156 | Retire Before Mom And Dad | Rob Berger

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Rob Berger, founder of Dough Roller and Retire Before Mom and Dad, talks about the simple math of early retirement and more essential FI lessons that are important to talk about.

Rob’s Personal Finance Story

Before a total transformation, Rob thought about money in a similar way to his law partners. Rob had spent eight years at a law firm and recently made partner. With that promotion, he started doing what many lawyers in his firm did. He bought a fancier car, joined an expensive golf club, and a designer watch.

However, he realized that it wasn’t enough for him. It felt like he was trying to emulate his father but didn’t actually want the life he was pursuing. As he looked to the partners further along in their careers, he realized they were not all happy. In fact, many older partners still struggled to find their place and continue to thrive.

I thought, you know, we’ve got one life to live and I just don’t think I want to go down that route and make my entire life about big law. And, yeah, it’s funny, looking back on it, it doesn’t seem that risky to me. But I know it sounds crazy to actually make that decision.

After two years of being a partner at a wonderful law firm, he realized that he didn’t want this lifestyle anymore. So he quit and took a six-figure pay cut in the process.

Changes

This career shift necessitated some dramatic personal finance changes. Rob realized that stuff wasn’t making him happy, so it was time for a change. He ditched the country club, sold the fancy watch, and took a closer look at his financial picture.

At the time, Rob and his wife were carrying debt in the high six figures. An assortment of student loans, car loans, mortgage, and a HELOC was the cause of their debt burden. When Rob quit in 2005, he wrote a note to himself that promised he would be debt-free in seven years. Although that timing did not quite work out, this decision led him down the path towards FI.

Paying Down Debt

After making the commitment to become debt-free, he started by paying off a car loan. He also made sure to avoid taking on any new debt, even if it was a 0% APR offer.

Rob and his wife took advantage of any 0% balance transfer options they could find. Importantly, they continued to invest throughout the entire process. For Rob, not investing throughout the debt pay off process is terrible advice.

Rob made this decision after deciding what his ultimate goal for the personal finance transformation was.

I always keep my eye on what my ultimate goal is. My ultimate goal isn’t to pay off all my debt; that may be part of it but the ultimate goal is financial freedom.

For Rob, the goal was financial freedom not simply debt-free. If your goal is to become Financially Independent, then skipping a 401(k) match during your debt pay-down process is not ideal.

With their goals in mind, Rob and his wife made sure to get the lowest interest rate possible on all of their debt. Although most of their interest rates were relatively low, they did tackle the higher interest rates first.

He also felt more comfortable paying down different debts at different paces. For example, he was more comfortable paying off the HELOC in big chunks when possible because he could always reborrow the money. Unlike an installment loan that would be unaccessible once he repaid the debt.

Emergency Funds

Throughout their debt payoff process, Rob did not keep a large emergency fund on hand. In fact, they only kept a few hundred dollars worth of savings on hand for many years.

If an expense such as a car repair came up, they could easily cover the expense through borrowing. He felt that his income was relatively secure based on his education and the area they lived in. However, today he has enough money in his emergency fund to live on for many years.

This approach to an emergency fund worked for Rob, but it might not be ideal for everyone.

The key here is to understand that there’s no one right answer that is going to apply for everyone.

For Rob’s situation, he did not feel there was a big risk to keep a lean emergency fund. However, others around the world may feel differently based on their situation.

Investing For FI

When Rob started investing, he didn’t know anything about it.

So, he bought a front-loaded expensive fund from a bank. Next, he invested in an actively managed fund at the suggestion of a coworker. Although that fund beat the market for five years, he realized that at some point it would underperform the market. Since he couldn’t stick with his investment for the next 50 years, he decided that he had no business staying invested in that fund.

After reading All About Asset Allocation Full Disclosure: We earn a commission if you click this link at no additional cost to you. , he took a different approach. At first, he attempted to be invested in every single asset class. However, he now has a standard portfolio of six funds. With a mix of index funds and other investments, it makes it more manageable to stay the course.

In a six fund portfolio, Rob has these funds:

  • Small-cap values
  • Large U.S. companies
  • International fund
  • Emerging market fund
  • REITs
  • Bond fund

Additionally, Rob has 15% of his portfolio in individual stocks. With the exception of Berkshire Hathaway, these individual companies are all blue-chip dividend-paying stocks. Over the years, he has been able to buy them when the market prices go haywire.

If someone young is just starting to invest, then they might not need to have bonds in their portfolio. However, it will come down to their risk tolerance.

As you grow, it is likely that your allocations will shift based on your risk tolerance. After all, your age can lead to more money at stake and less tolerance for losing money. You can look to target-date retirement funds as a place to start your allocations.

Dough Roller

Rob started Dough Roller as a way to document his personal finance story. At first, the site was only a hobby that he was very motivated about.

For the first two years of the site, he would get up at [5:00] AM to work on the site before work. Plus, he would work on the metro and at night. It was a fun way to focus on his finances. Over time, it became a side hustle that turned into a full-time business. He retired from practicing law as Financially Independent in 2016.

After 11 years of enjoying the site, he sold it. The sale gave him the freedom to do other things such as the Dough Roller podcast and Deputy Editor at Forbes.

Related: Why A Side Hustle Is FI’s Secret Weapon

Retirement

Although he still earns money from several sources, Rob considers himself retired at 53. The Forbes position pays enough to live on, so they haven’t had to touch their nest egg yet. Congrats Rob!

How To Connect

You can connect with Rob’s content on his website, Retire Before Mom and Dad. His book, Retire Before Mom and Dad Full Disclosure: We earn a commission if you click this link at no additional cost to you.  is now available.

Also, he still writes for Forbes.

The Hot Seat

Favorite Blog, Podcast, or Book: All About Asset Allocation Full Disclosure: We earn a commission if you click this link at no additional cost to you. by Rick Ferri

An Inflection Point: The death of his father in a car accident when he was 12.

Favorite Life Hack: Deciding on the three most important things that he needs to do the next day in order to move his life forward. He writes these three things on an index card the night before and tackles them the next day.

Biggest Financial Mistake: Joining the country club which cost around $70,000 in 2001.

The advice you would give your younger self: Don’t move somewhere where the commute will be an hour and 15 minutes both ways.

Bonus! What purchase have you made over the last 12 months that has brought the most value to your life? He got rid of his car and mostly bikes now. If you want to challenge something you take for granted, then start by running experiments and thinking outside the box.

Listen to the Friday Roundup of this episode here.

Related Articles

New to FI? Be sure to check out Episode 100: Welcome To The FI Community!

ChooseFI has partnered with CardRatings for our coverage of credit card products. ChooseFI and CardRatings may receive a commission from card issuers.
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