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Join Mindy Jensen and Scott Trench (from BiggerPocketsMoney.com) weekly for the BiggerPockets Money Podcast. Each week, financial experts Mindy and Scott interview unique and powerful thought leaders about how to earn more, keep more, spend smarter, and reach financial independence.
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If you and your sweetheart want to get married, rent a truck in a Colorado ski town, and have your dog watched while you’re doing so, Stephanie Warner is the person you should get in touch with. Even though she has a great W2 job, she still hustles hard with her side income work, making enough to pay for her lifestyle while her nine-to-five pays for her future financial freedom.
Stephanie had enough money growing up, but she wasn’t given a ton of financial literacy lessons from her parents. Thankfully, her Grandma who loved driving used cars and buying rental properties taught her the importance of being a homeowner and helping those who are in need. Once she left her hometown for college, graduated, and got a job, she moved all over the country doing all different sorts of work. This gave her a diversified education and allowed her to take on challenges that were interesting to her.
Now, she shares with BiggerPockets Money listeners how she flipped her financial position, thanks to some very lucrative side hustles!
A special thanks to our guest host, Joe Saul-Sehy from Stacking Benjamins, who got so tired of Scott’s puns, he decided to host one of the shows himself.
In This Episode We Cover
The importance of owning your own home and rental properties
Graduating with little-to-no college debt, allowing you to save and invest more
Taking on jobs that interest you, instead of ones that solely pay the bill
The art of side hustles and making thousands after your nine-to-five
Living “paycheck to paycheck” by paying yourself first for investing and saving
And So Much More!
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Over at BiggerPockets, we all have much love and respect for our trusted video editor, Joel Esparza. He brings phenomenal work quality, timing, and communication to every project he’s on, but many of us don’t know his inspiring and truly impressive backstory.
Joel is originally from Venezuela, which has experienced rampant inflation over the past decade putting its citizens in economic turmoil. Joel went to school in Argentina and was able to leave without debt thanks to an inheritance left to him. When he migrated back to Venezuela, he was hired as a video editor for an agency making, get this, $20/month. Yes, that’s correct, we’re talking about $240 per YEAR.
This was not an uncommon salary for Venezuelans, but through sheer luck, Joel was introduced to some side business that began paying him two to three times the amount he would make in one month, in only two hours. Joel quickly jumped ship as an employee and began building his clientele as a self-employed editor. Now, as the head video editor at BiggerPockets, Joel wants to outsource his business, hire on staff, and move towards more of a leadership role.
In This Episode We Cover
The massive financial struggles of living in Venezuela during exceedingly high inflation
Living as a political refugee in a brand new country on a whole different continent
Using freelance work as a way to substantially increase your income
Starting partnerships with others in your field who may become competitors
Being cognizant of your professional strengths and using them to get more clients
Understanding the unit economics behind growing a business and a team
And So Much More!
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It didn’t take Addison Freeman long to realize what worked in school, wouldn’t work in real life. Those who got good grades and followed the standard playbook weren’t rewarded as plentifully on the investing front as they were in the classroom. When Addison realized it would take her over thirty years to hit millionaire status on the conventional track, she knew she needed a change.
Addison started to look for, as she likes to call them, “super assets” or assets that grow while putting cash in your hand. She started with a house hack duplex where she was able to pay her mortgage by renting out one side. Then, she started to get into self-storage investing, which is now her husband’s main job. Along the way they tried (and failed) at starting businesses, but never took their foot off the gas on their journey to financial independence.
At the age of 26, Addison and her husband are financially independent, sitting on a net worth of over $700,000 with an almost guaranteed chance at being part of the millionaire class very, very soon.
In This Episode We Cover
Why conventional investing won’t cut it when you’re trying to be a millionaire
Buying as many “super assets” as you can while you’re young
Starting a small business and the reason that it may (or may not) fail
Why self-storage is an excellent industry for real estate investors to get into
How commercial real estate is valued and the immense equity you can add to it
Living below your means and investing hard for years
And So Much More!
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Strong frugality is hard to come by. Not many people would write off their solar system as a business expense and use bitcoin mining to provide heat to their house, instead of using a space heater. These are just two things that Yourri, an engineer and diversification whiz, has done to make his balance sheet as optimized as possible.
Yourri has spent the better part of the last decade at school and was able to graduate with a phenomenal job doing something he loves. He makes $120,000 a year but has a big retirement goal of $7,000,000! While this may seem like a massive number to most, Yourri should be able to hit it with some regular investing due to his age and aggressiveness to invest. But, he’ll need to opt-out of an over-diversified investing strategy if he wants to reach this goal as fast as possible.
Passion projects are also a big part of Yourri’s life, as he’d like to rebuild a vintage motorcycle, get his pilot license, and adopt as many dogs in need as he can. He has a calculated outlook on his financial growth, and there’s no doubt he’ll hit his goals!
In This Episode We Cover
Pursuing high-cost hobbies and understanding that FI isn’t all about saving every penny
Whether or not diversification could be slowing down your net worth growth
The “golden butterfly” investing ratio that helps mitigate risk when investing
Writing off solar systems as a business deduction when in a buy-back program
Mining bitcoin for not only extra income but free heat!
Whether a 401(k) or a Roth 401(k) is the best option for your retirement
And So Much More!
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High-income earners have a better shot at retiring early than those making a median income. That being said, with more money comes more investing risk. After the great recession, Bob Haines was sitting on a $300,000 loss from leveraging too many properties to flip. This put the possibility of retiring early multiple years behind. But, even with a money mistake as large as Bob’s, he’s been able to retire at age forty-four, a good twenty-one years before the standard retirement age.
You could say that Bob’s early retirement sprung from his ability to take risks, leave jobs, and go where the money was. Bob went from making $40,000 a year at his first job to $500,000 less than a decade later. While a $500,000 salary was not the norm for Bob, these frequent career and company jumps allowed him to build up a massive cash position ($250k) and invest for retirement faster.
Funnily enough, the first time Bob heard about the FI movement, he quickly calculated his FI number and realized he had already hit it. While he took a couple more years to finally pull the trigger and get over his “one more year” dilemma, Bob and his wife were able to retire in 2018 and 2019, allowing them to travel, spend time with family, and enjoy life at the beach.
In This Episode We Cover
Why small salary increases can massively change a financial position
Calculating your market salary and finding a job that matches it
The world of “pre-sales engineering” allows for huge compensation
The mistakes you can make when sitting on a large amount of cash
Over-leveraging yourself in real estate and biting off more than you can chew
How to shake off “one more year syndrome” to enjoy early retirement
Fighting lifestyle creep even as your salary expands exponentially
And So Much More!
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A rock-solid financial position consists of a few things: budgeting, expense tracking, living below your means, and making extra income. Once those are accomplished, you’re on track to start investing heavily and financial independence is in sight. This is exactly the position Lynsey (mother to Mindy’s pool boy) is in.
Lynsey and her husband bring in a moderate salary from his job and her businesses of jewelry making, relationship counseling, and their garage and basement house hack. For a long time, Lynsey assumed she would never be able to retire, but as her income has grown she’s realized that she not only can retire but retire early.
Lynsey has a few key ways she could increase her business revenue: outsourcing, marketing, and scaling. Her husband also has a strong suspicion he’s underpaid, meaning a boost in income could be one ask away for him. The couple also wants to invest in more short-term rentals or buy another house hack property. But, of all the options they’re presented with, which one will push the needle?
In This Episode We Cover
Creating a “hype folder” so you can painlessly ask for a raise
Shopping the sales and feeding a family of five for $700 per month
Creative house hacking by renting out basements, garages, and other dwelling areas
Using a self-directed 401(k) to invest in real estate and grow retirement savings
What to do with a large amount of cash while you’re waiting to invest?
Outsourcing repetitive tasks in your business so you can scale
And So Much More!
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Life can be challenging at times. When you think you’re in a stable spot, the universe tends to throw you one (or many) curveballs. In the realm of financial education, the smart early decisions we make can help alleviate the stress of these curveballs. This has happened almost to the tee for today’s guest, Karen Ferrero.
Karen grew up in a small town to a middle-class family. She was a first-generation college graduate and worked throughout high school and college. She later took a job and began consulting in the tech world, which offered her a respectable salary. She got married and had two kids with her husband, but shortly after, her husband was paralyzed in a motorcycle accident. Not only that, her son was diagnosed with autism.
Now, Karen had to sell her house, find a new accessible one, take her son to therapy every day, and continue working her full-time job. This put her in a sizable debt hole, but through strategic debt payoff and intelligent investing, Karen has come out on top. She still has a very high-paying job, a loving family and some very, very profitable investment accounts for her children that she started decades ago.
In This Episode We Cover
How to plan for when life changes your course by force
The importance of having good insurance when you’re young
Why you should always take advantage of the 401(k) match when presented to you
Investing as early as you can to capitalize on massive gains
Why you should put education accounts in a trust
The extra costs that come with taking care of special needs family members
And So Much More!
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Kari and her wife made some big moves over the past few years. They packed up their stuff and left the San Francisco Bay Area for a relocation in the midwest. Unlike the Bay Area, the Midwest has many affordable housing options with plenty of chances to house hack. So, that’s exactly what the couple did! They bought a duplex in rough condition, put in close to $80,000 of renovations, and now get $900 a month from the side they’re renting out.
Although this renovation allowed them to live for free, it put a $66,000 hole in their pockets, which they recently just paid off. Without much retirement savings or investments in general (save the house hack), Kari is wondering what she can do to maximize the extra $100,000 in after-tax income she and her wife bring in every year.
Should she go the index funds route, buy another rental, or help her wife pursue her dreams by investing in a restaurant? Scott and Mindy give Kari a lot of ideas in this episode, many of which could help you as well!
In This Episode We Cover
Using “strategic debt” to grow your investments and income
Planning your future finances when trying to start a family
Investing in your 401(k), Roth IRA, Self-Directed 401(k), and other investment accounts
Using the “Live in Flip” model to avoid paying capital gain taxes
Why you shouldn’t diversify when you are in a low to moderate net worth category
And So Much More!
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Not everyone has the vagabond spirit of those who choose to optionally live out of their cars, trucks, or vans. While this isn’t up Scott and Mindy’s alley, it’s been perfectly fine for today’s guests Tien and Brandon. After deciding to end their lease before a road trip, Tien and Brandon found living in their specialty-built van wasn’t just habitable, but preferable for their lifestyle. This was especially true after paying pricey southern California rent.
All this happened after making some impressive financial moves; paying off $50k of loans in eight months, flipping their first house, and buying a small portfolio of duplexes. Tien and Brandon have made a spree of financially intelligent moves, pushing themselves into a high net worth category, all while living in one of the most beautiful places on earth.
As of March 2021, Tien and Brandon dismantled their truly remote lifestyle to settle into their first short-term rental house hack. They’ve been pulling in $8,000 a month (yes, a month) from their San Diego Airbnb property, which is not only covering their entire mortgage but paying them some profits to boot!
In This Episode We Cover
Paying off a large amount of student debt in a short period of time
Finding side hustles that can support your saving and investing goals
Making a plan to retire early and investing in income streams that will make it a reality
Flipping a house without construction or real estate experience
Investing out of state where you already have family/friends/relationships
The hardest part of living in a van full-time (and its MAJOR benefits)
House hacking with a short-term rental
And So Much More!
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Retiring early can be a daunting task. Not only do you have to do more, with less time, but you have to stay diligent on your budgeting, expense tracking, and investing if you want to hit your goal by a certain age. Today we talk to Lisa, who wants to retire next year, in her mid-50s. While most people think early retirement means retiring in your 20s and 30s, this isn’t necessarily true. Retiring 10 years early, like Lisa, is a massive accomplishment, but requires the same skills needed for retiring decades earlier.
Lisa has three pieces of property: a cash-flowing rental in pricey Boise, her primary residence in Washington, and a plot of land in North Idaho. She’s tinkered around with ideas of using her primary residence as a short-term rental, but unbeknownst to her is the fact that having a short-term rental could bankroll her retirement. She also has a sizable amount in retirement accounts, but none of those assets produce cash flow.
Will Lisa be able to retire using the 4% rule with her retirement accounts? Or, should she use this last year of employment to double down on cash-flowing assets like rental properties?
In This Episode We Cover
Using the 4% rule to calculate how much you need to be invested to retire
Leasing out your home as a short-term rental while you travel
Choosing cash-flowing assets over assets that merely appreciate
Calculating out your TRUE living expenses (with the Mindy Method!)
Profiting off of land purchases and when the right time to sell is
When the appropriate time to raise rents on a tenant is
And So Much More!
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