FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s

Ho ho ho it’s time for the next installment of the FIRE Community Interview Series!

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financial independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

I am incredibly excited to have Jeremy Schneider from Personal Finance Club on to tackle our interview questions this week.  You mean THAT Jeremy who’s a multi millionaire in his 30s, breaks down investing into super simple emoji filled little stories on Instragram, and has over 100,000 followers?  YES!  Seriously, if you have Instagram and aren’t following Jeremy already, get on it.  If you were to ask me what is the number 1 account on IG that you should be following it’s @personalfinanceclub, hands down.  He is brilliant at breaking down investing into simple terms.  I also joke with him from time to time to see if he gets sick of repeating himself and tweaking things ever so slightly as the investing side really is the easy part – it’s having the money TO invest that’s the hard part.  He is doing wonders for thousands of people out there who are scared of investing or don’t know where to start.  Every parent and high school teacher should be using his simple explanations to help educate our youth.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie cutter way to FI.  If you have any follow up questions or would like to get in touch with Jeremy, please check out his Instagram page, YouTube channel, or website (all mentioned below) or leave a comment on this post. My man, Jeremy, without further ado, take it away!

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

Hey! I’m Jeremy. The short version of my life story is that as I was graduating from college with a computer science degree, I started an internet company called RentLinx. I grew it for 12 years with no outside funding, and was always the lowest paid employee with a maximum salary of $36K/year. Then in 2015, I sold it for $5 million! After taxes and paying my co-owner and employees from the sale I walked away with about $2 million. I wanted to be a good steward of that money, so I started reading every classic book on investing and realized they all say the same thing. (Live below your means, invest early and often, buy and hold index funds.) It’s a message that very few people are getting in their daily lives if they’re not reading investing books in their spare time. It’s also a message that is unquestionably the difference between being broke your whole life, and building wealth and becoming a millionaire. So I started Personal Finance Club (PFC) to try to share that message in a simple, easy, friendly and unbiased way.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

I was in college during the original dot com boom, so I already had visions of selling a tech company dancing in my head. I guess that vision was more “win the lottery” style fantasy at the time. But after the 12 years of hard work and some life experience I had a more realistic vision of wealth. And when I did get the money and started doing the research I learned about the “4% rule”, which basically says you can take 4% of your invested portfolio out every year with very little risk of ever going broke. 4% of $2M is $80,000, which is more than double what I had ever lived on before. After I sold my company I worked for the company that bought us for two years. And during those two years I watched my investments provide more wealth than my actual salary, so I guess I figured I didn’t need a job anymore.

3. To help put things into context, if you are comfortable sharing some numbers, what was your savings rate during your working years, net worth, salary, how many hours a week did you work, etc?  How long have you been working towards financial independence and where are you today?

When I was making $36K/year I was living on about $31K, and trying to max out my Roth IRA along the way. At the age of 34 my net worth was about $110,000. Not FI/RE territory, but I was certainly a future millionaire at that pace, even living on $36K in San Diego. After my windfall I’ve been living on about $60K/year and my net worth is now sitting at about $3.9M. Pretty much every year my net worth goes up, even though I’m not working and spending money. When I was starting my company and working after the sale I had pretty normal work hours. You’re never really “off the clock” when you own a business, but I wasn’t doing crazy allnighters all the time or anything. But I did work hard, and persistently tried to grow the business for 12 years. Now I don’t have a day job, but spend a lot of time working on PFC, flipping houses with my friend, photography, coaching high school beach volleyball, traveling, etc.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

When I was poor I was living with a roommate mostly and I drove a ’99 Ford Explorer. I still actually live in the same one bedroom apartment that was converted from the garage of my friend’s house. (Full disclosure, I did just buy a two bedroom condo and will be moving after I remodel it, and I now drive a 2016 Mazda CX-5). I think a lot of people live with this constant pressure where they believe that more money translates directly into happiness. “I’d be happy if only I could afford this next thing”. A belief where that car, or that trip, or that apartment, or that outfit, or that whatever is what you need to be happy. I think that is way off base. I think the opportunities to convert money to happiness are few and far between. And they’re usually in the form of “Whatever. I’m just gonna pay too much for this airline ticket in order to see my family when I want” or something like that. If I had to rate my happiness driving my new Mazda vs my 99 Ford Explorer, I would say it is exactly the same. It breaks down less often, but I’m definitely not driving around with a big grin and a sense of inner contentment now.

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

I still live pretty frugally relative to my net worth and investment growth (about $60K/year total spending, which is about a 1.5% withdrawal rate). This condo is the only big money I’ve spent. The Mazda is probably my second biggest expense. It is fun to be outrageously generous on occasion. I usually try to pick up the check whenever I eat with friends. (Although, I don’t aggressively insist. It feels more like a social appropriateness dance than a question of who has more money). I say yes to all travel opportunities (pre-Covid at least). For example I spent two months coaching beach volleyball in Italy and five weeks in Australia since I quit my job. I still travel frugally, and since my income doesn’t come from work I can basically travel indefinitely if I want. But at some point you want to come home and live your life. It still doesn’t buy happiness.

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

Yes, yes, yes and constantly. I do all of that with You Need A Budget (YNAB). I still enter every single purchase I make into the app when I make it. That sounds daunting when you hear it, but I make about two purchases per day on average. And I send about 500 text messages per day. So if I claimed I didn’t have time to type two numbers into my phone, that wouldn’t really be genuine.

7. As a FIRE member living in the US who has already retired early (rock star!), are there any pros to living in America specifically that have helped you along your journey?  Conversely, any cons?

Hmmm…. well I’ve only ever lived in America so it’s hard to give a fair comparison. But I like living here because it’s safe and my passport allows me to explore the world. Investing in America is certainly easy with Vanguard, Fidelity, Schwab and a host of other online brokerages offering great index fund options. Cons are it’s certainly expensive compared to many other countries in the world. My net worth puts me “over the hump” where I can comfortably afford it, but if you were trying to FI/RE on $500K, it would be a different story. Health insurance is also crazy expensive. I would imagine there’s a lower cost of living country that has lower cost health care that might be a financially easier place to retire.

8. What is your investment strategy? Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years?

I buy and hold index funds. And I just leave them there. For a long time. I don’t day trade. I don’t time the market. I rarely pick stocks (and when I do it’s with well under 10% of my portfolio, and mostly for fun). When I started I bought about six different ETFs, diversified across US, international stocks, bonds and real estate. But the more and more I learn and experience how markets work and how people behave I believe I would probably have been better off dumping 100% of my money in a single target date index fund. I believe humans are way more likely to screw something up than they are to find a way to out-optimize a target date index fund. And the upside is incredibly slim and the downside is huge.

I also invest in real estate. Real estate investment can provide great returns, but it’s essentially starting a company and way more work than clicking a few buttons on Vanguard’s website.

9. If you could go back in time and change things, what would you have done differently?

I would have dumped every penny to my name into bitcoin when it was at 6 cents and sold it at $18,000. But short of actually being omniscient in that way I try not to second guess myself because I’m trying to make the best decisions based on the information I have. I made some painful mistakes (like selling 30,000 shares of my old company stock at $24/share… it just recently hit $180, good for a $4.6M oopsie). But even that, I was following best practices of buying and holding index funds which is growing my wealth every year. I doubt my happiness would increase if you plop another $4M into my accounts, but I think having a coherent plan and mitigating risk does make me happier.

10. Has reaching financial independence changed how you view life overall?

Not really. I have the same friends. Live in the same place. I think I’ve realized that the opportunities to convert money to happiness are pretty infrequent. And if you do get to a point where seeking money isn’t the primary tension in your life, you’ll find you need something else to work on. There is no happiness at the finish line. You gotta be happy each day.

11. Do you regret leaving your job when you did?  Did you battle internally/delay the leave?  Did you feel “lost” once you retired early?  What do you with all your spare time now?

I think I left at the right time. There were other people who could take over for me and it was a great opportunity for them. My biggest opportunities were working on something new. I did play StarCraft II for a year after I retired. That was a gigantic waste of time. But then I started PFC and next year I’m starting another tech startup with a friend of mine, so it’s time to get back on the horse!

12. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so? How do you withdraw from these funds early without getting hit with a penalty?

I certainly contribute to every tax advantaged account I can (401k, IRA, HSA). That said, I just have way too much money to fit a meaningful amount into those accounts under the contribution limits. About 95% of my net worth is in a regular, taxable brokerage account or in real estate. Since I have so much in non-retirement accounts and I’m living well below the safe withdrawal rate, I think it’s incredibly unlikely I’ll have to tap my retirement accounts before 59.5. THAT said, I don’t think anyone should ever pass up the opportunity to contribute to those tax advantaged accounts. Having SO MUCH MONEY that you can retire but it’s “locked” in those accounts is what I call a good problem to have. There’s many ways to get at it. I did an instagram post on it here.

13. As someone who has already retired early, have there been any unexpected costs that you have encountered so far that you didn’t plan for prior to retiring?  Conversely, have you made money somehow in an unexpected way since retiring early?

Health insurance sucks. It’s about $350/month for me as a single 39 year old. If you have a family and aren’t a millionaire I think that might be unsustainable. The stock that I held of the company that bought my company has done incredibly well. I shouldn’t have sold it. But it did buy me my new condo, so that’s nice!

14. As an American who has pulled the plug, what are your post-FIRE plans regarding health coverage? What do you estimate your post-FIRE health costs have been per year so far?

Oops. I answered that above. I’m on Obamacare/Covered California. I just pay for it out of pocket. I also use an HSA and plow $3,500/year into it. I keep about $5K in cash to cover medical expenses and the rest I invest in a target date index fund through Fidelity. 🙂

15. Where do you see yourself in the next year, 5 years, 10 years?

In 5 years I’d like to be married and maybe have a kid?! In 10 years I’d like to have another big business success under my belt. I want to keep helping more and more people along the way, any way I can.

16. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know that you have reached financial independence and retired early?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money such a taboo topic?

I basically post my bank account on my instagram page, so I’d say the cat is out of the bag. I think it has almost no impact on me socially. I don’t think anyone treats me any differently. There’s always jokes “Jeremy, do you have to work tomorrow? Oh wait.”. I don’t have people hitting me up for money or expecting anything from me. I know not everyone has that experience, but I have.

17. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?

I would give the same advice that I give on my instagram every day: Build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often. If you follow the rules you’ll be rich, and if you don’t you’ll be broke.

18. What has been your greatest accomplishment to date?

I once ran a half mile in 1 minute and 49 seconds. I still hold the school record in the 600m dash at the University of Michigan.

19. Are there any books, blogs, or podcasts that you would recommend for our readers to check out? 

I have a book list on an Instagram post here. If you’re in debt, check out Dave Ramsey’s podcast. If you’re out of debt, ignore Dave’s investment advice and learn to invest in index funds.

20. How can people get in contact with you?

You can hit me up on instagram, youtube @personalfinanceclub or at www.personalfinanceclub.com!

21. Anything else you’d like to share?

The most valuable 15 minutes of your life will be setting up an automated monthly investment into a target date index fund. So you should go do that.

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See, isn’t he great!  Here are some of our key takeaways from his responses:

• Jeremy continued to live below his means living off of $31,000 while trying to build up his business (and stashed $5,000 towards his Roth IRA).  Aka he did not let lifestyle creep impact him while on his wealth accumulation journey.  Roommates, older car, hmmm sound familiar?  Focus on your BIG expenses to cut down on expenses to help build your wealth. He’s now living on $60,000 with a net worth of $3,900,000.  If all of this is passive income, that means he’s withdrawing 1.65%, WELL below the 4% “rule”.  So some may see this jump up from $36k to $60k as extreme, but he’s actually being very conservative considering his net worth.
• The responses to Question 4 continue to be my favorite responses in this series.  Take the time to figure out what actually brings YOU happiness and focus on that.
• Love Jeremy’s reasoning behind finding the time to enter in his expenses into YNAB.  While we are more old school and enter our expenses into an excel sheet, not doing so because “you don’t have the time” really is just an excuse that you don’t want to prioritize it.  Track your expenses!
• Now that I understand how the US and Canadian tax advantaged accounts work, I’ve come up with a con to be American for you sir J.  While most people accumulate their wealth through a steady income with the goal of maxing out their retirement accounts each year, Jeremy received his windfall of $2M all in one fell swoop.  Because he’s in the States, his 401k and IRA room is use it or lose it each year.  Prior to selling his company, he was maxing out his IRA but not touching his 401k.  Once he had more income and was working for the company who bought him out, he was only then able to contribute to his annual 401k limits during those higher earning years.  Whereas in Canada, any unused contribution room in your RRSP (like a 401k) and TFSA (like a Roth IRA) rolls over each year.  So if Jeremy was in Canada, he would have likely had $200,000+ room in his unused RRSP to dump some of his new found money into to max out his tax advantaged accounts.
• How do the wealthy get their wealth?  They become boring.  “I buy and hold index funds. And I just leave them there. For a long time.”  It’s really that simple.  Have a plan, stick to it, and bring on the happiness.
• Love Jeremy’s response to number 10 – so true!  You have to build a happy life along the way!  You won’t suddenly go from overly stressed from your 9-5 grind for 10-20 years to poof magically happy just because your bank account reads a particular number.  Figure out how to enjoy the journey along the way so that once you do reach FI, your life is pretty similar to how it was the year prior – except now you have even more time on your hands to do those things you enjoy.
• Did you ladies pick up that Jeremy is single…. wink wink…. he’s a great guy 😉
• I’m jealous that Jeremy is out of the closet. Money shouldn’t be a taboo topic and I’m so happy to hear it hasn’t impacted his relationships with friends and family.
• Agree with Jeremy to ignore Dave Ramsey’s investment advice and instead to learn more about index funds. Why? Fees!!

Thanks again Jeremy for being a part of our FIRE Community Guest Interview Series.  Next month’s interview we jump back to a fellow Canadian who’s also quite active in the blogging space and well on his way for his family to reach FI between a mix of dividends and index funds.

Did you enjoy this interview?  Any additional questions for Jeremy?  Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher

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