BiggerPockets Money Podcast

BiggerPockets Money Podcast 128: Pay Off Debt Fast With These Smart Money Moves From Whitney Hansen

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Whitney Hansen is one of six children. Growing up, she watched her father start a business, watched it fail, and watched him turn destructive, eventually leaving her mother to raise six kids on her own—all while making $7.25 an hour.

Whitney has seen the ugly side of money—and what can happen when you have none—and decided she wanted no part of it. Money equals options, and she wanted as many options as she could get!

She began to research how to build wealth, because she did not want to perpetuate the cycle of poverty. She knew she wanted to go to college, but also knew she'd have to find a way to pay for it. Rather than taking out tons of student loans, Whitney went through a three-month cosmetology program starting the day after she graduated high school and used the money she made as a nail technician to pay for college.

Because she values financial stability over everything else, she bought a house when she turned 19—and house hacked by renting two rooms to friends to help with the mortgage.

Upon graduating college, she realized she had taken out $30,000 in student loans that now had to be paid back. Rather than allow it to rule her life, she cut out everything and worked a second job in order to knock out her debt—in 10 months!

Whitney knew she had figured out how to lead a healthy financial life and was eager to help others solve their own financial struggles. She started a coaching program to financially empower people and help them navigate the beginning stages of their financial journey.

Whitney’s story is 100% repeatable for anyone listening. She came from nothing and made it on her own.

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Listen to the Podcast Here

Read the Transcript Here

Mindy:
Scott and I often record episodes in advance, to make sure our schedules never get too full to release a new episode every week. We planned to bring you stories of debt paydown earlier in the year. In fact, they were scheduled to start airing on March 16th, but when the U.S. effectively shut down on March 13th, we decided to put them on hold to cover the next big thing. Then unemployment reached such staggering numbers that we really felt these stories should be shelved indefinitely. But when I went back to listen to them again, I realized these are really great stories. While the world has changed, there are still lessons that you can learn from each one of our guests. The show today features Whitney Hansen’s debt paydown story, but as you listen, please keep in mind that it was recorded in February in a very different time. We hope you find as much value in Whitney’s story as we did.
Welcome to the BiggerPockets Money Podcast, show number 128, where we interview Whitney Hansen from the Money Nerds Podcast and hear her story of how she paid off $30,000 in debt in 10 months, and hacked her way to an MBA that cost her a total of $472.

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Whitney:
I prioritized financial security more than anything. That was my number one thing, is I have to be able to take care of myself. I don’t want to be in a crappy situation. And so at that time, that was my driver. And to me, the ultimate financial security, I mean, right or wrong, this was an 18 year old, 19 year old Whitney mind thinking, I wanted a house. That was the only thing. I could never be kicked out of that house. I would always have a place to go.

Mindy:
Hello, hello, hello. My name is Mindy Jensen, and with me as always is my nice and happy co-host Scott Trench. And my ten-year-old gave me those descriptions of Scott, because she thinks the world of you, Scott.

Scott:
And that description absolutely made my day. Thank you.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else, and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can lead your best life.

Scott:
That's right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or simply learn the fundamentals of finance, just starting out, we'll help you build a position capable of launching yourself towards those dreams.

Mindy:
Scott, how are you today?

Scott:
I’m doing great. I got a chance to talk with one of our friends, Whitney, today, Whitney Hansen from the Money Nerds. And I thought it was a great, great episode and great story.

Mindy:
Yeah. Whitney shares a lot about debt payoff, and she is really passionate about helping students before they get themselves into so much debt. She wants to really educate you and let you know all of the things that you can do so that you don’t wind up with massive college debt once you’ve graduated. So if you’re listening to this today, think about somebody in your life who’s in high school, who’s in college, who could use the information that you’re you’re hearing, and please share this episode with them. Just say, “I know you’re graduating from high school or college really soon. I want to share this with you. You can change your financial future by taking action based on just a few things that Whitney shares today.”

Scott:
Love it. Before we get to today’s show, I do want to do a little quick tip, a little financial tip here, and talk about fees on investments. So when you’re looking at a mutual fund or passive index fund investment or whatever, one of the things of note is the fee structure. And there’s a couple of ways to go about this.
One is you can look at your statements, but those can be hard to read, or two, you can go to a site like personalcapital.com, put in these mutual funds, set up your accounts, and you'll be able to, they'll actually give you an accounting of what those fees look like in your investment portfolio. So today's show is not actually sponsored by Personal Capital, but it can be a good resource if you're trying to look up what you're currently paying, and then when you're going into new investments, make sure you look at that fee load upfront.

Mindy:
Yeah. We talk about this as, spoiler alert, this is Whitney’s biggest money mistake, was the fees that she was paying for her financial advisor, similar to Mama Purple back on episode 111. When she discovered the fees that she was paying, she said, well, that’s not acceptable, and she took action and changed where her money was, so she was reducing the amount of fees that she was paying. And that’s just, that’s a really great tip, Scott, and that’s just so important. You don’t want all of your hard work and all of your investments to go lining the pockets of your financial advisor. Another great resource for a financial advisor is the XY Planning Network, if you’re looking for a fee only financial advisor who can give you more advice about what you should be doing than what you should do so they get more money.

Scott:
Yeah. And then just as one kind of follow up here that I just thought about, when you’re looking at what good looks like in the context of low fees, we discuss this again later in the episode in the Famous Four, but if you’re looking to hammer that home twice here, probably a 10th of a percent in terms of the overall fee load is probably good in the context of a passive index fund investment. Anything within that ballpark, 0.11, .12, all the way down to 0.04 was through these Vanguard index funds. I think they get down to 0.05, .04%. You’re really splitting hairs with the cost of those funds. So convenience can probably be a bigger factor than the hundreds, you know, single basis point or a hundredth of a percent that you’re playing with at those fee loads.
And you’re not going to see that same fee load in your 401k, right? So even here at BiggerPockets, we’ve got a 401k. And I think the lowest cost index fund actually has a higher fee load than that, and that’s because of a lot of the administrative burden with in company 401ks. So you really need to take those both into consideration between your employer, 401k, and then your after tax brokerage investments or things that are happening outside of that personal activity. You can probably find those really low fees in your personal investments, and maybe not so much in your employer ones, for those of you who work [inaudible 00:06:12]jobs.

Mindy:
But it’s still really important to be looking at the fees charged, because the different options in your 401k will have different fees.

Scott:
Absolutely. Yes.

Mindy:
Just depending. So if you, I mean, look at the fees. Oh, this one’s the lowest fee. Do you want your money in that type of fund? Yes, I do. That’s where you put it in. So this would be a really great discussion in our Facebook group. If you are new to the podcast, we have a Facebook group that we started I think at the beginning of the year. You can go to facebook.com/groups/bpmoney. Please answer the questions to let us know that you have actually listened to the show and are not coming in there just to spam the group, not that you would be. If you’re hearing me say this, you probably are listening to the show. But please answer the questions. We will approve you instantly, and then you can get in there and start asking the questions that you need to have the answers for that our group members can help you out with. They’ve been there, they’re on the same [inaudible 00:07:12]path.
Uh oh, Scott’s got a look on his face.

Scott:
And I do want to point out, there is no spam in the Facebook group because Mindy moderates it so effectively. So don’t worry about that.

Mindy:
Okay. We should bring in Whitney. Before we do, let’s hear a note from today’s show sponsor.
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Okay, huge thanks to the sponsor of today’s show, Whitney Hansen from the Money Nerds. Welcome to the BiggerPockets Money Podcast. I’m super excited to have you on the show today.

Whitney:
I am so stoked, you guys. You are two of my favorite people, so it’s truly a pleasure to get to hang out with you.

Mindy:
We had you on way back on episode 99, when Scott met you at [inaudible 00:09:19], but we didn’t really get your whole money story. So I want to know where your journey with money begins.

Whitney:
Yeah, my journey to where I am today really began from childhood, of course, like everybody’s. My money story is really interesting. So my parents, just to give you guys some context, my parents met when they were in high school. I grew up in a really small farming city of about 10,000 people, so not a ton of people. We were not farmers. My dad did not graduate high school. He I think made it to about junior year and then dropped out. And my mom had graduated high school, but she got married when she was 17 years old to my dad. Now for people outside of small cities, they’re like, what the what? But for people in small cities, that’s not really that abnormal.
And so that’s how they started their marriage. They had six kids. I’m the second oldest. And throughout their entire marriage, they did the best that they could. They were very blue collar, were always working in factories and that kind of stuff to support the family. And one day my dad had this big, hairy idea that he was going to start his own business. And so he was going to start a pallet distributing company, which meant we would go outside, build pallets, like you always see those on Pinterest, that people make into chairs and coffee tables.
So that was our business, and so we’d go outside and we’d build pallets and deliver what we called the load of pallets to different semi-truck distributors. And so that was our entire business. The cool thing about that is it taught me an incredible amount of work ethic. We literally had to go out there and hit nails and saw boards, and I thought it was the coolest thing ever. But it was really interesting, because as I watched their business grow, my dad got to the point where he could not delegate. He could not let go of control. And part of the way that he dealt with that was he turned to unhealthy habits. He turned to drugs, and that was what kept him up at night. It was a 24/7 business. And it also kept him, I think it was a form of escapism in hindsight.
And so as he started to go down that path, their marriage started to deteriorate. It became abusive. It became really dysfunctional, and it became really scary. And so at one point, my mom was in and out of the house, like all throughout when I was a kid, she was always moving in and out. And it really got to the point where the abuse got so bad, she legitimately left for her life. I’m not being dramatic. She really seriously did. And that’s when we moved up to Boise, and I started to start to have more money conversations with her and asked her, “Mom, why the heck did you stay in this marriage? He was such a jerk to you. Why did you stay?” And of course there’s love and there’s all this other stuff, of course. But part of the reason was she didn’t have money. She did not have the finances to leave the situation. And so that’s where I started to really learn that money mattered, and when you have money, you have options. So that’s where my whole money journey really began.

Mindy:
And how old were you when you had this conversation with your mom?

Whitney:
I was about 16 years old.

Mindy:
Wow.

Whitney:
I was super young.

Mindy:
Yeah. Boy, that’s a lot to be dealing with when you’re 16.

Whitney:
It was a lot, but you don’t know any different. I think we all have some form of dysfunction in our childhood, and we don’t necessarily realize that it’s different until you talk to other people, and you’re like, “Wait, your childhood wasn’t like that? What?” You don’t quite realize it. And so I didn’t know it was any different, really.

Mindy:
Okay. So what happened after you moved to Boise? You had this conversation with your mom. You’re in high school.

Whitney:
Yeah. So we were so broke, you guys. Six kids, she was making 7.25 an hour, so she was barely making ends meet. She didn’t have a college education. She had just barely graduated high school. And so she started over and was trying to just make it all work. And one of the things that we did when we moved to Boise was we lived in a two bedroom apartment, and we were sleeping on the floor of this apartment for a period of time. And one day my mom and I were walking, and we looked over and we saw a mattress in the garbage can of this apartment complex. And we’re like, whoa, that’s so awesome. Let’s grab that. So we grabbed that mattress and took it home. Honestly, I don’t remember how we got it home. Like, did we put it on the roof of the car and hold it? I really cannot remember, but that’s what we did. We took it home.
And that was like, 16 year old Whitney was like, holy crap, this is nuts, because there’s a true difference between a want and a need. So when we’re always like, oh, I need this, I need my coffee. This is something I say almost every day. Do we actually need it? Or do we really just want it? And so it started to really shift my whole philosophy on personal finance, and I started going down this rabbit hole of how do I earn wealth? How do I get money? And then how do I make sure I’m never in that situation personally? So that’s kind of where it all began.

Mindy:
Finding a mattress. So you slept on that mattress, I’m assuming. When you said you slept on the floor, you were sleeping on the floor, not a mattress on the floor.

Whitney:
No. It was legit on the floor. We were so broke, and I say that not because I want sympathy, that’s not at all the intention. There are always people that hear that and have it 10 times worse than I did, and my hat goes off to them. But I think it’s what can you learn from those crappy life situations that we don’t have really any control over until you start to become aware of it. And I believe you either repeat or you evolve, and I chose to evolve, thankfully.

Mindy:
Yeah. The repeating is, actually one of the biggest problems is the cycle of poverty, and how do you get out of the cycle of poverty when you don’t know anything else? Of course you spend every dollar of your paycheck, because that’s how you do things. And being able to see outside the box is really powerful.

Scott:
So what was your personal financial situation in this? Did you work in addition to this? Did you save up money? What happens in the later years of high school?

Whitney:
Yeah. So my personal situation, I was always a great earner. In hindsight, I’ve always been kind of an entrepreneur. I’ve always been earning my own money. I’ve always wanted control over that. So when I was a kid, I would go out and build pallets. That was how I earned money. I was involved with cheerleading for a while, so that was how I paid for my uniforms. And so I’d go out there and just build pallets. And then when my parents started going through their divorce, my income situation, they basically just kind of put the business on the back burner. They were just really going through a lot.
And so I would go out there, and I remember I was like 14 years old, didn’t even have my driver’s license. This is so terrible. But I would go out there and take a pallet call, and go build the load of pallets and deliver it to a city that was about 30 minutes away. And that was like, I would get all of that money. And I look back on that, I’m like, what the heck? What was going on? But again, different times for sure. But I always was earning my own money. I worked at a snow cone shack. It was the coolest job ever, because you’ve got to make all the different combinations and eat all the snow cones. I was always a waitress. I had a ton of different jobs all throughout high school.

Scott:
Got it. So what happened after high school?

Whitney:
After high school, I went into this moment where, again, I’ve thought education was the key to my future, and I wanted to figure out how am I going to afford to go to college. How am I going to do this? What do I want to study? All of that normal stuff. So for me, I knew I had to figure out the finances on my own. My mom was not going to be able to contribute. My dad definitely wasn’t. And so it was one of those things where I decided I had to figure out some type of trade school. So I went to nail technician school, like cosmetology. I did manicures and pedicures all through undergrad. It was a three month program. I had graduated high school. I started cosmetology school the very next day.
And over that summer, I was being trained and certified. And for me, oh, that was the best job ever. I mean, a lot of people are like, you clip toenails for a living, and yes I did. And you know what, if I had to, I’d do it again, because it was a really good job. It was very flexible, and it taught me how to budget with a variable income. So that was my job all through undergrad. That helped me pay the bills.

Scott:
But where did you go to undergrad?

Whitney:
Boise State.

Scott:
Boise State. Okay. So you start this program in the summer, after senior year of high school, and work your way through college manicuring and pedicuring?

Whitney:
Yep. That was it.

Scott:
Love it. I’ve never heard that one before.

Whitney:
It’s a weird one.

Mindy:
What kind of money were you making doing manicuring and pedicures?

Whitney:
Okay, so actually I was making decent money. So I was 18, 17, 18 years old when I started working that job. So I was bringing in, God, in a good summer, because it’s a very cyclical business, as you can imagine, usually per year, summers are busy season, winters are slow season. I was bringing in about 35 grand per year.

Mindy:
While going to college?

Whitney:
I mean, definitely full time work, but while in college. So that was cool, because it allowed me to bank up some cash and then market ’08 hit, and I had some cash so I bought my first house when I was 19, because I was in a good situation. It worked out.

Mindy:
Wait, what? We didn’t even talk about that in the pre-show interview. Hold on.

Whitney:
Yeah, isn’t that wild?

Mindy:
Okay. So you graduate from high school, you start cosmetology school, then I’m assuming you start college in like August or September.

Whitney:
Yeah, exactly.

Mindy:
So you’ve basically finished cosmetology school. You’re working part time during school and full time over the summer?

Whitney:
Yeah. I mean, I would pick up shifts, so it averaged to about full time. Full time there was about 35 to 38 hours. So I was definitely hitting that all through undergrad.

Mindy:
Okay.

Scott:
Did you get any assistance for college, like financial aid or anything like that?

Whitney:
Yes, I did. So because I was a lower income household, I definitely did get some assistance. The way financial assistance works is you get more upfront. I think that the theory behind it is they want you to stick through that first two years for retention purposes. And then towards the end of your degree, it starts to diminish a little bit. So you don’t get quite as much, but yeah, I was definitely getting some financial assistance for sure, because I came from such a weird background.

Scott:
Got it.

Mindy:
Okay, so you start college at about 18, 2008 hits, and you buy a house at 19. Let’s dive into that, because that’s not a normal thought process for a 19 year old, but you’re also, I’m guessing, not a normal 19 year old, having lived in the two bedroom house on the floor. So why did you think to buy a house?

Whitney:
So I think the reason why, from an emotional standpoint, and I’ve learned I mostly make a lot of my initial financial decisions from emotions, part of me was coming just out of all of my parents’ craziness and my childhood. I prioritized financial security more than anything. That was my number one thing, is I have to be able to take care of myself. I don’t want to be in a crappy situation. And so at that time, that was my driver. And to me, the ultimate financial security, I mean, right or wrong, this was an 18 year old, 19 year old Whitney mind thinking, I wanted a house. That was the only thing.
I could never be kicked out of that house. I would always have a place to go. And so I decided to do that. I live in Boise, Idaho. So at that time, the market was really great. My house cost me $147,000. It was a brand new home. And there were, I mean, the banks were really throwing away loans, too, left and right, right or wrong, for sure. But we saw how that panned out. But they were willing to give me a loan. They took a chance on me, and it was, I mean, it worked out. So I rented a couple of rooms out to some friends, because I knew if I had my friends renting rooms, then I could afford my house payment, no problem whatsoever. And so that's what I did. I have a three bed, two bath house, and a couple of my friends rented two rooms and we just had a good old time during college.

Mindy:
Okay.

Scott:
Love it. This is what I wish I did during college.

Mindy:
Yes.

Whitney:
It was worth it, it really was.

Mindy:
I definitely wish I would have bought a house sooner. So what was your mortgage payment, and what were your friends paying in rent?

Whitney:
So at that time, my mortgage payment, all in, including taxes and insurance, I actually just looked this up. It was $890 per month. That’s how much it was at that time. My friends each rented…

Whitney:
$90 per month. That’s how much it was at that time. My friends each rented a room for 300 bucks each. We would kick in I think it was like 25 or $50 per month per person for utilities, but that was it. And so my house payment was like next to nothing for me.

Mindy:
Wow.

Whitney:
It was pretty cool. I loved it.

Mindy:
That's called house hacking, but how could she have done that, Scott, when Brandon hadn't invented that term yet?

Whitney:
I know.

Scott:
I love it. I think it’s interesting. I always thought or I think that a lot of college students think, oh, if you’re going to go to the local college, the way to do it is just get as much financial aid and student loans as possible, live in the nicest place on campus in the kind of sexy apartments, and then rack up a huge student loan balance. So it sounds like you probably didn’t graduate with much, if any, student loans at all going through this process, right?

Whitney:
I wish that were the case. I wish. Yeah. I didn’t… Again, hindsight’s always 2020, right? We always learn later, but I was such an idiot, you guys. I just took out any money that came my way. I’m like, sure, I’ll accept that. So when I graduated, man, I had $30,000 staring me in the face. And the sad thing is I did not even realize it, you guys. Like I was not paying attention all throughout undergrad. I now know that’s so normal and what not to do, but I had no idea how much money I was going to owe until I looked at that later.

Scott:
Well, let me ask you this, you said you’re making $35,000 a year.

Whitney:
Mm-hmm (affirmative).

Scott:
Right? So where did that go then?

Whitney:
Yeah, so the 35,000 per year mostly at first went to my house down payment fund. So that's where a lot of it went. And then I did buy a car. It was a $7,500 car. I paid that off within a year and a half, and I was also financing my cosmetology portion. I cannot remember for the life of me how much it was, and it wasn't like a traditional. They were brand new in the field. You can't offer financial aid with cosmetology schools for a few years until you get accredited. And so it wasn't a traditional loan, so I can't even look on my credit report to find that, but I don't remember. I know I had to pay that off, and I think it was somewhere to the tune of like five or 6,000.

Scott:
Okay, that makes sense. I mean, this is still a remarkable set of choices for someone going into college. So it seems like you’re really setting yourself up for some awesome next steps here.

Whitney:
I did my best.

Mindy:
Yeah. I want to stop you right there. I want to correct Scott who said that the traditional student will just take out all the money they can without even thinking about their loans. I don’t think that the traditional student is like, “I want all the money.” I think it’s more like what you did. Oh, you’re giving me $10,000? Okay. Without thinking, I’m going to have to pay that back. Like, oh, I’ve got this big bill for school and somebody is now going to give me money to cover it. I don’t think people are actively looking to get into debt so much as just it happens because the student loan industry maybe doesn’t share with the students who are taking out these loans.
Hey, by the way, this $10,000 is actually going to cost you 27 or whatever it is when you pay it back. So do you have any tips for students who might be listening to this right now?

Scott:
Just very good point there, Mindy, and I’m sorry, that was a somewhat thoughtless comment. So thank you for putting it in there. I’m sorry, guys.

Mindy:
I will always put you in your place, Scott.

Whitney:
It’s what we’re for, right? Yes. I have tons of tips for students. So first and foremost is only take out the bare minimum. So I know that sounds like common sense and everyone’s like, well, yeah, duh, but we don’t do that. If we did that, we would not be looking into the situation that we’re in with the huge student loan crisis. And so one of the things that I think students need to do is really sit down and say, “Can I reduce my lifestyle first,” instead of, “Can I take out a loan to cover my lifestyle,” which is very, very normal. And like the things that we excuse ourselves for like, oh, I need a new computer every single year, or I have to buy the brand new textbooks, and so I’m going to finance those, those are really silly little mistakes.
You don’t need a brand new computer. I mean, we can all find computers on Facebook Marketplace or Craigslist for a fraction of the cost. You can buy textbooks on half.com. There’s so many different ways to approach that, but I think it’s really, really naive to think you have to finance all of your entire living expenses from a student loan. I think that’s where a lot of students go wrong is they don’t quite realize that. And to be very fair, I work for a university. I’ve worked for higher education for seven years before I did my business full-time, and I still teach at Boise State. And one of the things that I’ve learned is that students are not even taught that they have options when it comes to financial aid.
It’s immediately just take out the student loan, don’t work too many hours because that’s going to affect your GPA. We’re taught to almost be mediocre, when really what I find is most students that do work more than 30 hours are incredible at prioritizing their time management. They get stuff done because they have to, versus the student that lives on campus, and no shame if this is your situation, but lives on campus and just goes to school only, they are blowing through a lot of time too. And I see both sides of it as a professor now too.

Mindy:
Okay. So when you say that you have options, explain that. Scott, did you have student loans?

Scott:
No, I did not.

Whitney:
Oh, good job.

Scott:
Well, my parents paid for college for me, so I was very privileged in that regard.

Mindy:
Yes, and my parents bought savings bonds. Every week my dad would buy a $50 savings bond for my sister and I from his paycheck to pay for our college, and then took massive advantage of the ridiculous interest rates in the early '80s and put all of these savings bonds into these CDs, like locked them in for a long time. So he was able to finance my college. I didn't have to go through this, so I'm not quite sure how to give advice to people who are listening. But let's say you get… I'm assuming that scholarships are in round numbers, like here's $10,000 or here's $15,000.

Whitney:
Yeah. I think that the options that people don’t quite realize they have is yes, scholarships. That’s a very legitimate way to finance your education. I see that as a good option, not the sole option. So it’s not like student loans or scholarships. A lot of people kind of feel that way sometimes, but it’s working for a job that offers tuition reimbursement. When I went back to school for my master’s, I learned you could work for a university. And if you work for a university, it gives you a discounted tuition. So my entire MBA costs me $472 with a couple of late fees in there, if I’m being real. There’s different options. You don’t have to just go one of those routes.
It’s not scholarships or this. I think stacking them is probably the best strategy for a lot of people, and getting you to the point where I think if you see opportunity, you’re going to find it. But if you are closed minded to it, you’re never going to see it, even if it’s in front of you.

Mindy:
Okay. So back in episode 64, we interviewed Zach Gautier about different ways to pay for college, and that was one of the tips that he gave was work for a company that has reimbursement. Where were you working when you got the reimbursement?

Whitney:
For Boise State University directly. So I was working….

Mindy:
That was another tip. That was another tip was work for the actual company or the actual college. Rich and Regular, Scott. Do you remember this? Julien from Rich and Regular worked for the school and he said his college was $25. I’m like, Oh, do you mean $25 an hour? He’s like, no, $25. How much was your college? Your MBA?

Whitney:
The MBA was $472. It was a three year program.

Mindy:
How long is an MBA? Three year program.

Whitney:
So it’s normally two. I did a part-time program. So part of the university… This is just Boise State, so I can’t speak for others, but Boise State allowed you to do I think it was up to nine credit hours with the discounted tuition. And so it was like five bucks per credit and then you had to pay like a normal application fee every semester. So it wasn’t much, but because it was extended, that’s what pushed me a little bit over that edge. But still, I mean, you can cashflow $500 pretty easily, I would think.

Mindy:
You should be able to cashflow $500 for three years or two years. $5 a credit hour, that’s like… So yours was more. Yours was $40 then instead of 25.

Whitney:
Yeah. With those little fees…

Mindy:
What were you doing for the college?

Whitney:
So when I first got a job, I was working as a grant manager. So I worked for College of Education and I was managing… We have tons of different grants. The guy that I worked for was very much an entrepreneur within the university. It was really cool to see. And so he would go out there and hustle and get tons of different grant, millions of dollars worth. And I was doing the financial side of that. So I was making sure that we had money, and then it started leaning a little bit into marketing. And then when I launched my business through an on campus program, I went and worked for the program itself. So I was doing workshops and helping other entrepreneurs get their feet on the ground and starting businesses. It was tons of fun.

Mindy:
So is the tuition discount… Is that available to every employee? Could you go and do a relatively unskilled job for the college and still get assistance?

Whitney:
So that’s a really good question. Totally depends on the university, of course. But what I’ve seen is usually it’s a full-time position, so you do need to be in a full time position. Most part-time positions, some of them can allow that, usually they don’t. But I do know like work study or like student positions do not qualify for the tuition discount. So those are not positions that will allow you to get into the university. So you really do have to work in like a permanent position on campus.

Mindy:
Okay. I really wanted to cover those just quickly, but I want to get back to your story too. So you’re in college, you have your own house, you are going to college. Did you take the traditional four year college degree?

Whitney:
I did. Yup. I majored in accounting, and I graduated within four and a half years is how long it took me.

Mindy:
Okay. And what did you do upon graduation?

Whitney:
I had my first aha moment when I saw my student loan, the bill, I’m like, oh, dang, this sucks. I got to pay this back. Really that’s when my adulting moment really happened for me is I was holding that piece of paper, physical piece of paper, that time. I’m not that old. It was in 2010. So I remember holding that paper thinking, holy crap, what did I do? Why did I do that? Why did I finance the computer? Why did I finance textbooks? Like that was stupid. And so I had this moment where immediately, I’m not going to lie, my brain went to this place of, oh, I mean, it’s a low interest rate. It doesn’t really matter. It’s not that much debt. And so my brain immediately went to that point because that’s what society tells us so much.
And then I stopped and I was like, you know what? No. No. This is not going to be part of my life. I could already feel it making decisions for me. I know this sounds like super dramatic, but it’s true. I was holding that thinking, this is really dictating the decisions I make. I felt like my paycheck wasn’t mine. I felt like my money was no longer me, and I didn’t like that control over me. And so I put together a plan working as a staff accountant. So I did taxes and external auditing by day, and then nights and weekends I was still doing manicures and pedicures. Kept that job. And between the two jobs, it was like 80 hours per week, it was not fun, it was definitely a grind, I sacrificed anything that was truly not a necessity.
I really did. And I paid it all off within 10 months. 30 grand in 10 months. It was amazing.

Scott:
Awesome.

Whitney:
But then I kept that lifestyle too, guys.

Mindy:
You kept what lifestyle? The 80 hours a week?

Whitney:
I did for about year and a half after that, to just bank up some cash.

Scott:
Were you continuing to house hack and rent out the two rooms in your house during this period?

Whitney:
So I at one point… So what I ended up doing, I did it for maybe another year. I’m trying to remember my timeframe there. And then my house, I ended up turning it into just like a full rental. And then my boyfriend, now fiance, and I had lived together. And so my house was a rental for I want to say it was two and a half years.

Scott:
Awesome. So after graduation, you lived there for one year. Is that what you just said?

Whitney:
Yup. Yup. I still had it for one year.

Scott:
And that was the period in which you paid off the 30 grand in 10 months?

Whitney:
Yeah. Part of my sacrifice to help me get out of that 30 grand was just… That was when I completely rented out the house, like just solely, I’m not going to live there at all. And then that’s when I moved in with my fiance for a discounted rent. So even though you own a home and even though you could house hack and make it really cheap, you still have maintenance. And when I was working 80 hours a week, I truly did not have a ton of time to mow a lawn. You still have utilities. You still have like your HOA every year. So it was actually more cost effective for me to live with my fiance than live in my home.

Scott:
Makes sense. Wow. So you’re house hacking. You’re living with your fiance. You had paid off car. And I imagine you’re just controlling all the other expenses in your life, not letting any of them get out of hand, and that’s how you managed to crush that debt so quickly.

Whitney:
None of them. I’m not joking when I say this, I could even pull up bank statements to prove it, I didn’t go out to eat once during that entire time. I cut out Starbucks, which my heart hurts so bad over that one. It sounds cheesy, but it was a hard one. There was no fun. But frankly, people are like, well, how do you do that? When you’re working 80 hours a week, you don’t freaking have time to go spend money. You really don’t. And that’s my way of doing it because I have the personality type where I have to take immediate action and I have to go all in. I cannot drag something out longer. That just does not work for me. It really messes with my head.
So I want to see some immediate reactions and immediate results. And so for me, that aggressive strategy worked super, super well.

Scott:
You said you continued it after you paid off your debt. What were you looking for? What was the feeling where you’re ready to start easing off the gas in terms of your overall financial position?

Whitney:
So I was doing it to hit my six month emergency fund. That was the big motivator there. And so I was able to hit that pretty quickly after, and then it was just…

Scott:
Yeah, at that rate, it sounds like it was about a four, five month journey to six months emergency fund.

Whitney:
It wasn’t bad. You would think that, right? For some reason, I don’t know what it is, anybody that’s paid off a lot of debt gets this, when you’re paying off debt, you see that aggressiveness and you make really good progress. When it’s a savings goal, it’s not the same tenacity. I don’t know why, but it’s different. It takes a little bit longer with savings goals. Maybe you put the foot off the gas, I’m not sure. It’s got to be that. But yeah, that’s what I kept doing was just boosting up that savings. And then eventually when I decided to quit that hustle was when I started the MBA program. I tried to do that for about six months into the program and it was just too much.
Like I just couldn’t do it. And so at that rate, I just decided to quit my salon job and say goodbye to clipping toenails.

Scott:
Fair enough. Was there any notion of investing or was it just kind of, I’m going to get six months emergency into the bank and then I’m going to go into the MBA program?

Whitney:
There wasn’t a lot of investing, which is a bummer. Like I had been investing all through undergrad. I was doing a couple hundred bucks a month with one of the big box firms, which that’s for another conversation, but I was just investing as much as I could at that time. When I was paying off debt, I did push pause completely. And then I started to slowly incorporate it back in. And then when you work for a university, you’re required to put money into retirement. That’s one of the things they kind of force you into, which is great. So I was still investing, but it wasn’t like actively or aggressively.

Scott:
Your assets are spread across your six month emergency reserve and your equity in this home, which knowing Boise is going to be a part of the story later, I’m sure.

Whitney:
Yup, that’s exactly what it was though.

Scott:
Great. So what position do you kind of emerge from financially from this MBA program, and what year is it?

Whitney:
So I got done with the MBA program in 2015. Yeah. Has it been five years? That’s so crazy. Time flies. So 2015 is when I got done with that program and totally different, guys. I thought I was going to be doing corporate marketing. That was my whole jam through the MBA. And I discovered entrepreneurship because I had paid off all this debt. I was helping people with their own plans, ironically, at Starbucks. And we’d sit down and drink some coffee and create budgets and put together like here’s how you can actually pay off your debt. And that’s where I didn’t realize it could be a business. This was still fairly… Coaching was not really a big thing at that rate.
And so it was really fun, but that’s where I started to launch the business. And when I graduated, I continued working for the university for a few more years and was growing my business about midway through my MBA program. And so by the time I graduated, my income had been replaced by my business. And then it was this kind of decision of do you jump ship or do you stay with the security? And that really challenged me emotionally. It really did.

Scott:
Well, hold on. Going back to the Starbucks comment, Starbucks can really kill your budget if you’re going through the drive through every morning on the way to work, right? If you’re going there to get a latte and meet somebody and make a connection, even if it’s just a new person or acquaintance, business contact or whatever, that’s an enormous ROI. That’s not… That’s not… I don’t… I do not see that as the same thing as a latte habit that people are always given grief about. Anyways, I wanted to give you some credit from the Starbucks thing.

Whitney:
I appreciate that.

Mindy:
Well, and if you’re meeting somebody there for coffee, you buy their coffee too, and then that’s a business write-off.

Whitney:
Oh, here’s the best thing though, because this was a side hustle for me. I wasn’t even charging for those stuff. Most of the time people were like they felt bad that they were taking my time and I was giving them free information there. Let Columbia just buy your coffee. So half of the time you got free coffee. It was pretty great.

Mindy:
You need to listen to episode 112 with Natalie Kolodij about itemizing your expenses and getting your… Well, you’re an accountant. You studied accounting, so you know that you’re supposed to keep all your receipts.

Whitney:
You are, unfortunately, unfortunately.

Scott:
Well, let me ask you this, so in 2015, it sounds like you’re kind of going through a choice here. And what I want to know is when you’re deciding between the choice between kind of the safe corporate career and entrepreneurship, how big a role did your personal financial situation and your savings and your emergency reserve have in your decision making process there?

Whitney:
I seriously think it was everything. I truly believe if I would have done kept my debt around and then finance the MBA program, like a traditional MBA program costs like, I don’t know, 50,000, if I would have did that, there’s no freaking way I would have went into business because I am so risk adverse. It doesn’t sound that way, but I really am. I prioritize that financial security. So if I had that debt, I know for certain there’s no way I would’ve did it.

Scott:
Love it. Yeah. I just have this hunch that a lot of people who go and get MBAs or get very large student loan balances from private universities, those kinds of things, I wonder if they are locked into one set of choices. Instead of giving them multiple options as you would think is the outcome, they really are just kind of forced into one niche career path. And because of your strength with money and your healthy relationship with money and the fact that you did grind it out at 80 hour work weeks and pay off that debt, I wonder if that actually is what delivered the choice to you upon graduation.

Whitney:
I think it did. I think you’re really onto something. I mean, of course, I have no scientific proof or research to back that, but anecdotally, yeah, for sure. I know for certain it would have been different had I had that six, $700 monthly payment over my head. There’s no way. And that pressure I think gets put onto your business, which makes it even worse. Because then you come from a place of desperation instead of serving, and that’s not good either for business.

Scott:
Love it. So can you walk us through your journey in creating the business during your MBA program and following?

Whitney:
Yeah. So the first thing that most business owners go through, I think, is that imposter syndrome. And so for the first year of my business, I was just kind of testing the waters, just working with people one-on-one, helping them again at Starbucks doing all that kind of stuff very informally. And then I started teaching in person workshops, so I would host events. At that time, it was targeted for high school students because I wanted to be a little bit more preventative and get them before they made all of the mistakes I did. And so that’s where I began. And then from the high school workshops, I was doing like a $50 Facebook Ad targeting Boise and Nampa and some of our surrounding cities.
And what I was doing, it was interesting, it was targeting high school students, but I was getting a lot of single moms that were coming to the workshop. And I thought, wow, that’s kind of weird. You know? As a business owner, you’re taught to like pay attention to those outliers and see if it becomes a pattern. And so I started to target more single moms and women and people that you wouldn’t necessarily get targeted for financial type of work…

Whitney:
And people that you wouldn’t necessarily get targeted for financial type of workshops. And those started to grow a little bit further and that led to webinars and it led to online courses and then one on one coaching and podcasting eventually. But yeah.

Scott:
I love this and I’m sorry, this is your story, but I’m going to jump in here with a bit of my story.

Whitney:
Do it.

Scott:
I went for a period of years here in Denver, and I tried to find an organization to volunteer and teach finance because I thought, hey, this is really important and people don’t know this. And I remember teaching a lot of homeless folks at churches, those types of things. And really a lot of the times I wouldn’t get interest. Like they would show up because it was kind of like, hey, you’re going to stay in our church. We really want you to go listen to this dude. And so they would come and they would, and they would be polite, but the real interest came from two groups of people. One was immigrants and the other was single mothers. And these people showed up to my talks and paid rapt attention, sometimes brought their kids and we got into it and they were asking questions, all that kind of stuff. And so I kind of saw the same relationship there and I’m interested to see where are you going with this? So, anyway, I just wanted to [inaudible 00:43:13]and just say, yeah, that makes sense in my context.

Whitney:
I think it’s so fascinating too, with business, especially any, even if you’re side hustling, I think it’s important to pay attention to the market. It really is. You’ve got to hear what are customers saying? What do they like? What are they … Even if you’re doing Uber Eats, throw on a business card and say, here’s what my goal is. Here’s how you’re helping me achieve my goal through Uber Eats. Thank you so much. And see if that increases your tips. I think it’s like you should always be paying somewhat attention to every area if you’re making money from it. And so, yeah, that was one of the things that really stood out to me as being weird in hindsight, like, yeah, I’m a product of a single mom household. It makes sense that then single moms would naturally gravitate towards me, but that’s where it all began.
One of the weird things guys about business, the one on one coaching piece, I fell into this trap of like the Gary V, Russell Brunson’s of the world. Everything has to scale, scale, scale that I shied away from one on one coaching because it wasn’t scalable in my eyes. And so I kept trying to push the courses and webinars and that kind of stuff. But once I leaned into what are my customers wanting? What are people actually asking for? It was one on one coaching and they wanted to chat about their own lives. And so my business started to grow significantly when I just listened.

Mindy:
Wow. Wow. That’s an excellent quote. My business started to grow when I just listened. That is amazing. Have you ever thought about releasing your coaching sessions or recording your coaching sessions?

Whitney:
I should.

Mindy:
Just because I have a question about my own personal situation doesn’t mean that there isn’t somebody else out there who can also benefit from that exact same information that you’re sharing.

Whitney:
That’s such a good point. I haven’t actually.

Scott:
All right. Hope you’re enjoying the show. We’ll be right back after a word from today’s show sponsor.

Mindy:
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Okay, so you are doing one on one coaching, which you readily admit is not scalable, which is totally fine to have … I mean, that’s not every minute of every day. How many sessions does that take? Like the average person needs 5 sessions or 20 sessions, or it seems like you would constantly have a rotating list of people who are coming in to need the coaching and are graduating from the coaching.

Whitney:
Yeah, it is one of those things where you do kind of have almost like a retention issue, right? Any business owner sees that you’re like, well, what about over here? And frankly, I actually don’t care too much about over there because there’s still so many people that initially need that first help. So how coaching works, this is just my own version of it. I work with people for three months at a time. And my whole goal over that three months is to get you to the point where you’re like financially empowered. You don’t have all the answers, but you can figure it out. Like you have the confidence to be able to go and read through Vanguard, to learn about your own investing. You can go to BiggerPockets and not be intimidated by the calculator. It’s getting you to that point where you feel comfortable knowing where to go to get that information. And so coaching for me is very hands on.
We work with each other every single week in some capacity. So I work with people once a month for a money mastermind call, we're [inaudible 00:47:46]your budget, we're getting into the weeds. And then every single week we hop on a 15 minute phone call and that's our accountability time. Yo Scott, you said you were going to do this. How you doing? And then it's just your time to just really get that accountability. I find that structure works really, really well. But basically, when I created my coaching package, I asked myself what would have been the most helpful thing for me when I was paying off debt? When I was just getting started into my journey, what did I actually need? And it wasn't more books, it wasn't more education. I needed somebody to hold my hand and to tell me, hey, you know what? You've got this, this is normal. This is not normal. You need to watch out here. That was what I needed. So that's kind of how I created my program, was coming from a place of like, what would have helped me.

Scott:
And this became your main source of income rapidly after you graduated from your program, right. Can you walk us a little bit through the journey of how you cash flowed that situation and just did it cash flow immediately from day one and then it just kind of scaled from there? Or what did that look like for you?

Whitney:
No, I wish it did. I was one of those people because of that imposter syndrome I charged for that same three month program after I got into the coaching piece. I really did not value my own skillset, which breaks my heart, but I was charging $300 for the entire three months of talking every single week and creating that plan with me. And so it was not profitable, but I think it was valuable because at that time, I needed to get to that point where I started to build up my own confidence in my skills, where I said, you know what? This is ridiculous. Like, I am worth more than $300 for three months of coaching. I know I’m worth more. And so finally I got to the point where I was just fed up of charging so little and seeing the results that people were getting that I started to just slowly increase my prices.
And it really made a big difference, but that’s where I’d say just plugging away, being in the trenches, continually working every single day on getting slightly better with my own coaching skillset and marketing. And that’s how the business started to grow further.

Scott:
Got it. Awesome. So what do you do now with the excess cashflow? So how do you invest it and what do you kind of build out as your asset allocation?

Whitney:
I’ve got the weirdest thing that I’m working on right now. So I’m super excited about it. I, of course, am maxing out my Roth IRAs, now my solo 401ks the best that I can, but I’m starting to not be as aggressive with my index fund investing and actually putting more into just a savings account because I’m working on … This is so weird, but I want to build my own tiny cabin. I live in Idaho, so we have mountains everywhere and I’m looking for a piece of property where I could just go buy the property, develop it a little bit and build my own tiny A-frame cabin and then do a little Airbnb style. So that’s kind of what I’m working on currently.

Scott:
And is that personal or business or both for that?

Whitney:
Both. Yeah, definitely both. My fiance and I have very different opinions. He’s an engineer by trade. So for him, it’s like, it’s got to make sense numerically. Like the math has to work out and again, I’m an emotional person, so I’m like, but I could stay there on the weekends sometimes if it’s not rented. So we’re trying to find this happy balance of what should you actually do with an investment property? And I think he’s probably right.

Mindy:
He’s probably right. But there are other times, I mean, I wouldn’t sink your entire nest egg into this, maybe I’ll be able to rent it out property. But if it’s a small amount of your financial overall picture and it’s something that you’re going to use, it’s something that you enjoy having. I think it’s okay to not have absolutely every single investment be this massive cash cow. You have to enjoy your life too. And this is something that I struggle with my husband who really likes to go full on, full force. And I’m like, it’s okay to stop and read a book that has no message in it. It’s a Stephen King book, he’s an amazing author, but he’s not teaching you how to better your finances or mindset or anything like that. He’s just telling you a great story and it’s totally okay to read that book. So that was … Wow, that veered off, let’s get back to your story.

Whitney:
I think you’re spot on though. And I like that you’re mentioning that it doesn’t always have to be about money. Like it’s personal finance because at the end of the day, do you want to sit on millions of dollars? I do. But do you want that to be your only thing that you accomplished? And so this is one of those things where it’s been [inaudible 00:10:16]me for a long time that I think it would be so cool to just go physically build this cabin and just see what I can do with it and make money off of it. Like that’s, to me, the biggest thing that I really want to see for my financial life. So I think it’s really important to invest in those things that do bring you joy because at the end of the day, money is awesome. But if you’re not having fun with it, what’s the point.

Mindy:
Exactly. Exactly. When you get to the point, like you don’t just charge full steam ahead to financial independence and then you get there and you’re like, well, what do I do now? That’s actually something we’re going to tackle in a couple of months, we’re going to start talking to people who have made it to the other side of financial independence. And how do you spend your days? What is different about your journey than what you thought it was going to be? Because how you spend your free time now is how you’re going to spend your free time after financial independence. You just have a lot more of it. So if you’re you’re watching TV tonight, because you get home from work, you watch TV and that’s all you do. You’re just going to watch a lot more TV. If you go out and hike, you’re going to do a lot more hiking. And if you have nothing that you’re super passionate about right now, stay at your job until you find something you’re super passionate about. So you’re not just sitting there doing nothing in retirement.

Whitney:
Agreed. I think that’s one of the biggest fears I have for a lot of people that do hit financial independence is then what? It’s that deferred life plan, and I see this when you’re paying off debt, my life’s going to be better when I pay off my debt. Once I’m out of debt, it’s going to be better. And then you hit that milestone and it feels good. Like it’s awesome, you’re proud of yourself, but then what? You’re back into that same cycle. And so I think it’s the whole thing that I’ve learned from paying off debt from now reaching for financial independence from all of this stuff is you truly have to learn to love the journey because at the end of the day, if you don’t love the journey, you’re always going to be milestone hopping and trying to chase the next best thing. And you’re never going to find it.

Mindy:
Yeah. So true. Okay. So where are we now in your story? We’ve kind of hopped around a lot. You have your own company, you are helping people, you’re charging what you’re worth. That’s not just you, that’s a lot of people. I liked that you started off charging less and gained your confidence. And you know what? I am worth this. I am going to charge this. And I think if you started charging where you’re charging now, in the beginning, that imposter syndrome would have been even greater, that could affect the advice you’re giving to people, because you’re like, oh, am I doing this right? You’re not as confident when you have imposter syndrome and you’re charging so much for it. Does that make sense? I don’t know.

Whitney:
It makes so much sense. I think you’re spot on too. And one of the things that I see is, and now I feel very comfortable charging what I charge and it’s still compared to a lot of coaches, it’s still, people are like, wow, you’re really undercharging. It’s all perspective. It all comes down to your market and their ability to pay really. And so if you are charging a price point that you don’t feel comfortable with, what I see a lot of new coaches doing, or even people in general, even if you’re doing like a speaking event and you don’t feel very comfortable with it, you will almost try to be somebody that you’re not. You start to try to be a little bit, maybe more knowledgeable, more of that expert.
And that’s, I think where people run into a lot of issues, especially with coaching is they feel like they have to know the answer to every single thing, because somebody is paying you a higher price point, instead of being confident and saying, you know what? Maybe I don’t know this answer, but I can get back to you and research it. So I think that’s one of the things that I see too, when people don’t charge what they think they’re worth is they try to fit into this mold that doesn’t work for them.

Scott:
I love it. So what are some of the biggest, maybe moving on here before we get to the famous four, what are some of the biggest challenges that are facing many of the people who, who you talk with about their finances?

Whitney:
I think the biggest challenge is if it’s a person that has a lot of debt and that’s usually the people that I see, is they have a significant portion of debt, significant meaning more than $50,000. One of the biggest things that I see is they don’t actually believe that they can get rid of the debt. They hear stories and they think it’s possible, but they don’t believe it for themselves yet. It’s a confidence issue.
And so what I find for most people is it’s not a matter of getting stuff on paper and creating your budget and sticking to your budget perfectly. If you don’t believe you can do something, if you don’t believe that you can actually pay off your debt, you’re never going to get there. You just, you won’t, you’re going to find ways to self sabotage. You’ll pay off the debt and do the debt yo-yo where now you’re back into it. And so it’s really starting to really change the ability of my life can be different. And then I think the numbers support and here’s how. But I think at first starts with, can you actually believe that your life will be different from your financial choices?

Scott:
When you are confronted with individuals who have a large amount of debt relative to their income, what percentage of the time is a slog or a grind kind of not maybe on the 80 hour work week that you were on, but maybe in that same ballpark, right? Where, hey, I’m going to have to go and find that extra source of income, I’m going to have to really make dramatic changes to my lifestyle or spending overall. What percentage of the time is that required and for how long is that required?

Whitney:
I find most people do not resonate with that actually, which breaks my heart because I think it’s really worth it. Most people that I deal with, have very different life situations where maybe they’re married, maybe they have kids. They just don’t want to forego that time. And so I would say probably about 20% of the people I work with are willing to head down, nose to the grindstone and just hash it all out as much as they can. And the other 80% want some type of a balance. They’re willing to reduce some of their eating out. Maybe they don’t want to go on Amazon as much and by random crap. But they’re willing to make some sacrifices, but it’s not to that same level. And so I’d say most people are looking for more of a balance.

Scott:
Yeah. I really think that the hard truth here for a lot of this financial stuff is that if you dig yourself into a hole financially and then you get married and have kids and adopt that lifestyle, you’re going to be fighting that battle for 5, 10, 15 years, because you are not going to be willing or able to make some of those hard choices. Whereas if you can attack the problem aggressively and early the way like you did and get it, get that jumpstart, it makes all the difference downstream. Is that kind of the takeaway?

Whitney:
I think so. I see a lot of parents too. And this is like one of my biggest peeves for a lot of people is they almost blame their problems or their inability to maybe aggressively pay [inaudible 00:58:56]debt. And I don’t think they mean to do this, but they put it on their kids or on their partner or on their family or on their background. We’re always looking for almost like a scapegoat instead of just saying, you know what? Here’s where I’m at. The only way out is me and it’s nobody’s fault. It’s, I am where I am because of my own actions. I think it’s almost like extreme accountability that you need in order for you to truly better your life when it comes to paying off debt.
And I think a lot of people that do have kids feel, and I don’t have children. So to be very fair, I could be very off course, but I feel like a lot of times they almost put that on their children as the reason why they can’t better their financial future, instead of saying, what can I do instead to bring my kids as part of this journey and to teach them something different too? So that’s one of the things that really … You know what really grinds my gears. That’s one of those things.

Scott:
No. I mean, the levers are the same, right? You have either spend less, earn more, generate investment returns or create assets. Right. And all of those levers are easiest to pole to the extreme, right. To go to the extreme on each of those levers is easiest when you are young and single, I think. Not to say you can’t do it downstream, but I think that’s an interesting phenomena there. And I think that the way you just phrased that. Yeah, like I feel like you can’t and here I am, 29, single. So I won’t even go there, but I do like that hey, are you going to put that on your wife and kids? Or are you going to take that extreme accountability and say, how do I, and given my present circumstances, love my family and move toward my financial goals.

Whitney:
Yep. And your kids are not going to remember. Like, I don’t remember every time that my parents missed a game that I was cheerleading at. If you have to do that occasionally I think it’s as a parent, giving yourself permission to not feel so guilty over that stuff. If you’re truly trying to better your entire family tree, sometimes not always, but sometimes that’s the sacrifice you make is time with your family. And I think it’s giving yourself that permission to not feel so crappy as a parent. I see that so often it breaks my heart.

Scott:
Interesting.

Mindy:
Yeah. And I’ve got kids and they are as expensive as you want them to be. Until my kids were conscious of labels and conscious of new versus used, we shopped at garage sales. We shopped at thrift stores because kids clothing is expensive. They outgrow it in 12 seconds. They don’t look the cutest in the lineup of the kids. They’re beautiful children, but they don’t have the brand new outfit. They’ve got an outfit that they wanted to wear and they have a lot more clothes maybe than other kids do. But I mean, it was a 25 cent onesie, I paid 50 cents for those pants. And I don’t care if she wants to have four extra pairs of pants because that costs me now $2. Okay, garage sales are a great place to get kids clothes and yes, it costs money to put them in diapers, you could do cloth diapers. They’re a little bit more upfront, but you can use them across multiple kids. You still have to feed them, but there’s a lot of … Please feed your children. There’s a lot of things that don’t have to be so expensive.
Neither one of my children is exceptionally gifted in the sports arena. So we don’t do travel soccer and travel hockey and travel baseball and travel all this other garbage. That’s not something they like. Daphne is really good at art. So I splurge on art lessons over the summer. Like there are things that you do that better their lives, but it doesn’t have to be as expensive as … All these people say, oh, it costs $200,000 or $250,000 to raise them until 18. I’m like, did you buy them a brand new car when they turned 16? How did you possibly spend that much money on your children until they’re 18?

Whitney:
I don’t get it either.

Mindy:
I don’t get it at all. I’ve got a 13 year old and a 10 year old. So I have 23 years worth of kids. I have not spent even close to $50,000 on those kids.

Whitney:
You’re a good mom.

Mindy:
And I like to think I’m a good mom. So anyway …

Whitney:
You’re a good mom. You’re a good mom.

Mindy:
And I’d like to think I’m a good mom. So anyway, that was a… Wow, we should just call this tangents.

Whitney:
Tangent.

Scott:
We just get some feedback every once in a while on the show, “Hey, where’s the family who earns minimum wage, who started with $50,000 in debt, who climbed their way out of that at a rapid trajectory and became very wealthy?” And we haven’t found them yet. Right? And we’ve been looking for that guest, that story. And I think that it speaks to this. It’s just harder to pull all of these levers in all of those directions and have that great outcome. Although, maybe we will find that secret sauce in a few episodes here. So if you know anybody, let us know.

Mindy:
I will.

Scott:
That’s definitely a story that we’re looking for, you as the listener and you.

Mindy:
Yeah. And I think that that story though, when they tell it, is going to be… It’s going to include a lot of, “We sacrificed. We didn’t go out to dinner. We didn’t go to Starbucks. We didn’t go to the movies. We didn’t host big parties and go on vacations and have a new car and buy a big house. And we didn’t do all of these things because we couldn’t afford it. We were actively paying off debt. We were bringing in extra sources of income.” It’s not going to be a story of, “You know what? I found myself in massive debt, and then one day, I found an envelope with $50,000 on the sidewalk. So I paid off my debt.” That’s not how it works.

Whitney:
It really doesn’t.

Mindy:
You have to do the work at some point in your life. I did the work when I was younger. I was cheap. I still am cheap. I didn’t spend a lot of money. I didn’t go on vacations that I couldn’t afford. And when I do go on vacations, I don’t stay at five star hotels. I don’t fly first-class. And if that’s you, great. But what does your financial situation look like to put yourself in these positions? If you can afford first-class then fly it. It’s really awesome. I’ve done it once, but I got a free upgrade. I didn’t pay for it.

Whitney:
What? That’s amazing.

Mindy:
I did. I got a free upgrade. It was amazing. But I would never pay for that, because I have very short legs. I can fit in the seat regular. It’s not a big deal to me to have these fancy things. So I did the sacrifice in the beginning when it wasn’t really that much of a sacrifice. Like Scott said, when you’re younger, it’s a lot easier to live like a college student, especially when all of your friends are already college students and living like a college student.

Whitney:
And I think it’s truly living like a college student. I see a lot of college student budgets nowadays, and I can honestly tell you they are not true college student budgets sometimes. Sometimes they’re still spending outside of their means, or they’re still financing these really very… like, cars that are worth 10 times my car, and I look at that, I’m like, “Whoa.” Where did we go wrong where we start to value depreciating assets more than appreciating assets? And that really bothers me, but I see it a lot too. And so, yeah, my pontification there is drive the crappy car. Just do it. It’ll seriously save you so much money.

Mindy:
Drive the crappy yet reliable car, or get a bicycle. I mean, you’re in Boise, so that’s kind of snowy. But I went to school in Chicago. I took the train into… I lived at my parents’ house. I took the train into the city and walked to… I mean, there were some people who would take cabs from the train to the school. I was like, “Really? You could just walk that.” It never occurred to me to take a cab. I don’t take cabs. They’re very expensive.

Whitney:
They are expensive.

Mindy:
Okay. That was yet another tangent. Tangents with Whitney Hanson.

Whitney:
That’s what I’m here for, guys.

Mindy:
Okay. Is there anything else you want to share about your journey or paying off debt before we move over to the Famous Four?

Whitney:
No, I think we covered most of it. I think it’s just putting your head down and setting your own pace and going at a pace that you feel comfortable with and giving yourself permission to ignore everybody else. Put your blinders on temporarily and go in your own lane. I really think that’s everything when it comes to paying down debt.

Mindy:
That was wrapped up very succinctly. Okay. It’s time for the Famous Four then. Are you ready, Whitney?

Whitney:
I’m ready.

Mindy:
What is your favorite finance book?

Whitney:
My favorite finance book is ironically not super financially related. It’s called The Power of Habit. I feel like everything in our lives comes down to our habits. And so I think if you can control that, and you can learn the Habit Loop of what’s your cue, routine, and reward, if you really understand that, you will curb a lot of impulse buys and you’ll also be able to increase your wealth, I think, if you really understand the Habit Loop.

Mindy:
Wow. Yeah. That’s excellent advice.

Scott:
Great. What was your biggest money mistake?

Whitney:
The biggest money mistake that I made was blindly trusting a financial advisor, because I felt like I didn’t know enough. And so I got taken advantage of from a fee perspective, because I just didn’t know the right questions to ask. And I thought because they’re a professional, they know more than me, therefore, they have my best interests at heart. And I now know you should always do your own research and feel comfortable with your own investing. And if you don’t, then maybe you should do a little bit more homework so that you do feel comfortable.

Scott:
We didn’t hear about this. Can you give us a kind of idea of the scope of the mistake here?

Whitney:
Yeah. The mistake was I was investing in mutual funds that were incredibly expensive, incredibly expensive. And so by the time I was looking at my portfolio, my fees were about 7% per year.

Mindy:
What?

Whitney:
And that was all in, everything.

Scott:
Oh, my gosh. Yeah.

Whitney:
Yeah, hurt my heart.

Mindy:
How did you discover these fees were so expensive?

Whitney:
I saw my statement and was like, “Something’s not adding up here.” I was super young, so I didn’t really know. But I just started asking questions. I scheduled an appointment with my advisor and said, “Let’s just sit down and go over this, because I’m not understanding why I’m investing so much but I don’t seem like I’m making very much money, given the returns you’re showing me that my portfolio is getting.” And so that’s when he started to pull out all of the different fees, and yeah, 7% in fees. [crosstalk 00:05:50].

Mindy:
Wow.

Scott:
This industry is going to implode within the next couple of years, and good riddance.

Whitney:
Yeah. It’s a mess. It really is a mess.

Mindy:
Yes, because that’s not… I mean, I’m sure he’s steering you towards mutual funds that have the higher fees, because they pay him more money. And that’s just kind of a douche move.

Whitney:
It is a douche move.

Scott:
Was it a he?

Whitney:
It was a he.

Scott:
Oh, okay.

Mindy:
I’m sorry. I said he just in general here.

Scott:
That’s fair enough. [crosstalk 01:09:21].

Mindy:
To be fair, the industry stats are very, yes, it probably is a he in likelihood.

Whitney:
But yeah, it was a bummer.

Mindy:
Okay. So back on, I think it was episode 111, with Momma Purple, she was talking about how she also discovered that her mutual funds and her retirement accounts were fee heavy, and she went through… And she’s like, “I discovered this today, and tomorrow I took action.”

Scott:
Yeah, I love that.

Mindy:
It sounds like you took immediate action as well. And that is, if you’re listening to this show and you don’t know how much you’re paying in fees, you need to go find out. Go to Personal Capital and plug in all your stuff and look at their fee analyzer and see exactly how much you are paying in fees. And what’s a good fee ratio, Scott? I’ve got a lot of index funds, and those are real low.

Scott:
I mean, I love passively passive index funds, right?

Mindy:
Yes.

Scott:
So for that it should be less than 0.1%. I mean, they got to have some overhead to run the computers and send out your statements via paper or via mail for those who do not opt for electronic delivery or that kind of stuff. But I think that below 0.1%, you’re probably doing just fine. I know that Vanguard goes as low as 0.04% or 0.05%, but I don’t really make a distinguishment when you get below those levels. It’s anything over 1%, 2%, you’re probably buying an active fund, which is not something that I think any of the three of us are probably interested in.

Mindy:
No.

Scott:
But I think if you’re looking for a passive index fund, look at the fees, but when they’re below a certain threshold, it’s pennies now until you get really wealthy.

Mindy:
Yeah. 7% is not pennies-

Whitney:
No, that’s just not helpful.

Mindy:
… when you’re being charged that. That’s the bulk of the growth of your fund.

Whitney:
No lies.

Mindy:
Like you said, the bulk of the growth of your investments is now going back to fees. If you have a question about how much you’re paying in fees, jump into our Facebook group. It’s the BiggerPockets Money Facebook group. You can go to facebook.com/groups/bpmoney. I saw somebody the other day asking, “Oh, how much are fees?” or, “What are fees? What is a good amount of fees to pay?” or, “What are you paying in fees?” And if you have a financial question, jump in there and ask, and you’ll get a lot of answers.

Scott:
Yeah. And I would say, if you’re going to go the active route… We always trash the active investing route and the high fees, but I think that if you are listening and you want to go down that, it’s fine. Just don’t buy the fund that’s you’re sold on by the rep at your financial institution. Do one that you’ve researched and learned about and have a thesis behind in general, if you’re going to go down that route, I’d say,

Mindy:
Yep. Okay. Let’s finish up the Famous Four. What is your best piece of advice for people who are just starting out?

Whitney:
The biggest piece of advice I can give is to practice contentment. Yes, you can go and you can create a budget and you can track your expenses, and all of that’s great. But I think at the end of the day, look around your house and start to be grateful for what you currently have. I think the best way to get ahead is to appreciate it. And that also curbs a lot of, again, those impulse buys. So one of the things that I recommend is a look around the room that you’re in right now. Just peek around. Every single thing in this room costs money, every single thing. That used to be money that you had. And I think when you start to see that, you start to realize that, “Maybe stuff doesn’t make me happy, because if stuff actually made me happy, I’d be happy.” And so I think that’s one of the biggest pieces is to practice that contentment.

Mindy:
Wow.

Scott:
Love it.

Mindy:
That’s awesome. Okay. Scott, your favorite joke. What’s your-

Scott:
What’s your favorite joke to tell at parties?

Whitney:
I’m going to be really honest. I’ll give you guys an appropriate joke. But I’m like a 16-year-old boy. So everything that’s that what she said, any of those jokes, I’m the first person that’s there. It’s really inappropriate. But this joke is more of a dad joke. It’s a little more appropriate, guys. So what has two butts and kills people?

Mindy:
Oh, [crosstalk 01:13:30]I don’t know.

Whitney:
An assassin. And now you guys know how to spell assassin too.

Scott:
I like it. That’s awesome.

Whitney:
It’s so cheesy, I know. I’m sorry.

Mindy:
No, that’s great.

Scott:
That’s really good. All right. Where can people find out more about you, Whitney?

Whitney:
The best place is at the Money Nerds podcast. Just hop over there, continue the conversation and also what people are doing, for some incredible stories. And listen to Mindy’s episodes. She was my first ever two time repeat guest, and she did such a phenomenal job. So if you want to hear her story, it was very early on, but you can go listen to that on the Money Nerds.

Scott:
Awesome.

Mindy:
Thank you for that plug. I will make sure to include the links to those episodes and all the things we talked about today in today’s show notes, which can be found at biggerpockets.com/moneyshow128. Whitney, this was fantastic. Thank you so much for sharing your story. I got a lot of really great information out of this, and I think that people who are listening will also get a lot of really great information.
If you are listening to this, share it with a college student, share it with a high school student, share it with somebody who needs to learn from Whitney’s story, because having all of this knowledge after you’ve taken out $30,000 in debt, is not nearly as helpful as having it before you take it out. No shame in taking out the debt. I mean, sometimes you need to borrow money to better your career. But if you can take out less, that’s better.

Whitney:
For sure. Thanks so much, guys. I appreciate you having me. It was truly a ton of fun chatting with you and sharing my dad joke.

Mindy:
I love your dad joke.

Scott:
Well, thank you.

Mindy:
I’m going to don’t tell it all the time. Okay, we will talk to you soon, Whitney.

Whitney:
Bye, guys.

Scott:
Bye-bye.

Mindy:
Okay, that was Whitney Hanson from the Money Nerds podcast. Scott, what did you think?

Scott:
My biggest takeaway is something that I have been taking away for a while from a couple of other shows, particularly with these folks who graduate college and go on to reach big milestones or pay off big debt quickly, right? And it’s this concept of the all out grind, right? I mean, she worked two jobs, kept her expenses to a bare minimum, house hacked, and then found a way to live for free with her fiance, right?
And all of these things just were optimal choices to accelerate her debt paydown. And I don’t know whether to take heart in that or to be a little disheartened in the sense that I think that that’s the answer to really propelling your financial situation forward is the all out optimization, the heavy workload, and the extreme low spending choices that really help you get that propelled towards true early financial independence, entrepreneurship, or those extraordinary life outcomes.

Mindy:
Like I said, at the end of the show, there is no magic answer. I mean, there is a magic answer, spend less save more. You will have to sacrifice if you have debt. You have $10,000 in debt, you’re making $500,000 a year, it’s probably not going to be as big of a sacrifice as if you have $30,000 in debt and you’re making $30,000 a year. That’s going to take you a while to pay off.
And the more you throw at your debt, the faster it gets paid off. And there’s really… I mean, that’s like… As I’m saying that, I’m like, “Well, duh, that’s so stupid,” but that’s true. The more money you can throw at your debt, the faster you will pay it off. So the more money you spend, the less money you have to throw at your debt. And that’s just a choice that you are going to have to consciously make in order to pay off your debt.

Scott:
Yeah. And what’s happening across a number of these shows now is we’re seeing 30-somethings who are multimillionaires, who are retiring with an extremely conservative asset allocation, often meeting that 3%, 4% rule, plus another side business or source of income. Right? I mean, these are folks that are going to be very, very rich. Whitney’s going to be very, very rich over the course of her lifetime. Right?

Mindy:
She is.

Scott:
And I thought it was an interesting discussion about, “Hey, love the journey and love what’s going on during the journey, and don’t worry so much about the outcome with that.” Yet all these folks are optimizing in that journey and then arriving at the destination with a complete ocean of possibilities out in front of them. But this is what gets me up in the morning and why I love this, is because I feel like when folks reach that particular position, world’s their oyster, and they’re going to go on and do some very interesting things. And the frustrating part is I don’t know how to make that accessible to more people more rapidly without this grind it out, 80 hour work week, spend very little, invest aggressively, mostly in stocks or real estate, or start a side business. Right? And I just don’t know if there’s another answer out there that exists to get them to that point.

Mindy:
Well, nobody’s going to make a story about either of our lives, because they’re not that exciting. The Keeping Up With the Trenches, probably not going to be the next A&E show or whatever channel that’s on, because you’re not out there spending money and doing all these fabulous things that everybody thinks are the greatest ever. You’re out there just being a conservative person, and that’s kind of boring. And I’m not saying you’re boring, but that’s… I mean, nobody’s going to make a story about my life either.

Scott:
I disagree, though. I disagree, because I think about like a guy named Warren Buffet, right? This fellow generated $127,000 in wealth by the age of 25 by being a conservative spender and working at an investment fund. And then he retired to Omaha, little known fact, as a early retiree. He said, “Hey, that’s the equivalent to $1.2 million today. And conservatively, I’m going to be able to live off that for the rest of my life.” And what did he go on to do? Right?

Mindy:
Nothing.

Scott:
And so, yeah, I feel like that’s what excites me about this movement is Ben Franklin, if you want another one, early retiree at 42, Mark Cuban, a early retiree at 30, all these guys, they explicitly had the goal of retirement, to go on and go do some things. So I do think that there’s some books will be written about people in this financial independence movement, who go onto to achieve early financial freedom early in life, go on to become very, very wealthy and change the world. So we’ll see. Jury’s out on that one.

Mindy:
I hope you are correct. I really want to share this with everybody. But you know what I didn’t hear in Whitney’s story? I never heard her buy something because she deserved it. I never heard her finance a vacation and figure out how to pay for it later. I heard her say, “I had my debt making decisions for me, and I didn’t like that, so I changed it so that my debt didn’t rule my life.

Scott:
Yep.

Mindy:
And that’s kind of the bottom line.

Scott:
There you go.

Mindy:
Okay. Should we get out of here, Scott?

Scott:
Let’s do it.

Mindy:
From episode 128 of the BiggerPockets Money podcast, he is Scott Trench, I am Mindy Jensen. Over and out.

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In This Episode We Cover:

  • Whitney’s journey with money
  • Difference between a want and a need
  • Her personal financial situation during high school
  • Her job while in college
  • The reason why she bought a house at 19 years old
  • Whitney’s tips for students
  • The importance of scholarships
  • How she paid off her debt
  • Creating a business during her MBA program
  • Biggest financial challenges that people are facing
  • And SO much more!

Links from the Show

Book:

Connect with Whitney:

The BiggerPockets Money Podcast is for anyone who has money… or want to have more! Join BiggerPockets Community Manager and Podcast Director Mindy Jensen and CEO Scott Trench weekly for the BiggerP...
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    Zach Lemaster Rental Property Investor from Denver, CO
    Replied 30 days ago
    Outstanding information! Thank you for sharing!
    Don Spafford Investor from Idaho Falls, ID
    Replied 30 days ago
    Awesome story.