Why We Traded Stocks for a House Seven Years Into FIRE

Hey hey! It’s been a while! 👋

Long enough that a quick timeline can help fill in the gaps. So, what have I been up? Years of almost no changes, then a bunch all at once. To put them all in context, here’s the tl;dr on my financial rollercoaster since I left my job.

December 2018 – Decided to leave my job after Code School was acquired by Pluralsight, the company went public and I was able to sell my shares. I called it FIRE at about a ~4.2% withdrawal rate – higher than the target 4%, but clearly able to withstand any 20+ year period of market returns. My wife kept working until January of 2020, when she left her job for us to travel (just in time for COVID 😂).

I created this visualization to show how much I saved (y-Axis) at different ages. I saved 25% to 50% of my income for most years of my career. A negative savings rate of 100% would mean withdrawing 4%. Age 37 is less than that because my wife was still working at that time.

I experienced three notable income events – inheriting the house I grew up in when my mom passed away, Code School being acquired and Pluralsight going public on the NASDAQ stock exchange. At age 37 when I left my job I had about $2.2m in cash and investments, no debt and no property (other than a Fiat; that counts right?).

December 2018 – April 2021 – Minafi Focused – For the first 3ish years of FIRE, I had a lot of fun working on whatever I wanted. I created an investor bootcamp, fund directory and a number of interactive calculators. I had dreams of turning Minafi into a side project that could generate enough income for me to lower my safe withdrawal rate from ~4.2% down to a number that would last forever (3%). That’s the “goal” on this chart.

There was a problem with this plan – I burned myself out on financial content. 😭 There are two ways I’ve seen people be successful in the investing/finances/influencer space: they peddle products that aren’t worthwhile and might even cause others to take longer to reach FIRE. Or they build such a huge audience that they can make a profit from ads or affiliates.

Neither of these felt right for where I wanted to put my effort every day on. In April of 2021 I stepped back and decided to try my hand at a different project.

May 2021 – Now – Hardcover Focused – After Tweeting about my discontent with Goodreads, I decided to go all in on the idea. I put out a post on Reddit looking for collaborators, and we started Hardcover, a social network for readers! It’s been such a fun project. I’m spending much more of my time coding than I was on Minafi, where content was the most important piece. We’ve grown to 28k members, 290 subscribers with a thriving Discord and dozens of new people (sometimes hundreds) joining every day.

It’s been an amazing and fun project. I’ve spent days working on it from coffee shops, from our office in our apartment, from bed and recently from our new house (more on that later!).

What it’s not is profitable. It’s making $1,500 a month, but that’s not even covering the high hosting costs needed for such a data-heavy site.

Now – That brings us to today! I’m still actively working on Hardcover, looking to turn in into a successful business and enjoying life.

What About Income and Expenses?

Success with FIRE depends on two main assumptions: how much you’ll spend and how much the stock market will return. Out spending ended up being higher than I anticipated: 82k, 104k, 133k, 133k, 121k. The last few years that’s included $15k/yr to bootstrap Hardcover. Yet even with this, when we looked at our portfolio in 2024 it was still higher than when we retired!

However the math wasn’t mathing for forever FIRE. In August 2024 I ran the numbers. Our SWR had climbed up to 5.9%!

We were in a classic FIRE dilemma: should we spend less or earn money?

I started exploring different scenarios. What if we cut out Hardcover, reduce extra spending but stayed in our apartment? We could potentially live there another 25 years before we run out money. If the market declines, we’d run out of money sooner. The thought of bring broke at 67 didn’t sound good.

What if we buy a house? I’ve loved living in an apartment, but math-wise I wanted to rule it in or out. I ran the numbers on different house costs, combined with lower monthly expenses due to not having to pay rent. The results surprised me! We’d be under $1m much sooner, but with lower expenses our remaining investments wouldn’t dip as fast.

This has assumptions built on other assumptions. Of how much the market will return (7%), of inflation (3%), of rent increases (3%), of home insurance and property taxes (3%) and how much we’ll spend each year on maintenance ($35k/yr – which is super high, but includes taxes and everything else).

The fact that with all of these assumptions, in 26 or 27 years we’d run out of money matched with the FIRE simulators I’d run. My wife and I talked through these scenarios and one thing stood out:

We’d rather own a house in 27 years than still be in an apartment.

So, in August of 2024 we started looking for a house!

House Hunting Without a Job

We lived in a 2 bedroom, 2 bathroom apartment for 7 years. After that many years, we’d expanded into every inch of the space plus two storage units in the building for camping gear and holiday decorations. Our second bedroom was my office, my wife’s office, our guest room and our Peloton room. We needed more space.

Deciding on a budget was the hardest part. We initially planned on limiting our spending to about $600k (of $2.3m). We were dismayed when we saw what that would get us: the smallest, oldest, most dated houses in the areas we wanted to live.

In September 2024, a house on my run/walk path went up for sale. It had a ton of space, beautiful views of the city, open floor plan and more. It ended up being entirely too expensive ($1.4m, but later sold for under $1m). But talking about that house got us both excited in the idea of being homeowners again.

We had very specific criteria for this new place:

• We wanted to stay in Salt Lake City, Utah. Even though it’s a blueberry in a tomato soup – politically.
• Walkability is huge to me. I wanted a place where we’d never need to drive.
• 3+ bedrooms, 2+ bathrooms, 1,500 sqft or larger.
• A good entertaining space inside for friends hangouts and board games.
• A yard with enough space for some friends to being over their dogs.
• Close to nature in some way! Specifically a park because we didn’t want to be on the ridge line (first to be impacted by fires).
• Modern, updated interior and a nice kitchen.
• We’d be OK doing minor fixes and updates, but didn’t want to do a renovation, addition or anything major.

In the neighborhood we wanted to live in (Liberty Wells), most houses are 100 years old or older. The “good entertaining space” and “modern kitchen” ended up being the most difficult pieces to find.

Like for most things in like, I created a spreadsheet to generate a personalized “Walk Score” for each place we investigated. These are weighted by how often I’d go to them – including going to the park with a dog once we adopt one. It uses Google Maps and a macro to get the distance to each place and convert it from meters to miles.

Throughout September and October we toured about 25 houses. We went under contract with one, but the inspection scared us off (“it’s falling in on itself” – our inspector). In late October we went on a cruise that we’d planned early in the year (Barcelona!)

One place was listed while we were gone that looked perfect. It went under contract before we came back.

The pricing and competitiveness of the housing market was starting to get to us – and we’d only been looking for 2 months! Some friends of ours spent 9 months hunting for their place (in Seattle). We hoped to find something sooner.

We got back from our vacation on Friday. On Sunday we saw a new place in the perfect spot show up Redfin. We called our Realtor, got in within 2 hours of listing and were the first to see it – even before the sign was put up!

After going through a failed purchase, we were hesitant to make an offer too quickly. We slept on it, talked about it, and decided yes, this is the place. Let’s do it!

We put in an offer that was contingent on an inspection, but not contingent on financing. We knew that would either be an SBLOC or cash. They accepted the offer in November and we started the inspection process.

SBLOC or Cash?

The big question for us was whether we’d take out a securities backed line of credit (SBLOC) or just pay cash.

We looked into Interactive Brokers for SBLOCs after a bunch of other FIRE bloggers mentioned them. Here’s how that would work: 1) we’d need to transfer all of our Vanguard Mutual funds to ETFs, then 2) Transfer those ETFs to Interactive Brokers, then 3) Take out a cash loan on those funds at a max of 50% of the holdings (so if we had $1m in investments at IB, they’d loan us up to $500k).

IB’s rates are competitive, but you’d still pay 6.5% at the time. Since this rate is variable, it could go up or down at anytime. It also means that if the value of our investments declines, we’d need to sell enough so that our loan amount is less than 50% of the total amount invested.

For an $850k house, we’d need to have $1,700,000 of investments to loan against. We didn’t have that much, but we could pay $250k immediately, then we’d only need a $600k loan on $1.2m in assets. Ideally, we’d need $1.5m+. In that case we could still be in trouble if the portfolio decreases 20%.

I didn’t love the idea of moving of our investments from Vanguard. They’ve served me well for almost 20 years.

The biggest downside to the SBLOC is the chance of the loan being called in. If the market dips, they could still some of that stock automatically. This loan also wouldn’t give a mortgage interest deduction for taxes.

The Cash Option

The alternative is that we buy the house completely in cash. We’d need to pay a lot in taxes to liquidate that much cash, but after that our ownership wouldn’t be tied to the market.

We investigated both paths for most of November and December. After the election I had no more of an idea what direction the market would head than anyone else. What we did know was the present. We could cash out some funds at the markets all time high, buy a house, and then figure out what’s next after that.

So in December I started rebalancing our portfolio into cash. I recommend dollar cost averaging for investing a lump sum into the market, and it seemed just as useful for cashing money out. I’d put in an order to liquidate $100k a week until we had enough to make the purchase. This would completely blow our chances at any Healthcare.gov subsidies for the year, but it needed to be done. We already had 3 years of expenses in a Vanguard Cash Plus account, but we’d need to sell a lot more.

Side note: Vanguard won’t allow you to send a wire from a Cash Plus account. We found this out the day before closing. You also can’t instantly transfer to another Vanguard account. This meant that the best way to wire money for the house was to wire money from the Vanugard Cash Plus account to our already connected Bank of America checking account, and then go into a physical branch to transfer from BoA to the Title company. I wonder how often people get a 900k transfer in the morning only for it to be transferred out an hour later. Not suspicious at all. 😅

Our US Stock allocation had grown to almost 60% of our portfolio – well above our target 50%. We sold mostly VTI/VTSAX to fund the house purchase, with a smaller amount of international stocks. Here’s what our allocation currently looks like.

This is the end result of our expenses after paying $72k in taxes for 2024 ( 😭), and another $100k in house fixes (😭😭). Foundations are expensive. 🛠️🏡

To me, this felt like cashing chips out at a casino after a winning streak. I don’t know what’ll happen next with the US stock market, but I’m not optimistic. I believe tariffs, trade wars, small businesses closing, more unemployment and more international competition will result in a serious correction to the US stock market. In the worst case, that’ll lead to international options for many US products and services, resulting in those companies never recovering and the dollar losing it’s position as the worlds reserve currency.

I don’t have a crystal ball, but I am concerned. I’d rather have a physical home and a decent cash cushion at this moment in time.

Consumers are voting with their wallets. TSLA, Amazon and Target are all down because of protests as these companies have made the clear decision to become political entities. I’m doing the same thing with my limited purchase power. I haven’t completely left the US stock market, but it’s switched from being my priority to a secondary investment.

Today, this only costs taxes. For this we get peace of mind by owning a home, and to no longer need to worry about the markets (for as long as our cash cushion holds out 😅).

We’re Homeowners! 🥳

That’s where we’re at today! We have a house and decent cash cushion that could last us at least 5 years.

We closed on the house in late December, spent two months on various fixes, and moved in about three weeks ago. It’s already starting to feel like home. ♥️

Our new place is a 1898 Victorian 4 bedroom, 3 bathroom duplex (2/2 and a 2/1). The downstairs is our primary space, while the upstairs is my office, guest room, exercise area and future rental (if and when we want to).

For now, we’re settling in and enjoying the space. We haven’t made too many big purchases (aside from a Dresden gaming dining room table). Just about everything else came over from our apartment, but now has much more room to breathe.

The future of our finances is still in question. Do we go back to work? Do we rent out the apartment upstairs? Do Hardcover or Minafi start generating enough income to support us? These are the questions we’re still figuring out.

With everything happening politically in the US right now, it feels difficult to make long term plans. Some politicians thrive on uncertainty, but markets don’t. As we start tracking our expenses in the new house, we’ll have a better understanding of how much we spend a year here. That’ll give us some insight into how much time we have before needing an income.

For now we’re going to enjoy this new phase of life as much as we can – between protests, boycotts and calls to our representatives.