I chat with my friend, Cody Berman, about retiring as soon as possible. It’s basically talking through the ideas in his book, Retire By 30.
Meet Cody and the Book
Doug: Hey, what’s going on? Welcome to The Doug Show. I’m Doug Cunnington, and I’m talking to my good friend Cody Berman. How are you today?
Cody Berman: Doing awesome, man. How are you?
Doug: I am doing really well too. And we were just catching up and I, you know, this happens every time, I’m like, “Oh, we better hit record or we’re gonna use all of our good ideas before we even start recording.”
So Cody, you’ve been on the show a ton, and we’ve hung out in person over the years at different conferences, which is like one of the, you know, key things to like have good bonds and, and make friends and such. But we’re gonna talk about your recent book. What’s it called?
Cody Berman: Retire by 30
Doug: And how old are you right now?
Cody Berman: I’m 30.
Doug: You just turned 30. Uh, I, I missed your birthday when it came around, so happy birthday.
Cody Berman: Thanks, Doug.
Doug: when, uh, when I turned 30, barely. I had a, I had a lot of hair just like you, so look out. I’m just kidding. I di- I didn’t have a lot of hair then. But you were financially independent, um, a few years ago. What…
Is– Was there a specific age where you were like, “I am FI at this point”?
Cody Berman: 25 is the age I proclaimed FI, and people can take that as they will. I had, just for hard numbers, I had 500K in the stock market. So we can talk about all the ways to hit FI, so that’s like 4% rule. I could spend like 20K there. Then I had $3,700 per month coming in from my rental properties. This is net everything, net PITI, reserves, maintenance, all that stuff.
And then I had a digital products business that was netting me just over $10,000 per month, and I only had to work a couple hours a week on it. So that was 25, and that’s when I proclaimed FI
Doug: Right on. Okay. Pretty amazing. I b- was barely out of school when I was 25, so it’s like, it’s all relative. But we’re gonna go over a lot of the ideas in the book, and you have been on the show a few times talking mostly about digital products. So I’ll link up so people can refer to, you know, those business models as well. But, um, congrats on the book. I know it’s a huge undertaking. It is a Amazon bestseller, right?
Cody Berman: Yeah, all three categories. I was pumped
Doug: Okay, and what are the categories? That’s really awesome
Cody Berman: Yeah, so it was personal budgeting, it was retirement planning, and it was investing, and I hit number one in all three of those within 16 hours of launch, which is nuts. I, I c- I couldn’t believe it
Doug: Yeah, congratulations. That’s really cool. And I wanna make sure we, you know, just jump into some of the, the details here.
Quitting Corporate for FI
Doug: But you did start out in the corporate world, like many of us do. So you went to school. Um, what, what did you study, and then what was the first gig that you got?
Cody Berman: I studied finance and economics, and then the first gig out of school was a commercial real estate lending job in Boston. And I lasted there for a long seven months before I went full entrepreneur
Doug: And what was, was there one or two, like, big things that clashed with your values e- early on? ‘Cause, I mean, when you’re, when you’re young, you’re like, “Okay, I’m gonna absorb,” and I, I imagine you were like, “I wanna learn. There’s some wise people here.” But some things didn’t match up with what you valued and what the company was sort of directing you into.
So what were the big things that set you off on your own path?
Cody Berman: I don’t think anyone’s ever asked me this question before. It’s a good question. I think there’s probably two main things. One was looking at my boss, looking at my boss’s boss, looking at my coworkers, and realizing I didn’t want any of their lives. Most of them were absolutely miserable. There was a recent Gallup poll that came out that said 78% of people are not satisfied with what they’re doing on a day-to-day basis, and this was like the perfect archetype.
Probably more than 78% in my office did not like what they were doing, and it showed. Everyone was miserable. People weren’t fulfilled. People were just waiting for the clock to go home to repeat th- the same thing the next day, and I just didn’t want that life. And I was like, “If I persist here for the next two or three years, I’m gonna be like, you know, coworker A here.
If I do this for another five or 10 years, I’m gonna be like my boss. If I do this for another 15 years, I’m gonna be like my boss’s boss.” I didn’t want any of their lives, so that was one reason. The second reason was just awareness. A lot of people ask me, like, “What’s the most important thing on the path to financial independence?”
And for me, it was awareness. It was seeing other people do this in their 20s, their 30s, their 40s, hitting financial freedom at an incredibly young age, and that just opened Po- Pandora’s box for me. Once I knew that that was available and that I didn’t have to work in corporate forever and ask my boss if I could get an extra 15 minutes for my lunch break, like, I saw real people who were building incredible lives, and so I wanted that too.
I just wanted to escape. So it was probably a mixture of those two things that really made me just wanna quit as fast as humanly possible
Doug: Perfect answer, and it’s one of those philosophical, and I, I use it for myself or I have in the past. But basically you were like, “If I’m successful, what does this look like?” And then you had a snapshot of two years, five years, 10 years, and the success path was actually n- not what you wanted. And I’ve had like small, sort of test businesses or something like that, and I’m like, “If this works, do I wanna be there?” And then you could like paint all the goals that you are going to achieve and then realize that, oh, that’s actually not quite right. I just created a job I don’t want. you went to school, you got the job. Did you have any reservations on quitting? People would think, oh man, you, you had this, uh, great job, which I, I mean, I imagine it was a, it was actually a pretty decent job, and then people were like, “Ah, maybe you can’t cut it,” and you quit.
Did you have any in those areas?
Cody Berman: Did I have reservations? I’m not sure, but people had a lot to say about my decisions, that’s for sure. I was pretty confident because, just to paint the picture, at the time I left my job. Now, if you were to ask the question, going into the job, like, was there a reason you went to a job at all versus entrepreneurship?
I think for me, maybe it was a bit of scarcity mindset, a bit, bit of can I actually do this? Could I actually make entrepreneurship work for me full time? And I had this $80,000 per year job offer just sitting there waiting for me, so I’m like, “Why not take this? I’ll build my businesses on the side. I’ll bank everything I’m making in corporate.”
So by the time I left, seven months later, I was making about 12 to $1,500 a month from my side hustles. I was also spending about 12 to $1,500 a month as a just out of college kid with zero lifestyle inflation. So I felt pretty confident when I left that job that, okay, if I’m already making this much from my side hustles and now I have 60 plus hours per week back, I could probably make, you know, two, three, five, 10x that once I get that time back.
But other people, like I was mentioning before, were like, “You’re such an idiot. You have this dream job. You’re making $80,000 as a 22-year-old out of school. Like, what are you doing? You’re gonna quit and try to be an entrepreneur? Like, all entrepreneurs, don’t you know that 90% of businesses fail?” And I got so much of that from people even in like the FI community.
It wasn’t just friends and family. I had FI community members telling me, “Hey, just grind it out for five years. Save a bunch. This is like the perfect platform for you to hit FI fast.” And I’m like, “No.” Like, I’m, I’m gonna do it my way and I’m gonna enjoy the ride, not just put my, quote-unquote, “nose to the grindstone.”
Doug: Why do you think the FI community folks were giving that advice?
Cody Berman: I think they’re probably just thinking math first and maybe not leading with quality of life. And I do– Not with everyone, but I do see this in the FI community. People are willing to really have a terrible quality of life for a couple of years just to hit FI, and it’s like at what expense? Like, if you’re giving up your 20s or giving up your 30s just to hit FI, you might be missing the point.
Like, those are some of your prime years. There are ways where you can achieve FI, you can go after those financial goals and hit them incredibly early and enjoy the journey. Like, it doesn’t have to be this one or the other thing. I, I really don’t like the notion that you have to, quote unquote, “put your nose to the grindstone” for some undefined number of years just to hit FI.
Like, you can totally enjoy the ride, and that’s exactly what I set out to do
Doug: In a second, we’re gonna get to a bunch of the different side hustles that you tested, probably focusing on a lot that failed, because those are interesting stories.
Cody Berman: Yeah.
Doug: it sounds like if I’m doing the math right, around 2018 is, you know, early in your career, you had good savings habits. It sounds like you were already involved in the FI community. Again, you know, for me, it wasn’t even in my radar, um, until I had, you know, a decade in a corporate job, and I made horrible decisions. I even– I had a roommate, but I think I, like, blew all that money on, uh, bars and drinking and food and stuff like that, like you would in your 20s, and just a series of kind of bad decisions and, um, ignorance, right?
Like, now that I know, I’m like, “Oh, I could have made a handful of better decisions and retired much earlier.” that, that said, how did you get introduced to, you know, high savings rate, um, investing and making sure you’re taking advantage of compound interest when you’re so young, knowing that the payoff is, you know, decades away?
So how– What was your introduction to all of that?
Cody Berman: So the first introduction into just thinking differently was “The 4-Hour Workweek,” and that was when I was a sophomore in college. So unlike what it sounds like you in your 20s were like, I fortunately dodged that bullet because I was 19 when I found out about all this stuff. So right from the get-go, I went Tim Ferriss, and then from Tim Ferriss, I jumped to the Mr.
Money Mustaches and Mad Fientist, and started listening to podcasts. At that time, it was like ChooseFI, Four Dinning, BiggerPockets Money. I was just absorbing as much content as I possibly could, and we all have seen the shockingly simple math behind early retirement. That chart, like, blew my mind, and I’m like, “If I can save 85, 90% of my income,” which is what I was doing at the time, “I’ll be able to retire in like three or four years.”
So I think just, again, awareness, knowing that that was a possibility, all of my other decisions, all my day-to-day decisions became infinitely easier because I had that overarching goal of FI
Doug: Perfect. Yeah, that’s super awesome.
Side Hustle Framework and Lessons
Doug: And let’s just jump into some of the side hustles. So you, you tested a bunch of stuff, and you outline several in the book, and I think we’ve probably talked about a few of them over the years on the podcast. But yeah, what are some good highlights that you out?
Cody Berman: Yeah. I’ll… If it’s helpful, I’ll split up the kind of framework that I use for side hustles, ’cause I think that’ll just help us better talk about the side hustles that I’ve had. So real quick, I, I break side hustles into four different buckets. Type one is trade your time for money. So this could be on the computer, this could be IRL, in real life.
So for me, like the on the computer trade your time for money side hustles looked like I did freelance writing, I did freelance podcast editing, I built websites for people, I did freelance video editing. I was running an affiliate marketing program. Let’s see. That’s a handful of them on that front. On the like physical trade my time for money, I was doing landscaping, I was cleaning boats.
I had a couple like vegetable stand, lemonade stand, hot chocolate stand type of deals that I was doing. I worked at a, a disc golf shop. That’s pretty much just type one in a nutshell. It’s just you’re trading your time for money straight up. Like, you know, you work 10 hours, however many dollars you make per hour, you multiply that by 10 and that’s what you make.
So that’s type one. Type two is what I like to call a scalable side hustle. And we’ve talked about this on the show before, Doug, where you are putting your time, your energy, your money into something, and then that thing can potentially pay you in perpetuity. So this could be creating a digital product.
This could be buying a piece of real estate. This could be creating a YouTube video or a podcast that… Like I have podcasts, Doug, from 2018 where maybe we talked about a certain product or some kind of a sponsorship or affiliate deal, and I’m still making money from that, a podcast episode that I recorded eight years ago.
Like it’s just these types of things that are more evergreen. You put the time, the effort, the energy, the money in once and it pays you in perpetuity. That’s type two. Type three is the sharing economy. So this is your Airbnbs for houses, your Turo get-arounds for cars. There’s even sharing platforms that you can rent out your pool, you can rent out your power tools.
You can rent out your camera equipment. You can rent out your trampolines, your bouncy houses. Like there is this whole huge sharing economy, and so oftentimes I see people just sitting on a goldmine that they might not even be using for 99% of the time anyway, that they could easily rent out. And then the type four side hustle is what I like to call like the agency or the hybrid model.
So this is taking a type one side hustle. So let’s go back to some of the examples I gave before. Instead of a freelance writer where you’re just trading your time for money, you build a freelance writing agency. You build out SOPs, standard operating procedures. You have freelance writers that work under you.
You start to, you know, productize your stuff and you have different packages and boom, you have a business. Let’s say you’re doing landscaping. At one point you’re just trading your time for money, then you build a landscaping business, kind of the agency model. You hire people and it becomes more passive than it was before.
So just to give people a framework, those are like the four main types of side hustles. Now, to answer your question more directly- At the beginning, I was mostly just doing type one side hustles. Like, I was trading… At some points I was working 16 to 18 hours per day just to just make as much money as I could.
This is, like, the early years. I know you had mentioned, and good memory by the way, 2018, that was that first year I worked in that corporate job. I was side hustling like crazy. 2019, 2020, 2021, those were the grind years, and I was doing a lot of this, like, type one side hustle where if someone wanted me to build a website for them, hell yeah, I’ll build you a website.
Someone wants me to edit some videos, edit their podcast, write some freelance articles, I’m, I’m here. You know, I, I have all this time. I was a young 20s hustler. I then started really pivoting hard into more type two side hustles, and for those who have listened to any of our previous conversations, most of them have been around digital products, ’cause that was one that worked incredibly well for me.
But this is also when I started pivoting into, like, real estate. I started pivoting and just focusing more time on my, like, personal brand, which, you know, was a podcast and a blog, and now I have the book and I have, like, courses and educational products and social media. So I started focusing almost all of my time.
It was a slow process, but I, I started shifting almost all of my time from these type one side hustles to type two side hustles, where I could put in the time and, you know, I’m still spending a lot of time, but these things are now paying me five, 10 years down the road later on
Doug: Very good. Do you have any good stories of either failures or things that were actually working but you were like, “You know what? I should probably quit this because it’s not really where I wanna spend my time”?
Cody Berman: Well, my funniest failure story is my Uber Eats on a bicycle. And this is when– this predates me working in corporate. I lived in Australia for six months with my now-wife, then girlfriend. She was studying abroad. I had graduated, and I was like, “Oh, my job starts in June. I’ll live with you from January to June in Australia.”
Tried to get a bunch of jobs. All of them rejected me. For some reason, they didn’t want an American who was just staying there for six months. Fair. And so I was like, “I’ll do Uber Eats.” But I didn’t have a car. I didn’t have my international driver’s license, so I got a bicycle. I was doing Uber Eats bicycle.
I got this bike from Gumtree, which is the basically Australian Craigslist. Twenty-five bucks. It was pink, it was too small, and only one gear worked. So I go through all the background checks. I go into my first shift, and I did not realize how hilly the suburb that we lived in could be. And I just remember that first shift.
I am like, my legs are on fire. I’m, like, profusely sweating. It was like, it was awful. I was like, you know what? I’m gonna have a positive mindset, glass half full. I’m getting paid to work out, right? I’m getting paid to work out. But after probably a month or two, I had accumulated a couple one-star reviews because I was sweating on people’s food when I was delivering it to them.
So that was a, uh, short-lived side hustle, and it was somewhat of a failure, but hey, I learned my lesson. I tried it. Uh, I am a huge believer that, like, n-not even side hustles, just anything. I really try to think of them not as failures but as learning lessons. Because even the side hustles, I have a better answer for, like, one that I’ve learned things from.
Even the side hustles that I’ve since put into the graveyard, laid to rest today, ’cause I’ve tried 30-plus. I probably have, like, three or four that are active today. Even the ones that I don’t do to this day, they taught me so much. Like, my very first business, we might have discuss, discussed this on a different podcast.
Um, my disc golf manufacturing company. That was running for, from 2016 when I launched it, and we officially sold it in 2024. And that business, like, wasn’t the one that made me a millionaire, wasn’t the one that gave me financial freedom. It really wasn’t the one that had any, like, cool accolades with it, besides the fact that it taught me almost everything that I knew about entrepreneurship.
Like, it taught me marketing, sales, networking, building websites, copywriting, recording on video, recording podcasts. Like, it taught me all these lessons that would then come to help me in my side hustles later on. So even if it was a quote-unquote failure, like, yes, it didn’t do as well as I wanted it to, and we ended up selling the business, but I probably wouldn’t be standing where I am today talking to you in the microphone if I never started that business back in 2016 when I didn’t know what the hell I was doing
Doug: It’s always a messy, uh, path and a messy journey. But that’s super cool. And it’s– I mean, the fact that you were able to, you know, keep it in business and then actually sell it tells me, like, it was… At, at the end of the day, like, it was roughly successful. Like, a lot of people will run a business and, like, barely break even.
But I don’t… Again, since you were able to sell it, like, there’s value there, there’s brand value, maybe physical products or at least the branding or whatever. So a-any… No real question there, but if you have any other follow-up on it, feel free
Cody Berman: I mean, it’s not like we sold this thing for millions of dollars. It was more like a fire sale, just selling the injection molds. For people who don’t know, the process of manufacturing a plastic disc, which, you know, it seems like, oh, it’s a little plastic disc. You might just be able to pump that out with a 3D printer.
No, we had to get these injection molds cr- shipped over from China after a ton of testing, and, like, we had… It’s basically just huge steel blocks. So basically, all we did was, like, sell the steel blocks for what they were worth and then maybe a little extra for the brand. But it wasn’t like we had this huge, you know, here’s how many multiples of revenue we sold the company for.
No, it was more just like, “We’re getting rid of this stuff. Here, you guys take it.”
Doug: Okay, fair. Fair
Cody Berman: yeah
Doug: Okay. Um, but still, it was cool. You
Cody Berman: Still, but still, but still, not a failure, not a failure. Even though I’m not doing it today, so many learning lessons
Doug: All right.
Nest Egg vs Cash Flow FI
Doug: Let’s shift gears to like the sort of nest egg model versus cash flow. And we’ll, we’re gonna do sort of quick hit ’cause there’s a lot of topics that I wanna get into, one of which is around sort of spending now that like you and I have kind of reached the other side where we’re like, we have more money than we did before.
But, but anyway, we’ll get into that in a second. So let’s talk about some of the FI ideas here and how you viewed it to get you to a certain place
Cody Berman: Yeah. So I kinda hinted at this earlier when I was breaking down my investments when I hit fi- 25. So there’s two main strategies, and most people are probably more familiar, if you’re in the FIRE community, with this first one, which is the nest egg method. This is your typical 4% rule. You save up 25x your annual expenses, invest that in the market, and per the Trinity study and various other Monte Carlo simulations, you can live on that portfolio in perpetuity.
So if you’re spending $60,000 a year, you multiply that by 25, you need $1.5 million invested in the stock market, and then you’re FI. The faster way to do it is method two, which I like to call the cash flow method. So the cash flow method is where you have to generate enough passive or mostly passive cash flow from real estate, small business, digital products, whatever floats your boat, to cover your monthly expenses and probably a little bit more.
I like to have a buffer. So instead of, in that same scenario, you’re spending $60,000 a year, you just gotta figure out how you can generate $5,000 per month in passive or semi-passive cash flow. And this, and I know you’ve had a lot of other folks on the show, like real estate investors, small business people, Doug, on my show as well, this seems to be by far the fastest path.
And for a couple of reasons, but I think probably the main one is because of leverage, and leverage is a double-edged sword, so you gotta be careful. But, like, let’s just use some real numbers here. If I had a chunk of $500,000 – let’s just use some real numbers from the beginning of my journey. That $500,000, per the 4% rule, would yield me $20,000 that I could spend each year in perpetuity.
Or if I use that $500,000 and I buy a bunch of investment properties, I could probably get… Oh man, public math. I could probably get, like, $1.25 million worth of investment properties because all I have to do is put, like, 20% to 25% down on each of those. So, like, you’re able to multiply your wealth a lot faster if done well.
Now, where people go wrong is they over-lever, and then we have, like, a 2008 scenario, and then all these properties that you bought, all of a sudden they devalue a ton, and now you’re underwater on your mortgage, and things can go awry. So I don’t want people to be like, “Oh my gosh, leverage sounds awesome.
I’m gonna go get a bunch of debt and acquire small businesses and real estate.” Not what I’m saying. All I’m saying is if used correctly and done smartly, leverage is a, a way that you can kind of boost your results and hit financial freedom even faster. For me, I took the kinda two-pronged approach. I did both, ’cause I am kind of a skeptic.
I- maybe I do have a deep-seeded scarcity mindset. I wanted to do, like, the nest egg method and the cash flow method at the same time, just so I wasn’t spread too thin. I didn’t have all my eggs in one basket
Doug: And you do real estate as well, so, like, it’s like a
Cody Berman: Yeah. Three-pronged approach. Yeah, the trident.
Doug: Yeah. Um, I’m, I’m not a fan personally of real estate, although obviously it works for many people. But I had– I bought a place in 2005 and then ended up underwater, tried to rent it out, and basically lost like, think if you include expenses and other stuff, I probably lost like $500 a month for two and a half years, which is not…
I mean, that math is pretty clear. Um, so I let that place go into foreclosure actually, which is another side story. But all that to say, like, you had the three-pronged approach, and I think, I mean, at that point, you’re as diversified as you, you can be. Um, do you think the market… Or do you think you could recreate the real estate that you did?
‘Cause what years did you purchase your places?
Cody Berman: 2020 was the first year, so yeah, we got incredibly lucky with interest rates
Doug: Yeah.
Finding Deals Today
Doug: Okay, so math is different now. You would probably… I mean, you can still do it, I believe, because there’s always a market where, the tide is rising and you’re gonna be able to find the right deal and all that stuff. But, just overall, it’s a little tougher to find the good deals.
Would you agree with that on the real estate front?
Cody Berman: Yeah. I, I do think what you’re saying before holds true though, because even when we started investing in 2020, that’s when people were like, “We’re at the top of the cycle,” like, “Real estate’s gonna crash.” And they were also saying that in 2015. They were also saying that in 2011. So people have been kind of saying the same stuff for decades, and I’m sure they said the same thing, like, whenever there’s a couple of good years, everyone thinks it’s gonna crash immediately.
But if you can just ride out the couple of bad years in between, like it’s kind of like when you’re looking at a stock market chart and you zoom out and it’s just like, oh, it is going up and to the right infinitely, ever since the birth of the stock market. Same with the real estate market. Um, so I do think there are deals to be had today.
Like, maybe the strategies are different to find them, and maybe where there was, you know, abundant deals in XYZ neighborhood and now it’s like maybe now you have to try ABC strategies in these other neighborhoods. I do think there are deals somewhere though. Deals don’t just disappear, just the, the tide shifts
Doug: Yeah. And I mean, to that point, it’s like it gets really expensive in huge cities, so people move somewhere else, or maybe there’s better jobs or more jobs in another place um, it’s underpriced, and then people start moving there and you see the appreciation. But it’s, it’s fluid and it depends on the, the specific market.
So
Cody Berman: For sure
Doug: okay, very good.
Designing Your Ideal Life
Doug: Let’s talk about, um, maybe like the, lifestyle design aspect of this and what you value, and I think y- you’re an avid traveler, you have hobbies and many interests, and you have multiple pieces of, um, your business. So how did that inform what you were gonna do and the kind of businesses you wanted to run? And I’ll kind of leave it open to the lifestyle design ideas.
Cody Berman: So I think this is why I made the very intentional shift from all the type one side hustles to type two, ’cause now with any type of, any type of type two side hustle, that’s a mouthful, I can have sprint months and then I can have vacation months. So if I wanna just go crazy for, we’re recording this in the month of June, if I wanna go crazy for the month of June and I wanna, you know, build a bunch of digital products, I wanna record a bunch of content, I wanna buy a new property, I might be able to get all those set up this month and then just chill in July.
Like if I wanna travel in Europe all of July and work an hour a day, I can because I’m focusing on type two side hustles. So to kind of go back and answer your question, the reason why I’m doing type two side hustles is so I can build my ideal, my dream life. And how we actually did that, so me and my wife Lauren, when we were– back when we were just boyfriend/girlfriend, this is probably 2019, we wrote down a list independently of one another of the top 10 things that we value, and it were things like travel, time with family and friends, good food, experiences, fitness, and we just had this whole list.
And so we took our two lists, put them together after we were done writing them, and we’re like, “Is how we’re living today, is our calendar and bank account and credit card statement, uh, are these aligned with what this sheet of paper says? If not, we need to add in the things that aren’t there, and if there are things that are there that we don’t value, then we need to eliminate those.”
And it’s been a long process, but over time now I’d like to think that, like during our, quote-unquote, “normal” days when we’re home not traveling, ’cause our travel days are just more sporadic, we have like pretty much drilled down our ideal day, which consists of like, again, all the things from that original value sheet.
And to take this one step farther, like we didn’t just set this ideal day and then, you know, hope that it happens. We check in every single month and we have like a monthly meeting, and during that monthly meeting we’ll talk about like, we talk about money, real estate, health and fitness, relationships, our goals for next month.
We have like a random category. And so it just keeps us accountable and allows us to like constantly make sure that we’re living in 100%, or as close to 100% alignment with our values as possible. So yeah, that’s– Yeah, hopefully that answers both of the questions, like why scalable side hustles and how are we actually like building our fi life even before we hit fi.
Doug: Right. Yeah, very, very cool. I think, um, I think we end up doing a s- a similar thing, although we don’t have the formal meetings, which sounds like a good way to get feedback and be able to adjust. And, uh, is there anything maybe in the last six months you guys decided like, “Oh, you know what? We, we actually aren’t spending enough time or, um, resources on, like, good food,” or something.
A- any adjustment that you have made and you were like, “Okay, like, actually we need to reorient some of this stuff and take some of our time and effort from somewhere else”?
Spending Tests and Buying Time
Cody Berman: I wouldn’t say so much reorient, but we can talk about spending and money dials, and I know before we hit go we were talking about the Mad Fi-entist and… ‘Cause I think a lot of people in the Fi community, ’cause what gets you here does not get you there. If you are a super saver, you’re just gonna have tens of millions, maybe hundreds of millions of dollars when you die if you don’t learn to spend that money appropri- appropriately.
So like I have all my stuff connected. I use ChatGPT like a therapist and a financial planner and b- probably a lot of other things that I shouldn’t.
Doug: Yeah.
Cody Berman: But I was, like, looking at my finances and, you know, plugging in, like, here’s what I spent last year. We do, like, an annual review as well, and our top categories were travel and experiences, just like we say we value.
It wasn’t housing, it wasn’t transportation. So I was like, “Okay, that’s good there.” But then I plugged in the numbers and chat was like, “Dude, you gotta spend more money on travel.” Like, in terms of the margin, like the difference, the, the difference between your income and your expenses, you have a lot more give here.
And if this is truly your number one thing that you value, like if this is where you and Lauren, Lauren create all these experiences and all these memories, then you need to spend a higher percentage of your income there. Unless you want a ton of money in retirement, that’s fine. But if you subscribe to, not like Die with Zero, but if you don’t want like a crazy, crazy amount of money when you, you know, finally kick the bucket, then you need to start spending a bit more.
So I did, and so at the beginning of this year, like we planned out some trips and I spent more money than I’m, was usually comfortable with, like on our accommodation and sometimes be upgrading to business class flights and stuff that I would throw up at when I was 22 starting this Fi journey. Like the, some of the stuff that I spent in the last year.
But it’s, you know, I’m, I’m not like living paycheck to paycheck. I’m still spending percentage-wise a pretty low percentage of my overall income. So has my like ex- have my expenses gone up? Absolutely. But I still like to keep a healthy gap between my income and my expenses on the journey.
Doug: Okay. It, so you’re still actively saving and, you know, stacking
Cody Berman: I am. Yeah. Just, I don’t know, just because right now we don’t have kids. We are planning on having kids. I’ve, I’m just in, like, the let’s stack as much as we possibly can so, like, we really, really don’t have to worry once, you know, we start a family and thing- things start to slow down a bit. So I, I’m not as crazy, crazy as I was a couple years ago.
Like before, like I mentioned, I was working 16 to 18 hours a day. Now I might be working six to eight hours a day on a day where I’m working while I’m at home. But also we’ll have months where we’re in Europe and I’m working 30 minutes to an hour a day maybe. So yeah, it’s, it’s all seasons
Doug: Yeah. Which, I mean, I was only asking the question, but I was gonna say y- you’re pretty young and it totally makes sense and, and you have like lot more energy than I do. Um,
Cody Berman: on, Doug.
Doug: so y- I mean, and, and you’re like, “Oh, ha- I’m pretty pumped to do this.” And I, I mean I, again, I had the, a corporate job for a while and I’m like, “I think I may have more energy like once I rest up.
Perhaps I’m still decompressing.” Although it’s been a, a lot of years, but all that to say it totally makes sense for you to continue to save because, I mean, you have a plan, you have a projection, but the only thing we know about our plans are it’s gonna be wrong. Like y- it’s a great plan to have but it’s never what you think.
There’s so many– I mean, there’s infinite external factors that could impact it and it’s only, um, assumptions that you could make with the information that you have right now. So, and let’s keep digging a little bit with some of the, you know, the spending that you’re doing where, I mean you said, uh, w- it would make you sick if you thought about y- whatever some of the prices.
You’re like, “For this flight I could have lived for a whole month, food and sheltered, uh, you know, leisure activities, everything.” how did you get started doing that? And you did some smaller tests where you were like, “Does the extra leg room actually help?” Or, or whatever. But how did you test this out? Because I suspect it was like a little gradual and you keep going a little farther and you get used to it
Cody Berman: This is a really good question. Yeah, I think it was more of a test, see if we like it, and then reassess. And you said something pretty insightful at the beginning that I think a lot of people, FI or FI not, they just don’t try things. I, I think a lot of people will think, “Oh, you know, when I hit FI, I’m going to get in really good shape.
I’m gonna start playing pickleball. I’m gonna start traveling.” But if you haven’t done any of those things during the journey, even if you have less time to commit to them, then how the heck are you gonna know if you’re gonna like doing those things in FI? And I think a lot of people, you know, they hit FI, they quit, and then they wake up on that next Monday, and they’re like, “Uh, what the heck do I do?
Like, I don’t actually re- really like these things that I said I was going to do.” So I think sampling is huge. So for us, to answer your question more directly, yeah, we upgraded. I’m trying to think of the first time we flew business class on… It was like a long flight home. I think it was… Was it from Bali?
We had, like, an 18-hour flight home from Bali. That’s where we got married, and we ended up splurging, getting, like, the lay down on the way home, and I was like, “Oh my God, that was so worth it.” It was a i- literally 19-hour flight, and I was like, “I have the money. It’s not like I’m going into debt to buy this flight.
Like, it’s seriously only a couple of percentage points higher that I’m spending per month, like, o- over of my total all, uh, to, o- of… Wow. Of my overall income. Like, we, we can afford this.” Um, so yeah, it’s just been testing things. Like, some things I’ve thought about upgrading, and then we’re like, “You know what?
We don’t really need to do that right now.” Like, we were thinking about buying a new car for my wife, but her car is running perfectly fine and, you know, we were getting all excited about, like, getting a new electric car. We’re getting solar panels on our forever home that we’re building right now, and we’re like, “Oh, we, we should get that car now.”
And I’m like, “You know what? This, this car works perfectly fine.” Um, so I think it’s honestly just being honest with yourself and seeing, you know, do I need this thing right now? Is this expense worth it if it’s a one-time expense? And just going from there, ’cause you won’t know until you kind of test the waters and see if the one-time expense that you’re going to pay for you’ll enjoy or if it’s like a permanent upgrade.
Maybe you, you know, lease the car for a month and see if you like it, or maybe you stay in an expensive Airbnb and then you realize, “Oh, actually, I used the pool once. I don’t really need to get this in-ground pool for my house.” So I think just going on a test ride, no matter what decision it is that you’re making, is just a great thing to do ’cause then you can really decide whether or not you actually like that thing and wanna spend the money on it.
Doug: Yeah, sometimes we’re really bad at understanding and being correct about what we’re going to like or how certain things are gonna make us feel. And you never know until you give it a shot. So yeah, great answer. Okay.
Cody Berman: You g- you got any, Doug?
Doug: um, things that I tested out or, or…
Cody Berman: Yeah, yeah. I’m just curious
Doug: Okay. So I’ll give a coup- one, you mentioned the flight.
So we don’t do nearly as much, um, flying as, as you guys or international travel currently with our elderly dog. Um, but we did, um, upgrade to first class recently, both my wife and I independently on flights where it was not too much to upgrade, and we were both like, “This is fucking awesome.” So if
Cody Berman: Yeah
Doug: if it’s an acceptable price, like we’ll definitely do it.
I think me more so than my wife ’cause she still has some price anchoring ideas, and it’s hard for her to, to pay the extra. But I was like, “Ah, this is, this is great.” And you watch the assholes go to the back of the plane, you know? So, no, I’m just kidding. No offense, I sit in the back most of the time. Um, the other is, um, guitars. So I’ve started buying more guitars, and I actually just got a new one yesterday. I’m on Facebook Marketplace a lot, and I like… I still like a good deal, but, um, I’m like slowly upgrading more and more. And I’ll, uh, actually, I’ll just hold it up
Cody Berman: I know nothing about guitars, so let’s see how cool I think it is. It looks pretty sweet.
Doug: Thank you. A- and it, yeah, even my wife was like, um, is really beautiful.” So, uh, yeah, I’m, I’m very happy with it, and I haven’t yet reached the top of where, um, it’s like no longer helpful. So, uh, this wasn’t super cheap, and it– I mean, I think I could probably go up a few several thousand dollars more than this one and, um, still find great enjoyment out of it.
But I’m incrementally going up versus like going str- I, I thought about like just it, like all right, let’s, let’s see what a 10,000 guitar
Cody Berman: How it strums.
Doug: that yet. Yeah. Um-
Cody Berman: No, I’m glad I asked because it’s seriously about what you value. Like I know you’re a guitar guy, so it makes sense for you to spend there. If you were, I don’t know if you’re a car guy or not, but if you weren’t a car guy and you just went out and bought a Lambo, I’d be like, “What the hell are you doing, Doug?
Like, why are you spending all your money there? You don’t care about cars.”
Doug: Right.
Cody Berman: So yeah, it’s, it’s all just depending on what you value. I’m glad I asked
Doug: Yeah, it’s, um… And, and there are areas that I’m exploring more, like is this worthwhile? And, and some of it would be like travel and accommodations, and a lot of times it’s not the amenities at the place, it’s the location. So we’re big, um, and, and you probably are as well, like with the type of traveling that you do, where you wanna kind of be able to walk to things and be
Cody Berman: Yeah
Doug: versus like, okay, how, how do we get down there? And then we have to whatever, find parking or figure out how to get transportation versus like walk out the door, there’s a cafe, there’s like 10 restaurants where you could be happy eating a, a different one. You know you’re not gonna eat out every single meal, so like over the course of a month or something, it’s like 10 restaurants is all you probably need. Um, but yeah, is walkability one of the key things, like a gym
Cody Berman: It’s the first thing we look at is walkability. Yeah. We will pay a premium for a location 100% of the time because we don’t have to worry about, like, driving from place to place. We don’t have to… If we don’t have to worry about Ubers, we just like staying in a place, so we’ll pay the premium for the location to just have, you know, foot access everywhere.
So yeah, that’s huge
Doug: And, and one more n– you got me excited talking about this. So one more, like with a location, that’s great, but the other is not renting a car and just Ubering
Cody Berman: everywhere? Yeah
Doug: because for whatever reason, parking stresses me out where like you have to find it, and then it’s like, how do I pay f- like, okay, I have to install the app.
It’s like… A- anyway, there’s a handful of like small little things that stress me out where like if you just get an Uber, then it’s all outsourced. And the perfect place that we did this in was, um, we went to Mission Beach, San Diego, and we’re like right on the beach, so that’s perfect. And then, you know, you don’t…
I mean, gas is kind of expensive in California, and it’s great just to outsource that whole thing and not even think about it. But anyway,
Cody Berman: I love it. While we were talking about this, it made me think of some better examples. So I talked about the car, but I think some better examples are things that have bought me back my time. So things that we started to slowly outsource, like I pay for lawn care. I’m not cutting my own lawn. I’m not doing my own gardening.
I don’t do any of that stuff. I- we Instacart all of our groceries. We’re… You know, I do not go to the grocery store. I do n- you will not find me inside of a grocery store. I think it’s a waste of time. Um, and yeah, we’ll just, we’ll just like order things and do things that save us time and are more convenient.
And again, I would not be caught dead doing this when, during my FI sprint from 22 to 25, where I’m like going to the grocery store, getting the cheapest deals I could possibly get. Even if it wasn’t the highest quality food, I would never pay for like landscapers and plowing. I’d just do it all myself.
But now I’m like, “No.” I am, uh, at a point where I can pay for these luxuries and I can, you know, spend my time doing things that light me up. I think that’s probably the best part about FI now that I’ve like really internalized it. And it took me a while, Doug. Like when I hit FI at 25, it wasn’t like, oh, that next day I just became this person who lived in perfect alignment with his values and all my time was so well spent.
It took me like probably three years after that to like fully internalize what I had accomplished, but now I’m like, “Hell yeah.” Like I’m gonna outsource this stuff. I’m gonna pay for this, do that. Like this, that’s what money’s for. Money is not for just getting this massive number in an account that you can look at and screenshot.
It’s, it’s utility. It is to b- uh, build a better quality of life so that you can do the things you actually wanna do, spend time with the people you actually wanna spend time with. So
Doug: Yeah
Cody Berman: I’ve, I’ve been a lot better at using money as a tool.
Doug: Yeah, that’s a perfect way to look at it, to buy back time. And there’s a couple– many of my friends now have, um, cleaners that come to their house just a, I think like couple times a month, and
Cody Berman: We have that too.
Doug: Okay.
Cody Berman: Yeah
Doug: and we, we haven’t yet. It– we– I think both of my wife and I, we do a little bit of cleaning of all the time while we’re doing some…
Uh, yeah, so like we don’t mind it too much. But, um, I think that could be an area that like we need to test it out for maybe a couple months and just see if that, you know. I mean, it should buy us back probably a couple hours per week or something like that maybe. Um, but one thing is perfect, like values are different.
You’re like, “We don’t do grocery shopping.” Now me, I love food and cooking, so I’ll spend probably a few hours a day, and part of that is going in there and thumping some melons and, and seeing what’s going on at the store. So I actually enjoy going to the store, and it is kind of, um, you know, it’s a leisure, um, low-stress thing, and I kinda like it.
But I appreciate the fact that like some people are like, “I don’t give a fuck.” Like, you could pick whatever, um, melons or grapefruit or whatever. I don’t know what k- why I’m keep talking about melons, but
Cody Berman: Like, get your head out of the gutter, Doug. I don’t know what you’re talking about here.
Doug: yeah. I’m in there squeezing stuff and yeah, so. But it’s great way to buy back time, ’cause like you have to spend time driving there and blah, blah, blah. But anyway. All right.
Side Hustles and Final Wrap
Doug: As we’re wrapping it up, any other sort of broad tips for people, uh, to start side hustles, especially if they’ve like dipped their toes and never actually had like success come their way, and they’re like, “I know there’s these business models,” where would you direct them?
Cody Berman: I think I can answer a broader question while hopefully also answering your question, because I saw a debate come up in a Facebook group yesterday, and I think a lot of people in the FIRE community, anyone who’s a spreadsheet nerd like myself, someone was debating, they’re like, VOO versus VTSAX. And for those who aren’t familiar, one is like a Vanguard, I think it’s just like the S&P fund, and one is like the Vanguard Total Stock Market Index Fund.
They have extremely similar expense ratios. One’s like .03 and one’s like .07, and someone’s probably gonna be like, “Those are wrong.” Uh, okay, well, it’s, it’s… they’re very close. And people were just, like arguing about, like which one they should invest in. And I think in the beginning of your FIRE journey, like if your net worth is under a million, you should not be worrying about that minutiae.
Like, do fees matter in the long run? Absolutely. If you have millions of dollars or, like tens of millions of dollars, hundreds of millions of dollars, does the difference between .03 and .07 matter? Yes, a little bit. But I think people should focus way more, this is getting back to your question, on the gap, the difference between their income and their expenses, especially earlier on in the journey.
‘Cause if you’re someone who’s just getting like a mediocre return, like let’s say you’re someone who’s… you’re only earning 8% on your money because you’re not doing X, Y, and Z fancy strategies, whatever. And then there’s person B who’s… maybe they’re making 10% on their money because they are doing these fancy strategies.
If you’re saving way more than person B, even if you’re only making 8% and they’re making 10, you’re gonna absolutely body them on your path to financial freedom. Like, it’s not even close. So I think a lot of people get really bogged down in the minutiae of, “Oh, what should I invest in?” Like VOO versus VTSAX, when in reality, the thing that really matters is the gap, the difference between what you’re bringing in and what you’re spending.
So to get back to your question, side hustling, where to get started Side hustling is one of the best ways to increase that gap. If you can figure out a way to make 500, 1,000, a couple thousand dollars per month in addition to whatever you’re making from your main thing, whether that’s a day job or a business, and you just pile all of that, you just throw all of that toward your investments, your FI journey, like you can plug this into a compound interest calculator if you don’t believe me, your FI journey is going to be years or decades shorter.
So I don’t really like answering the question like, “Oh, what side hustle should someone start?” ‘Cause if you sat three random people down, one’s a plumber, one’s a real estate agent, one’s an esthetician, I’m gonna have three very different answers for those people. Like, yeah, maybe they could do digital products.
Maybe they could start a YouTube channel. Maybe they could do freelance X, Y, or Z. But I don’t know, it, it depends on the person and, and what they like. So there’s a million different answers to, like, what’s the right side hustle, but I think the best answer is whatever side hustle you’re attracted to.
Whatever the path of least resistance is, like, if you are going to keep up with that side hustle, that’s the one you should do. If you hate it and you’re just doing it every day for the money, you’re probably gonna be giving up that side hustle fairly quickly. But if it’s something that you don’t … If you love it, great.
If you don’t mind doing it, that’s okay, too. But if you hate it, then you’re probably not gonna stick with it for a long time. So, you know, you’re gonna have to experiment. That’s why I have 30-plus side hustles in my side hustle graveyard. But once you find one or a couple that you like or that you at least don’t resent, then you can just start to use those to, again, maximize that gap between your income and your expenses, invest the gap, and then boom, you hit financial freedom a lot faster than you thought was possible
Doug: Your book, Retire by 30, is, uh, sort of targeted, it sounds like, for people under 30. Most of the audience out there, they’re over… I think they’re, like, 35 to 50. There’s some younger folks. But who is the right person for the book, assuming that it’s more broad than the title might suggest?
Cody Berman: It is more broad. And I kind of stole this out of Tim Ferriss’ playbook. He was the one who inspired me to start all this stuff. Four-Hour Workweek, it’s like, okay, if you even get to a 20-hour workweek, that’s a win. You don’t have to retire by 30. Like, that’s not the point. The, the name of the book should’ve been, you know, Hit Financial Freedom As Fast As Possible and Then Do Whatever The Hell You Want, but doesn’t quite fit as nicely on a title and isn’t as clickbait-y.
But no, you don’t have to be under 30. Like, yes, is it easier for someone who’s 22 reading this book who has zero lifestyle inflation to hit FI? Probably, because they haven’t upgraded the house, they haven’t upgraded the car, they’re still living extremely cheaply. But there’s no reason that someone can’t start this journey in their 30s, their 40s, their 50s.
Like, it took me from 22 to 25, three years. That does not mean that someone can’t do this from 35 to 38, or from 43 to 46, or from 50 to 53. Like, and I’ve seen people do it in faster than three years. So, like, regardless of whatever age you are, it’s never too late to start, and the journey can hap- be- happen incredibly quickly if you start putting things in motion and getting that snowball rolling.
So yeah, I mean, ideally, if you’re someone in your early 20s, it’s going to be easier if you don’t have any lifestyle inflation, but that is not to say that someone in their 30s, 40s, and 50s can’t start implementing this stuff and hitting FI way faster than they thought was possible before
Doug: All right, we’ll link up so people can get the book. And you have a podcast, so tell us what that is about and we’ll link up to that as well
Cody Berman: So that’s called The Financial Independence Show, and in that show we share case studies, strategies, tips, real people, like real stories, people who have done this and retired in their 20s, 30s, 40s. Or maybe not retired. That’s another thing, is people will be like, “Well, what are you gonna do if you retire by 30?
Like just sit on your hands forever?” I’m like, “No.” Retirement is just the point at which work becomes optional. Like even when people, quote-unquote, retire at traditional retirement age, at 65, those people usually don’t just do nothing. They just start to pursue their hobbies and their passions. Like maybe now they’re fishing and gardening, and maybe they get a part-time job doing the thing that they always wanted to do during their career but they couldn’t because their career paid too much.
Like that’s what I’m trying to unlock for people. Like you can just go and do whatever the heck you want, whether that is some small business that you’ve always… You’ve always wanted to try opening that bakery. You’ve always wanted to, you know, have the, the world’s biggest garden. You’ve always wanted to become really good at tennis.
Like whatever that thing is to you, you now unlocked the time to pursue that thing. So that’s what I mean by retirement.
Doug: Yeah. Very good. Awesome, man. A- anything else before we head out? Any, uh, other places folks should follow you?
Cody Berman: Um, I think we covered it all. Retirebythirtybook.com. I know you mentioned you’d link it up. I’m on social everywhere @codydberman. If you wanna hit me up, send me a message, let me know you came from Doug and The Doug Show, and I’ll, uh, hit you back. I always love hearing from people who… If you made it this long in a podcast, like, you’re committed.
I like helping people who like to take action, so hit me up
Doug: Very good. catching up, Cody, and hope to see you soon
Cody Berman: Yeah, this was awesome. Great questions as always, Doug, and, uh, I can’t wait to hear about the new guitar and the new, new guitar once you, uh, upgrade again.