4 Children, a Lower Income, and STILL Hitting Financial Independence

Mindy:
Welcome to the BiggerPockets Money Podcast show number 197, where we interview Nate Forbes and talk about saving for retirement with a big family on a low income.

Nate:
I agree mathematically, that’s the way to go, but life isn’t all about math. For us, kind of what I mentioned, like the whole life circumstances are, we don’t have any energy. We’re tapped out, and we’re living and seeing what can happen overnight made me think about tomorrow.

Mindy:
Hello, hello, hello. My name is Mindy Jensen and with me as always is my legendary co-host Scott Trench.

Scott:
You’re always labeling me Mindy. You’ll get it in a sec.

Mindy:
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 that financial freedom is attainable for everyone, no matter when or where you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business or just pay off a small rental property portfolio and FI relatively early. We’ll help you reach your financial goals and get money out of the way, so that you can launch yourself towards those dreams.

Mindy:
Scott, I am so excited to talk to Nate today. I met Nate in our Facebook group. If you’re not part of our Facebook group, you should be. You can go to facebook.com/groups/bpmoney, or just search at BP money on Facebook and join our group, and talk with your fellow frugal weirdos about different aspects of your financial education, your financial situation, and see what other people who are like-minded can do or would do in your situation.
I met Nate because he posted that he had just paid off several of his rental properties due to some 20:20 circumstances that he went through and he realized, “You know what, I want to shift my focus a little bit.” He’s here today to share his story with us. Nate Forbes, welcome to the BiggerPockets Money Podcast. I’m so excited to talk to you today. I can’t wait to jump into your story.

Nate:
Well, thanks for having me. I’m a big fan and this is awesome. Glad to be here.

Mindy:
Let’s jump right into it. Let’s talk about your money journey. Where does your story with money begin?

Nate:
Well, I think probably just growing up, watching your family, watching your parents and how they do things. I think for me, watching my parents, they started on two incomes, but when I was born my mom was at home and she just stayed at home with us the whole time growing up. My dad worked for a nonprofit, so we weren’t making much money, but they were always, we always had plenty and we always had enough. I remember them listening to, I think it was Larry Burkett on the radio, and it was always part of our life.
I think just watching my parents and how they dealt with money and how they weren’t stingy, even though they didn’t have a lot. I think that was probably the biggest part of my journey starting, was just seeing how they manage money.

Mindy:
Let’s talk about your experiences in high school and college.

Nate:
Yeah. High school, well, on the same lines, I worked in high school. I had to earn money and save up for college. I knew that was coming, so my parents said, “We’ll help you as much as we can, but we don’t want you to go into debt going into college, so you might want to start saving.” I worked as a janitor for a while and then worked at a restaurant and then through college, I worked at all sorts of different places. Together, between my parents and me, we were able to get through college without any debt, which is unreal these days. I think it was a huge start for my future.

Mindy:
Yeah, that’s enormous. What is your college degree in?

Nate:
It’s a Bachelor of Science in Theology, which is like what most pastors would do. I didn’t really want to be a pastor, but I was interested in learning about those kinds of things. I really haven’t done much with it other than school, but that’s how most degrees are anyhow.

Mindy:
Yeah. I have a degree in fashion design and I work for a real estate education, internet startup, and host a podcast about money. My college degree really got me nothing.

Nate:
Yeah.

Scott:
You’re very fashionable, Mindy. What was your position upon graduating? You had no debt. Did you have any cash? What kind of job were you able to get?

Nate:
Yeah, I think I had a … Well, I didn’t have a car. Had just failed on me. I had a Volkswagen bus and it had just caught fire on a road trip, which is kind of … I got a nice picture of a van on flames behind us. But I didn’t have a vehicle, but didn’t have any debt. I think I had maybe $2,000. I wasn’t really thinking about money too much, to be honest because my first job was an internship, where I had a place to live at a camp that I was helping run running. I think I made $5,000 that year. It was basically a volunteer position.

Scott:
All right. Where does your money story kind of like … where do you get your first job and you go … I don’t even know how to, yeah, $5,000 is a … Did you take on any debt with this position or?

Nate:
No, I had a place to live, and so … It was a camp and they had food, so I got to eat at the camp and I had hired some staff, so I was in charge of the summer staff. I realized that they were making more money than I did per hour. But yeah, no, it was … For me, I wasn’t married yet, so I was just doing what I wanted to do, and that’s what you get to do when you don’t have debt and you can take care of your needs. I was passionate about doing things that I was passionate about.

Scott:
That’s a luxury, that’s the advantage of graduating debt-free.

Nate:
Yeah, exactly. So yeah I didn’t have any overhead, but …

Scott:
That’s sounds like a wonderful year. What was the next phase?

Nate:
Well, I had been working at these camps in high school and college, and I got … At that age, I was just out of college, so I was supposed to hire some college staff. I basically hired all my friends that I had worked with in the past years, one of them being my future wife. After that year, I started dating her and then we didn’t date long because we’d known each other for several years. Got married quickly after that. I moved near her family so that I could get to know her parents, so they would know me.
We just were working like coffee shop and just random jobs that were short-term, because no one wanted to hire me for longer than that, because they knew that I was only there temporarily. We get married and we didn’t have any good jobs, so I’m like, “Well, let’s just move somewhere.” We decided to move to Pennsylvania where I had gone to college and didn’t have any jobs or any place to live or anything. We just headed out road tripping, and my wife had just secured a place on Craigslist.
We were house sitting. We were house sitting for somebody that didn’t even know us. I don’t know if I’d recommend that or not, but we stayed there for a month and started looking for jobs. I got a job doing carpentry and my wife got a job working at a doctor’s office. We did that for about a year and then got back into camp. I just love camp. I love being outside. I love being with kids. We headed back to Oregon, which is where we’re at now. I got a job at a nonprofit there. I think started out at like $25,000, which isn’t much for … It’s a living wage, I guess, but it’s not much to try to save and try to get financially free. I don’t know. But yeah.

Scott:
At this point when you get this job at the nonprofit, several years have gone by, you’ve gotten married. You’ve really just taken whatever jobs are available based on factors that really have nothing to do with money. It doesn’t seem like a priority there, but what’s the position that you’re in there? Where you able to save anything? Did you have any debt?

Nate:
Well, before we got married I told my wife, there’s the vows that you take, in richness and poor and I’m like, “Let’s focus on that poor one, because that’s the jobs I like to do are the ones that don’t make any money. Are you up for that?” She’s like, “No problem. I love that you are passionate about what you’re doing and let’s do this.” Yeah, money, wasn’t the main factor at that point and that was nice, because we didn’t have any debt and we weren’t accumulating any debt, but we really weren’t gaining much traction on income at all or any savings.
We had maybe a couple thousand dollars in savings, but we didn’t have any credit card debt. We used cars, old cars and we did everything ourselves. It was just bootstrapping it, but it was fun. That’s what we were at that first year, and then we ran into this seminar, Dave Ramsey and I was looking at them like, “I think we could …” My wife was working too, I’m like, “I think we could maybe front end, just save as much as we can towards retirement. Then maybe once we have kids and we’re making less income, maybe we could just quit, retire, put money towards retirement.
But maybe we could actually retire.” Before that I was thinking, “I’m just going to work until I die and do stuff I like doing, and not even think about retirement,” which is kind of looking back, wasn’t the smartest thought, but that’s what I was thinking. But once we saw Dave Ramsey, I’m like, you see the chart of a guy that starts contributing to his retirement earlier than the other person, I’m like, “Well, we’re starting early and we can just max everything out and just live really cheap.” We were living in a one bedroom room.
We were in a house that was like a common house, a bunch of people lived together. We had a bedroom with a bathroom, but we were living with a bunch of other people. We were sharing meals. It was really like 300 bucks a month I think, and then I think $40 a month or $50 a month for groceries. Our costs were super, super low. At that point, when I was working at that camp …

Scott:
What year is it that you’re … How old were you guys and what year is this?

Nate:
2007. I’m not sure how old I was. I’m 40 now. I just turned 40. But yeah, 2007 is when we started …

Mindy:
That was 14 years ago, because my daughter was born in 2007.

Nate:
Okay.

Scott:
In 2007, you’re sitting there and that’s when you go to the Dave Ramsey seminar and begin this new trajectory with your finances?

Nate:
Yeah. Yep. We saved everything my wife made and some of mine and we had a company match. I think I put in, I think 3% and then they would double that. They would put it in an additional 6%. We did that for her job and my job, because she was working. The camp was owned by a university, so she worked for the university. I worked for camp and this is nonprofit university and camp. We saved it all. I think we were maxing out Roth’s and saving some money for a house. But housing was like, in Oregon at that point, I think the cheapest house was $300,000.
When you’re making $25,000 [inaudible 00:11:57] my wife’s income, we were saving hers. But you’re not going to be able to buy that kind of house, and then the market crashed and we were able to buy a house, because we’d been saving up a down payment, which is cool. We were actually the lowest offer for the house. There’s like five offers the first week and we just put our picture in there and we’re telling our story kind of like, we love the house basically.
The realtor told us to do it and we did it and they went with the lowest offer, which is us, which was pretty cool, but it was a big blessing for sure. Yeah, that was the story.

Scott:
This is one year after the, your focus on finances with after the Dave Ramsey seminars, you were able to save up enough to be the lowest offer, but the winning offer on this house?

Nate:
Yeah, I think it was actually … Let me look here. I think that was 2007 when we started, so I think it was 2009. This was about two years living in that one room and then … No, actually let me look here. No, we went to … We just started renting a regular house, but that was like $545. We got a sweet deal on that too. Then in 2011 is when we actually purchased our first house. Yeah, so we’re still [crosstalk 00:13:11] working with the nonprofit, still saving money, but my wife got pregnant that 2009. We both grew up … Our parents, one income even though it was just …
That’s how we grew up and it was a nice way for … We enjoyed growing up with our moms at home and it was more peaceful. Then what we were seeing out in the world where everyone’s working tons of jobs and it’s just a little stressful. We decided, even though we’re not going to save as much money or whatever, it is more part of our values to have somebody at home with the kids at least at the beginning. We’ve just kept doing that actually.
My wife is still at home and we still been able to save money. Yeah, at that point, that’s when I got a little bit more focused when we had our first kid, I’m like … I was reading every book. I was reading JD’s Roth blog and Get Rich Slowly and all sorts of other stuff. We were just focused more on that. But then my job got a little bit crazier. They let my boss go and they wanted me to do that job. We had another baby and I’m like, I was just looking, I’m like, “I don’t know if we can do this.” We started looking around and then talking to family and friends and my father-in-law was like, “Well, I’ve got a position.
Do you want to try it for a year?” I’m like, “Okay, let’s do it then.” I’ve been doing that for the last, I guess 10 years now. That changed things a little bit.

Scott:
What are you doing at this job when your first kids were born? Was that carpentry still?

Nate:
No, I did carpentry in Pennsylvania and then I moved back to Oregon and we started running the camp. I was a camp director for a day camp. I was hiring all the staff, doing all the curriculum-

Scott:
Okay. Got it.

Nate:
… that sort of thing.

Scott:
Got it. During that time, while you’re camp director, that’s when you’re resetting the position, beginning to max out the retirement accounts, you and your wife are both working, then she begins to stay home after your first one is born?

Nate:
Yeah.

Scott:
Now you’re looking for ways to raise the income with baby number two on the way, and that’s when you make the shift to work for the father-in-law. Okay.

Nate:
Yeah. It’s partially income, partially just the situation at work. It is getting a little stressful. I was working about … With nonprofits, you work 50, 60 hours and it’s just really hard to do that with a new baby. I was just feeling stretched to all ends, but we were saving the whole time. A big part of it was just frugality. We were, yeah, used cars. For our shopping at Thrift Store, we’d go to this place called the Goodwill by The Pound. It was like a Goodwill outlet, and you’d go in there and you’d have clothes.

Mindy:
I love the Goodwill outlet.

Nate:
Yeah. It’s craziest place ever. We would just get all of our clothes, all our baby clothes, all of our clothes and I would search for vintage clothes. I found all these vintage clothes and then I would take them to the vintage resale shop and they’d give me money for the vintage clothes I found. That would pay for our shopping trip and maybe a little bit extra. That was kind of fun. In our vacations, camping out. We would be house sitting. We wouldn’t really do any crazy vacations. We’d go visit family, that kind of thing. We just lived a frugal life and we still do. I think that’s a big part of our success for sure.

Mindy:
I think that’s a huge part of your success. I’m hearing you say, “Well, I didn’t make a lot of money, but I didn’t have any credit card debt. We weren’t … You’re saving for retirement and we weren’t … In the beginning, we weren’t really doing much to further ourselves.” You were doing a lot to further yourself, because you weren’t collecting credit card debt. You weren’t trying to keep up with the Jones’s. You weren’t trying to be this consumer that a lot of Americans are. You were doing a lot for yourself and discovering Dave Ramsey, his baby steps are great.
I like the first three. We split paths after the first three, but they’re really, really powerful when you get yourself in a position, where you are not accumulating debt, because then instead of being able to save anything, you’re paying off this debt or just accumulating more and not saving at all anyway. You were doing really, really well. You had two kids, a stay at home mom and you’re still saving for retirement. You mentioned, I know I’ve said this on the show before, but you mentioned that you saw this thing with Dave Ramsey, that one person puts in this much money and start saving early, whereas another person puts in more and starts saving a little bit later.
I’ve read that too. If you start from age 22 to 30, you put in X number of dollars per week or per month, you will have more money at retirement than the person who starts at 30, puts in 2X and continues until 65. The power of compound interest is so enormous. The earlier you start, the better off you are. It sounds like you started in your early 20s, your mid 20s, you started saving for retirement?

Nate:
Yeah. I think they had a certain percentage with Dave Ramsey, like how much percentage of your income you should do. We just didn’t know, are we going to be able to keep doing that? If we’re going to work in nonprofits, are we going to be able to keep putting money aside? Let’s just max out even more than the percentage. Let’s just do as much as we can front end, and then we won’t have to do it in the back end if we aren’t able to.

Mindy:
I love that mindset.

Nate:
We looked at that.

Scott:
When you are switching your job at this point, this is like 2011, 2012? Is that we’re talking about with the job switch?

Nate:
Yeah. Yeah. It was 2011.

Scott:
Does that involve a move?

Nate:
Yeah, well, it didn’t at first. Work was about an hour and a half away, so I was doing a big commute. Whenever we have a new thing, we look around and see, “Well, what’s the cheapest way to make this happen?” Which wasn’t commuting obviously, but we had just refinanced the house, and we were not sure we were going to keep the job for longer than a year. It was just a trial basis. There’s a website called fueleconomy.gov. You can look at all sorts of different cars on there. I found this, the 1992 Honda Civic Hatchback, you can get close to 50 miles to the gallon.
In 1992, it seems like a crazy amount of mileage per gallon, but anyhow, you can search around on that website. That’s how we got the car for the commute. But eventually we moved to where I’m working here about five miles away, two miles away or something like that.

Scott:
How did that change the game for you? Was that a better income situation? What were the advantages of the job switch?

Nate:
Yeah, no, it was probably close to double what I was getting paid at the nonprofit. Yeah, we just started saving more. Obviously, we’re used to staying low in our expenses, and that was really tight and we just kept it tight as long as we could. Now we have four kids and expenses are getting up and we are probably loosening it up a little bit. When you have more kids and more responsibilities, you do have to open up that a little bit. We have eased up on the spending front.

Mindy:
As you are investing, what are you … As you’re saving money, where are you putting it?

Nate:
Mostly we were doing Roth IRAs, and then I found the Mr. Money Mustache site, and then I found Mad Fientist. Then we started doing just regular index funds and the 401k contributions to an HSA. We started doing all that for a couple of years. Then I think real estate, we’d done well on the first house. We had sold that one to move to this new house and we made some good money just because of the market and because of forced appreciation, we kind of fixed it up quite a bit. Bought a foreclosure where we’re at now and did the same thing.
Yeah, I don’t know how we got into it. Eventually, I saw some stuff out in Michigan where I grew up and I’m like, “Those are really cheap houses and the rent is the same as it is out here in Oregon.” We started looking out there and that’s where our investment changed a little bit from ….

Scott:
During this period, from 2007 when you begin changing your trajectory with money and all that, what would you say on average you’re putting away per month through that period? Can you just have highlights of the highs and lows there?

Nate:
I don’t know the actual dollar amount, to be honest. I know we were maxing out our IRAs. That’d be like 11,000, 5,500 each and then money toward HSA, money towards just saving. Yeah, we were saving as much as we could, and I don’t even know what that was, but we were also living and giving and that kind of thing too. I don’t really know the numbers. I’m more of a general person than a specific.

Scott:
Well, fair enough. But I want to point out A couple of big levers here. One, it sounds like you’re living very frugally the entire time, even with the kids on a relative sense there. Second, you did a live and flip, which probably added 50 to 180 plus in this add on to your wealth there. It sounds like you’ve done that at least twice now with the second home that we’re in the middle of discussing with this kind of stuff. You have a pretty good approach with the Roth IRAs. The point I want to make is that there is no event here in this journey that we’ve had so far, it’s a process that’s very gradual and very repeatable.
Nothing special financially speaking about the story, which I think is really powerful in a lot of ways. You’re just following a very proven process over a, so far, five, six year period and amassing what I imagine to be a several hundred, perhaps close to quarter million dollar net worth at this point in the story through this. I admire it and I think it’s really cool, how simple if not easy, but how simple the approach is, “Hey, we looked up the best car and bought it on the website.” What an idea. I love it. Most people just don’t do that. You’re doing it for the efficiency point of view.

Nate:
Yeah. I think we looked at it as, we want to have one person at home and that’s not normal. We want to do what our values are, so instead of trying to earn more money by having both of us work, let’s just be frugal. Let’s meal plan. Let’s do everything that you guys talk about on the podcast, let’s do that. We read books. My mic is sitting on one right now, it’s called The Complete Tightwad Gazette by Amy Dacyczyn. That was what I got from the library just now, because it reminded me of what we used to do, we still do, but we read it and all the stuff we could about how to be frugal. We just went down that path and it’s actually really fun. It’s kind of a game. When you have kids …

Mindy:
It is a game.

Nate:
Yeah, and when you have kids, it just simplifies your life anyhow. What do you do for entertainment? How expensive is it to go to the park, to get on the bike. It’s not. Kids make it simple. I like that about having kids and a lot of joy and just a lot of fun.

Mindy:
The kids are the entertainment.

Nate:
Exactly, yeah.

Mindy:
They’re hilarious. They come up with some of the craziest things. They don’t have these societal norms. They just say whatever comes out of their mouth and you’re like, “Oh my goodness, that was hilarious.” Write them all down too, because they all of a sudden, you forget all the cute things that they say, but they’re hilarious. Yeah, having kids … I have had friends who, “Oh my kids in this and this and this and this, gymnastics and soccer, and all these things.” I’m like, “That sounds like such a difficult life as an adult.”
You have to manage all this stuff. Just take them to the park. They love it. They run around. They play on the swings. Oh my goodness. I could have pushed my daughter for 30 hours on the swing and she would still say more. Exactly, how much does that cost? It’s nothing. You just walk down there or drive if it’s really far away. But yeah, it doesn’t have to be expensive. I think that frugality sometimes gets a bad rep, like, “Oh, I have to give up everything.” You seem like a really happy person. You seem like you have all the things that you want.
I want to be outdoors. Well, being outdoors doesn’t pay so much. Okay, so then I just won’t buy so much stuff or I’ll figure out a way to pay for it, so I can still have it. I want to have clothes and I found these super cool vintage clothes. I’m going to sell them and get enough money to pay for all the things that I bought. It’s a wash, I guess. It’s not a net anything. It’s just a wash. It’s a net win, because now you don’t have to pay for your clothes and your housing, you lived with roommates. Some people are like, “Oh, I could never do that.”
Well, what is the saying, Scott, if you live like no other now, so you can live like no other later or something like that?

Scott:
I think Nate probably does the Dave Ramsey quote for that better than us.

Mindy:
Yeah.

Nate:
You got it. That’s right.

Scott:
If you can live like no one else, then-

Nate:
[crosstalk 00:27:19] no one else.

Scott:
… later on you can live like no one else, I think is something like that.

Nate:
Yep.

Mindy:
I’m hearing this story of this guy, who’s making $25,000 a year and his wife is making a little bit too. Then now you said that you doubled your income, so now you’re at 50,000 and a lot of people listening are like, “Well, I make more than that and I still can’t save any money because I have to buy all these things.” You really don’t have to buy all these things. You choose to buy all these things. Nate is figuring out ways to have it without paying for it and also not stealing it, right?

Nate:
Right.

Scott:
Well, so overnight and just six short years, you have constructed a several hundred thousand dollars net worth I presume at this point with this, and you’re in the middle of … You just made a move to be closer to your new job an hour and a half away from where you were living previously. Is that where we are in the story?

Nate:
Yep. Yep. For awhile I tried riding my bike and I realized that wasn’t for me and it started raining and I’m like, “Okay, I can’t cut that out,” but for most of our life, we had just one car. But then with kids and everything, we ended up knowing two cars, but we never paid more than $4,000 for a car. We don’t have that Toyota Corolla like everyone’s supposed to, but we got the Avalon, so we’re a little bit more-

Scott:
Fancy.

Nate:
… fancy, yeah.

Mindy:
Ooh, bougie.

Nate:
Right. Yeah, just cheap cars and they run well. If they break it’s cheaper than a payment, so we just go that way. Yeah, eventually we had a friend that was doing real estate and I was seeing stuff in Michigan, and we were thinking about doing another live in flip with this house that we’re in now, but it’s perfect for us.

Scott:
You’re in Oregon at this point, right?

Nate:
Yep. Yep. Has a great yard and we’re an Oregon, yeah. Loving it, close to the park. There’s a pool right across the street. It’s really a great place for our family. We didn’t really want to flip it. We want like, “Where are we going to go? This is kind of perfect for us.” We’re homeschooling the kids and stuff. You need the yard, but what we have here. We were really at a struggle what to do with it. We ended up refinancing the house and able to have enough cash to go get our first BRRRR in Michigan, and that started our real estate adventure. That was probably, when was that? Got that written down here. That was in 2017.

Scott:
Between then and between where we were just, in this story and 2017, four years have gone by in this new job, is that right?

Nate:
Yeah.

Scott:
All that time, you’re just continuing to save money and the savings rate is increasing as you’re closer to work and?

Nate:
Yeah. We were on the Mr. Money Mustache path, just index funds. We found that blog and we just said, “Oh, this is … I can relate.” I wasn’t sure how long I’d do this job. I’m like, “Maybe we’ll get back to nonprofits and let’s just focus on saving now. I don’t have to worry about it later.” Then once we realized, “Oh, you don’t have to put any more money towards retirement if we stopped right now.” It’s like the Coast FI which I hadn’t heard about till recently, but yeah, you look at that and you’re like, “We could just stop putting that towards our traditional retirement.”

Scott:
When was that moment for you?

Nate:
I think that was like 2014, ’15, something like that. Just kind of realized …

Scott:
Did you stop contributing or did you continue?

Nate:
Oh, we kept contributing and then yeah, that’s all we did, kept contributing. When we put some just in regular index funds, not in the traditional retirement accounts at that point.

Scott:
I know you’re skipping ahead to the real estate stuff, which we want to get to for sure. But what I want to point out here is like, okay, we started in 2007 and in 2014 you reach Coast FI. It doesn’t sound like you brought home a huge income here over a hundred grand at any point during this, is that right?

Nate:
Right.

Scott:
You’re just slogging it out with, I call it the grind. You’re just grinding it out over the period of years, but you’re living your life. It seems like you’re happy with everything that’s going on with that. You’re stockpiling tens of thousands per year it seems like in wealth in this that’s compounding in a pretty meaningful way over this. This is the not exciting part of the financial journey, which is why you’re trying to get to the BRRRR on this. But this is the important stuff; you are getting rich in a really unexciting, highly repeatable fashion here over this period of seven years that we just discussed.
It’s because your incredibly strong fundamentals that you’re then able to begin slowly amassing an incredibly … a financial fortress, that makes you feel ready to take the next step with the real estate. Am I going too far with any of that? Or is that generally the picture?

Nate:
Yeah, no, it really didn’t feel like a slog though. It just felt like life and we were having fun and yeah. I think a big part of it was just how I grew up. We didn’t have a ton, but we didn’t need a ton. Our life was very full. I think a big part of it growing up that I try to emulate now is that, my parents were just completely open and giving. They had a lot of community. They were part of the community. They’re giving to the community. Didn’t feel like we were missing anything and that’s how we still feel now.
That’s how we live now and just don’t feel like we’re missing anything. I honestly don’t think our life will change. We’re just living our life, but with a future.

Scott:
I think it’s fantastic. Frankly, I am a little envious there because I’ve always liked my job here at BiggerPockets of course with that. But the way I viewed it at first, and I think a lot of people view it is, they don’t really like their job and they’re looking forward to the day they can quit and become financially independent with that. It is a grind or a slog for those couple of years, but what you just went through with that, because they’re just stockpiling money and you have to do that for a period of years until you get past the hurdle, the Coast FI, Leading FI or whatever it is that you’re looking and target there.
But you’re like, “No, this was automatic. We did exactly what we wanted to do and got pretty rich at the same time by just doing a lot of the basics right.” I love that, but I just wanted to point out that there were four years that went by prior to your real estate investment, of you applying great fundamentals and enjoying your life. That I think is an important thing to just point out before we get to the real estate journey.

Nate:
For sure.

Mindy:
Well, I want to define Coast FI for people who are listening who may not have heard this topic. Nate, what does Coast FI mean to you?

Nate:
I think it’s where you have enough saved up that you don’t have to worry about retirement. Some people have a certain date before 65 or something, but I think for us, we were looking at, if we quit contributing, we can still live in our current income at age 65, and take out 4% and be able to survive on what we’re living on, which isn’t a lot. It wasn’t really … I think that’s part of it. The less you live on, the less you have to save up for your retirement.

Mindy:
Yes.

Scott:
You can’t quit your job to sustain your lifestyle right now, but you can stop contributing anything to retirement, and you’d be set at retirement? You can take a lot less income to live your life today, because you don’t have to contribute to retirement anymore?

Nate:
Right. That’s kind of what we were looking at with the whole, when I saw that Dave Ramsey chart comparing the two. We were trying to reach that place so that if we did have … We’re still open to whatever life’s going to throw at us and where we want head, what kind of jobs do we want to do. Right now, it’s great. I work with my father-in-law and I’m seeing a big value in that being able to work with family. Just losing my dad this year has made me think more about that. To be able to work with my father-in-law is a pretty amazing opportunity, just to have that relationship. But yeah, you’re right. I got sidetracked there a little bit.

Mindy:
I want to put a link to that Dave Ramsey picture that you’re talking about, the Dave Ramsey graphs in the show notes for this episode, which can be found at biggerpockets.com/moneyshow197, because I want people to see just how powerful the compound interest is. I know what graph you’re talking about and it is, well, it was mind blowing to me. I don’t know, maybe other people …

Scott:
One minor nitpick there. I love that. That chart that Nate was referring to where, “Hey, if you’re a contributor for 10 years in your 20s at a whatever, a thousand bucks a month or a hundred bucks a month or something 200, I forget the number. Then you’ll have more wealth than the person who contributed the exact same amount over the next 30 years at the end of retirement.” Just note that that assumes … I think, I generally believe Dave Ramsey-

Nate:
High percentage, yeah.

Scott:
… could be wrong here.

Nate:
High returns.

Scott:
He was [crosstalk 00:36:28] 12% return on your money and that’s not true. That same phenomenon is not true with those numbers if the return is 7% versus 12%, for example. Know that there’s some nuance to look at, but in general, I think it’s a very, very powerful concept to think about.

Nate:
Yeah, I agree. That percentage is pretty high.

Mindy:
Yeah, it’s awesome. You look to Michigan. You said you did your first BRRRR and for people who are not familiar with that term, that that’s an acronym that stands for … Let me get it right. Buy rehab, rent, refinance, repeat. Basically you’re buying a house that is in disrepair or outdated. You rehab it, you fix it up, you rent it out, you go to a bank and refinance essentially pulling out most or all of the money that you have into the property. Then you repeat, meaning you go find another property that’s not so great and fix it up and do the same thing again.

Nate:
Yep. Yeah.

Mindy:
You have your first BRRRR.

Scott:
How does it go?

Mindy:
You said first as though there’s more than one.

Nate:
Yeah, no, it was good. It was actually pretty cosmetic. We spent some money in it and changed all the flooring out, painting, a lot of cleaning, new toilets, new vanities, that kind of stuff. It’s not the best rental. It’s a big, big house. But we would still be able to pull out our money and we moved on and bought a duplex that was the second BRRRR. We are going to go down that pathway, just get a … I think we are going to try to just do 10 properties because as you noticed, we’re not really driven by money really.
We don’t want to have our life consumed by money. 10 properties would be plenty for us and then we could live. I think we want five paid four and five that are leveraged. That was kind of our goal. We’re going to head towards 10 BRRRRs and then pay off five, and then see what’s next. But we didn’t get there. Life changed. We did the first property, got right tenants in it. They’re still in there. Then we got the second property that’s a duplex. That place was just a mess.

Scott:
Can you give us a very quick overview of the numbers behind the first property? We don’t have to go into each one, but it could be helpful to be like, hey, how much cash did you need to bring to the table to be able to do the deal?

Nate:
We refinanced our house here and we bought it super low and the market had gone quite a bit. We were able to use that money to cash out the house, so we didn’t have to find a bank or anything to get the seed money to start on …

Scott:
As a reminder, the reason you’re able to refinance the house is both because of appreciation, and because you fixed up your house that you’re living in? You basically lived and flipped it to BRRRR it?

Nate:
Yep. This is a foreclosure, the worst house in the best neighborhood kind of idea. Yeah, you’re right. Let’s see. I wrote that down somewhere here. We bought that house for 111,000 and we put 18,000 into it and then we refinanced it and I think we got 124 out, so it wasn’t quite BRRRR, I think we had 5K still in it and then we bought a duplex.

Scott:
Oh, you lose.

Nate:
Yeah, I lost.

Mindy:
You essentially have $5,000 in your first rental house and it rents for how much?

Nate:
Today it’s like 2100.

Mindy:
Oh, okay. Two and a half months worth of rent and you’ve made all your money back that you have stocked in it.

Scott:
Well, what’s the cash flow for the property?

Nate:
I don’t have that right in front of me. But as of today, that one’s, the last one we’re working on trying to pay off. I think the cash flow might be $700 or something like that. I don’t know. You have different people …

Scott:
That’s fantastic.

Nate:
People look at it differently. You’ve got your mortgage. You’ve got your [inaudible 00:40:42] other stuff, CAPEX.

Scott:
It’s 140% cash and cash return if you put five grand in at the end of the day and get 7,000 some odd, I guess, 8,400 a month a year in cash flow.

Mindy:
Yeah. That’s not bad. Let’s go to your duplex.

Nate:
Then we got this duplex for 67,500 and put 40K into it.

Mindy:
I need to go by in Michigan.

Nate:
Not anymore, but yeah back in the day, just a couple of years ago. We refinanced and got, I only got 80 … Well, we got 85 out on that and so we left 22,000 in there.

Scott:
I love it. I think that that’s a big point key here is that most BRRRRs, I believe you do not get to pull out all of your money that you put in. Doesn’t mean you’re losing, you’re into that property for 20,000 instead of 40,000 or whatever it would be which is still very advantageous. Because of the way you’re doing it, it sounds like you’re adding value and upping the value and running the numbers pretty accurately. You’re still not taking that much risk relative to other forms of investing.

Nate:
Yeah. It also is a blessing in it, was that we got to be where my family was, where I grew up, my parents and my sister. Like I mentioned earlier, now that my dad’s passed, I have all these great memories of working on the houses together. I spend two or three weeks, maybe four weeks, some years out there in Michigan with my family, and they were helping too. That’s a big part of it. They were a big part of our success for sure. But yeah, just all the extra time that we got with my family was awesome.

Scott:
You bought this property in 2017, and over what period of time did you amass the next couple of … What was the activity set here that resulted in your overall portfolio?

Nate:
Yeah, so that was 2017, the first one, and then the next one was 2018 and then we bought two other houses in 2019 and then the pandemic hit. My parents in the town that they live in; there was a breach of three dams down river. Then the dam about two blocks from their house also failed. 40,000 people were evacuated. It flooded their house. It flooded their rental house next door. Yeah, my mom broke her arm, but right before that and pandemic and then my uncle died of cancer. My mom got cancer.
My dad died of cancer, all in one year. All that happened-

Scott:
Geez.

Nate:
… yeah, in 2020. That reset everything. You think about life a lot differently. I think that’s why our shift happened from going into getting more properties. We wanted to focus on helping my parents to get out of the damage, the flood damage and then with the cancer and all that stuff, that just took over. Now we’re kind of just, we had all this sitting because we were just going to go all in. We pulled out all of our, maybe not recommended, but we pulled out all of our contributions, our Roth contributions because those are tax-free to fill out.
We pulled all that out because we saw the return was so good in Michigan that we were just going to focus on that, and then we could always dump more money into retirement, traditional retirement if we needed to. But at that point we’re like, “The return is so good. Let’s just go all in there.” We had this money sitting here ready to do more BRRRRs, more property, and then all this happened and we just tightened it up. We’re like, “We’re not doing anything. Let’s just pay off the debt.” That’s what we’ve been focused on lately is paying off these properties.
That post on Facebook that got us talking was that we finally had reached a point where our passive income was paying for our lifestyle, which is because I wasn’t planning on that, because it was going to be a while because we were just doing BRRRRs. But when we paid everything down, that was pretty neat a moment to see … A big part of paying it down, I think was that we were just tapped out emotionally. The other part was, I’d see my dad pass … He was healthy. He found out in the summer and he’s gone in the fall.
It’s like we don’t have tomorrow. We have today. I have an insurance policy on me, but my wife’s at home, she’s homeschooling, but we want that to keep happening, because it’s great. The kids love it, she loves it. But if I were to go, life insurance would be there, but it wouldn’t be enough for her to keep doing that. I figured if we pay off all the debt, then she can just keep doing it. We don’t have to worry about that. That was also a big factor as a life insurance of sorts too. As we saw with the flood, not anything is guaranteed.
Even though we’re paying these things off, disaster can strike, but we’re doing our best to make it so we have more options for the family for sure.

Scott:
I think it’s a really powerful why and a big shift with that and thank you for sharing all of that. That’s very personal and got to be a really tough year with this. How many houses are we talking about here? I counted four properties, rental properties one of which at least was a duplex.

Nate:
Yeah. We have the three single families and the duplex.

Scott:
Then are they all paid off at this point?

Nate:
Everything, but that first house that we BRRRR’ed. Yeah, the two single families and one duplex.

Scott:
When do you expect to have the last one paid off?

Nate:
I think we’re hoping 12 to 18 months. That’s our goal.

Scott:
12 to 18 months?

Nate:
Yep.

Mindy:
Okay.

Scott:
Go ahead, Mindy.

Mindy:
I was going to say, I can hear people right now yelling at the radio, “No, don’t pay it off. Leverage because money’s so cheap.” Scott and I even are on camp don’t pay off your mortgage, but we’re not living with you. What do you say to people who are like, “Oh, you should always just leverage all the time?”

Nate:
I agree mathematically, that’s the way to go, but life isn’t all about math. For us, it’s like kind of what I mentioned, the whole life circumstances are, we don’t have any energy. We’re tapped out and we’re living and seeing what can happen overnight made me think about tomorrow. Paying off the debt right now is probably the quickest way for us to have stability in our family if I were to go tomorrow, which we’re not planning on that, but you don’t know. I think you’re right. Mathematically it isn’t the best, but sometimes you just do what’s best for your situation. I think that for us seeing how our life is, that’s the best way.

Mindy:
I love that. I love that. Yeah, you do what’s best for you. Nate, let’s talk about an emergency fund. I hear you saying that you have these all paid off. Do you also have an emergency fund for emergencies? What a horrible way to phrase that. Sorry.

Nate:
No, that’s okay. Yeah, we have that one still we’re paying off. But everything else is paid for, but we do have an emergency fund 25, 30 right now, 30,000 just for emergencies and then, life emergencies or it’s combined. It’s not separate where you have your personal emergency fund and your house emergency reserves. We usually have more than that, but since we’re paying down that last debt, we’re a little bit more aggressive on that. Since the other ones are paid off, the cash flow’s pretty good. We’d be able to just wing it I think.

Scott:
You have four rental properties, one duplex, so five rental units and then you also have your primary residence. Did you pay off your primary residence as part of this or …

Nate:
No.

Scott:
Okay.

Nate:
The primary is-

Mindy:
And is that in the plans?

Nate:
Not really, not yet. Maybe someday. But then it’s not our immediate plan. I think we’ll see what happens with life and how we’re feeling once these things are paid off, what direction we’re going to want to go. But before our goal is to have 10 properties, rental properties, five of them paid for. We’re doing it backwards, getting them paid for the five, five paid for first and then moving on to the leveraged ones, but yeah.

Scott:
I think that’s very interesting about that decision to pay off the rental properties, but not the primary residence with that kind of stuff. Do you have a reason for … Is there a strategy behind that or is that … What’s the full process there?

Nate:
Mostly it’s just the percentages, the debt.

Scott:
Oh, the higher interest rate on the property?

Nate:
Higher interest rate, yeah.

Scott:
That makes sense actually. Okay.

Mindy:
Then do you have any plans to buy more rental properties after you’ve got these four paid off?

Nate:
I think so. I think we just shifted for a short while. But yeah, we are just trying to feel out the waters with life, and how we’re feeling emotionally and physically and with our kids and everything. I think the goal is to keep going. We like it. It’s fun.

Scott:
One question I have about the portfolio is, you mentioned you flew out to Michigan and spend time with your family improving the properties. How do you think the returns and … Would it have been worthwhile if you had completely hired it out and done it remote out of state in Michigan? Would that have changed the profile of the returns and how well this has worked out for you?

Nate:
Yeah. I’m sure it would have changed it. I don’t know how. It could have been better. It could have been worse. I’m glad I did it though, because that was precious time with my dad. I don’t know.

Scott:
Absolutely. I’m just wondering if I’m listening and I’m saying, “Wow, look at these returns.” My belief is that a good part of those returns have to do with all the other things, qualitative factors that went into those properties as well, as well as the math that you clearly had mastered, but going into those things. I just wonder if it would have been very expensive, for example, to contract out all of the labor that went into repairing those properties.
For someone who’s listening and trying to repeat this, this may not be repeatable in the same sense without some of those advantages or it may be. I’m not sure.

Nate:
Yeah. No, I think you’re right. A lot of it was family and friends helping them out and you can’t ask for that, and we felt a little bad having that happen, but they wanted to invest in our future too, and something that my parents could do and my sister and brother-in-law as well, and some other friends. Yeah, you can’t … Yeah, I think you can’t repeat that unless you have a bunch of family and friends that want to help you out, for sure.

Scott:
Your work, or your situation in general allowed you to spend several weeks at a time working on these properties, on at least a few occasions as well.

Nate:
Yep. Now it’s been [crosstalk 00:52:55]-

Scott:
Just to point this out that-

Nate:
I’d work 80, 85 hours, at least during those weeks that I was there too. I was just pushing it as hard as I could. I was only there for a short time, so I was really, really focused on getting it done. So yeah, they did affect it for sure.

Scott:
I don’t want to paint a rosy picture of BRRRR here for folks with that. Not that it can’t be done, just that you didn’t get all your money out. You went to a place that was very distant from where you lived, but you had connections, family and you were willing to do 85 hours a week of work to prepare the properties as quickly as possible and upgrade them, adding value, increasing rents and all that kind of stuff. That’s how BRRRR can be so powerful, but you’re not going to get that same profile that you just described anywhere in the country by just dumping money in from Denver, while trying to be completely with that project. That’s all I’m trying to point out for folks.

Nate:
True. No, we definitely forced it with our own sweat equity and our family’s kindness.

Mindy:
Scott, I’m glad you pointed that out because there is this … Frankly, I think it’s a misconception that BRRRR is the best strategy for someone who’s just starting out. It can be a good strategy, but you’re combining all the elements of flipping a house with all of the elements of renting out a house. You’re actually learning two different strategies at the same time. If you’re listening to this and thinking, “Well, that sounds like a lot of work.” It is a lot of work. Flipping a house is a lot of work. Rehabbing a house, just even if it’s just cosmetic, but especially if there’s other things, if you’re trying to do this yourself, that’s a lot of work.
Know that going in even if you’re not trying to do it yourself. You’re still trying to find a contractor. How easy is it to find a contractor, Scott? I’ve been doing this forever and it’s hard to find a contractor.

Scott:
If you know any good ones, call me.

Mindy:
Yeah. I have a line on an electrician, Scott, so if you need one. But yeah, it can be a big, big, big task. I’m glad that you pointed that out, because I’m getting ready to write an article, where it’s like, “BRRRR might not be the best strategy for you if you’re just starting out.”

Scott:
Well, it’s a great strategy for you if it’s your first investment after you’ve spent seven years practicing excellent financial fundamentals with that, have a high savings rate and really studied the market, know your math and are willing to go out there and bust it for several weeks alongside friends, family or even just by yourself and with some hired help there. Then it’s a great strategy and can make an enormous difference in your life in just three or four years, which is what happened with that.

Mindy:
Yes. I take it back. BRRRR is an excellent way for beginners to become overnight successes in just three to four short years by leveraging all of those things.

Scott:
That’s right.

Mindy:
Okay. I’m sorry, go ahead, Nate.

Nate:
Yes, everyone’s story’s different and it’s not always repeatable, but you can always grab a little bit from everybody’s story I think.

Scott:
Absolutely.

Mindy:
For the next 12 to 18 months, you’re going to be paying off this debt and then you’re going to start looking at the market again? Start looking and see …

Nate:
Yeah, I’m really curious to see what happens because the market has increased so much. That that duplex is probably 215,000 now that house. The first house is probably 250. The other house we just paid cash for, because we were going to BRRRR it, we paid 75,000 for it. It’s probably worth 150 now and we just painted it. You know what I mean? The whole market, I can’t do this anymore in that market, so we’ll see. That’s another part of it, we couldn’t find anything. It all just got switched overnight.
Yeah, we’ll see what happens in a year or a year and a half. But yeah, that’s our goal is to find a market or the same market or I don’t know. Our story changes as you noticed and I think everyone’s does. We were on index path fund and now we’re moving to in real estate. My wife always like, “You keep changing.” I’m like, “Well, when new opportunities come up.” It’s hard to know.

Mindy:
I like that, be fluid. What is the phrase, life is what happens when you make other plans or when you’re busy making other plans. You plan for this and then life’s like, “Nope. Going to just give you a big ol’ slap.”

Scott:
I thought it was man plans, God laughs.

Nate:
Yeah.

Mindy:
There you go. Yeah.

Nate:
You look at my parents’ story, then that’s very true. Everything came to him and it just hit him so hard, but I wish you guys knew my mom.

Mindy:
Yeah 2020.

Nate:
She’s so joyful still and hasn’t … It’s amazing the testimony to her faith for sure. But yeah, she’s an amazing lady.

Scott:
Well, I think you’re going to be very successful with your stuff. Your fundamentals are great. I have no doubt you’re going to pay off that property probably a little sooner than you think or hopefully, and I wish you the best of luck in finding that next market and continuing the story. When you find it, after you complete the flip and the market’s changed, then you can tell everybody about the secret market that you found. That’s great for BRRRR’ing next with that.

Nate:
Yeah. It’s hard to find any right now for sure. Thank you.

Scott:
Should we move on to the famous four here?

Nate:
Yeah.

Mindy:
I think it’s time.

Scott:
I think so.

Mindy:
Nate, are you ready?

Nate:
I think so.

Mindy:
Okay. Nate, what is your favorite finance book?

Nate:
It’s hard to narrow it down. It really is. I was looking around-

Mindy:
Hit me with a couple.

Nate:
Okay. That Tightwad Gazette thing I mentioned was pretty great. Rich Dad, Poor Dad. This book here is really good. Coach Carson talks about it.

Scott:
Building Wealth One House at a Time.

Nate:
Yeah. Chad Carson has had that guy on his podcast and yeah, it’s a simple way to do one house at a time, paying off in 15 years and it’s really a basic book, but it was a good one for us. All the stuff you guys have put out, I’ve read all those books. They’re wonderful. Yeah, a lot of resources. It’s amazing. I don’t have a one, but yeah.

Scott:
Yeah, we’ll just link to all those books in the show notes. Of course we’re always happy to plug our BiggerPockets books there as well. What was your biggest money?

Nate:
My wife keeps me from making too many of those. But probably, it could be taking out the retirement. We’ll see about that in the future. It could be that, or it could be maybe selling our house to get this one. If I would’ve known what I knew now, I probably would have kept that first house we bought and rented it out.

Scott:
As a rental?

Nate:
Yeah.

Scott:
I love that. Is there opportunity cost mistakes? That says that, “Hey, you really haven’t had a big blunder with money in your past …” A lot of people have bought a car that really cost them or lost tons of money on a house. You’re saying, “Mate, did I make the right resource allocation decision? Time will only tell.” But you made the highest probability bet that you could with the information you have at the time with that. I want to be clear, you did not take money out of … You did not liquidate retirement account and realize income; taxable income like you would if you liquidated a 401k. You did not pay penalties on that.
You just withdrew the contributions to Roth IRAs, which is a non-taxable event and it’s something that you have the option to do when contributing to Roth IRAs. Is that right?

Nate:
That’s mostly right. I got laid off for two weeks, so I did take advantage of the, we have a work plan that’s not very good. It has a high management fee. I took that out and we’re paying taxes on that for the next three years, but we’re not getting the penalty for that. I did do that as well.

Scott:
Okay. You took some money out of a tax deferred account and will pay taxes on it, but not penalties?

Nate:
Yeah, because of the law, the new rules from the … If you were affected by coronavirus with layoffs or anything like that. Since I was, I decided to do that. Time will tell on that too.

Scott:
Nope. Makes sense. But I think that if you’re going to make money, mistakes, those are the type to make is like, “I think this is the better bet. I have done a lot of research. I’m going to go forward and see how it plays out.” To me as, I completely respect. I have a lot of respect for mistakes “like that.” I think that’s great.

Mindy:
If you find some windfall, you can repay that back. You don’t have to take all of it out and then just pay taxes on it. If you pay it back before three years are up, you have the opportunity to … It’s like a loan more than with … I’m trying to say withdrawalment, but that’s not a right word.

Scott:
Withdrawal.

Mindy:
Withdrawal. That doesn’t sound right either. Okay. Moving along, Nate, what is your best piece of advice for people who are just starting out?

Nate:
Get out of debt. If you have debt, if you don’t just … If you do either way, look at your bank statements and just see where your money is going. Read your money or your life and follow their direction. Map out what you’ve always made. Just go through that book and then look at your expenses and see where your money’s going, and start on the worst defenders, and try to hack each one. Like the house hack is great. Any of that, just keep going down the list. We still do that every year. We look at our expenses and see if there’s a better way.
We just got a new phone plan with Comcast. If you don’t have data, it is so cheap. I don’t know if you guys have extended Xfinity Comcast. If you are Xfinity Comcast subscriber for internet, you can do their phone plan and it’s super cheap. Me, my wife, my daughter and my mom, $22 a month total.

Scott:
That gives you a limitation on data that you have to be smart about it, is that right?

Nate:
Yeah. You have one gig of data shared, but we just turn the data off and we’re in internet most of our lives. Do you really need to be looking at your phone your whole life when you’re out and about? Xfinity has so many hotspots in town. You’re at the mall or you’re wherever, they’re everywhere. You don’t need it. If you do, you just turn it on for a second. You really don’t need data in my opinion, unless you’re like, that’s your job. But we probably should be less connected probably than we are and that’s a different topic.

Mindy:
Yeah, I agree with you.

Nate:
But yeah, you can keep looking at different parts of your budget like that since you’re not paying $100 a month, you’re paying 22 and you’re paying … that is everybody’s phone, I don’t know. Yeah, you just look at all the options of your different personal finance and try to bring it down as low as you can.

Scott:
What is your favorite joke to tell at parties?

Nate:
Well, I try to think of jokes that have never been told before. This is one people have never heard, I’m sure. Is your refrigerator running?

Scott:
Yes, I think so.

Nate:
Well, you better go catch it. Okay. That one’s been done a lot. I couldn’t think of any good ones. I thought let’s just think of the joke that’s been told the most. That’s probably the one. Yeah, I don’t know.

Scott:
I love that. I think it’s fantastic.

Nate:
My daughter said I should do this one. It’s a, what do you call a pencil with two erasers?

Scott:
I don’t know.

Nate:
No, don’t worry about it. It’s pointless.

Scott:
Ah, pointless and dull pencil joke. That’s fantastic.

Mindy:
Nate, where can people find out more about you?

Nate:
I don’t have too many places, I guess. I’m on BiggerPockets, like the real estate place and you can give them my email if they want to email me. It’s just my name, my full name, [email protected]. That’s probably the best two places to find me. I would say Facebook, but I probably would just message you, but I wouldn’t really friend you, because I’ve got all my kids’ stuff on there.

Mindy:
Okay. Good point. Good point. Okay. Well, fantastic. Nate, this was awesome. I love your point of view. I love the whole frugality thing as not a punishment, but just as a way of life. I think a lot of people look at frugality and they’re like, “Oh, well, I could never do that,” and look at Nate. Nate made $5,000 a year and still didn’t have any debt. Nate wins. Nate is doing an awesome, and I’m so thankful that you came on our show today to share your story.

Scott:
Yeah. Thank you. This is a wonderful story and really effective approach. Love it.

Nate:
Thanks for having me. I just have to say, it’s a community. It’s you guys, it’s family, friends. There’s a lot of blessings that have helped us get to this point. Thank you guys for what you do. It’s awesome. It really helps. It’s probably more than you know I’m sure, the ripple effect.

Mindy:
Well, thank you.

Scott:
Yeah, thank you.

Mindy:
Yeah, the community is so important. Last week we spoke with the Brenda Olmos and she said, “One of the biggest things is to surround myself with people who don’t care what kind of car I drive, and don’t care about what kind of clothes I wear and whatever. That’s super powerful. That’s what we’re trying to create here is just, here’s a community of people who think like you do, frugal weirdos.

Nate:
Yeah. When you strip all that other stuff away, they see who you actually are instead of your stuff.

Mindy:
Exactly.

Nate:
I think it’s better in many ways. Yeah, so thank you guys.

Mindy:
Well, I agree, but it is mine, so of course I would agree. Okay. Well, thank you, Nate. We will talk to you soon. Have a good day.

Nate:
All right. Talk to you guys later. Thank you.

Mindy:
Okay. That was Nate Forbes. Scott, what did you think of Nate’s story?

Scott:
I thought it was great. I think it was … Look; it’s been a 13, 14 year journey to FI and discovering Dave Ramsey and beginning to move some of his financial position forward. I think it’s just a highly repeatable approach here. There was no flashy event, no exciting turn of events. There were some challenges and hardships, especially in the last year, which I’m sure have been incredibly tough for him. But what I think is so great about it is, “Hey, here’s a guy with four kids and one income household, who is able to just do the fundamentals right over a sustained period of time.
Get to Coast FI and then pay off a rental property portfolio relatively quickly.” That’s remarkable and I think is really impressive. I hope that it inspires a lot of people to rethink a lot of aspects of their lives, and see if they can achieve a similar result even if they do have large families.

Mindy:
Scott, this story reminds me of the episode with the Jordan Clint.

Scott:
Jordan Clint, for those who are wondering is the guy with the enormous beard. Of course, if you listened to it, you wouldn’t have seen the beard, but he had a great beard.

Mindy:
Yes.

Scott:
That was episode 63.

Mindy:
Episode 63. Wow, Scott’s faster than I am today. I normally have them …

Scott:
Yeah I googled it.

Mindy:
I normally have them at my fingertips, but I was slow today. But yeah, his story reminds me of Jordan. Jordan has five kids, but he’s still investing in real estate. He has a job, but his wife is a stay at home mom. The bottom line is, you can absolutely reach financial independence with kids, without a computer programmer salary. You just have to be intentional with your spending. Consciously don’t spend every dime that you make. Invest it wisely. Be prepared to make different choices than other people who aren’t on the financial independence path and you will be able to make it.
You’re not going to make it if you spend every dime you make, you don’t invest anything in the future, you buy all the latest and greatest everything there is and try to keep up with the Jones’s. That’s just not the recipe for financial independence. Here’s yet another story of, I did it and I didn’t do it in a flashy exciting way, but I did it. He’s 40 now. He’s Coast FI with four kids and a low income. That’s awesome.

Scott:
Absolutely. He had a few advantages that he took advantage of and worked on, and they made his life and his finances better and that kind of stuff. I think that’s the creativity you’re going to have to bring to the table with a large family in those types of things. But I think it was really fun and really exciting and go Nate.

Mindy:
Yep, go Nate. Okay, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
Okay. From episode 197 of the BiggerPockets Money Podcast, he is Scott Trench, I am Mindy Jensen saying got to go Buffalo.