From Fired to FI Couple in 2 Years with Josh and Ali

Scott:
Howdy, everybody. We mentioned this last week, but we are going to have a Q & A, the first Q & A. Maybe the first, maybe not the last. Maybe we’ll have them go on a go forward basis, you never know.

Mindy:
Live.

Scott:
Yes, a live Q & A with me and Mindy. And we’re going to answer questions that you have as an audience. We just want to get to know you a little better and want to hear your questions directly from you and spend some time with you in our Facebook group. We already obviously interact with you guys on a regular basis in the Facebook group, but it’s very fun. But this will be a chance to talk live, I think, and get some good questions from you. That live session is going to be on February 4th, which is a Thursday, at 5:00 PM Mountain Time. That’s going to be 7:00 PM Eastern, 4:00 PM Pacific. So Prime Time, hopefully. Well, we’re going big. But anyways, we hope to see you there. And I think it’ll be a fun little event. And obviously, all you have to do is join the Facebook group if you’d like to attend, the Facebook group is completely free to join. You can just find it at facebook.com/groups/bpmoney. Hope to see you there.

Mindy:
Welcome to the BiggerPockets Money Podcast, your number 167, where we interview the FI couple Ali and Josh, and hear how they went from a net worth of negative $100,000 back to zero in just a few short years.

Ali:
Figuring out your why, and it has to be a big why, and you have to really care about it because whether you’re paying off debt or you’re investing, or you’re pursuing FI, it is not a smooth sailing easy road. There are going to be challenges, there are going to be things that test you, and I think when that happens, remembering your why and remembering the big reason why you’re pursuing this, because at the end of the day, that’s what gets you through the hard times. So just figure that out and stick to it.

Mindy:
Hello. Hello. Hello. My name is Mindy Jensen. And with me as always is my ideologically pure FI portfolio investing cohost Scott Trench.

Scott:
It is a cult, but yeah, you guys will figure that one out later this year.

Mindy:
Yeah, towards the end, that gets explained a little bit better. Scott and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter where or when you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, going to make big time investments in assets like real estate, start your own business, or dig your way out of $100,000 in student loan debt after getting fired, we’ll help you reach your financial goals and get money out of the way so that you can launch yourself towards your dreams.

Mindy:
You said after getting fired, after losing your job, because fired means something different in our vernacular here, Scott.

Scott:
Yeah, fair enough. Laid off, terminated, whatever floats your boat, but yes.

Mindy:
I am really excited for today’s episode. We are talking to Josh and Ali from the FI couple, and we get into several topics including how to hack student loan debt, and as Scott just alluded to, sudden unemployment just as they discovered financial independence. But their story really isn’t that unusual, student loan debt exists for a lot of people and sudden unemployment does too, especially after 2020. And while today’s guest is very young, their underlying message of being conscious about your spending and investing aggressively, reducing unnecessary expenses, can be taken and applied to your financial situation regardless of your age.

Scott:
This was an awesome episode, one of my favorites. They’re just so enthusiastic. The dynamic, I think, between them is hilarious and fun and they just have made so much progress in such a short period of time, knocking out chunks of student loan debt, getting a house, heck, underway. The underlying money story, I think is incredibly informative and relatable, I think, to a lot of folks. I think everyone who listens to this is going to learn a lot. And I ended up being really impressed with both Josh and Ali here. And it was just amazing. By the way, we found Josh and Ali through the Facebook group. They’re like what some of our… Josh in particular, is one of our top contributors in our Facebook group and his name just keeps popping up over and over and over again.
I started following him on Instagram and yeah, we just got to know him there. So if you’re interested in connecting, that’s a great place to go. You can follow him or you can go and join our BiggerPockets Money Facebook group. And Mindy, I think we have a special incentive for folks if they do join the Facebook group this week.

Mindy:
Would you like to listen to Scott and I talk live on Facebook? Would you like us to answer your questions live on Facebook? Scott and I are doing a Facebook live on February 4th. Do you know what time that is, Scott?

Scott:
It’s going to be at 5:00 PM Denver Time, which is 7:00 PM Eastern or 4:00 PM Pacific. Okay. Whatever. Yeah, those time zones. But yeah, we’re just going to be doing a Q & A, it’ll be a good chance to hang out. We’ll have a couple of questions that we’ll be ready to talk about and then we’re hoping that you guys will chime in with some questions or thoughts. It can be about a recent episode, a money challenge. Just general, hopefully not too personal questions, but we’ll just hang out for a couple hours. I think it’ll be really fun.

Mindy:
Yeah, we are really looking forward to talking to you and that will be in our Facebook group. If you are not a member of our Facebook group, you can join at facebook.com/groups/bpmoney. Ali and Josh from the FI couple, welcome to the BiggerPockets Money Podcast. I’m so excited to talk to you today.

Ali:
Thank you so much and thank you for having us here. We are super excited to be-

Josh:
Yes, this is like a dream come true for us.

Mindy:
So you’re a couple, so I’m wondering where your journey with money begins. Is there some before we met backstory or does it start basically as you became together?

Josh:
Yeah, I think we came from polarizing backgrounds in terms of financial upbringing. I came from a very, very low income background and really, really poverty and hard circumstances and things of that nature. And that very much shaped the decisions that I made in early adulthood in terms of really poor financial spending.

Ali:
And I think for me, I came from a more middle class background and I didn’t really… I had the privilege to not fully think about money growing up. I knew my parents fought about money sometimes, and that was a point of contention. And then I remember being in high school and my dad lost his job and that was like a really big deal and it made it hard for my family. And my mom went back to school, she got her master’s, she got a stable state job. And that was a point in my life where I remember having that thought, like I need security, I need something that will provide me safety. I think that’s a big reason why I have a school job right now with my pension and all of this. And it led me on that path. And I think your experiences led you on the financial path that you were on, but then we meet in college and we have these different backgrounds and we’re friends for a long time and started dating and yeah, it definitely was interesting to merge those two perspectives in one.

Scott:
What college was this? Just out of curiosity.

Josh:
Yeah, so we went to the State University of New York, it’s called SUNY and it’s called Oneonta. So it’s a small state school in the Southern Central part of upstate New York. I graduated in 2012, Ali graduated in 2013 and unbeknownst to each other, initially, we actually transferred into the same major at the same time. And conveniently, I was one of three guys in the entire major and most of the classes the two other guys were like sleeping, so it helped me kind of stand out. So that’s how I met Ali.

Scott:
That’s awesome. So not to be confused with sunny, I imagine, at SUNY. Terrible joke. Let’s move on. So what’s your position upon graduation? You guys are dating at that time? Do you have student loan debt? What’s the situation at graduation there?

Josh:
Yeah.

Ali:
So tons of student loan debt. Josh was in a special program called the EOP program for folks that came from disadvantaged backgrounds, so you graduated with about $30,000. I did the same. My parents were willing to take on half of my student loan debt. So we both had $30,000 each, combined $60,000. But then I did go back for my master’s, which was almost $40,000. So right out of college we weren’t dating, we were friends for a long time, but about a year after I graduated, we started dating. We moved in together. But even at that point, we weren’t talking about money. We were making minimum payments on our loans. Money was not a big conversation in our home.

Josh:
No, and it wasn’t until… So we got married in 2018, we’d started dating in 2014 and it really wasn’t still until we started merging our lives together, moving in and having conversations of marriage that we, for the first time ever, really started talking about finances. And frankly, the debt that we’ve had, I knew of debt and there was some number attached to me, but I didn’t really know what that number was. And when Ali went back for her master’s again, we knew it would be more debt, but we just assumed, “Well, it’ll all work out” not really knowing the true depth of the day.

Ali:
Mm-hmm (affirmative).

Scott:
So what triggered that decision to begin thinking more about money? What was maybe that inflection point for you guys?

Ali:
Honestly, and we talk about this a lot, the year of our wedding, the first week of January, Josh had been with a long-term employer for seven years, he had poured his heart and soul into that company and was very unexpectedly laid off. So that was like-

Scott:
This is the first week of January 2018, [inaudible 00:09:52]?

Josh:
Yeah.

Ali:
Yeah, so we got married in August. So then prior to that in January, he had gotten laid off. That was like really, really scary for us. We didn’t know how we were going to afford our wedding, pay our bills, all of this. And through that crisis, it led us down the path of, we need to figure out our financial situation and we need to do it quickly.

Josh:
Yeah, and just to kind of backtrack a little bit. So I had been working full time while Ali was working on her masters. And in 2017, actually I discovered Dave Ramsey and the total money makeover and I was like, “Well, once you graduate Ali, and I’m working and you’re working, we’re going to take the world by storm, we are going to get rid of this debt” because now we were starting to be more aware of it. We had two car loans at the time too, “And we are going to change our lives and live like nobody else.” And so Ali graduated college, she got her first job, first career, we were both working full time for about three months and then you’re going into 2018.
And back in 2017, I had also found Set For Life by Scott. And we were feeling a little burnt out on the Dave Ramsey method and feeling like there had to be a better way to achieve our goals. And so that’s actually, when we discovered Set For Life, we discovered BiggerPockets in general and started listening to the podcast, reading the books and everything like that. And that’s when financial independence actually became part of our vocabulary. 2018 was going to be the year that we really made a huge dent, and then I got fired.

Scott:
So wait, going back for a second, a big fan of that book too, of course. But going back, you discovered this concept, you start reading Dave Ramsey and some other guru around finance and you get this picture together. But it sounds like you have $100,000 in student loan debt and you’ve got two car loans. What’s the picture that you paint? What’s your net worth statement look like when you’re making this transition heading into 2018? Do you have that?

Josh:
I can tell you assets-wise, I had a $401,000. That was about it. And then any money that we had in savings… That was from the assets perspective, that was all we had. But we had, I think just under $20,000 in car notes, then we had about $102,000 in student loans. I’m not really sure if we had credit card debt, or what that number was-

Ali:
We had a debt.

Josh:
… but I’m sure we did. We probably did.

Ali:
Yes.

Josh:
So all the bad things, I guess, relatively speaking, that you could be doing financially, we managed to get ourselves into that.

Mindy:
Congratulations.

Scott:
Okay. Well, what is… This is why it’s going to be such a good story, right?

Mindy:
Yeah.

Scott:
But I don’t think that we’re in the same position today.

Josh:
No.

Mindy:
I hope not. That would be terrible.

Scott:
What’s your income at this point, combined? Do you know if you can get a ballpark there?

Mindy:
Well, Josh’s income was $0.

Josh:
Yeah.

Scott:
Before the firing, getting laid off.

Josh:
Sure. So I think Ali was working part time during her her master’s program, but it was just side jobs and stuff like that. I was just under $60,000 a year in my full-time career, working a ton of hours. That was another really big conversation for us the year before our marriage was. I was working probably 70, 80 hours a week and we were both saying, “Well, when we get married, we want to spend time together. And if we don’t make a change, nothing will change.” And so that’s really when the conversation started to shift, in terms of me maybe making a career change, which originally I was planning to make a career change and then it was made for me.

Ali:
And he was making like $60,000, right? But he was making it at a not-for-profit where there was very little room for growth or advancement or control over your own salary. So that company, working for it, so much time and energy and yeah, he was doing valuable work, but it felt tough because you don’t have so much control over your financial state, it’s dictated by someone else.

Josh:
Yeah, it was a small start up.

Scott:
Yeah, and what was your plan going into 2018? You were planning both to work, I imagine.

Josh:
Yeah.

Scott:
And what would you have projected your income to be that year before being laid off in January?

Ali:
So 2018, you were probably pretty close to $60,000 and I had started my school job in a small rural school district making about $45,000.

Josh:
Just over $100,000. And we could not be more excited because again, like you talked about synergies, we didn’t feel like we had a blueprint. Then we get Set For Life, and Set For Life, came into our life right around April or May. Ali was getting ready to graduate from her masters around April or May and I’m like, “Oh my God, we have it. We will have the income. We will have the blueprint. Everything is going to work out and this is the process by which we’re going to do that.” And so she graduated, she starts working in September and wouldn’t you know it, we’re making this money, we are implementing strategies in terms of saving money, cutting out costs, so on and so forth. And we had a glimpse of proof of concept of, “This can work as long as we do these simple steps.” And so 2018 was going to be like just on steroids and we were going to completely change our life and march down the path towards early financial independence.

Scott:
So what happens after January? How did things change from there?

Josh:
Yeah, so unexpectedly laid off and everything shifted very quickly because we went back to a single income household. And what’s nice though, is because we knew what we wanted to do and we had had a lot of conversations about figuring out what our why was, like what are our values? It wasn’t a question of if we would still do that, it would just be a matter of maybe like a different timeline. And so, like I said, I had started some entrepreneurial endeavors prior to getting fired. And so all me getting fired was just a kick in the pants to really do that. And so I started pushing more so into doing that full-time while Ali was still working.

Ali:
But also Josh had gotten fired and it was such a shock. He went immediately out into the workforce and he secured a job making half his salary. He went from making close to $60,000, to $30,000, $35,000. And he said, “I need a job, I need money.” That automatic fear response. Of course we need to pay our bills. But then a few months later it was like, “Wait, I’m actually going to take a risk and go out on my own and be an entrepreneur and develop my own business because we can’t afford not to. Because if I’m making this salary compared to what we were, we have all of this debt, I need to take that risk to achieve our goals.” And it was around that same time that we also were considering house hacking and we started looking at real estate, so that we could radically reduce our cost of living as well. So it kind of was a nice, a nice synergy there with some of the changes we made.

Josh:
And one thing I’ll say too is, I went from 65, 70 hours a week to 30 to 35. So all of a sudden I had a lot more time on my hands. And so while I wasn’t making as much money, I got the Uber side hustle. So if I wasn’t working in that job, I was driving for Uber. And if I wasn’t traveling with people in the car… And then even sometimes when I was traveling with people on the car, I literally had BiggerPockets Podcast going. I’d choose FI podcasts going. And I was listening and I was studying and I was studying because I was like, “This time capsule I’m in right now will not last.” I don’t want to get to the end of it and not be equipped with the knowledge and know-how to execute the plan that we had started in 2017. So I was like, “I can’t control necessarily my income fully right now, but I can control my knowledge.”
And so that was the lever that I tried to pull it. So I just poured into all things, BiggerPockets, Facebook, the website, podcasts, books, you name it. I just went all in because I knew-

Scott:
How much are we paying you for this episode, again?

Josh:
Oh my gosh. No, I literally joke with people, I went to BiggerPockets university in my spare time. Like I had professors, Jensen and Trench and [Dorkin 00:18:23] and Turner and all the adjunct professors like Chad Carson and J.L Collins, Paula Payne and Andy Hill, you name it. Like, I was just completely, completely obsessed.

Ali:
No, it was actually kind of a problem. Like it would get to the point where I would be like, “How many podcasts did you listen to today?” And he was like, “Seven.” Because he drove a lot for his work-

Josh:
All the time.

Ali:
And I’d be like, “That’s too much.” Because then he’s like, “I’m listening to all these podcasts and all these people making these incredible moves and we haven’t bought our first deal.” And his level is like, “I’m to here, through the roof.” I’m like, “You need to chill. Maybe we limit it to three a day. Let’s cut back.” But that’s a real conversation we had to have, like, “Let’s have some boundaries with this.”

Josh:
Because it felt like it was the one thing that I could control. And again, there was so much in my real life that I felt like I wasn’t really happy with, I can’t control. I was surrounding myself, in my head, with all the people that were telling me, “This can happen.” And when everything happened in January of 2018, it dampened our dreams a little bit, but BiggerPockets definitely brings light into that. And I was like, “No, we can do this. And these people are telling us, we can.” This is how we’re going to do it. And now we’re here.

Scott:
Love it.

Mindy:
Okay, so looking back to pre-January 2018, did you have any indication that this was coming? Like if you look back now, could you see, “Oh, there were some indicators that the company wasn’t doing very well or that they didn’t like what I was doing or that they were going into a completely different direction.” Or were you completely blindsided because I’d been fired one time and looking back, I’m like, “Why didn’t they fire me sooner? I was a terrible employee.”

Josh:
So full disclosure, I am Mindy Jensen in that regard. I would have fired me a lot longer before sooner or whatever, before that, because… So I’m starting to-

Scott:
You were listening to podcasts at work.

Josh:
Yeah. No. Well, yes actually. But I’m listening to podcasts of very successful entrepreneurs and business owners, I’m hearing what they’re saying, and then in my own respective career, I’m saying, “My gosh, why aren’t we running the organization we’re running this way?” And I became very vocal and I probably pushed the envelope a little bit. But also, full disclosure, the Christmas party two or three weeks prior to me getting fired, they were announcing that I was probably up for a big promotion, that I always do wonderful things. And so in some respects, I could not have been more blindsided, but in hindsight now two or so years removed, yeah, I would have canned me a lot sooner because I was very noisy.

Mindy:
That’s weird though, that they would announce a big promotion for you in Christmas and then, “Oh, by the way, you’re gone.”

Ali:
There were definitely some weird dynamics. And I think too, Josh is a really big out of the box thinker and something that I love about Josh is that he has really big, crazy wild dreams and goals. And we are now creating those together. But when you’re working at a tiny little non-for-profit, that’s Medicaid funded and you have to live in a little red box because that’s what the state tells you to do, big, wild, crazy dreams are not really what you can do. And that’s not a reality. So I think it probably just wasn’t a good fit, but something that I always like to say, especially this year, we have a lot of friends that have lost their jobs this year. And I tell them, Josh getting laid off was single-handedly one of the best things that ever happened-

Josh:
Absolutely.

Ali:
… to us in our lives because it offered perspective, it offered an opportunity to build the life that we want and live more aligned to our values and our dreams. So, definitely worked out.

Josh:
Yeah, I couldn’t agree more.

Scott:
Well, let me ask you this about that situation as well. And then we’ll move on if you’re listening, I promise, and get to the fun stuff here. But you had said you were executing your plan prior to getting fired. If you hadn’t been executing your plan, what would have been different about that situation? Was your spending, for example, lower than it would have been without having put a plan in place?

Josh:
Yeah, from a financial perspective, I don’t know if it necessarily… I think the biggest thing, truth be told Scott, from an implementation of plan was acquiring and equipping myself with knowledge and know-how because… So after I got laid off, yes, I went and got another job because ultimately in nine months or eight months we were getting married and I was like, “We have a wedding to pay for.” But a day or two after that, I also launched my own consulting business. And so I was already laying the foundation for eventually working for myself. And again, in terms of blessings in disguise, me getting fired was that kick in the pants that kicked me from the nest. And it was a sink or swim scenario. And that’s now, in retrospect, worked out really nicely.
But as far as the financial decisions that we were making again, if 70% of your income is housing, food and transportation, at that time, if we had known of Set For Life, but we couldn’t, or at least it wouldn’t feel like we could really make a big change in the 70%, so we are really just focused on 20% so that which was helping, but it wasn’t making big leaps and bounds.

Scott:
Got it. Well, let’s get into the fun part here. What happens in the rest of 2018? How did things evolve from there?

Ali:
Yeah, so August 2018, we get married, we go on a three-day mini moon and then we got back and we scraped together every literal dollar that we had to buy our first duplex. And we had started looking for properties prior to our wedding, in the spring and the summer. And we were putting in offers left and right. They kept getting rejected. We used a 5% conventional loan on our first property in my name alone and we were competing against buyers out of state that had way more money than us, cash offers, $50,000 over asking. Josh and Ali were just not competitive buyers. So very luckily and maybe not luck, but just persistence, our realtor had happened upon a couple that was owner occupying a duplex, and they were looking to sell their property. They were going to be having their second baby, they didn’t want to be landlords anymore. So we were able to get this duplex off-market, which is honestly a huge, huge reason why we were able…

Ali:
… which is honestly a huge, huge reason why we were able to secure it. Another thing regarding that story is that they weren’t able to do a traditional closing, where it’s maybe a 45 day closing window. They needed a bit more time so that they could find their own home. So we were willing to find a solution for that, we’re like, “Oh, you need extra time? We’ll wait as long as you want, as long as you agree to sell this house to us.” So finding a creative way to make a compromise.

Scott:
Were you guys both on the same page about the house hacking?

Ali:
No.

Josh:
No. I’ll tell you what, I’m so glad you asked that question. So you want to talk about a trial by fire leading up to our marriage. I got fired, in no way, shape or form did that deter Ali, we are house hacking this year. Things look a lot different and I get that, but the kicker is, if we house hack, it’ll actually make all of this that much more manageable. And so our initial conversations were a lot different because I was so heavily focused on the numbers of the deal. Again, I was like, “Well Brandon Turner says no one low money down. And what David Green says, if we just burn the deal, then we will get all of our money back out.” So I was taking Ali to the absolute worst possible places because I was like the XLC says the cashflow… And the Bigger Pockets Money Calculator says the cashflow is going to be massive. So this is what we have to do and-

Scott:
Ali, what are you hearing when he’s saying this?

Ali:
Like, why am I getting married to this person? I’m joking, I’m joking, I love Josh. But the reality was that we were going to properties that were in super rough areas. I was like, “I’m not going to feel safe here, am I actually going to ruin my life right now? I’ve never imagined being a landlord or owning real estate, I’ve been in my safe little secure box and I don’t know if I’m ready to deviate from it.” And it felt like this wild, crazy thing, because I wasn’t consuming eight hours of podcasts a day. So it hadn’t been normalized for me yet. And we haven’t shared this on a podcast, but it’s a funny story.
We were under contract for a house prior to our wedding, we did actually get one under contract and it was definitely out of our budget. We had no business looking at it. So this is the home that we were considering and very quickly it was like, you know what, this might not be a good fit. The numbers ended up not working out and we got out of it. But that was what we were looking at. So in my brain, I’m like, I am sacrificing my quality of life by house hacking, there’s no way about it. My quality of life is going to go down the hill, which is funny because the house hack that we ended up getting was so lovely.

Josh:
Yeah. And I have to say too, Bigger Pockets podcast kind of became my full-time job and I was saying things to Ali, but I wasn’t getting the response that I was really hoping for. So I was like, okay I need to change my message somehow so I get the results that I want. And I remember, you guys had Andy Hill and Andy Hill one time was sharing the same story of how he proposed financial independence to his wife, Nicole. And she didn’t want anything to do with it because he wasn’t speaking her language. And I found that once I learned not to be so driven by the Excel sheet and the numbers and the calculators and podcasts I was able to show Ali that the things that she really, really loved the most and wanted to do more of, but that we frankly couldn’t because of our circumstances, by doing this thing called house hacking and pursuing this thing called financial freedom, it would allow us to have a much better chance of doing more of that. And once I changed my message and I was more reflective or respective of Ali’s values in terms of where she would feel comfortable living, if we were going to pull it off, after that, everything changed.

Mindy:
[crosstalk 00:29:09] Okay, I have a lot of comments. First of all, I want to address the most recent thing that you said, which was the speaker language. I believe that Scott and I way back on episode 157, we’re talking about having a money date with your partner who is maybe not on the same financial plane that you are. And absolutely, that’s the top tip is to speak their language because you can’t convince somebody to do something they don’t want to do when they super don’t want to do it. And it’s like living with somebody else or doing this living in a very rough neighborhood. When I first met Scott, he was living in a neighborhood that I was fine to visit during the day, but would not have visited him at night unless he would walk me to my car.
Scott’s a big dude. [crosstalk 00:29:59].

Scott:
I didn’t have a spouse to convince at the time.

Mindy:
That’s a big dude, he can walk around that neighborhood and now the neighborhood has changed a lot and it’s no longer as rough and frightening as it was when he lived there originally. But that-

Scott:
It wasn’t that bad.

Mindy:
That’s a trade-off, Scott didn’t feel unsafe there, but again, Scott’s slightly larger than I am and he’s been playing rugby forever. He’s like- Ooh- if you get in a fight with Scott, you’re not going to win.

Scott:
This is like compliment Scott day.

Mindy:
It’s not even your birthday. And then back to the very beginning where you said that you had to work with them on their closing timeline, because they had a slightly different timeline than a normal timeline. I’m a real estate agent and I have been finding deals for people that are different than what everybody else is finding. If it’s a lazy agent who decided that they’re not going to make it easy to schedule a showing, there’s a lot of other agents who are like, “I don’t have time for this. I’m going to go schedule all the showings that are easy to schedule.” I will call you up and keep calling because those agents that make it tough to schedule never seemed to answer their phone either. I’ll keep calling because I want to get my people into your house and buy it. Being persistent, being creative, so what if you have to go rent an apartment for an extra month or live in a hotel for another weekend, that’s okay if you can get a deal, especially in this market where there are no deals to be had.

Scott:
Yeah. I just want to chime in there on the artificial timeline. So many people are buying their house because like, “Oh, my lease is expiring and I need to buy a house right now.” I mean, no, you’re going to rush your three or four or $500,000 decision in order to avoid your artificial deadline of your lease. Just pay the extra a hundred bucks a month or 200 bucks a month to go month to month with your landlord. Like any landlord is going to take that and postpone that turnover in a general sense, especially for a incremental fee, of course, but that’s 400 bucks and you have that much better odds at making the $400,000 decision that much better. That might be a 10 or 20 or $50,000 difference to your wealth even though it’s a time decay.I’m getting going on this, but I support Mindy’s points.

Ali:
Honestly, though, I love what you guys are saying because something that has been really big for us, kind of like a mantra is, we have to get creative here and we have to find innovative ways to reach our goals because when we looked at our picture in the beginning, it’s like, we’re a $100 000 in the hole. We have two car loans, we have credit card debt, we have all of these perceived obstacles and we were like, “We don’t have any breaks. I wish we had someone that would swoop in and pay our debt or someone that would help it, it’s us and we have to change our position.” So we felt like we were in a position where we had to get very, very creative to find ways to change our circumstance and if the sellers needed more time, if whatever the situation was, we were willing to do it because we knew how badly we needed this.

Scott:
So let me ask you this as well, you’re $100 000 in student loan debt. Why are you choosing to house hack rather than pay that off? I supported by the way, I just want to hear it from you guys.

Josh:
Yeah, absolutely. So I buy probably middle to end of 2018, kind of leading up to the wedding, my income was pretty stable overall so we were able to pay bills and everything like that, but still, we were living in a one bedroom, one bath luxury apartment with a pool and everything like that. And when we started understanding how to budget and actually looking at the numbers, which again, we really hadn’t done for most of our relationship until leading up to our marriage, $1,200 a month in rent was hands down our biggest line item.
I was trying to pull together some type of entrepreneurial endeavor and Ali being in the schools. I mean we anticipated the year after our wedding, maybe she’d get a pay bump of maybe two or 3%, but we knew that our incomes probably wouldn’t dramatically change in the next six to 12, maybe 18 months. So instead of focusing heavily on the income front, we said, “Well, if we can lop off our largest expense, namely housing.” And we had every intention once we understood the true cost of car ownership, we knew we were getting rid of a car too. That’s why we decided to go into house hacking because it was a way for us to put more money after tax back in our pockets, more than we probably ever could have done just by working more.

Ali:
That honestly, too, our income was just covering our expenses. So in terms of, why don’t you just pay off your loans? We didn’t have a lot of capital to just pay off our loans. Our margins were very skinny every month. We weren’t saving very well. So it would have been a struggle in order to do that. So that’s why through house hacking our finances, our margins were a little wider. So we were able to make better changes.

Scott:
Well, how’d you get the cash to buy the house hack in the first place?

Ali:
Very, very modest saving and every single dollar that we got for our wedding as a gift, we lumped in and used it for the down payment. So literally thank you, everyone that attended our wedding because you helped us buy our first house hack.

Mindy:
Okay. I have a question and this is for both Josh and Ali and Scott, because I know there’s people who are listening, who are in the same position where their housing is their big expense, they don’t have a lot of money to buy a house, they know that it’s a better option, but they also have this debt and I need to pay off my debt first. So what’s a good way to look at this? Craig Curelop up on episode 35, talked about how he had $80,000 in student loan debt and he chose to pay the bare minimums and bought a house hack and then bought another house hack and then bought another house hack and then he’s like, “Here’s a bunch of cash. I’m just going to pay off my loans now.” And it was a great story, but I can hear a lot of people saying, “Well, you can’t invest until you pay down your debt.”

Josh:
Yeah, that’s a great question and I’ll be honest with you. My first couple of mentors were Scott and Craig. So I had two young single guys and so how I… because I’ve kind of been the driver to some extent and then now we’re both working at twofold was, well Scott did this -okay, and Craig did that. And so as far as the balancing act between paying off debt versus investing for us, we were super jazzed about the idea of becoming debt-free and that was stemmed back when we started in like the Dave Ramsey school of thought but then the more that we thought about it, we were like, well, we also have a really aggressive timeline. We have every ambition of being financially free within our early to mid thirties and we wanted to cross that debt-free finish line with some assets in our back pockets so that way we had some net worth liquidity and cashflow versus… I’ve also spoken with a ton of people who are older, more experienced and they just were so focused on paying off that debt. And when I asked them and they say, “I probably could have took a little bit more time to pay that off. Especially during the bull markets, I could have bought more real estate. I could have bought more index bonds. I’m glad I’m debt free, but I wish I had taken more of a balanced approach.”

Scott:
No, I think that’s great and I think that one of the things about house hacking is you put down a low down payment. What’d you put down on your house hack?

Ali:
5% down.

Scott:
What is that like 10, 20 grand?

Ali:
So all in, with closing costs included, we were around that 16,000 mark.

Scott:
Okay, great. So you’re putting, let’s say it’s a $15,000 down payment and that’s 5% so you’re looking at a $300,000 property, in that case. If that property appreciates by 3%, that’s going from 300,000 to 309,000, that’s 9,000 divided by 15,000, right? That’s a 60% ROI on your money, right? Because you’re using extreme leverage. That’s what house hacking is or why house hacking’s attractive because it would have taken you, God knows how long to save up $60,000 in cash to put down 20%. Right? So the house hack by definition for most people is going to be an extraordinarily, highly leveraged investment and with that, if you can get average appreciation or loan pay down, you’re going to get a ridiculous ROI. Now that can work on the downside too. But every homeowner who’s buying a home with a low down payment loan is taking that same risk and I’d argue a much bigger risk because they don’t have any tenants to help offset the rent.
So for me, the ROI of a house hack is 60%. If you get a 3% appreciation, plus the loan amortization that you’re getting, plus whatever the difference in cash outlay that you’re getting from what you were paying in rent to what you’re now paying net on your mortgage utilities and all that kind of stuff after rent. And so the ROI could easily be 100, 150, 200, 250% in the first year or two and so that is just a gigantic return and there’s no way your interest rate on your student loan debt is coming close to that.
Now obviously that’s discounting the fact that you can have a down year, but the average year at 3% appreciation, which is lower than the average, you’re going to see that absurdity of a return only accessible in that first time to the house hacker and by the way, you can repeat this a few times, but once you get past five, 600… I’m getting going on this… Five, $600,000 in net worth. Getting a 200% return on 10 000 is not that interesting anymore. It’s extremely interesting on your first 10 000 and a huge catalyst to wealth. So anyways, my rants over, but that’s why I think the math and the qualitative and quantitative evidence to me indicates that it’s a really good move for someone in that… Because otherwise you’re spending the next six years paying off your debt and in another year or two coming up with a down payment on a property, I think it’s a risk, but I think that the odds are going to favor that risk 14 years out of 15, maybe 29 years out of 30. I don’t know.

Mindy:
Well, let’s look at the numbers on this house hack. So you were paying $1,200 a month in rent, which I don’t know what that’s like in your neck of the woods, but that’s inexpensive, I’ll say in my neck of the woods.

Ali:
So 1200, I think it was expensive for what we were getting, but it honestly was pretty average for a one bedroom, one bath, luxury situation apartment. So we were paying about 1200 with our first house hack moving and it had a long-term tenant. The rent was under market and we were paying about $600 a month. So right there, moving in, we cut our costs of living in half, which was huge.

Scott:
Can you walk us through the numbers? You said you put down 16 000 and what was the purchase price?

Josh:
So it was 158 000 and we got a $3,000 seller.

Scott:
I was off by it, yeah. [crosstalk 00:41:11]

Josh:
Yeah, and that a thing too, right is just on a sidebar. A lot of times I think where people get in trouble is they do the math and they say, “Okay, well, if the property costs X and I put a 5% down, then my out of pocket is 5% times the purchase price.” They don’t understand just how much goes into closing costs and all in all, I mean, probably almost half of our total down payment was closing costs.

Ali:
Yeah. I think our actual down payment was closer to like seven or 8,000 and the remainder was closing costs.

Josh:
Correct, So- [crosstalk 00:41:46]

Scott:
I should have let you guys go before I went on my rant, sorry about that.

Josh:
No, it’s alright, so 158 000, 5% down, we got a $3,000 seller concession and how it would actually help with some of the closing costs. And so the total PITI ended up being $1,384 a month.

Scott:
Awesome, and then what were you getting for rent?

Josh:
It was $725, which again, we knew that it was under market, but at the same time as first time landlords, we were just super excited, honestly, because what started off as a crazy idea, probably 18 months prior, it now became real and all of a sudden I was like, I know this is going to change our life. I don’t know exactly how and the numbers and so on and so forth and never could have predicted like where we are today. But I was like, this is what changes our life, because this is what Bigger Pockets says, changes your life.

Ali:
But then a year after we moved in, our tenant ended up moving, he got married, he wanted to move in with his wife and we fixed up the apartment a little bit and we raised rent to $925.

Josh:
$925 yep.

Ali:
So now our costs of living from 1200, 600 now we’re kind of in like that 400 range. So again, that was big for us.

Josh:
And something I would point out too, right, to kind of go back to what you were saying is, Ali and I are both working our jobs, doing our best to maximize income where we could, but between going from $1,200 a month, just [drawing 00:43:16] down to… We were paying over $650 a month. So that was $6,500 a year in after tax income, back in our pockets. And to me, that was a no-brainer and I knew we had in the back pocket, we could probably get another $175 a month upstairs, eventually when the person moved out and we updated the unit, but just that amount of after tax savings was a huge pay bump for us. Especially as someone who was just trying to start their business.

Scott:
So we got the spreadsheet from Josh. Ali, what was your take on the situation from moving in with the house hack? Was it better or worse, about what you expected?

Ali:
So initially definitely expected that my quality of life was just going to go down the drain at this point. I had very low expectations, but I was very pleasantly surprised. And I think this was the point, especially when we first saw the property. That’s when, he started to get the buy in from me and I was more on board like, “Wow, this is really cool. This is powerful.” I mean, this property was lovely, three bedrooms, one bathroom, we had a big fenced in backyard and a garage and a driveway and it was way nicer than our luxury apartment we were paying $1,200 for. So that was the cool thing and often I think there’s a misnomer. When we tell people that we’re landlords and we house hack, I think there’s an automatic thought of, well you must not be living in a nice situation. So I feel like it’s important to dispel that myth because that does not have to be your reality at all and you can still save a lot of money.

Josh:
And something for us too, we’re always trying to find the happy medium so we got the duplex and I was super excited to have a duplex, but instantly I said, “Well, we’re going to move into the smaller unit, not the bigger unit and we’re going to get a roommate as newlyweds because I mean, if Craig is living behind the curtains, Scott’s got a roommate.

Scott:
Your expression is just amazing.

Josh:
Literally this is what we have to do, why? Because we have to live for free or it’s a failure, right? Because you have to live for free from house hacking. And once I kind of stepped back from that a little bit-

Ali:
And by step back he means his wife was like, “No, that’s not happening.”

Josh:
And I realized that it’s okay, especially on your first deal. And you guys talk about this all the time, your first deal, doesn’t make you rich? And your first deal is really about just getting in the game and once I made peace with that and then kind of settled into, I was like, “You know what? It’s nice having this extra space.” We’re still saving a ton of money. My wife is super happy and we’re in, we’re doing it. And so, I didn’t live beyond the curtain and we didn’t get the crazy extra roommate. Although I proposed it a bunch of times, we did rent out the garage. We didn’t do necessarily anything super exciting.

Scott:
Little dig at Craig Curelop huh, with behind the curtain.

Mindy:
And you, you didn’t ask your wife to have a roommate.

Scott:
Yeah.

Mindy:
Nevermind.

Josh:
But at the time we were buying, Scott wasn’t married and he had a roommate, right. So if Scott lived for free, we have to live for free. But anyways, once I got over that and realized, we are still winning, things really started to evolve from there.

Scott:
So what does winning look like? What happens to your financial position as we move out from this house hack and closer to today?

Mindy:
Don’t answer his question because I got one that’s more relevant and then you can answer his question. First of all, Scott was living for free because he was living for free in a neighborhood that your wife would not have felt safe in and you would not have lived in this neighborhood. Number two, happy wife, happy life. Write that, etch that in rock. And Scott, do you ask your wife if she wants to have a roommate now?

Scott:
I have not asked her that question.

Mindy:
Why don’t you go home and ask her tonight and see what she says.

Scott:
Yeah. I’ll try that, after. I’ll make sure that she’s in a really good mood before we had that conversation.

Mindy:
And then I want to point out that you said that if you didn’t live for free, you were a failure and you are 100% wrong in your thinking and everybody listening, I want you to know that Josh is 100% wrong in that thought because you reduced your expenses, you cut your living expenses in half. That’s a win. If you cut your living expenses by a third, that’s a win. Cutting your living expenses and then doing something productive with that money is a win. But cutting your-

Scott:
Let me just say, they might be living for free after it’s all said and done after we factor in the appreciation impact and the loan amortization impact and those types of things-

Mindy:
Yes, but you can’t pay your mortgage payment with appreciation and loan amortization impact.

Scott:
That’s true, your cash outlays to living weren’t zero. Yeah.

Mindy:
Yes, but you cut it back. You consciously made a decision that bettered your financial situation and that is a win. So stop with the whole, ‘I’m a failure’. You’re not a failure.

Ali:
And for us, it was really finding that balance. But we’re still making smart financial choices, but we’re not super sacrificing our quality of life. I think if we were in a different phase of life, maybe we would have been more willing to sacrifice our quality of life. If Josh wasn’t married to me, he would have been way more willing to sacrifice his quality of life. For sure but we were, where we were and then fast forward, because of that situation and house hacking, it made us way more in tune with our finances, way more motivated to make that progress. So in that span from 2018 to present, we’ve paid off more than $50,000 in student loans, that’s amazing. We still have 50,000 more to go.

Scott:
Well, let me ask you something about that because in my experience, my journey was not just house hacking. House hacking is one component of the financial journey and other things are happening too. Incomes are going up, other expenses might be getting paid off. Can you give us the other parts of the financial picture? Because there’s no way you’re 6,000 bucks from the house hack helped to get the 50,000, there’s other things at play here.

Josh:
Absolutely, great question and something you said earlier that I really liked was, there’s the quantitative and then there’s the qualitative [through 00:49:42] . So in 2018, I got laid off, I took a job, but within a matter of weeks, I was like, “This isn’t going to last.” And then once I got my first client, that was my first taste of making money, truly for myself on my own terms and it’s kind of like getting that-

Josh:
Truly for myself on my own terms. And it’s like getting that first rent payment and I was hooked. So I was, okay, I have proof of concept. Now I just need to do this more. So I spent most of 2018 and there’s a lot of cool synergies, we’re wrapping up closer to the marriage, my business is really starting to pick up steam, we’re learning real estate, I’m still listen to a ton of podcasts. And then it all culminates a little bit in terms of, we get that house hack, my business is now at a point where I’m making a comparable income to what I was making in my previous full-time career-

Scott:
What time period are we looking at here? You’re feeling you’re making the same amount annualized as you were in your career. When specifically was that?

Ali:
We’re in January of 2019.

Josh:
Yes. So by the end of 2018, January 2019. So I’m back. My income is whole, if you will. Our cost of living has gone down quite a bit. We got rid of the car debt, my income is back up. Our housing is down a lot lower. I think you had started, she had taken a higher paying job-

Ali:
I applied for a different school job where I got a $6,000 pay raise. So, that was awesome too.

Josh:
And so by doing all of this, our confidence to start taking bolder chances on a higher income, because at that point again, we had just been focused on how can we cut our cost of living. And by doing so, especially as a full time entrepreneur, it gave me so much more confidence to grow my business organically, versus just taking every opportunity that came at me.

Ali:
So I think both of our salaries went up, our cost of living went down. And getting rid of the two car payments, that was big too. And that was really by chance. We joke that we crashed hacked our way out of car debt, which is, disclaimer don’t do this. And I swear, we’re not bad drivers-

Scott:
Sounds like [inaudible 00:51:58] again.

Mindy:
I know, that’s what I was thinking.

Ali:
I had gotten rear ended on my… Well, no. So Josh gets fired in 2018, a week later, he got in a car accident and totaled his car. So what did we do? We went out and got another car loan for $14,000, which was a splurge for us. And then that same car, I got rear ended on my way to work. And it was that pivotal moment, we’re in our house hacked at this point. We have-

Josh:
It was early 2019 when the rear ending happened.

Ali:
This is early 2019, right. So we’re in our house hack, we’re making financial decisions. I’m, well, I’m going to go back out and get that nice Volkswagen facade. Right, Josh, because I loved that car and he’s, “wrong. We’re going to get a used Toyota Corolla and pay for it in cash. ” And I think I cried my way home from the car dealership that day. It was missing a chunk off the bumper. And it had a cigarette burn in the seat, but you know what, it was $7,000. And it had 70,000 miles and it was a solid car. And Josh was, “Ali, millionaires drive this car. This is the car we need. ”

Josh:
And it wasn’t a new Toyota Corolla. [crosstalk 00:53:14] And so I literally, I felt so excited. It was polarizing in the car ride home because I was , we have a Toyota Corolla and we have a house hack. We are literally, so we’re set for life. We are doing it. We are literally checking the boxes. I swear to God, she was crying. I was literally just replaying all the podcast in my head. I was, this is what they do. We are doing it. We’re going to do it all. She was not feeling very excited about it.

Ali:
But now I can laugh about it. And I’m very grateful for my reliable, safe vehicle. And at the end of the day, it’s a car and it gets me from point A to point B. And not having a car payment is huge.

Mindy:
So, I want to focus on Ali for a minute because I know there are people who are listening right now, who are in this position. They identify with Josh, oh, I want to do this but my wife says no. What was it that he said that got you to think, okay, maybe I could do this. Did you actually have to see the duplex and know that it wasn’t a super dump? Or-

Scott:
No, they were under contract and the horrible one that she would have hated. So there was something else going on here. Right? What was that? I think it’s a great question Mindy.

Ali:
I think that it is thinking about your why and the bigger picture. And we talk about this a lot, because for me, did I want to drive a beat up Toyota Corolla or move into a yucky duplex? I didn’t want to do either. But what kept driving me was, if I don’t do this, what is my life going to look like? It’s not a life I want. So it was, I know I have to make hard decisions because I want more time with the people that I love. I don’t necessarily want to work my nine to five for the next 30 years. And it was, these are the breaks and I have to make them for myself. So the reality of our situation was my driving force. And sometimes it was easy to blame it on Josh. ” Josh, you’re ruining my life. You’re forcing me to make these choices. ” Yeah. I definitely said that, I’m not going to lie to you. But the reality is, and he would always say this he’s, “Ali, it’s not me. It’s our debt. It’s our financial situation. That’s what’s doing it. ”
So we created a common enemy and cause, of our debt and our financial position. And we worked together as a team. And once we had that perspective, we accelerated our path to our goals.

Mindy:
Yeah. It isn’t Ali against Josh. It’s Ali and Josh against the world.

Ali:
Yeah.

Mindy:
So, okay. What’s different, you, Oh, this is going to be horrible, this is going to be terrible. I don’t want to drive this ugly car. How has your life, let’s see, how do I want to phrase this question?

Scott:
Or do this, I’ve got the Corolla and the house hack.

Josh:
Yes. I felt like a millionaire at that point. I couldn’t have been happier.

Scott:
We’ll post that on Instagram.

Ali:
And I think too, something to think about. And this is important when we think about consumer purchases, my time versus my money. It is nice to have nice things, but we have to think about how much of our time we spend to pay off those things. So he’s, “Yeah, you can get that nice $20,000 car. And you’re going to like driving it for the first three months. And that’s great, but you’re also going to be paying it off for the next six years and that’s money. We could’ve spent to buy our freedom. ”

Josh:
And a book that I think was really transformative… So again, every time I would come to Ali with a new concept, I didn’t get a response. I’d say back to the drawing board, Josh. So I would go back to the drawing board and I would read, I would listen. And Vicki Robin, your money or your life really was transformative for me because Ali, I vividly remember we were sitting in the parking lot in our car and the heated seats at the time.
And we both sat there and we said, okay, what are the things that we value the most? What makes us happy? What’s the perfect day. What do we love? And we literally line by line started writing those things. And then it was how much time do we have right now based on our lifestyle, based on our circumstances to do those things. And it was pretty minuscule. And honestly, for us, both the biggest one was time with family, whether it be with our parents, aging grandparents and time together. And so for me, where my approach really shifted was okay, here’s the things that Ali values the most, loves the most. This is how house hacking, driving the Corolla, 50% savings rate index funds, all the nitty gritty stuff of five, these are bridges that will get us to where we really want to be instead of… But at the time I was just focused on building bridges.

Scott:
Love it. Well, I want to get back to the how and the nuts and bolts here. So you guys are sitting here in early 2019, you’ve crashed hacked your way into your new Corolla, your house hacking, and what’s going on with the savings. And why do you choose now to begin applying the savings towards debt as opposed to making the next investment? What’s your logic there?

Josh:
Yeah. So our goal going into it was we want to be debt free. And the reason that we prioritized house hacking in the beginning was we felt that would be the best lever that we could pull. Right? So earn more, spend less and that the difference is our income. We couldn’t really elevate that much. So by house hacking that lowered our expenses and that we felt would accelerate our ability to pay off debt.
And so we closed on the duplex December of 2018 and then January one 2019, one, we got that first rent check. We had never gotten a rent check before, and that was life changing money right there too. But really we were, we’re just going to buckle down for 2019. And we had, because our housing was so cheap and we had no car payments, we were saving now probably in that 53% to 54% in terms of savings. Right? So all of that extra income that had now between our income and expenses, we just started making big lumps payments on our student loans.

Scott:
Awesome. So what’s your position at closing 2019?

Josh:
So we paid off just over $50,000 in student loans. I paid off my student loans. Ali’s was a little bit higher because she still had taken on a master’s degree. So we were just about $51,000 we’re going into 2020. The property had actually appreciated quite a bit because like so many housing markets, our housing market is no different. So there was a lot of appreciation going on there. The rental income had gone up because we got a new tenant. I was still jamming out to podcast every single day. So I was really understanding real estate and finance better.

Scott:
You got a $6,000 raise, Ali, but was your income going up from your entrepreneurial activities?

Josh:
It was. And then what is the sequence of returns risk, so my income or not sequence of returns risk, the law of diminishing returns. So my income started going up, but very quickly I started finding myself getting back into 2017, Josh mode of I’m just going to work all the time.
My income was going up, but my quality of life was going down. And I created this business, not as a means of just making money, but I wanted it to make a comfortable living. But really I wanted more time with Ali, especially 2019 was our first year as newlyweds. I wanted it to be enjoyable. So I actually made a real abrupt pivot in my business. And again, this is what the confidence of having such a high savings rate because of low cost of living gave me is, my income was going up but really my focus became instead of just trying to amplify my income, how can I make a comparable income by working half the time.

Scott:
Love it. And so, okay. So this is a great mentality. What happens in 2020?

Mindy:
[crosstalk 01:01:33]was a plain old regular year.

Ali:
We’re feeling on top of the world. We’re real estate investors. We’ve paid off 50 grand in student loans, 2020 is our year. And as I’m saying this out loud, I’m sensing a trend because every time we say, it’s our year, what, Josh gets laid off our world crumbles. And now 2020 is our year and there’s a global pandemic. So, all intentions to continue to pay down that debt, to get another property. But we hunker down for the first chunk of 2020, because Josh’s income was pretty greatly impacted by COVID.

Josh:
Yeah. So my income in probably March or April, when everything really shut down, really was cut in half. But prior to that, January and February, again, all systems go. We paid off almost $11,000 between January and February. We figured, you know what we’re going to do, this is before everything happened, we’re going to spend the first half of the year, crushing student loan debt. And then around June, we’re going to start slowing down a little bit and we’re going to start raising cash so that maybe in the second half of 2020, we’ll try to buy a duplex and get our second house hack and then basically rinse and repeat in 2021 and then all set, everything’s going to go perfectly. And by the end of 2021, we will be debt free and two house hacks, have four units and almost financially free.

Scott:
So what was your cash position heading into this? So you’re paying off debt. How do you think about how much cash to have on hand and your emergency reserve and those types of things while you’re aggressively prepaying debt?

Josh:
Yeah, great question. So we typically hover and then I know this is a little bit skinny, but we stay pretty close to that three months cash reserves. Some people are a little bit more ambitious than they’d like the six, the nine to 12 months, for us because we felt confident in our earning potential, especially my business, I was able to pivot to virtual, which was prior. It just been the cooler idea, but now a lot of it is virtual, our savings rate also fell. So we are now starting to ramp up closer to that 65%, 70% savings rate.
That felt like a really nice buffer in terms of almost an emergency fund that in and of itself. So instead of having a lot of cash, we were going to shift to probably six to nine months closer to the end of the year. But in the beginning of the year, we had a high savings rate. We wanted three months of cash in case anything happened, which things happened.

Scott:
I just want to point out that you make a great point here. If you’re listening and you missed it, the less you spend or the bigger, the gap between your income and your expenses, the less emergency fund you need paradoxically. And the easier it is to accumulate that emergency fund. If you spend a lot or close to your income, that’s when it becomes even more important to have the emergency fund and it’s harder to accumulate and takes longer. So anyways, just want to point that out and I’m interested to see how that dynamic and your mentality in there helped you probably, didn’t hurt you as the pandemic begins.

Josh:
Yeah, no, honestly, it helped a ton. Hindsight was a little 2020 in March and April. Because we were probably , man, [crosstalk 01:04:59].

Ali:
2020.

Scott:
Nice job.

Ali:
He didn’t even know he was [inaudible 01:05:02].

Scott:
[crosstalk 01:05:05] You’ll hear it when you listen to that.

Josh:
So when everything shut down, I think we were, man it would be nice if held onto that cash a little bit. But at the time, we were also really happy to have paid off the student loans. And I got to tell you, that time from say March to May or June, in a weird way, it gave us a dry run of fire, if that makes sense. We were together pretty much all the time, life got really slow and quiet for a while and it gave us, because 2019, we’re going gangbusters, we’re working a lot with paying off debt, so on and so forth. And that gave us a time to almost hit pause and reflect on, okay, what are we doing? Why are we doing this and is it working? Are we happy? Are we still working towards that why? And it was actually a really interesting time in our marriage.

Mindy:
So when you bought this house, what condition was it in?

Josh:
Oh, it was-

Ali:
The first house or the second house?

Mindy:
The first house. We haven’t gotten to the second house yet.

Josh:
Yeah, no. Honestly you could not have cherry picked a better first house hack. Yeah. Again, the couple we bought it from, started house hacking seven or eight years prior to us buying it. They were a young couple taking the world by storm. They had a child and they’re , “Okay, we can still house hack more with one child. ” They had a second child and they’re, “No, okay. House hacking, we’re good on that. ” But because they had put so much time and money into it, they really didn’t want to just have it go to the highest investing. They specifically wanted to sell to people who they could relate to. And so there was some cool intervention there when our agent introduced us to them, we were, man, you guys are hosts in seven or eight years. It’s so cool. But yeah, it was in great shape.

Mindy:
And the reason that I asked that is because I don’t want you to have three months of expenses or three month emergency fund and you bought a dump that needs a lot of work and then there’s the pandemic. So I just wanted to point that out. That was in good shape. I’m glad, sorry, Scott, go ahead.

Scott:
I bet they would have increased their emergency fund though, if that was the case and the condition of their house warranted that-

Mindy:
Well, yes they would have, but maybe somebody listening, was, Oh, Josh and Ali only had three months. So therefore [inaudible 01:07:28] them three months and not if you’re right in a dump. You need a lot, a lot, a lot of extra money. Okay.

Scott:
Okay. So, you guys are having a Sit back and reassess period. And you’re experiencing a taste of fire. What you mentioned, fire life to be, what happens next? We’re in the summer, it sounds like of 2020 summer.

Josh:
Yep.

Ali:
Yeah. So, summer 2020 Josh is, “Ali, I think we should buy our second house hack. ” And what I’m about to say, I think in relationships it’s really important to have balance. So Josh is the go, go, go person in our relationship. He’s always thinking of the next plan. And I would describe myself as the Whoa, Whoa, Whoa person. So Josh is, “let’s go get that house hack. ” You’re like, hold on. I really like where we are. I’m comfortable we’re in a good situation. So again, it’s finding that compromise, but we ended up looking at some properties and getting our feet wet with it. And then it’s, okay, I think we can do this again. We should do this again.

Josh:
So at that point too, so I network a ton, right. And I’m always trying to learn more and provide value any way that I can. And so 2019 also gave me a really, really good chance to start attending Facebook group meetups, real estate meetups, get coffee with other investors and learn a ton. And so I started parlaying a lot more of those skills into 2020. And so again, like so many housing markets, our area was crazy competitive. There was a lot of out of town buyers things for selling for less than 20… In cash less than 24 hours. So we decided that if we were going to stand a chance to buy a property, we were really going to have to find something off market. And so we had met another real estate investor in our area probably sometime in 2019. And he was actually in the same neighborhood as our first house hack.
We told him, we admire your property. This is who we are. This is what we do. You ever think about selling. And he was pretty adamant, Nope, love the property. Never going to sell. Great. Okay. Well, if anything changes, we live up five houses up the street. And then actually in may of 2020, we were renovating our upstairs unit to have a new tenant move in. Ali was out there, she was painting and stuff. And then the investor walked up and admired the work that we were doing. And so I saw him through the window and I was, Oh, shoot, that guy. So I came out and put on my sales cap and I said, “Hey, we’re all here, we’re renovating. Man, we really love this neighborhood. You still got that property? ”
And he’s, “Yeah, I’m probably still not going to sell. ” So we’re, okay. And then in July of 2020, we went on Facebook and a neighborhood Facebook group. And I knew he was a part of it. So I said, I’ll take one last chance. And I posted in that Facebook group, Hey everybody, this is who we are, this is what we’re doing. If anybody in the neighborhood might be interested in selling, let us know. And he shot us a message shortly thereafter, his situation had changed and he wanted to talk about selling.

Scott:
[inaudible 01:10:41] funny sometimes. Yeah. I’ve noticed this in my life and I’ve read this across a couple of other things, but it seems sometimes you have your eye on that one property, it just ends up in your possession one day somehow if you’re thinking about it. Not always but not whatever, but it’s interesting how that works.
It’s fascinating that you were just, Oh yeah, I’ve got that. That wouldn’t mind. And I’m just going to keep playing my little game until that comes in under there. So walk us through the numbers on this property.

Josh:
Yeah. So, and this was our first duplexes off market, but we did have the benefit of a realtor and that realtor was a very good realtor with a heart of an educator. And you walked us through step by step. These are the forms. This is why there’s these forms. So on and so forth. For this particular property, there was a for sale by owner. The owner had no interest in involving realtors. He just wanted our attorneys. And so this was a really steep learning curve for us in terms of actually handling the transaction almost entirely. So we were getting the forms from our attorney.
We were walking down to their house. We were filling out the forms together. We were figuring out how to negotiate a price and so on and so forth. And so we ended up purchasing the property for $152,000 with… And I say that because there was a $2,000 seller concession in there, again to help offset some of the closing costs. We felt very confident the property would appraise more for that, but the seller was really adamant. That was his price. And we were trying to be as accommodating. Our big thing right now is we want to solve other investors challenges because we can’t compete with cash offers and stuff. And so there’s $152,000. We used an FHA on this property. So three and a half percent down between the down payment, closing costs and any other fees all in, it was $13,200.

Ali:
And we were pleasantly surprised when the appraisal actually came in just a little bit South of 169. So right there, we’re getting a house for 150 and it appraised for 169. So, that was pretty cool too.

Josh:
And the condition of this property was a lot different than our first property. And if this was our first duplex, the one we’re in right now, it would probably wouldn’t harder to sell. To Ali, I’m actually really glad that our first duplex up the street was a lot nicer because it was dipping your toes in the water real estate. The one we’re in right now is more of a burr hack, if you will. We’re renovating. Mindy, I know you do live in flips. And this is a very many live in flip. We’re renovating the unit that we occupy pretty much inside and out, and so while living here, so the total mortgage on this is $1,280 a month. The upstairs is rented for $975. And then the unit that we were living in prior, we actually rented out for $1,350.

Mindy:
So how long did you live in this house?

Josh:
The first property we moved in, in December of 2018. And we move-

Mindy:
I’m sorry. You rented out the first property for 13?

Scott:
They’re still in this house, the second house.

Josh:
Yeah.

Mindy:
Okay. I’m sorry. I misunderstood it. I was, wait, you just bought that. You have to live there for a year. So, a lot of things that you have said that I think other people may not be super familiar with. You use an FHA loan, which is a federal program that allows you to put only 3.5% down, but it has to be a residence. You can’t do that on an investment property. You have to live there for a year, because you’re living there for a year, you get the benefit of the 3.5.
I do want to point out because this is a point of confusion for some people. If you were to move out after living there for a year, you don’t have to refinance. You can still have only a 3.5% down and keep that mortgage and then go find something else. I don’t know if you can have two FHA, you can’t have two FHA loans at the same time in the same area. If you got transferred more than 50 or a hundred miles away, then you could get another FHA loan. So just FYI for that. But there’s a lot of benefits to this house hacking in that you can have a really low down payment.

Josh:
And go through the numbers one more time. The pity is what the rent is, what?

Scott:
… and go, let’s do the numbers one more time. Pity is what? And the rent is what, on the second one?

Josh:
1,280 all in and 975 upstairs.

Scott:
That’s great. So, what’s the situation at present right now? You’ve got the, almost, you’re living for even cheaper now.

Josh:
Yeah.

Scott:
You’ve got rent from the first place.

Josh:
Yeah.

Scott:
And so how much debt are we paying off in the second half of 2020 and what’s the current situation?

Ali:
So we finally hit our live for free goal with this house hack. So after you back out reserves and whatnot for that property, in terms of operational costs and savings, we are living for free with this unit. So, that is really cool. Like Josh said, this property is not in the same condition that our prior property was in. So we had a lot of capital improvements on this property. We just ripped out the entire kitchen in our unit, we got some new appliances, we did new cabinets. We had to replace-

Scott:
Wait, when you say, “We’re doing.” Are you guys doing it?

Josh:
No.

Ali:
We’re doing some work, but we’ve hired out for a bit. So we hired a company to do the kitchen, we replaced some of the flooring. And this was a nice surprise, we knew that some of the windows needed to be replaced, but pretty much all of the windows needed to be replaced. Windows are more expensive than we thought they were. So that was a really, really good learning opportunity. I’m not going to call it a mistake because I think that we’ve learned a lot and every other property that we buy in the future, I am going to meticulously inspect the windows. So in the next few weeks that’s going to happen. So really we have kind of hit a pause on debt pay down because we had been using our extra money to stabilize this house and get it in a position where it needs to be.

Josh:
But I should say though, that in 2021 we have now resumed paying student loans, so yeah. So we were heavily focused on in beginning-

Scott:
This is your year.

Josh:
Yeah, right.

Ali:
Don’t say that. [crosstalk 01:17:01]

Josh:
This is our year, no. Well in full honesty, I mean, if we’re able to execute some of the plans that we have. This very well could be the year that we become debt-free, which would be really cool. Originally we had shot for like four years to pay off 102,000, this would be like year three. So, but we also are mindful of, there’s a lot of stuff going on right now. So we’re also carrying a little bit more cash, we’re still in that three to four month range. But we now know what happened in like February, March of last year. So we’re kind of going to wait to see, but yeah. So, and what’s cool is because we bought the property with so much equity and there is that value add component. I think the seasoning period on this is like six or seven months and so depending on where the market is at that point. We may look to refi out of this FHA, put it into a conventional loan product, which then gives us access to another FHA. And then we would be looking potentially for a third, how’s that?

Scott:
So you guys are rocking and rolling here and it sounds like there’s always things that can happen, and probably more things will happen. But in a couple of years, you’re going to be sitting pretty with a small rental portfolio here, debt-free, and a significant ability to generate cash with what seems like a sustainable work balance between the two of you.

Josh:
[crosstalk 01:18:26]

Scott:
Nice, and then I think it will be this boring several year slog to fi after that. But that’s a pretty good situation to be in. So how do you feel about all this now having made this journey and being in your present state?

Ali:
You know what’s funny, I think when you’re in the thick of it, like the mundane Wednesdays. Sometimes I feel incredibly unimpressive and just like, “It is what it is. We have to do these windows, we have to do that.” But we try to push that perspective away and just focus on like where we were when we started this. We did not have the financial knowledge that we have now, our goals and dreams were so different. And I look at us and honestly, I just feel so much pride for all that we’ve accomplished. I feel proud of us and the sacrifices that we’ve made and the hard decisions we’ve made into, “Are you sure you guys really want to do this? That sounds kind of crazy,” And like pushing through all of that, and I think that, that’s huge.

Josh:
Yeah, I mean couldn’t be more excited to be honest with you. You know, it’s one of those things-

Scott:
You got the Corolla and the house hack.

Josh:
Two house hacks, really two house hacks you know. So it’s kind of like, like Scott, you were saying something earlier about like, “When you visualize something.” And so I played sports all of my life, and so I was always about visualizing the thing long in advance before the match or the game or the competition. And then when you compete and you achieve it, it’s like it’s a natural byproduct because you’ve put so much time and energy into preparation. And so, I’m feeling really, really excited because I have spent more time than I’m proud to admit between forums and podcasts and books. And I’m excited to see where we are, but in a way I also feel like, Well like if you follow a roadmap that says, “If you follow these steps, it’ll get you to here.”
I have listened to so many smarter and more successful people share their stories and doing, “If you follow this process, you will get to where we are.” So in a way I feel really excited, but I’m also like, “This makes sense because all these really smart people said, this is what would happen.”

Scott:
Now, do you have any peers that were in a similar situation to you around when you got married that you’re generally aware of? And are you seeing a difference there, or is there anything, because you’ve made a radically different set of choices, I’m sure that many of your friends and family. But do you have any thoughts on that, whether there’s a different outcome or thoughts around how not making those choices might have impacted you or where folks are there.

Ali:
Yeah, I think that when we first started this journey, the only friends that we had doing this we’re friends on BiggerPockets forums and podcasts and people that we heard about. We were definitely the weird friends that were making this really radical choice and I think that’s how it was perceived by many. And I think that now that we are sharing more of our journey online through The FI Couple and we’re having more open conversations with people around us. People are seeing the progress that we’re making and the success. So we’re a little less weird now and I think over the past few years, we’ve really built our community of people locally and across the country that are on this journey too. So that was cool to connect with people as well.

Josh:
And I think it’s one of those things, like it’s as old as time, like at first when you’re doing something different, people are going to say, “You’re crazy.” And then eventually when you do it and then you start maybe having some success, people are going to say, “Well, how did you do that?” And we were still very much like on the path defi and we still have another $50,000 student loans to pay off. And we have a lot of work to do, but just in the little over two years of this path, I mean we have completely transformed our lives. And there are now people who are starting to kind of come to us, both people who we know, and then people from breaches of the country we’ve never even visited. And they’re starting to ask questions and it’s really, really fun because, again, like I’ve always been someone who’s been too happy to get answers in other areas. And it’s exciting to have people now coming to us and I get to answer questions.

Ali:
And one more thing, and I know it’s hard when you have two people talking because there’s a lot of dialogue. But, and it’s super cheesy, but I have to say when you are in the thralls of not making huge salaries and being entrenched by debt, it can be really demoralizing. And it’s hard to think of the big picture and to dream because you’re in the day-to-day trying to make it work. And I think that’s something that so many Americans are struggling with and working through and that’s reality. And I have to say that like my biggest takeaway with real estate investing, house hacking, the pursuit of fi. I feel like for the first time in my adult life, I am actually dreaming like big dreams, big, scary, exciting dreams. And I think like somewhere along the line people forget to dream. And I think maybe it’s like beaten out of us a little bit or life hardens us in some way, but I feel like we are dreaming and we’re dreaming big and that has been huge for us.

Scott:
It’s weird, you’re like, “Oh, I want to get out of debt and just kind of build a little bit of private wealth and all that kind of stuff.” And then you’re like, “Huh.” You know, like, “If I keep doing this, I could live there one day. And I could not do anything or I could do this particular business venture, or I could literally. The world is big and I can go out there and I can do this from Maui, like Brandon. You know, I can do this from Thailand. I could do it from New Zealand. I could do it from whatever.” And so like, that picture is not available in the hundred thousand dollar hole. When a hundred thousand dollars is an unimaginable amount of liquidity that you have that it’s just like, “That’s a ridiculous statement.” But then itch begins to ticking.
And about this time in the journey, I think when you’re like, “You know what, like the rate of wealth accumulation to 50 to a hundred thousand dollars a year, in a realistic sense if we have a good year.” You know, “If you have a bad year, it won’t be. But if we have a good year it could be there. And then what are the implications of that if I sustain that for a couple of years?” I think it’s awesome, so it’s super exciting. This has been phenomenal, I had a blast. We went way over, which is great. Too bad if you’re listening, this was fun. We had a great time, it’s awesome. Their story was worth it. Mindy, should we do the financial scan though?

Mindy:
Yes we should, although I think our financial scan this time is going to be a little bit shorter because we’ve kind of already talked about it. But hey, Ali and Josh, where are you putting your money to grow for your future? Besides real estate because you already have real estate, but what percentage of your total financial picture is in real estate, and then what percentage is in anything else?

Josh:
Yeah, so right now we are very heavy real estate. We’re about 90% of our total assets are in real estate. And a lot of that is just because the available cashflow that we would be putting into index funds, right now we’re just putting into student loans, so about 90% real estate. We do have a broker to count with just, you know, VOO and some other boring index funds. That’s about 7% of our total portfolio right now. The rest is cash, so probably about 3%. And really our goal, I mean we’re pretty happy right now in terms of where our real estate portfolio is. We have no real ambition of having like hundreds of units or anything like that. Once our debts really paid off, we’re going to be looking to make sure that portfolio is a little bit more balanced and really kind of going more in the index funds.

Scott:
Yeah, and I just want to come to chime in here and say like, that’s not diversified and that’s intentional, I bet.

Josh:
Yeah, hell yeah-

Scott:
If you don’t dig yourself out of a hundred thousand dollar hole by guaranteeing yourself a diversified 7% return, right. And so like, “Sorry, you’re at a risky position.” But you have to be, I think, in order to have a shot, have a crack at those goals, like that could go South. But I admire that and I think like, “Hey, you’re going to make it work and figure it out.” If you run out of cash for example, or have something, just going to do to figure it out. And you have to do that at some point before you can build this like ideologically pure FI portfolio. Which you know, so I just want to chime in there and I think this is great.

Josh:
Yeah, thank you.

Mindy:
Ideologically pure FI portfolio, there’s the worst phrase you’ve ever talked about.

Scott:
It’s a cult Mindy, everyone’s got the index funds, the whatever. Yeah, so I love it.

Mindy:
I’m going to get you a t-shirt that says, “Ideologically pure FI portfolio.”

Scott:
Oh no, that’s not good.

Mindy:
Ask me about my ideologically pure FI portfolio.

Scott:
Oh, you’re at the cash position of X and yeah, so.

Ali:
That’s some BiggerPockets swag you can sell right there. Just coin that phrase and put it on there.

Mindy:
Now it’s time for the famous forum. Allie, what is your favorite finance book?

Ali:
I wasn’t paid to say this, but I would argue that my and our favorite finance book is Set for Life by Scott Trench. You may have heard of him.

Mindy:
No, I haven’t heard of him.

Josh:
And just to be like fair and balanced, like if there wasn’t that. Honestly, J.L. Collins, A Simple Path to Wealth. I mean, that’s really our thing, right. Is we are not looking to be all index funds or all real estate. We want to try to find that fair and balanced approach to it and yeah, Set for Life and Simple Paths, you know, keep it simple.

Scott:
Two wise authors there. What was your biggest money mistake?

Ali:
Honestly, how much more time do you have on this podcast, first of all? But, no I’m joking. Honestly, our twenties. If I could like sum up our twenties, I think we went through a lot of those years really unaware and we weren’t having smart money conversations and we weren’t making good choices and we looked back and we’re like, “We see people starting out at 21, 22, making these choices on this path.” And I’m like, “Wow, like we’re 30. Like that would be really cool if we started this, not in our late twenties, but our early twenties.” So, not a specific moment, but I think wishing that we started it sooner. But just to put a positive twist on it, we are where we are for making progress where we are and it’s all going to work out. So, despite that we’re going to hit our goals.

Scott:
Awesome, you guys are not behind. You’re doing awesome.

Mindy:
Yeah, I like that answer.

Josh:
It’s so hard because like in the general population, like we’re doing very well, and it can be tempting sometimes. Like you get caught and like this very specific niche of the population of like super FI people and stuff and where 30, somehow, becomes really old. And we always have to remind ourselves of that like, “It’s okay that we’re where we are right now and we’re still doing really well.”

Scott:
Absolutely, you guys are doing really well. And if you’re starting out and you’re listening and you’re in a position of where Josh and Ali were when they started this journey. And you know, you’re 33, 35, 40, 45, you’re not too late. You can make these changes and build wealth. And I’m telling you, you started this journey two years ago. You are not going to see a linear progression of your wealth, most likely. You’re going to see once you get back to zero, the benefits of exponential gains and the compounding that those investments can pay off.
And I think you’re going to see you reap some of the benefits of that unimaginable number of hours you spent consuming content around this, I think that’s going to affect your portfolio returns downstream and continue to contribute to that. When you actually can do that on things that can generate that return. You’re guaranteeing yourself a level of debt on the interest and you got to do it. But once you’re past that, I think you’re not going to see this. It’s not going to be like this, it’s just going to be a [crosstalk 01:30:19]. Okay, Mindy.

Mindy:
What is your best piece of advice for people who are just starting out? And you can each have your own advice, you don’t have to agree on one.

Ali:
So for me, I would say figuring out your why, and it has to be a big why, and you have to really care about it because whether you’re paying off debt or you’re investing, or you’re pursuing FI. It is not like a smooth sailing, easy road, there are going to be challenges. There are going to be things that test you and I think when that happens, remembering your why and remembering the big reason why you’re pursuing this, because at the end of the day that’s what gets you through the hard times. So just figure that out and stick to it.

Josh:
Yeah, and I mean, I would absolutely second that. And I would also say the knowledge and know how to achieve whatever goal, it’s all out there and it’s free. And so, whatever it is a person wants to do. No one in our life, growing up, no one taught this kind of stuff to us. And no one talked to us about this kind of stuff. But instead of saying like, “What was me, no one taught me this kind of stuff.” We said, “Well, let’s find out because other people are doing it.” So I would just say like, if there’s something that you want to learn more about, just go on like Google, that thing, and just like ask whatever question you want to know. And then just start equipping yourself with knowledge. And then from there, start connecting with people on Facebook and forums and stuff like that and ask a lot of questions, get a lot of answers and then eventually start answering them yourselves. And to me, that’s been like the best resource.

Scott:
Awesome, what is your favorite joke to tell at parties?

Josh:
All right, I am super excited. So full disclosure, we are not like joke telling people. We just try to have conversations and if something funny happens, it does. But, all right, so I’m going to ask it and I’m curious to see what you guys think. Why can’t you hear a Pterodactyl go to the bathroom?

Mindy:
My husband is obsessed with dinosaurs, so I know the answer to this one.

Josh:
All right, as long as it thumps Scott, I’m happy as heck.

Scott:
Something with fossilize, I don’t know.

Josh:
You can’t hear a Pterodactyl go to the bathroom because the P is silent.

Scott:
That was not where I thought you were going with that. All right, amazing, amazing. Where can people find out more about you guys?

Ali:
You can find out about us on Instagram. We have an Instagram account called The FI Couple. We have a website, theficouple.com and-

Josh:
We have a Twitter to the handle, The FI Couple.

Scott:
Nice.

Mindy:
And they’re all over the BiggerPockets money podcast, Facebook group as well, which you can find at facebook.com/groups/bpmoney.

Scott:
Yeah, absolutely-

Ali:
Yeah, I think I’m in there.

Josh:
She might be-

Ali:
I’m not as active as Josh, but like he sets the bar so high. Like who is as active as Josh?

Mindy:
Nobody’s as active as Josh.

Josh:
No, I live in those forums.

Scott:
And I will say, I love your Instagram content and all that kind of stuff. And we actually just did a Facebook live recently on there, that was really fun. So thank you for inviting me over there.

Josh:
Yeah, no that was a-

Mindy:
Instagram live?

Scott:
That’s right.

Mindy:
You said Facebook live.

Scott:
Instagram live, whatever the kids are on these days. All right, that’s all. Guys, this is an amazing show. Thank you so much, thanks for bearing with us as we went right way long, but I think it was worth every minute. Phenomenal story, so wonderful to hear your successes so far and I’m really excited to watch your journey over the next couple of years. And hopefully we’ll be able to have you back on the show, maybe once or twice over the next couple of years to hear about the next movements in your journey.

Josh:
Yeah, thank you so much. I mean, like I said, this is a dream come true and, I mean, you guys help millions and millions of people every single day. And we are proof of that, I mean, BiggerPockets in general changed our lives completely.

Ali:
It’s pretty full circle because like a few years ago, when we first started our journey, we were listening to BiggerPockets. And I’m like, “What? I’m like on a BiggerPockets podcast, it’s like I’m doing something right because I feel really cool right now.”

Josh:
Very cool, very cool.

Scott:
Sorry, this is all it is. This is all it is.

Ali:
So yeah, thanks again. [crosstalk 01:35:03]

Josh:
No, you guys are awesome. Keep it up man.

Scott:
Thank you guys.

Mindy:
Well, thank you. As much as I would love to hear you continue to tell us how great we are, we will have to say goodbye. But you can call me all the time and tell me how great I am. And Scott’s phone number is…
We had somebody give their phone number out on the podcast once, not on our show on the real estate show.

Josh:
I know, oh okay.

Mindy:
He was an attorney, he was like, “Call me anytime.” And I’m like, “Did you just give out your actual phone number? You are going to be slammed with calls.” But hey, works out for him. Yeah, so Josh and Ali, thank you for joining us today. This was a lot of fun, I really enjoyed your story. And I think that anybody who’s listening, you’re 50 years old, you can still listen to this episode and say, “Wow, it didn’t take that long to get out of debt. They were conscious about it, they did it, they pushed through, they moved on.” And there’s a lot of lessons to be learned at any age that you’re listening to this. So I hope that people are able to get as much out of it as I did, I had a great time.

Josh:
Thank you guys so much, this was a huge honor.

Mindy:
Thank you, and we’ll talk to you guys soon. Okay, that was Josh and Ali from The FI Couple. Scott, what did you think of the show? I know what you thought it was show you loved it, you thought it was the best. It was the best, it was so much fun.

Scott:
I did, it was the best. Okay, thank you. Well no need for me to talk to you.

Mindy:
No need for you, I don’t need you for this conversation. I can have it all by myself.

Scott:
So look, I love it. It’s the dynamic of the… he’s obsessed, I can completely relate. You go through this journey when you’re thinking about this, and you’re just surrounded by the voices in your head. Which is kind of weird because maybe I’m one for Josh now and that was my dynamic going through that and listening to Brandon and Josh Dorkin and reading Mr. Money Mustache. Listening to The Mad Scientist and all those things in my journey, that obscene obsession was there. And like, I can only imagine if I had a wife at the time, how annoying I would have been to my wife and I was just there. And it was just great and it was like, I just love seeing that dynamic at play. And I think that, “Wow, look at them go. Look, they’re doing it. They’ve got the Corolla out of the house hack, life is good. They’ve made it.”
And I think that they’re going to be so successful over the next couple of years. They’re going to dig ourselves out of that debt, I bet, and then they’re going to be off to the races financially. I’ll be shocked if that doesn’t happen the way that they’re approaching their finances.

Mindy:
Yeah, they’re just making really smart decisions. And I love the way that they tell their story. They fully embrace the fact that there were mistakes they made in the past and going forward they’re going to be better. And they’re taking steps and learning from their mistakes. Josh was trying to force Ali into it and I think it’s really impressive that at his young age, he was able to say, “Whoa, I’m not approaching this right.” And it’s hard when you’re so excited about something to be like, “No, no, just listen, just listen. I’m right, just listen to me.” And he’s like, “Ooh, ooh, I have to speak her language.” And I think that was kind of a brilliant, we kind of glossed over that, but that’s a brilliant take on that.

Scott:
Absolutely, I think that’s going to be a challenge for a lot of folks because most, I would imagine, it’s the rare couple that is equally obsessed with fi, right. There’s always going to be one that is a little bit more intense about it. And I think that, that’s a huge lesson and a huge reality that if you want to achieve this and get the most out of life and build your financial position, you got to be on the same page. And you know, your complete gung ho moving into the dumpy basement duplex, and then the up and coming neighborhood may not be the right approach for your family and those types of things if you’re in about it. And so I think that they’ve got that. How they worked it out, I think was just so wonderful. And I’m excited to see where they go.

Mindy:
I’m really excited for them too, I think there’s big things in their future. Okay Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
From episode 167 of the BiggerPockets money podcast, he is Scott Trench and I am Mindy Jensen. Girl scout cookie season is coming up, I’m the cookie mom for our girl scout troops. So I will end today’s episode with peace out girl scouts.