assume that you’re going to get the steady 7% a year. You will run out of money if you do it that way. So yeah, we basically just withdraw out whatever we need to every month. In our case, we’re on about 3.5% withdrawal, minus whatever the side income might be coming in from a variety of different sources. But yeah, it’s just log on every month and see where you’re at and withdraw what you need to pay off the credit card and rebalance and go from there.

Tim Ulbrich: So Jason, I’m sure many pharmacists are thinking, hey, I’ve got an employer match in a 401k or should I be taking advantage of those types of retirement accounts that have tax advantages, 401k’s, 403b’s, Roth IRAs, and you mentioned earlier that you did a little bit of that. But obviously, you’re depending on assets that you can draw before the age of 59.5 without a penalty. So any words of wisdom or advice for people that are thinking about trying to achieve retirement status prior to the age of 59.5 where they would need funds? And how they might think about balancing where they’re putting their money?

Jason Long: Yeah, if you’re wanting to retire before traditional age, before 59.5, it’s going to be necessary to invest beyond 401k and IRA. There are federal limits to what you can contribute to those. So you’re going to have to invest in taxable accounts. And you put that into some investment firm like, like I mentioned, Vanguard. You put all your money into that after you’ve contributed to the 401k, IRA. And like you had said, you have to be mindful of the fact that it’s not easy to get your money before 59.5. There is a clause called 72T. Basically, if you convert your IRA over to an annuity and take a certain amount of withdrawals per year based on your expected living, you’re allowed to withdraw it without penalty. I don’t know exactly how it works. I don’t plan on having to dip into that. We have enough in our already taxed accounts to go until maybe 60, 61, 62. But yeah, you have to be mindful that there is a 10% withdrawal penalty on the 401k. And that’s on top of any taxes you’d have to pay because it does count as regular income. I’m probably not the best person to ask about all that. I’m, of course, not a financial advisor. You just have to be mindful that you’re going to have to pay penalties if you withdraw the wrong way. And that’s going to increase your cost of living.

Tim Ulbrich: Yeah, and I think the takeaway there for our listeners is to be thinking about those logistics in advance and where you’re putting your money and some of the tax implications and things if this is a desire that they have to retire before traditional age. So Jason, one of the counterarguments to the FIRE movement is, you know, you’ve got 50+ years of living and satisfaction from work and social connections from work and fulfillment and won’t you get bored? You know, that type of a thing. Which I know is a very individualized situation and really depends on current fulfillment from work and hobbies and other types of things. So talk us through a little bit of that and what you’re currently doing with your time and hobbies and interests and things that you’re working on and exploring.

Jason Long: So basically, I guess it would be fair to say I do what I want. I have a ton of hobbies. I do volunteer work. I have picked up a lot more of the housework and errands and things like that since I’ve left. I’ve been able to spend more time with family. As far as like hobbies, you know, like anyone else, I read and watch movies, play video games. I build things. I exercise, I run, I cycle, swim, go to the gym, cook, kayak. I picked up some new things: golf, started collecting baseball cards again, which is something I haven’t done since I was a child. I volunteered. I’ve been a tour guide at Natural History Museum. I have taught English as a second language to adults here for a nonprofit. I volunteered in voter registration. I’ve done litter pickup. It’s just a lot of things to keep you busy. And if for some reason, you eventually run out of things, you can always go back to work, you know? There’s nothing saying you have to stay this way. But yeah, I’m pretty much on my own schedule. And I do what I want when I wake up.

Tim Ulbrich: So I think you probably answered this question for me in the list of things that you’ve been doing and even new things that you’ve picked up, but I have to ask the question, do you have any regrets looking back?

Jason Long: Zero.

Tim Ulbrich: OK. Awesome. So one of the questions I have is I’m guessing we have many of our listeners that are hearing your story and thinking maybe for the first time or second time, this might be a path they want to pursue or at least be on a path toward financial independence, whether or not they decide to retire early. However, many of our listeners, what we know is the average student loan debt, $160,000 a year, we have some salary compression that’s going on, 32 hours often is sort of the new 40. So for a graduate today coming out with $150,000-160,000 of debt, let’s say they’re making $100,000 a year, is FIRE an option for them? I mean, is that a path they can pursue? And if so, what advice would you have for somebody listening today that is looking at their debt load and looking at things and saying, I’m not even sure this is an option.

Jason Long: It’s always an option. It’s just depending on the circumstances, it may take you a little bit longer to get there than it did, say, 10-15 years ago. As far as the steps, you know, it’s going to vary on an individual basis. It’s going to be dependent upon what your student loan interest is. It’s going to depend on what your mortgage interest is. We — personally, I took the safe route, and I paid off the house first. The house mortgage was only 5% a year. Well, I could have put that money in the market instead and make, on average, 7% a year. So maybe that wasn’t the smartest choice, but it was probably the safest choice. If a person has student loans at, say, let’s say they have some at 7% and they have some at 4% and then they have a house at 6%, it makes sense to go ahead and pay off the 7% student loans first and then the 6% house and then the 4% student loans. Or you could maybe go the route of well, I’m just going to not worry about that. And I’m going to invest in the market first. And you know, maybe that works out for you. And maybe it doesn’t. The safest route is to just pay off your highest interest rate loans first. And work your way down from there.

Tim Ulbrich: Yeah, and if I could build on what you said there, you know, since your number is pretty much on target, many of the students coming out today with their pharmacy loans, unsubsidized, 6-7%, but there are options out there that I think somebody could look into as a strategy to allow them to invest aggressively. So we’ve talked before on the podcast about loan forgiveness, which certainly comes with risks that need to be evaluated, although appropriately evaluating the risk and the benefit, but obviously being a strategy that could allow for freeing up additional moneys to invest and invest more aggressively at a younger age, looking at competitive refinancing rates that can lower your interest rate and incentivize investing. So really looking at the options that are available out there if this is a path that somebody wants to pursue. So Jason, let me end here by asking for your recommendation for something that helped you on your journey, learning more about FIRE and kind of strategies around pursuing this, whether that be a book, a blog, a podcast. Is there a resource you would recommend that was helpful for you?

Jason Long: I have a pretty unconventional one. It’s “Walden” by Henry David Thoreau. I’m sure a lot of people have read it in high school or whatever. But it’s basically just the accounts of one man going to live off in nature for a couple years and realizing, hey, I don’t need money to do this. I’m happy. And then he would have visitors come over and be like, well, why are you eating this? Why don’t you eat nicer things? And he’s like, well, you’re only eating nicer things to compensate for the stress that you’re experiencing in your daily life. I kind of like to think of that as maybe the original Financial Independence book. It’s probably not, but it is pretty influential on my mind mindset as far as not wanting things I don’t need, just being content with what you have. Because like I said, I didn’t even realize this was a movement, a so-called movement or a thing until about 2015. There’s a lot of good stuff out there. There’s — some of the people that got me started — or not got me started but kind of helped me along the way there toward the end was on Reddit. There’s a sub-Reddit on there called “Financial Independence” that people can basically share their stories, share their goals, ask questions, and it’s a helpful community. You know, there are maybe a few naysayers on there. You have to be mindful of the fact not everyone is fortunate enough to have a six-figure job, you know. A lot of people say, well, it’s all hard work and this and that. You know, I couldn’t disagree more. No. You did nothing to be born in this country. You did nothing to be born in this era. You did nothing to be born intelligent. You did nothing to be born with good, helpful parents. You know, it takes a lot of different things to be in this situation. But when you find yourself in this situation, yes, it does require hard work and discipline to be able to do it. But always be mindful of the fact that if this is a thing that you can even think about doing, there are a lot of factors that went into that that’s beyond your control. You got lucky. The rest of it, the hard work, that’s up to you. So don’t go preaching to other people about how you can do it. If you go on these forums, be mindful that there are people on there who may not have had the same opportunities as you did. So be careful about what you say because there are real people online, and they can be hurt by, you know, what you say on there.

Tim Ulbrich: Yeah, and I think, Jason, it’s a great reminder that there is not one right financial path or plan. And I think what I really appreciate you helping me and our listeners think about is some more of those philosophical questions about why are we doing what we’re doing? And really evaluating, self-reflecting on that and then for some listening, this may be the path. For others, maybe a version of this, maybe something different. But you know, I think for each of us to focus on our own and certainly find resources and support. But in no way do we have to judge the path that others are taking. So Jason, I appreciate the time that you’ve given here. I appreciate you sharing your story with our listeners. And I wish you the best going forward.

Jason Long: I enjoyed it. Thank you.

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