Finance Friday: Middle-Class Trap on Steroids ($3.8M but CAN'T Retire!)

Finance Friday: Middle-Class Trap on Steroids ($3.8M but CAN'T Retire!)

There’s a “middle-class trap” that can keep anyone from FIRE—yes, even high-income earners. Today’s guest has a sizable nest egg that should allow her to retire early, but there are a few roadblocks in her way! At forty-seven, Allie has already built a net worth of $3,800,000. She would like to retire, and most people would assume she has enough to retire, but there are two problems. First, she lives in Orange County, California, one of the most expensive areas in the U.S., and has no plans to leave. The other issue? She has no cash! All of her money is tied up in home equity and retirement accounts. To retire, Allie has a BIG bet to make—one that could have a multi-million-dollar impact on her portfolio! Using Scott’s “Keep or Sell Your Home” worksheet, we’ll look at whether it would make more sense for Allie to keep or sell her Laguna Beach property. Will turning this home into a rental property give her the cash flow she needs, or is selling it and investing in the stock market the better long-term play? Tune in as we attempt to thread the needle and provide Allie with the best roadmap for a long, early retirement! In This Episode We Cover What Allie should do to reallocate her $3,800,000 nest egg and achieve financial freedom What to do with money locked up in home equity and retirement accounts Keeping your home as a rental property versus selling it and investing elsewhere Creative ways to improve your cash position so that you can retire early Building wealth with short-term rentals, live-in flips, and other real estate strategies Escaping the “middle-class trap” of earning high income in a high-cost-of-living area And So Much More! Links from the Show Mindy on BiggerPockets Scott on BiggerPockets Listen to All Your Favorite BiggerPockets Podcasts in One Place Join BiggerPockets for FREE Email Mindy: Mindy@biggerpockets.com Email Scott: Scott@biggerpockets.com BiggerPockets Money Facebook Group Support Today’s Show Sponsor, Connect Invest, the Alternative Way to Earn Passive Income Through Real Estate Buy Scott’s Book, “Set for Life” Find an Investor-Friendly Agent in Your Area Finance Friday: How the “Middle-Class Trap” Stops Your Early Retirement (00:00) Intro (01:00) Allie’s Money Journey (03:36) Money Snapshot (13:50) Retiring in Laguna Beach (19:01) Keeping vs. Selling Her Home (26:06) The BIG Bet on Real Estate (34:01) Growing Cash & Renting Her Home (43:41) Real Estate vs. Stocks (52:02) What Should Allie Do? Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-585 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com Learn more about your ad choices. Visit megaphone.fm/adchoices

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Mr. and Mrs. Waffles on Wednesday (WoW) were doing everything wrong. They ran up ridiculous tabs at a local restaurant/bar just ‘hanging out,’ while getting abysmal returns from their financial planne...

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6: Fearlessly Paying off Massive Student Debt on $30,000 per Year with Sarah Wilson

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5: Jump Starting your Early FI Plans by Live-in Flipping with Mindy Jensen

5: Jump Starting your Early FI Plans by Live-in Flipping with Mindy Jensen

Mindy was born in a small town, and then she moved and moved and moved. In fact, moving doesn’t phase her at all, which plays right into the core component of her investment strategy -- The Live-In-Fl...

29 Jan 201853min

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Rosemarie Groner was a State Trooper - a good, recession-proof job. Chronic disorganization led to more than $30,000 in consumer debt when she made the decision to quit her job to stay home with her f...

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As a mom of (then) two, Erin Chase found herself shopping for groceries without a plan, picking up things that sounded good, but no idea what she’d do with them once she got them home. They made their...

15 Jan 201854min

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