The Middle-Class Trap That Could Keep You from FIRE (How to Escape It)

Buying a houseOne of the biggest fears of people in the PHI community is ending up in the middle class trap landing here could delay your retirement for years, but don’t worry, Scott and I are going to dive deep into how to escape the trap. There is a way out. Hello, hello, hello and welcome to the BiggerPockets Money podcast. My name is Mindy Jensen and with me as always is my not trapped cohost Scott Trench.Thanks, Mindy. You’re just so good at chaining together all of these wonderful different intros that are so relevant to whatever we’re talking about every day. BiggerPockets is a goal of creating 1 million millionaires who are not caught in the middle class trap. You are in the right place if you want to get your financial house in order because we truly believe financial freedom is attainable for everyone no matter when or where you’re starting. Mindy, I’m super excited to get into this today because we ran a YouTube poll to the BiggerPockets money audience and the middle class trap was one of the top two problems that folks wanted us to provide answers to. The other being most of my wealth is an index funds and I don’t know how to actually harvest that for cashflow, which we need to cover at other times and something I’ve been grappling with as well. But this is the one we’re going to focus on today, the middle class trap, and we should start by defining it. How do you define the middle class trap, Mindy?The middle class trap is what happens when you have been super good with your finances, you bought a house like you’re supposed to, you invested in your 401k like you’re supposed to, and all of a sudden you find yourself a millionaire on paper. All of your net worth is actually tied up in your home equity and your pre-tax retirement accounts. The problem is you’re not going to sell your house in order to access that equity. You still need a place to live or you’re probably not going to sell your house. You are also not going to refinance and pull some of that equity out because chances are really good you have a better rate on your mortgage now than you would get if you refinance. On the same token, you pre-tax 401k is awesome for reducing your taxable income, but you can’t access those funds until what age, Scott? Can you access them at 55?59 and a half, right?59 and a half. And if you do access them beforehand, you’re paying a 10% penalty plus you’re paying taxes on all the money that you’re taking out. So Millionaire on paper is awesome, but you need to be a millionaire accessing that million dollars in order to be able to spend it. So that’s why we call this the middle class trap.I agree. I’ll add a couple more nuances there. The middle class trap as I describe it is you do everything right and that’s the frustrating part about this, right? Imagine a two income household or with kids, two and a half kids and a dog and a two car garage and all that kind of good stuff each making somewhere between 50 and $80,000 a year on that front, doing well on paper, contributing to the 401k, contributing, paying down the mortgage, maybe have reasonable cars that are fairly new with some payments on ’em that they’re making and they’re just looking up and like, well, my net worth is a couple hundred thousand dollars, maybe even over a million at this point, but it’s all in my home equity, it’s all in my retirement account. If I were to stop working or one of us was to stop working, we would start running out of cash in a pretty remarkably short time period.What the heck is going on? We see you making all these decisions and not getting ahead. That’s the middle class trap and there are many variations of it, but the one that we’re going to talk about today is a millionaire to $1.5 million net worth that is all stuck in assets that seem unhurtable for the individual, and we’re going to talk about how to either dramatically the different ways to get out of there either gradually or dramatically to access that capital and actually have it begin producing freedom in your life right now and the trade-offs that go with that.Awesome. So Scott, in a perfect scenario, what is the ideal portfolio so that you’re not in the middle class trap? Let’s say that you have just a pile of million dollars, 1.5 million. Where would you put it so that you would not find yourself in this middle class trap?I can give you a couple of answers that, and by the way, there’s no way to answer this in a way you’re going to like as a listener. The middle class trap is there because so many of the decisions that put you in the middle class trap are textbook decisions that have a healthy balance of life and long-term tax advantages to them. So lemme give you an example of middle-class trap, right? We talked to this couple a while back. They’re based in Colorado, the $1.5 million net worth, roughly speaking, 500,000 of that was in their home equity. Their home was worth 800 grand. They had 300,000 mortgage left, another 500,000 was going to be in retirement accounts. Another 500,000 was going to be in two rental properties that were highly levered, so like maybe 500,000 in equity against 1.2 million in asset value, so $700,000 in additional mortgages and then a little bit of a sprinkling of cash and credit card debt.On addition to that, that portfolio produced effectively no cashflow for them and while they were able to continue contributing and paying down these mortgages over time, they just weren’t getting ahead. So that’s a middle class trap portfolio for example, even though that includes some rental real estate, let’s take that same amount of net worth. Let’s just tweak some numbers That house the $800,000 house paid off no mortgage. There’s one rental property and that clears up $30,000 a year in p and i payments on the remaining balance of that mortgage, right? Then the rental property, there’s, there’s one rental property that’s paid off there in the $400,000 range and that’s producing, let’s call it 20 grand a year in cashflow. That’s a swing of $50,000 a year and less income that this family has to realize to pay for their lifestyle expenses. And then let’s say that we have maybe 400 ish thousand dollars in mostly in an after tax stock bond portfolio that’s producing maybe 3%, 4% blended yield on that front.That’s another $12,000. So that position is not financially free. We’re not in a financially free position because so much wealth is in the, but you can see how much more cash is going to flow into this couple’s bank account with that portfolio tweak and that, no, that’s not what I would be recommending. That would just be one set of moves that that family could make that would make them have be a lot less dependent in the near term on having two full-time income earners. So we’ll get into the nuances of how to actually think about this and the trade-offs. I told you, you are not going to like it. None of us like that move and I’m not saying they should do that, it’s just that’s the kind of thinking that we have to start with to figure out how we move the chess pieces to get out of the middle class trap.Alright, so I hear what you’re saying. Not having a mortgage payment is awesome, but you’re advising them to pay off a large chunk of this pretty low interest rate loan just to free up that amount. Is there any other, what would you say to somebody who says, I do not want to give up my 3% mortgage?Well, look, I think escaping the middle class trap is fundamentally, it comes down to a question of am I optimizing for some future state total net worth number or am I maximizing for nearer term flexibility? And there’s not a wrong answer to that. The middle class trap is not a problem if you do not intend to retire early. It’s just a problem if you intend to retire early and the mortgage payment’s a great example of this. We had a very lengthy debate about paying off your mortgage or not a while back and you did not want to pay off your mortgage. And I decided, dude, pay off my mortgage on that front. And I think that there’s, when you’re getting close to the journey and finishing the play to financial independence, not having a mortgage payment drastically reduces the amount of income that you need to realize either from your work or from your portfolio, which makes the game a lot simpler. And over most 30 year periods, you’re going to do better investing in the stock market and taking an index fund seven to 10% at long-term yield that the stock market historically produces almost over every 30 year period. But you know you’re going to be freer if you pay off the mortgage sooner, and that’s the fundamental again, that’s why this is so hard when we think about escaping the middle class trap.While we are away, dear listeners, we would love to be able to hit a hundred thousand subscribers on YouTube and we need your help while we take a quick break. You can go on over to youtube.com/biggerpockets money and subscribe to the channel.Welcome back to the show.I like that you acknowledge that it’s hard. This is not an easy fix. This is not an easy solution. Scott and I aren’t going to say, oh, just do a, B, C and blam. You have escaped the middle class trap. It’s not that easy. I think you hit a good point, Scott. You said, do you intend to retire early? We’ve spoken with a lot of people on this show who are pursuing the FI part of financial independence, but they like their job. They’re not actually looking to retire early. So if retiring early is not your goal, the middle class trap is far less of a problem. However, that’s real easy. Okay, those people are taken care of. Now we’re going to talk to the people who do intend to retire early. Again, you haven’t done anything wrong by maxing out your 401k and buying the house and having equity buildup in your home, but you have done, and I mean that’s been the advice.Oh, max out your 401k, build your wealth, that’s great for traditional retirement. If you find yourself a millionaire on paper, there are things that you’re going to have to change in order to be able to retire early. And one of those things, the biggest thing you’re going to have to change is your asset allocation. Are you investing in your 401k? Maxing that out? Do you have a Roth option? You are trading reducing your taxable income for accessing your retirement funds early. So talk to your employer if there is a Roth option, perhaps that’s the way to go for you. You can pivot from investing in the stock market through your 401k to investing in the stock market in an after tax scenario. Again, if you’re not maxing out your 401k, you are not reducing your taxable income by that much, so you will be paying more income taxes, but you’re building after tax wealth that allows you to access these funds until you can access your retirement funds.Let’s make up another example here. Let’s say we have somebody with 500,000 in equity in their home, an 800,000 home and they’ve got a million dollars in retirement accounts, essentially all in a 401k. Super simple, unrealistic example. Many people have more complex situations than that, but let’s just take this situation here. How do we help this? This person is sitting there and they got 10 grand in their bank account and $5,000 in the credit card balance, so they run out of cash and two paychecks if they stop working basically, and this is how a lot of people I think live. There’s a car, there’s loans, there’s all these other kind of other things in place there, but generally they’re getting ahead and contributing to their retirement and they’re a millionaire. This is a millionaire. This is a $1.5 million net worth household and we’ve talked to people that are actually fairly close to a situation like this on BiggerPockets money in the past.So you say, I want to be financially free tomorrow. Well, we have one answer to that that you’re really not going to like. I want to be financially free in five years. We have an answer to that that you might like more and I want to just continue what I’m doing through to retirement there. There’s three different approaches to how to handle this. Let’s say, let’s take the middle ground for how we can move this person on a path toward financial freedom in five years. At the framework level, again, let’s say they have $300,000 left in their mortgage and that million in the four oh k one answer is to say, okay, this couple is probably, lets assume it’s a married couple, our married couple with two and a half kids example here, they’re probably able to, they’re clearly generating more than they spend because they’re contributing heavily the 401k.That’s how they have a million dollars in that 401k, but they’re also facing a problem here, right? This is not a couple that’s earning so much that they can go through the classic finance influencers playbook that are all slight permutations of a formula that everyone uses right here of like how do you save? Well, first you max out your emergency reserve, then you take your 401k match, then you max out your HSA, then you do your Roth, then you do your 401k until the balance and then you invest in your after-tax brokerage. Almost everyone you talk to is going to have a variation that’s almost verbatim that particular flow here. The problem this couple has is they can’t quite get through that whole thing because they don’t have $75,000 to invest. They have 50,000 to invest and that’s why they never get to accumulating wealth outside of that 401k or those retirement account balances is because they go down that neat stack and there’s just not enough income, not enough leftover before their expenses to actually build up wealth meaningfully anywhere else.So to begin unwinding this problem, if this is a 40-year-old couple and wanted to retire in five years and approach that could work might look like this, we’re going to stop contributing to the 401k. We might take our match and that’s it. We’re going to stop maxing out the HSA. We’re going to not do the thing that the finance influencer textbook says to do, and instead we’re going to pay our taxes and we’re going to be left with $35,000 after tax that will actually hit our bank account and we’re going to pay off that mortgage early and that is going to have a whole bunch. That means I’m going to pay more in taxes and I’m not going to invest in the stock market over that time period. But what you’re going to end up with is 3, 5, 7 years from now, you’re likely going to have that mortgage paid off and the $30,000 that you need to pay in principle and interest on that mortgage are going to be gone, which is going to reduce the pressure on your situation for both parties to work.For example, one could maybe do some sort of entrepreneurship or whatever. The second thing that’s going to happen is over a five to seven year period, historically this may not happen. You cannot count on this happening, but you can analyze formulaically that this is the average outcome that has happened is the stock market will roughly double every 7.2 years at 10% yield. Okay? So if you, your 401k accounts are in there, they will still grow. You may end up with $2 million at that point and a paid off house. Now things begin to get interesting. Now we still have the problem of the in the 401k, but we can actually start beginning to back in our minds into how can I actually harvest that? Can I put some of that into a bond fund, something very, very safe, for example, or maybe even like a syndication or something like that that would produce a yield and can I start to harvest some of that?There’s a program called the Substantially Equal Periodic Payments, for example, where you can begin, if you commit for life to taking out some amount of money from your 401k, you can do that penalty free. You’ll still pay taxes on it. But now, hey, okay, at 47 I have this portfolio, I’ve got a paid off house and I’ve got my 401k balance that has grown to some degree. I take some percentage of that and I begin harvesting just one or 2% of the balance of that on an annual basis. That makes a big difference. 2 million times 1% is 20 grand with $30,000 and less p and i payments from your mortgage and $20,000 coming in from your 401k through these substantially equal period payment plans, the pressure begins to ease dramatically. That’s a $50,000 swing in cashflow. That’s a full-time $65,000 a year job from one of the spouses here that does not have to be worked in that situation. So that would be a way to begin thinking about bridging this difference and achieving some sort of freedom from someone starting in that traditional middle class trap position. Again, I told you you weren’t going to like it though. That’s one example. So what do you think, Mindy?I don’t like it, but I see where you’re going. So that isn’t the route that I would choose. I do like the 72 T. I do have to make a couple of corrections to what you shared. You don’t have to take the 72 T for life, you have to take it for a minimum of five years or until age 59 and a half, whichever is longer.Sorry about that. Yes, thank you.Yes, and the stock market tends to double every seven or eight years, not every five to seven, however, all of the rest of that, absolutely. I’m picking nis. I don’t want to pay off my mortgage. I don’t want to get rid of my 3% loan. So instead of doing that, I take that extra, I think you called it 35,000 and I start investing in accounts that I can access without paying fees that I don’t have to be a minimum age to access. So your Roth IRA or if you make too much money a backdoor Roth IRA, that allows your money to grow, you can access the amount that you put in at any time, even though you can’t access the growth, the growth still stays there, still keeps growing, so that’s a great way to access some of those funds. I would also start funneling funds into an after tax brokerage account.I have done well in the stock market. I have done well with, I mean index funds have done amazingly well. So that’s another option going into the stock market in your after tax brokerage, that’s money you can access at any time and just for fundies, you can actually access a lot of the money in your after tax brokerage account tax free once you stop working, once you don’t have income, it is something like $96,000 that you can access. You can pay no capital gains taxes on, I got this from Jeremy Schneider from Personal Finance Club over on Instagram. You can access up to $253,400 tax free when you have an after tax brokerage account, and that’s per year. So in his example, he says, will and Whitney retired early, they withdraw $253,400 per year from their taxable brokerage and pay $0 in tax. Here’s how $96,700 is the top of the 0% tax bracket for capital gains.$30,000 is your standard deduction and $126,700 principle of investments sold in total. That means the couple can spend 253,400 of their investments in a year and pay $0 in tax. Of course, Scott and I are not tax professionals, and you should absolutely consult one before you start doing this and be like, oh, well Mindy and Scott said, so the IRS is going to be like Mindy and Scott who, but anyway, you can actually access a lot of these funds without paying taxes. So that’s another way to go. You said don’t contribute to the HSAI am going to say maybe continue contributing to the HSA and stockpile your receipts. That’s another way to pull money out of your retirement accounts and the things that you’ve been saving so that you can get that money without paying taxes on it. I think that when people hear the middle class trap and we talk about, oh, it’s just everything’s in your retirement accounts or your home equity and they’re like, oh man, I’m stuck. You’re not stuck. You have a lot of options, but you do have to start redirecting your money in order to be able to take advantage of those options.That’s the big thing here, right, is the middle class trap is this feeling of being stuck in a slog. And that’s the idea is you can do this by diverting flows of cash, which I think is going to be easier for most people, or you can continue what you’re doing and have a plan to make a hard cut and begin accessing the money that’s in the HSA. So for example, if you want to contribute, if you want to continue contributing to HSA and like Mindy said, store all your receipts over the course of the next five, seven years, maybe you spend 25 grand on healthcare, actually you can put your insurance premiums on top of that as well, right? And the HSA can reimburse, so store all of those too on that. So you’re probably spend significantly more than that depending on whether your employer pays most of your plan or not.But you could potentially have 50 or $60,000 worth of expenses over a five, 10 year period for healthcare that can then be pulled out of your HSA tax and penalty free and the growth in that HSA will have occurred tax and penalty free. So that’s a great way to do it as part of that, and you have to get really savvy about these retirement accounts, but that’s going to be a hard pivot for someone who’s 35 and has over 40 and has a million dollars in that 401k or thereabout grows it over the next seven to 10 years and then all of a sudden starts harvesting their HSA and starts pulling out of the 401k. If you can do that, that’s great, have a strategy there. The mad scientist has put together some really thoughtful ways to do that. The challenge you’re going to have at the fundamental level is most of that wealth is going to be in pre-tax accounts, most likely like the 401k, and rolling that into post-tax accounts will involve a decades long timeframe.You have to be thinking 10 years out, how do I actually, when I have low income, begin to roll that money out of my 401k into a Roth in the early stages of retirement? It can be done, but I think it’s just a lot lower probability than beginning now to build wealth outside of that retirement account, either by paying off the mortgage or by beginning those after-tax brokerage account contributions. And again, the problem you’re going to run into is the textbook of maxing out the HSA, taking the 401k match and maxing out the 401k is likely going to leave you with nothing left to really begin doing that unless you actually make the hard suboptimal, long-term wealth choice of stopping, continuing to pile up wealth into the middle class trap.Yeah, and Scott, even hearing you say maybe you stop maxing out your 401k, I’m like, oh, that sounds so wrong. I didn’t max out my 401k last year and I did it on purpose and I funneled that money into different investments, but it was weird to not max it out and I’m not in the middle class trap. Personally, I chose to. There were other investment opportunities that I had that I wanted to take advantage of, but it was still really, really weird to on purpose, not hit the max, especially now that I’m over 50 and I can get an extra 6,000 on top of that. I didn’t get that either.Alright, what if you’re already in the middle class trap? Don’t worry, we’ve got you covered after the break.Let’s jump back in.I mean, look, it comes down to cash and cash flow. If you have no cash and you have no cash flow and you have large cash outflows, you’re going to be stuck working at the job for a very long period of time until that changes and there are multiple ways to change that. Again, you have to grapple with here, my favorite is to begin building up some kind of cash outside of the 401k in the retirement accounts here. I like the paying down the mortgage. Mindy disagrees on that front because paying down the mortgage has such a drastic reduction in cash outflows for the next X amount of years, in many cases, two decades or more, which some of the best years of your life where you’re going to have the energy and time and inclination to do all the big things in a more robust way. And then I think building up investments outside the 401k or having a specific plan to access it like the substantial equal periodic payments 72 T concept here, or real estate or after-tax brokerage investments are all ways to do it and again, all come with the cost of sacrificing some of the tax advantages in those accounts.Scott, let’s talk about real estate. Let’s talk about how somebody can use real estate to escape the middle class trap. Somebody who doesn’t have any real estate right now outside of their primary residence.I think that a lot of investors are finding that the promise of buying a levered rental property, putting 20% down on a rental property and then having eking out a cash flow and having that compound as you buy more and more and more is a false promise and is not coming true for most folks. Where you’re seeing real estate really contribute to financial freedom, I believe for a lot of folks is when it’s paid off. Another theme here, right, with the paid off mortgage, a $500,000 duplex that produces a $20,000 cashflow, for example, that’s a 4% yield or maybe let’s call it 30,000, that’ll be a 6% yield would be a better example. That’s probably going to happen for the most part when that property is paid off, that same property that’s supposed to produce $10,000 or three of ’em across there, one CapEx item blows from one of the properties, blows that cashflow completely up and you can’t really rely on it.So I think when we see the folks who are posting who’ve actually retired and sit there and chill in the BiggerPockets forums, it’s guys like Steve Vaughn or this guy today who has like 20 units and he produces 200 grand in cashflow because it’s so lightly levered. He’s basically paid off, almost paid off the whole thing. And so I think that’s another way to think about it here is if you can just have one or two rentals alongside that stock portfolio, that’s going to make a big difference on there if they’re paid off, but it’s going to be, I think you’re going to be disappointed in the cashflow until you get to really low leverage or a long time goes by if you’re trying to double the penny. I think a lot of the folks who bought, bought, bought, bought, bought, bought and continue to scale. They’re not realizing the actual promise of that cashflow in a robust sense, but the guys who did the un optimal thing and paid it off are realizing that and probably even though it’s not going to build them as much wealth as an index fund portfolio and an unlevered real estate play, probably enjoy freedom at a little bit earlier of a time period than our peers in the index fund portfolio, which we’ll get to in a second here. What do you think about that?I think I’d like you to explain it a little bit further with regards to it’s so difficult to buy a $500,000 property without 500,000.That’s right. I think the fundamental issue here is that becoming financially free is a function of spending less than you earn and investing the difference over a long time period in a portfolio that you’ll actually rely on to fund your lifestyle downstream. So we’re not getting there overnight and we have to think about what is the portfolio. If I hand you 1.5 million or $2 million in cash, whatever the BiggerPockets money audience by and large says that their fire number is between 1.5 and $2.5 million, so let’s use $2 million as the midpoint in that. What is the portfolio that will actually enable you to sleep well at night without working a job on a $2 million asset base? That’s the question that we’re solving for here and real estate for many people on BiggerPockets money and BiggerPockets is a part of that, but not the entire answer to that because what we just discussed,Okay, you just hit the nail on the head about this entire scenario. You said, we are not getting there overnight, and I think that that’s really important for people who find themselves in this middle class trap to realize you’re not going to get out of it overnight. You didn’t get into it overnight, but you need to start pivoting where your money is going, where you’re investing in order to be able to get out of it at all. The other end of that is you just work until traditional retirement age, which doesn’t make you a bad personOr you just keep contributing and the way you’re doing it and the problem begins to gradually ease because the house and the cars and whatever begin to gradually get paid off and the asset base begins to swell so large past the point of what you need, that the problems begin to gradually recede from the middle class trap. But I think in the meantime, that’s where we’re talking about. Let’s think about some other ways to do that and I think one of the challenges that I have not been able to get around is paying the tax man seems to be a price you have to pay to actually realize the dollars after tax that you can spend on your lifestyle and after tax investments. And it’s much harder that way. It feels smaller and it is smaller, but I think that it’s a part of the trade-off we have to make.Having a conversation with a tax planner can be really, really valuable to open up your eyes to different scenarios. Scott and I are going by what we know and we’re not tax experts, there are tax planners out there who could look at your portfolio and make suggestions based on where you are and where you want to be and the timeline to get there. Scott, how long would you say on average it would take somebody to withdraw themselves from the middle class trap?It depends on how drastic you want to be. If someone says, I want to become financially free in six months, I would tell them, sell your house, harvest the gain, probably tax free. Go start a new house hack or something like that and that will reduce your expenses dramatically. Take your proceeds and invest them in something that will produce after tax cashflow, whether that is a bond or a hard money node or a rental property or depending on your risk tolerance and skillset, something else out there, or buy a new house hack that’s paid off that then provides a couple thousand dollars of income from the other side or other units, and that will greatly defray your living expenses. Sell your cars, pay off the car loans, buy two beaters, one or two beaters for that. Begin packing all of your lunches and those types of things, and you can probably reduce your cash outlays by 30, $40,000 a year in that situation.Using our previous example, which all can go into the pot for cash accumulation, and if we add in our $35,000 because we’re reallocating funds away from our 401k, we get a serious amount of incremental cash that begins piling up for this person. That choice is way easier for the 23-year-old to make with nothing getting started than it is for the family with two kids. So it’s unlikely that most people will take that choice in the current situation, but that is the fastest way to do it overnight, and you can really reallocate in a hurry and move that you might be able to even quit your job and begin harvesting some of that 401k account to live a pretty good life right away. If you’re willing to tolerate the house hack and the serious reduction in lifestyle that would accompany, that’s that moves that I just talked about much more likely again, is don’t buy new cars when the current loans in the cars pay off.Just hold ’em. Just keep driving those cars, whatever they are. Another one, just stay put in the house. Don’t upgrade, don’t change, don’t whatever. Just let that, let your income in the gradual career progression hopefully, and a static mortgage payment, let inflation do its work on that front and stop putting theirs. Don’t max out the 401k the whole way, but begin piling up some fraction that’s meaningful outside of the 401k. And depending on how fast you want that freedom and the optionality, you can just cut back more on those contributions to the pre-tax retirement accounts or less if it’s not as anxious a need for you. But I think there’s so many degrees for ways to get out of this that it’s really hard to have a one size fits all and it’s going to be so dependent on individual circumstances, but you can’t keep doing the same thing and expect more flexibility in your life. Something’s got to change if you want out of this, if you feel stuck and your wealth is not actually doing anything for you and can’t do anything for you in the next 5, 7, 10 years.Scott, I think our role here, our job here is to just introduce the concept of the middle class trap. Give ideas for ways to get out of it if you find yourself in there, ways to avoid it if you’re not there yet, and then give it because it is so personal. Your finances are different from, my finances are different from Kyle, mass. Finances are different from everybody else’s finances, so let’s not even try to give advice. Although I will say that the majority of people that we have talked to have reached financial independence from a position of approximately zero net worth to financially independent in about 10 years.I think that’s the minimum. Yeah, I don’t know very many folks who got there faster than that, but that seems to be the minimum. Yeah,So since you’re already in a position of you’re saving, you’re investing, you have your house and whatever, even if you don’t have a house, you could be in the middle class trap when all of your money is in your pre-tax 401k because you’re already used to this. I think your trajectory will be, or your timeline will be much shorter than that 10 years to get yourself out of the middle class trap because you’re not planning for all retirement. You’re planning for the portion of time from early retirement, whatever age that is, to 59 and a half 55 if your plan allows to when you can access those retirement funds earlier than 65. Alright, Scott, should we get out of here?Let’s do it.I would love to hear from my listeners, what are you doing with your portfolio? How are you in the middle class trap? And if you are, how are you getting out of it? Email me [email protected]. Email [email protected] or post in our Facebook group because we will have a thread for this particular episode. If you would like to share publicly again, please go over to our YouTube channel. If you are not already a subscriber, we are trying to get to a hundred thousand subscribers because then Scott gets a beautiful plaque for his little bookshelf behind him that says We have a hundred thousand subscribers. So please go to youtube.com/biggerpockets money and click subscribes. Thank you, thank you. Thank you for listening. We really, really appreciate you and you spending your time with us. But that wraps up this episode of the BiggerPockets Money podcast. He is Scott Trench. I am Miny Jensen, and I am going to shout out to my fans, Lucy and Juliet, and say, take care, brown Bear.