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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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Being in the military opens you up to an array of benefits for a financially abundant life. You have access to VA loans, a tax-free housing allowance, and a pension (if you stick around long enough). That’s why it’s of the utmost importance to start saving and investing while you’re young and in the military. But, that wasn’t exactly what David Pere (From Military to Millionaire) did when he was first enlisted.
David grew up with frugal parents, who never splurged on much. So when he joined the Marine Corps in 2008, he was ready to catch up on the spending he never was able to do. As he describes it, he spent his first salary on “a truck, tattoos, and drinking”. Not the best way to set yourself up for financial freedom! It wasn’t until a few years later when a friend gave him a copy of Rich Dad Poor Dad that David discovered he could be doing A LOT more with his money.
He bought a duplex with an FHA loan for $81,000 and house hacked it so his tenants were paying a majority of the mortgage. When he was shipped off for duty, he ended up leasing out the other side of the duplex and cash flowing an extra $300 per month. He then went on to buy a 10-unit with just 5% down and also got in on a small syndication in South Carolina.
Everything was looking good, until David decided to partner up on a 40 unit, mixed-use building with a sizable amount of leverage. Some things happened and the deal turned sour, now David is in a legal battle to get his money out of the deal. Even with this massive deal not going through, David pushes the importance of scaling, but not too fast. Scaling to an amount where you aren’t overleveraged but at the same time pushing yourself to accomplish more is the sweet spot!
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Last time we talked to Sarah, AKA Budget Girl, she was on Episode 6 of the Money Show. If you haven’t listened to that episode, here’s a quick recap. Sarah was $33,000 in debt from student loans, but she was able to pay it off while making less than $30,000 year! For most people, this would have taken decades to pay off, but Sarah was able to crush her debt in only a few years!
Now it’s time to check in on Sarah, and see what she’s been doing since clearing herself from debt. Currently, Sarah has a net worth of over $100,000, she took some advice from the BiggerPockets community and bought a duplex to house hack! She purchased the duplex within the “path of progress” around Texas A&M University. She’s seen some solid appreciation over the past 10 months and cash flows a small amount off the property. She’s not only living for free, she’s getting paid to live in her own property!
Sarah has also hoarded a serious sum of cash and investments sitting on the side. She has retirement accounts, brokerage accounts, and a large surplus of cash that is slowly building so she can buy her next property. Sarah is able to do this by keeping her expenses very low, while making money from her full-time job and her side hustle as Budget Girl. She proved that even with a low income, you can get out of debt and hit financial milestones!
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It’s hard being a first time home buyer, especially if you don’t have any experience with real estate, property values, or market appreciation. You may be wondering how you’ll be able to buy a home that will help increase your net worth, or at least, not shrink it. Scott and Mindy are on today to tell you how to make the best first time home buying decision possible.
We’ll go through the most common myths that first time home buyers tend to get caught up in. Myths such as:
If you’re interested in gaining some appreciation with your first home purchase, Scott and Mindy also walk through the most common exit strategies and how you can prepare to use them. You’ll also hear some great advice on how to find a good deal in your area. And no, a good deal doesn’t just mean a deal that is lower than market average!
Want to know more about how to successfully buy your first home? Scott and Mindy’s new book First Time Home Buyer can be ordered now!
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Most listeners of the show will know that a cash cushion is always great to have and should be mandatory for almost everyone. Having a cash reserve of 6-12 months can help you cover unexpected expenses or life events like a sudden medical bill or losing your job. That being said, sometimes you can have a cash cushion that’s too big for your lifestyle.
Today we talk to Steve, who has been paying off his mortgage quickly with the help of his wife. They both have respectable salaries, retirement accounts, and a large cash cushion. Steve wants to know whether or not he should move some of his cash out of his reserve and into retirement accounts or real estate.
Since Steve has such a large cash cushion to rely on, he could take out a fraction of it to use as a down payment on a rental property and still have tens of thousands left over! Scott and Mindy walk Steve through the different options he has, such as paying off his primary mortgage then buying real estate, pausing his mortgage prepayments and going all in on real estate, and other strategies.
Steve is in such a secure position that it makes it hard to criticize his current standing. That being said, he could be using leverage to springboard his investment property portfolio and be on the path to financial freedom sooner!
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Last time we talked to Purple from A Purple Life, she told us about her plan to retire at the end of 2020. If you haven’t listened to that interview, you can listen to it here to get the full scoop on Purple’s journey from a $5,000 net worth to hundreds of thousands within only a few years.
Like many financially savvy early retirees, Purple put a lot of time into planning, saving, and investing her capital in order to retire in her early 30s. Well, she did it! As of October 2020, Purple is financially independent and retired! So, how’s it going so far with financial independence in Purple’s world?
Purple talks about her hobbies, interests, and most importantly, how the final month of her employment went with her former employer. She also gives some great insight on taking advantage of her employer’s health insurance for the last month of work, making sure that she was able to keep her quarterly bonus, and how she ended up breaking the news to her boss.
It’s all worked well for Purple, but she did have some big plans to cancel. Purple had lined up 4 months worth of travel that all had to be canceled when COVID-19 hit and shutdowns began. She would have been snorkeling in Australia and scootering in Thailand right now! Thankfully, Purple has been able to adapt and take advantage of this off time to assess her financial situation and what she wants out of early retirement.
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Real estate investors are known to have their hands in 20 different pots, this is doubly true for Marine and real estate investor Fabio. Fabio is a Captain in the Marine Corps and has been in service for the past 21 years. He has at least five years left before he wants to retire, but is poised to hit his “freedom number” (or what others call their financial independence number) soon.
Fabio has rental properties throughout the country: a duplex in San Diego, a house in Arizona, a BRRRR currently in the rehab stage in St. Louis, and his residence in Illinois. The problem? Some of these properties aren’t cash flowing as much as Fabio would like. He also has a high interest hard money loan on the BRRRR property he is rehabbing, plus a loan taken out against his retirement account.
This presents a handful of different options: should he sell some of the houses that aren’t cash flowing in order to pay back some of the high interest loans or wait to refinance? Which debt should be taken care of first? How can he leverage his current assets to help him build a bigger real estate portfolio.
If you’re a long-term real estate investor, you’ve probably been in a dilemma like this before. Stick around for all the lucrative options Fabio can use!
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Welcome to episode 173.5! Yesterday you heard from Brent, a former registered nurse who paid off over $100,000 in debt and started a mobile pizza truck! Brent’s original interview was recorded back in January or 2020 and was scheduled to be released right around the time that the pandemic hit and shutdowns began. Since it was released yesterday we thought it’d be a great idea to have him back to talk about all his progress since then!
Since we last spoke to Brent, he’s added a whole other food truck to his business and has hired on more staff. Now he’s cooking up (and selling out) pizzas wherever he goes. He even has a new social media handle, he’s TheFoodTruckCEO!
Brent talks through the challenges he’s faced this year, the wins he wasn’t expecting, and advice he’s given to young entrepreneurs just starting their business. As you heard in the last episode, Brent paid for his first pizza truck with savings he had, allowing him to finance the business debt-free. A year later, Brent still agrees this was a good idea, as has less stress and far more creative freedom being able to make decisions without having to worry about paying off a large amount of debt.
What are the profit margins of pizza and food trucks? Brent shares his margins, his pricing, and success stories, showing that regardless of how profitable your product is, you’re always going to have to put in the work to get it to where customers are willing to buy. Brent manages a very tight ship and is still learning the best ways to hire, manage, and make delicious pizza (without burning it)!
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What does the average person do in their 20s? For most people, it means going into student debt, getting a car loan, getting a mortgage, and treating yourself. These are the “average financial decisions” that put many Americans into debt and stuck at jobs they only dream of leaving. That’s how Brent aka TheFoodTruckCEO felt when he and his wife realized they had over $100,000 in consumer debt.
Brent and his wife didn’t make any crazy decisions, he merely did what society said is the right thing to do. He and his wife had student loans to cover nursing school, both had car loans, and racked up around $13,000 in credit card debt alone. This doesn’t even include a tractor Brent decided to buy for a future business purpose!
Both Brent and his wife were bringing in solid money every month from their nursing jobs, but as soon as the money came in, it somehow flooded right back out. This annoyed Brent, he felt like he wasn’t in control of his money and his life. He went to work on debt, adding up everything they had spent over the past few months and realized he and his wife were eating out far more than needed, wasting groceries they were paying good money for, and jeopardizing their future with random purchases.
They cut up the credit cards, started snowballing their debt, reduced their eating out, and stopped shopping at the big box stores. They attacked their debt! Within 5 years, they paid off $109,000 in debt, and started to save up for investments every month.
As time went on and Brent got promoted to a more corporate role, he realized that he put himself in a terrific financial position to leave and start his own business. He had accumulated $100,000 in cash, started investing in his business, and now runs a mobile pizza truck, serving delicious woodfired pizza and doing what he loves.
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Jeff, like many listeners, feels as if there is enough money coming in every month, but somehow it’s slipping out, not allowing him and his wife to hit financial independence. A big reason this could be happening is simple: not enough income and expense tracking. This is why Mindy and Scott are always so adamant about having a budget (and sticking to it).
Jeff owns his home, and it has appreciated a favorable amount since he bought it; he also owns a duplex in his home state of California, and a rental property in Memphis. But that’s not all, Jeff owns another type of property...one he isn’t too proud of. A timeshare! Jeff wants to get rid of his timeshare so he can put more money into growing wealth.
He also has HELOCs taken out against homes which are burning holes in his pockets on top of the bills he and his partner already have to pay. While Jeff is happy with his line of work, his wife wants to be able to leave her job. With so many factors at play, it can seem difficult to reach financial independence and grow wealth, while also being happy at work, but with some financial intuition, it’s possible!
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Most people would consider $80,000 a year a respectable salary, but what if you were making that much during college? That’s what today’s guest, Brandon Richard Austin, made in his sophomore year. As a journalism major, he started doing freelance writing work, and a client of his ended up offering him a remote position on the team.
So there Brandon was, making $80,000 a year, working 12 hour days, all while juggling school at the same time. Thankfully, Brandon wasn’t a big spender. He didn’t go out and buy a new car, a new watch, or even move out of his parents’ house.
Brandon was able to start investing in index funds and early cryptocurrencies, netting him some pretty stable returns (at least from the index funds). After completing college and still having a very low cost of living, Brandon asked himself if the job was worth all the stress. He decided it wasn’t and voluntarily chose to take a pay cut to work somewhere else where he was happier and had more control of his work.
Brandon still lives at home and advocates doing the same for people his age. Not having a housing cost (or having very low housing costs) is one of the best ways to put yourself on the path to financial freedom. This low cost of living situation has allowed Brandon to be on the path to financial independence while still valuing his happiness.
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