Are You Headed for FIRE or the Middle-Class Trap? (Finance Friday)

If there’s an issue that keeps aspiring early retirees up at night, it’s the dreaded middle-class trap. At just 28 years old, this financially savvy couple is already looking for ways to avoid this issue. Whether you’re just starting your FIRE journey or approaching early retirement, we’ll show you how to do the same in today’s episode!

Welcome back to the BiggerPockets Money podcast! So far, Leah and Zach Landis are doing everything right. They earn high incomes, they spend very little, and they invest the difference. Well on their way to retiring early, they plan to quit their jobs by age 45 or sooner! But will their current asset allocation get in the way of their big goal? What kind of bridge will they need to tide them over until traditional retirement age? Will having children impact their financial freedom?

Fortunately, Leah and Zach have all kinds of options. Tune in as Scott and Mindy dive into the couple’s budget and discuss their best path forward. Along the way, we’ll debate whether they should pause their 401(k) contributions, double down on brokerage accounts, and deploy their cash savings on their “dream” home!

In This Episode We Cover

Breaking down Leah and Zach’s best path to FIRE by 45 (or sooner!)

The middle-class trap explained and how to avoid (or escape) it

The BEST ways to invest your cash and make it work harder for you

How much you should expect to pay in taxes once you reach retirement

When to stop growing your 401(k) plan (and where to invest instead)

And So Much More!

Links from the Show

Mindy on BiggerPockets

Scott on BiggerPockets

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(00:00) Intro

(01:05) Leah & Zach’s Money Journey

(08:20) Money Snapshot

(12:27) Buying the “Dream” Home

(18:33) Best Ways to Invest Cash

(26:51) Avoiding the Middle-Class Trap

(36:28) Maxing Out the 401(k) & HSA

(47:06) Don’t Get Trapped!

Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-613

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