I Retired Early in My 40s WITHOUT Withdrawing from My Portfolio! | Life After FIRE

Chris:
From a FI aspect. I mean really it was just a matter of keeping in the back of my mind the 4% rule, and if I could meet that 4% rule with just my investment accounts alone, then I felt safe. Okay, I can leave work, I can just live off of what my real estate’s bringing in. I have other side hustles too, just because no rest for the wicked man. I just love doing things. So hi there. I’m Mindy Jensen.

Carl:
And I’m Carl Jensen,

Mindy:
And this is the Mindy

Carl:
And Carl

Mindy:
On Life After Fi show where we talk about what happens after you reach financial independence.

Carl:
Why do we call this show Life After Phi?

Mindy:
Because we are talking about and talking to people who are living their best life after reaching financial independence. And today we’re speaking with Chris Luger from Heavy Metal Money. Chris, thank you so much for joining us today.

Chris:
Oh, thank you for having me.

Mindy:
I’m really excited to talk to you. I’ve met you a ton of times. I’ve heard a bit about your story at Camp Phi when you spoke. Was it last year or the year before?

Chris:
Yeah, it was last year at Camp Phi, Rocky Mountain

Mindy:
Campfire, Rocky Mountain. Let’s get back into your money story. Just very briefly, I’d like to know how you reached financial independence. So what was your job? What was your savings rate? Let’s talk all the nerd money things.

Chris:
Yeah, just really quickly. So I discovered all of this back in 2015 when I got divorced. So when I got divorced, my wife at the time handled all the money discussions, all the money things. I didn’t really even log into the accounts. I had no idea where the money was going or whatever, and I was working as an enterprise systems engineer for a software company At that time, it was a locally based software company here in Minneapolis. And basically discovering this personal finance community and the financial independence community, I quickly learned that hey, wow, when you’re intentional with your money, you can retire in 10 years. And that was just a super crazy concept for me. I had no idea people could do that. And so then because of that, I started educating myself, reading tons of books, listening to tons of podcasts, and that led me to, like you mentioned, I worked my way up to paying off all my debt. I was able to save and invest nearly 70% of my income for about seven years or so, and that really accelerated my path to financial independence. And around that same time, I also got involved in real estate and so I started investing in real estate as well, and I bought my first property in 2017, and then I worked my way up to, I had 10 rental properties and that’s when I decided to hang it up and leave Corporate America.

Carl:
First of all, metal money does not refer to the actual heavy metals. Those are cadmium, mercury. That would be bad. Those are toxic. And I assume you didn’t discover financial independence from Metallica or Megadeath, which is what heavy metal, heavy metal money is really a reference to. I’m curious, what was your entry 0.2 financial independence? How did you discover this?

Chris:
So heavy metal money is, I took my two passions and kind of smashed them together when I started learning and discovering back in 20 15, 20 16. And I started googling literally how to budget and I first discovered Mr. Money mustache. I discovered Dave Ramsey and I followed Dave Ramsey really closely the first year or so, really just paying off all my debt and focusing on paying off my truck, paying off my house, that type of thing. So that’s really how I discovered it was just really starting to Google how to budget, how to manage money for the very first time. And then it was reading some of those other books like Rich Dad, poor Dad, and then the ABCs of Real Estate Investing, and I started to realize, wow, money can be used a different way.

Carl:
I’ve got one more follow-up. You mentioned David Ramsey and Mr. Money Mustache. Those two have a little bit different viewpoint and I remember Mr. Money Mustache even wrote a post about Dave Ramsey and it wasn’t unkind, but it wasn’t kind either. Where do you land between those two?

Chris:
That’s a great question. I definitely, I’m a student of everyone. I want to learn different points of view, different takes in all sorts of different areas and kind of formulate my own, I guess my own plan, my own strategy. And so that’s kind of what I do. I think Dave Ramsey’s great for those people that are just starting out on their money journey. It definitely helped me, but then I quickly realized, I’m like, well, I’m going to use credit cards. I’m going to leverage these points going to, so there’s definitely some things that I don’t really agree on, but I also agree on living super frugally. I like some of the things that Mr. Money Mustache talks about as well. So yeah, I just make up my own rules based on everything that I learn and it changes, it evolves along the way, so we’re human, we can do that. We can change our mind.

Carl:
Yeah, I think that’s a super great answer because both of those guys are right. Dave Ramsey has lots of good information and so does Mr. Money mustache. It just depends what your temperament is and some of the beliefs towards money. For example, we do not believe in paying off cheap debt. We have a mortgage that we could pay off, but we do not. And yeah, that’s all I have to say about that.

Mindy:
Chris, you said that you had 10 rentals at one point. How many do you still currently own?

Chris:
Yeah, right now I’m down to five. I have five residential properties, and that’s because I’m involved in a much larger commercial project, so I needed to basically sell some of those properties to leverage the cash for this larger project. So I’m migrating away from residential properties to this larger new construction commercial project. I’m learning along the way. We’ve been talking about it since 2023 and there’s been lots of delays, changes, scope creep, but it’s fun. I’m learning along the way. It’s super awesome. I’m excited. We break ground here June 1st, and yeah, I got the loan out for underwriting this week and it’s going to be a fun project for sure.

Mindy:
Is this a solo project or do you have partners with you investing in this?

Chris:
Yep, so a friend of mine we’re partnered 50 50 in the project, so it was just too big for me to bite off on my own. I tried, I attempted, but I would need such a large cash position after talking to a few different lenders. And so I tried to leverage the equity I had in my existing portfolio and a lot of the lenders, commercial lenders are like, well, because it’s a non-owner occupied project, I’m not going to be in the facility. There’s just a lot of, I guess, limitations on what they’ll use as far as my equity. So they wanted a larger cash position. So I went to my friend that he actually brought me the deal, he originally owned the land, this is going to go on, and he’s like, Hey, do you want to do this? And I was like, sure, if you kind of help me coach me along the way. I’ve never done it before and after me trying to do it on my own, I just went back to my friend that said, Hey, will you partner on this with me 50 50? And he was like, sure. So luckily it’s cool. I feel in a really good position. He’s done this before and he’s really been like a mentor for me as well.

Mindy:
Oh, that’s awesome. Okay. Do you have a partnership agreement in place?

Chris:
We do. Oh,

Mindy:
Thank you. They say never ask a question that you don’t already know the answer to. That’s in court, and this isn’t actually court, but I was like, oh, I guess we could edit it out if you’re like, no,

Chris:
No, we absolutely do. Yep,

Mindy:
That makes my heart sing because everybody’s all friendly at the beginning because you’re going to make so much money and everything’s going to go perfectly and at the end, a lot of times friendships are challenged or even kind of broken because you had different definitions or expectations than they did and one of you wants to sell and one of you wants to keep it and neither one of you can afford it by the other one out and yada, yada yada. So I’m just very happy to hear that you have a partnership agreement in place. Let’s go back to your residential real estate, the five units that you have, how much income does that generate in terms of your monthly or annual spending?

Chris:
I basically bring in from my existing rental properties about 6,000 a month. That’s the disbursement for my management company. So I have a full service management company that manages all my properties, self-manage when I had up to three. And I will tell you, it’s just a lot of work and once you get management in place you really can scale and it’s a lot easier to scale and grow your rental portfolio. But yeah, so right now, I mean now my expenses are relatively low. The notes that I have on my existing properties, one is paid off in full and then the other ones, I do have notes on them, but again, they’re all at 4% rate. And so yeah, the rents I get, that’s what I’m using to live on. That was my plan when I left work when I retired, I was going to use the income from my real estate to pay my bills.

Carl:
Okay. Chris, so you became financially independent. Was that based on your rental house portfolio or was that based on your investment portfolio or both?

Chris:
I would say both because I looked at two different things. I looked at what I had in my retirement accounts and my brokerage accounts, but I also looked at my overall net worth and so definitely real estate helped me accelerate that net worth for sure. But I will say from a PHI aspect, I mean really it was just a matter of keeping in the back of my mind the 4% rule, and if I could meet that 4% rule with just my investment accounts alone, then I felt safe in that I can leave work and I can just live off of what my real estate’s bringing in. I have other side hustles too just because no rest for the wicked man. I just love doing things, but yeah, so I think, did that answer your question? I kind of forgot

Carl:
It. Did I find people like you? Pretty interesting because in my experience, Biddy and I’ve been in this community for 12 years now and most people side on the side of real estate or investment, and I call people like you polys. It’s a hybrid model, Carl, it’s a hybrid model. I use both. No judgment here. However you want to live your life, Chris, that’s not to be, so you bet. Should real quick one follow up. You mentioned the 4% rule return for your investments. Do you follow a rule for real estate? Some people want to get the 1%, do you do that or is that out the window?

Chris:
That’s out the window? I mean the 1%, there’s no way I could ever do that here where all my properties are here in Minneapolis and yeah, you can’t do it.

Carl:
Just curious, do you care to tell us what your net worth is when you retired versus what it is now? And I’d also be curious to know how determined your spending, how did you know what amount you needed to retire with?

Chris:
When I started kind of thinking about what life’s going to be like after I retire, I basically made my own spreadsheet. That was my cost of living in retirement and I had a couple different columns and I had one that was bare bones minimum expenses. This is just insurance, taxes, food, gas, just no frills man. Just like this is the minimum I need to live. Then I had another column that was like, okay, well I’m going to go out to eat sometimes I’m going to go to some concerts. I’m going to buy that collectible, iron maiden vinyl or whatever, and so I’m going to do that. And so I started really tracking that for a while and I got super down, I mean really nerdy. I had a bunch of nested rows in there digging into every single utility and what I had spent every month over years and kind of building averages and that type of thing.
And so I determined that. I’m like, man, I have very little expenses. I have no mortgage. I’m a single guy. My utilities are relatively low. And so man, I could live literally off of $2,500 a month. It’s super cheap, kind of a guideline. It is like ballpark, let’s see where I hit. But I knew I wasn’t going to be drawing down on those accounts. I wasn’t going to be drawing down on those accounts until 65 or something. So I didn’t really even, I used it as kind of a target to hit, but then once I made the decision I’m like, you know what? I’m not going to use those accounts for another 15 years, so I’ll just worry about my rental income right now.

Mindy:
For people who are listening who are like, there’s no way you could live off of $2,500 a month. Yes, you really can and you can live a nice life. You’re just not living. What does Paula Pan say? You can afford anything. You can’t afford everything. You’re not doing everything, but you’re making decisions based on I spend approximately 2,500 a month and now you’re making 6,000 from your rentals. So if you have that iron made maiden vinyl come out and you’re like, I need to spend more this month, you’ve got it covered because you’re generating so much more income than you actually need. I did a quick math. 2,500 a month is $750,000 in investible net worth per the 4% rule. When you retired, what was your exact dish? Net worth number?

Chris:
Net worth number was like 2.2.

Mindy:
Okay. Stock market, I’m sorry?

Chris:
Yep. Stock market. I was at 1.3.

Mindy:
Okay, so a little bit over but not grotesquely over, oh, well I guess you’re almost at 1.5, which is two x. Okay. What year did you retire

Chris:
Last year? 2024.

Mindy:
That’s interesting. I don’t know if you’ve been paying attention lately, but the stock market’s a little squidgy.

Chris:
It is, yeah. And I think that’s the thing is, and I know a lot of people are, I went out to lunch with my uncle the other day and he was like, oh my gosh, I wish I would’ve sold this. And he’s kind of in a panic, but I think that’s one thing that you can hedge if you have real, I have income producing assets so I can weather the volatility of the market because I have real estate. And even if the real estate market, if there’s a little bit of a dip or values go down or whatever the case is, I’m still getting rent. People need a place to live. I mean, again, whether that’s the way I think people need a place to live. I have these properties and I provide these quality properties where I’m getting and pretty comparable rents for the area. So I know that I still have these income producing assets, even if the market starts to be volatile and has these drops and like I mentioned before, knowing that I’m not drawing on that right now. I have the runway, I have the time for that to come back and eventually hopefully make again additional gains.

Mindy:
Do you have anything in a bond portfolio? What does your portfolio look like?

Chris:
It’s still like a 60 40 right now.

Mindy:
60 40 bonds or 60 40 stocks. Real estate

Chris:
60. 60 stocks

Mindy:
At 40. What’s 40

Chris:
Bonds? Yep.

Mindy:
Oh, bonds. Okay. So you did retire per the 4% rule with the 60 40 bonds portfolio. Now that’s your equity or your, what is the right word for that? That’s not your real estate, you just added up a hundred percent. So that’s just a hundred percent of your,

Chris:
My portfolio is 60 40,

Mindy:
But what about your real estate? What percentage of your net worth is real estate?

Chris:
Almost half. Like a little over half probably.

Mindy:
Okay.

Chris:
Yeah, of that entire 2.5 or whatever. I mean before a few days ago it was up to 2.7, which was like, wow.

Carl:
Yeah, we live in interesting times. I saw the, we actually don’t have any bonds, but I saw the 10 year bonds spiked like crazy I think last night around midnight or something like that. Chris, is that you selling bonds? I know yields are inverse and all that. So Chris, did you double your bonds around midnight two days ago?

Chris:
No, I did not.

Carl:
Okay. It must’ve been the Chinese then.

Chris:
In all seriousness, these last few days, I’ve just really been kind of like eyes closed, ears closed, not really paying attention. I don’t want to get wrapped up. I would get emotionally, it really starts to take a toll on you. I mean, during Covid for instance, the news, it can hurt you, man. It causes stress, it causes, I mean, I was feeling really bad. I mean, I had to go to therapy. I, I thought the world was ending. All my friends were going to die. I didn’t know what was going on. I mean, I saw a video on TV of refrigerated semi-truck with stacks of dead bodies and you know what I mean? I was like, what’s happening? And it was really scary. And so I got to start to limit what I take in. And so now I’m trying not to pay attention to the news. I don’t want to see the doom and gloom that’s out there.

Carl:
The news is bs. That is a valuable life lesson right there. What’s the biggest difference between what you thought retirement was going to be and what it’s really like?

Chris:
Carl? That is a great question. I guess I knew I wasn’t going to just flick a switch and things were going to be okay. I actually did go through some challenges after what, six months of being retired. There’s really no structure and I have to build my own structure, but I thought I had all these things I wanted to accomplish and I had to run a hundred miles an hour. I thought, okay, I’m going to leave my corporate job on a Friday and Monday I’m going to hit the ground running and I’m going to make all this progress. I had a lot of things I wanted to accomplish. There’s a lot of things I want to do. I want to keep building my blog and my brand and I want to help educate people with financial literacy on savings, spending, investing and different ways to earn money and things like that.
I’m going to continue to do that, but I also started a nonprofit a few years ago and I want to make a bigger impact with that nonprofit. There’s a lot of things I wanted to do and it was challenging. I wasn’t making the progress I thought I was going to be making. It was starting to be scary. And actually I started, I actually was in Milwaukee. I was at a music festival in Milwaukee and I had a panic attack and I didn’t know what was happening and I had to get a plane, I had to fly home early and I was like, what’s going on? What’s happening to me? And it was one of those things, and I’ll say a good, really good friend of mine in the PHI community, Kevin Esta one of my really good friends that I’ve met probably three, four years ago.
But him and I have gotten really close, really cool dude. And I remember I called him and I was just like, man, I dunno what’s going on. And I love this analogy. He said, when you retire, when you leave work, it’s going to take some time. And he goes, think of retirement of, think of it like a manual five speed transmission. And I left work thinking that I was just all the way in fifth gear. I was going a hundred miles an hour. It’s like that’s not how it works. You have to ramp up to it. You have to like, okay, you’re going to spend six months for a year in first gear and then you’re going to spend another six months and then you’re going to go up to second gear, third gear, and then eventually after a few years, well yeah, then you can be running in all cylinders, you’re in fifth gear, ready to hum. And so I just love that analogy. And so that’s one of the things where I didn’t expect that to happen and it was scary. But again, this community has been great and connecting with people, other people in the community has been really wonderful for me and I think it’s really helped me get through the last six months for sure.

Carl:
Yeah, it’s a difficult transition. I like the manual transmission and what I would say about myself real quick is I always operated and level six and I had the car redlined and as soon as I stopped working, I just kept on working and kept it at that whole thing. So I would like to learn how to put the car in neutral and coast for a while. The same qualities that make us eligible for early retirement. We’re pretty determined. We work hard. A lot of smart people in this community, those qualities do not serve us in retirement much of the time.

Mindy:
I would also like for you to learn to put the car in neutral.

Carl:
This

Chris:
May get a lot of, I may hear the, it’s going to come out of the woodwork now. I kind of butt heads with a bunch of people in the personal finance community. I have a financial advisor and I pay fees, I pay assets under management, a percentage of my portfolio. But I feel confident, I feel more confident. I feel I talk with him. I’ve been working with him for years. And what I like about it too is that it’s a more holistic conversation. We talk about more than just my portfolio. He analyzes, gives me talks about my real estate, talks about my kids, talks about my estate, talks about taxes, talks about everything. I mean, and he will also, when I was working and I had a 401k with my employer, I could have him help me look at the funds available in my 401k and those are funds that he’s not managing, but he’s helping me based on my goals, based on where I’m trying to get to.
And I think that there’s so much value in that. And so I remember there was, I kind of really got, I don’t want to say bullied, but it was a couple years ago at some of these FY events and jokingly they were like, well, you could be doing this on your own. Why are you paying someone and all this stuff? And jokingly they’re like, I’m going to take away your PHI card because I’m paying someone. But you know what? I like the idea of having the confidence, not having to just rely and focus on it every day. I can have someone that I can talk to and I talk to him all the time. I talk to him every couple of months and he called me the other day talking about what’s going on right now in the market. And so I dunno, that’s the way I feel. And I think there’s nothing wrong with that if you can still hit your goals and it gives you peace of mind. And again, there are DIY investors that are doing it on their own and I think probably you guys are doing it on your own, I don’t know, but I absolutely think you can do that. I just choose not to and I’m okay with it.

Mindy:
So we had an episode with just a couple of weeks ago with my friend Amy, who is also using a financial advisor and assets under management. And the comments were generally positive about that. I think the PHI community ebbs and flows in what’s acceptable. If you do have a problem with Chris using assets under management, financial planners, please email. We don’t [email protected] because it is Chris’s money, not your money. So don’t worry about what he’s doing with it. He’s clearly doing okay. Would you categorize it as okay or would you categorize it as great? I think I would categorize it as great.

Chris:
Oh, well thank you. No, I’m doing okay. I think that, and again, I understand there are, I get it when you hear people, oh, they’re charging you like one point a half percent or something, I get it. When you get a portfolio that’s so large, it can be a pretty big percentage again over time as well. And I feel as though, again, finding the right balance between who you’re working with and lower fee end up paying like 0.079% on my assets. So I feel comfortable with that.

Mindy:
Chris, you mentioned have covid affecting your mental status and having panic attacks. And in the past, how has this very recent market downturn affected your mental status?

Chris:
I don’t want to say I’m stronger now,

Mindy:
But I think, well, I mean that was five years ago. You could be very much stronger now.

Chris:
But I think I am it. It’s one of those things where because I have the confidence that I have these income producing assets where I’m not necessarily dependent on my portfolio at this time, it’s really not affecting me too much. I’m just, I keep doing what I do and I continually dollar cost average. I’m still dumping money in there every month and I’ll continue to do that. It doesn’t really bother me even though, I mean we are in a little different time, but I do feel as though it is cyclical. This will happen. It hopefully will rebound at some point and I’ll still be in a good position then.

Carl:
Yeah, I’m not going to get into politics, but if the current policies work great, well, I’ll be better off. If they don’t work, then someone else will be voted in and we’ll take another path and that’s the end of that. Do you worry at all about running out of money?

Chris:
It doesn’t prevent me. I’ve actually started to kind of spend a little more than what I was spending when I need to buy a brand new guitar.

Carl:
What kind of guitar is

Chris:
That? This is solar. The name of the brand is Solar, but I just love that matte black carbon, black super, super sick.

Carl:
Is it wood or what is the guitar material?

Chris:
Yeah, no is, I can’t remember if this is mahogany the neck, but yeah, it’s fricking awesome.

Carl:
Oh man, cool.

Chris:
I don’t think I worry about running out of money. I like what you say, Carl. I am more afraid of running out of life.

Carl:
Yeah, I like to, one thought exercise I’ve done lately is I’m about 50 now. So I picture myself in my 80-year-old body and consider my life at 50 and think about when I turn 80. If I don’t do X, Y and Z, am I going to regret that? And I don’t know, there’s different things that’ll work for different people, but that works for me and it makes me want to spend a little bit more and live a little bit because I hope I have quality of life at 80, but I’m not counting on it. Hell, I might not be alive at that point. So

Chris:
I remember one time you shared that you did the Vegas sphere experience. Yes. And you were like, this is what it’s for. Spend the money.

Mindy:
What advice do you have for any new early retiree for a smooth transition into retirement?

Chris:
You are onto bigger and better things I expect. So yeah, I really do like the idea and the mantra that people have said that you retire to something then from something. And so that’s definitely, if you have something that you can retire to that you’re creating a life of purpose and meaning. And not to jump on, I love Doc G’s book, the Purpose Code. It’s super great on creating purpose. And that’s something that I really did. I went through that after six months into retirement, the honeymoon phase wore off and now I’m like, let’s actually truly create the best life I want to live. And maybe that’s volunteering, maybe that’s doing those things or maybe it’s like the job that you really want, but you don’t care how much it pays kind of a thing. Just you want to do good in the world or whatever it is. You want to play guitar, learn an instrument, go to art classes, whatever, man, just do it. I think it’s great.

Mindy:
Alright, Chris, this was so much fun, was I really appreciate your time today. Tell our listeners where they can find you.

Chris:
Awesome. Thanks so much for having me. I really appreciate it, both of you. The best place to go is my blog at Heavy Metal Money and you’ll find all my socials there, my YouTube, all that stuff. So heavy Metal Money and I look forward to connecting with people. And you know what, let’s hit a show sometime I travel to hit cool shows in different cities too. Let’s rock out.

Carl:
Oh heck yeah. We have Red Rocks right here, which is, oh

Chris:
Dude, did you see what’s announced at Red Rocks?

Carl:
No.

Chris:
What? Grunge

Carl:
On the Rocks,

Chris:
Dude. Really?

Carl:
Let’s do it.

Chris:
That sounds

Mindy:
Awesome.

Chris:
Grunge on the rocks. It’s, I’m not a grunge fan, but I can’t remember. Look it up. There’s two headliners, but then they’re going to cover Nirvana stuff and I want to say Alison Chains and I can’t remember, it’s grunge on the

Carl:
Rocks. I am looking it up right now. Cool. Come out here, we live 40 minutes away. You can stay in our guest suite, which is pretty nice and let’s do it. Awesome.

Chris:
Thanks so much guys. Have a great one. And

Carl:
Horn’s up.

Chris:
Thank you Chris. We’ll talk to you soon.