Log In Sign Up
BiggerPockets Money Podcast 225: From $52K in Debt to $100K/Month in (Almost) Passive Income

BiggerPockets Money Podcast 225: From $52K in Debt to $100K/Month in (Almost) Passive Income

50 min read
The BiggerPockets Money Podcast

As a Guest you have free article(s) left

Join BiggerPockets (for free!) and get access to real estate investing tips, market updates, and exclusive email content.

Sign in Already a member?

A lot of people in the financial independence community successfully get out of debt, but not many of them get out of debt and then start a monthly six-figure side business. One person who has done that is Deacon Hayes. Deacon was raised by a single mother on welfare who taught Deacon that debt was a way of life. When Deacon married his wife, they both collectively realized that the only way for them to live the life they wanted to, was to get out of debt.

Deacon did whatever he could to pay off his debt. He delivered pizzas and resold furniture, all while working full time. Once he was out of debt, he decided his passion was in teaching others how to get rid of their debt, so he became a financial planner and started his website, Well Kept Wallet. His story was so well received that he was brought on to record with Fox and tell their audience about his debt-free journey.

Deacon left the financial planning world after realizing he didn’t want to just help the rich, but the average person who still struggled with debt. To subsidize his business, he started a website building business, but later automated this and kept the lion’s share of the profit while doing very little work. He started an SEO (search engine optimization) business and did the exact same thing. Then as Well Kept Wallet was bringing in massive revenue numbers, he did the same, hiring another worker to fill his role so he could focus on what he loves.

Click here to listen on Apple Podcasts.

Listen to the Podcast Here

Read the Transcript Here

Mindy:
Welcome to the BiggerPockets Money Podcasts show number 225 where we interview Deacon Hayes from Well Kept Wallet and talk about creating a successful business.

Deacon:
When she asked me like, “Deacon, what do you want to do with your life?” It’s like, “Well, I don’t really want to be helping high net worth people, to be honest. I love this company. You, guys, are great. But I really would love to figure out how could I help the everyday person.” So, she’s like, “Well, we want to help you do that. So, you’re fired. But we’ll give you a severance.” And I was like, “Okay. Well, that didn’t come out the way I thought it would. But-

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

Scott:
Thank you, Mindy. People will be buzzing about that intro.

Mindy:
Scott and I are here to make financial independence less scary, plus just for somebody else to introduce you to every money story because we truly believe 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 or start and scale your own business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams.

Mindy:
Scott, I have known Deacon Hayes for a super long time. And I’m excited to finally have him on the show. He’s got a very interesting story. He created a business. He created another business. He created another business, and he just keeps figuring out how to scale and then step back, and then start something else to scale and step back. And it’s a great, great story of truly what the goal is for financial independence. It isn’t just to retire and do nothing. It’s to retire and then find purpose.

Scott:
Yeah. I mean he’s got an incredibly successful story. He’s helped a lot of people. He’s done it all from delivering pizzas to pay off his first debt and been foreclosed on and been underwater and a mortgage to building this enormous enterprise that he leads today. What a fantastic journey. And I think really highlights all of the levers of finance that we like to talk about here and a great mindset for approaching life.

Mindy:
Deacon Hayes from Well Kept Wallet, welcome to the BiggerPockets Money Podcast I am so excited to see you. I haven’t seen you in like a hundred years.

Deacon:
It’s definitely felt like a long time. I got a lot more gray hairs now. But, yeah, it’s good to see you too. Thanks for having me on.

Mindy:
I’m glad you brought that up. I didn’t want to bring that up. I also have more gray hairs. But my dad’s a redhead. So, they don’t show up as much in my hair. But, yeah, it has been a very, very long time. I have known Deacon Hayes since preschool almost, like, preschool of my financial independence years. And it’s good to have you. I love your story. And I want you to share it with my listeners. Where does your journey with money begin?

Deacon:
So, when I grew up, my mom was a single mother, welfare, food stamps, working couple of jobs. It was very much debt was a way of life like if you needed something. We even had layaway back then. I don’t even know if that exists anymore where you’re like, “Hey, I’m going to pay on this until I can own it type of thing.”
And so, that was kind of my upbringing. And so, I just kind of inherited a lot of those habits of, hey, if you want something, go borrow money. You want to go to college, get student loans. You want to get a car, finance it. You want to go on your honeymoon, use a credit card. So, those were kind of some of the habits that I learned, and that’s kind of where it all began.

Mindy:
So, well, you’re not on food stamps now. Where did the change come?

Deacon:
Yeah. So, I think really getting married was a huge catalyst for like, “Wait a second. You’ve got a different upbringing than me. And both of us actually are very bad with money. So, we should probably figure this out.” So, it was kind of my wife and I got married, and this was 2008 Hopefully, that’s the right year. And so, we literally… No. We just celebrated our 13th anniversary. So, it’s 2008.
And we realized we had very different views of money. And so, we decided, “Hey, we’re going to study. We’re going to figure out what’s out there.” I read a ton of books. And I was like, “Hey, I want to figure out how to pay off debt in the shortest period of time.” Really love the debt snowball method. So, we’re like, “Hey, first we’re going put all our money together. We’re going to figure out how much do we owe. It’s $52,000 in debt.” And we said, “Hey, I love smart goals. So, saying I’d love to not just say, “Hey, I want to pay off 52 grand in that. But I want to pay off 52 grand in 18 months.”
And my wife thought I was crazy because we didn’t make a lot of money. I think we made probably like 70 grand gross before taxes and everything. But it was like, “Hey, what if I got another job delivering pizzas? What if I went to yard sales?” And I would do yard sale arbitrage. I’d buy stuff for less and sell it for more online. Just figure out any way I could to come up with extra money to pay down that debt. And we were able to pay it off in 18 months which was amazing.

Scott:
And what year was that?

Deacon:
It’d be like 2010. So, we got married 2018, towards the end of 2018. And then, paid off 2010.

Mindy:
2008. You said ’18. You said you got married in ’18. You got married in 2008.

Deacon:
Yeah, 13 and a half.

Mindy:
And paid [crosstalk 00:05:21].

Deacon:
I’m like a money guy, and I can’t even do math. Yeah. So, 2008 is when we got married. So, 2010 is when we paid it off.

Mindy:
Okay. So, you paid off $52,000 in debt making $70,000 gross. That sounds like you really cut some expense. First of all, what was your debt? Was it credit card, student loan?

Deacon:
Yeah. So, it was credit cards, student loans, and car loan.

Mindy:
Okay. So, now you’re in 2010. You have a paid off car. You have no more student loans. You have no more credit card debts. What does your life look like after the debt? And first of all, actually before we get to that, I know I’m throwing seven things at you at once, but I love that you went out and delivered pizzas and did yard sale arbitrage and did the things that some other people might consider beneath them or, oh, I’m not going to do that. I’m not going to deliver pizzas. I don’t think that delivering pizzas sounds like a super fun job. But if it’s the difference between being in debt and not being in debt, deliver pizzas.
Good for you. I don’t know how to make that not sound condescending. But I’m very proud of you for doing all the things instead of just being like, “Well, I guess I just have debt.”

Deacon:
It’s funny. So, I delivered pizza in college. So, I thought, “Oh, this is going to be a breeze.” Well, I ended up going to a place that did burgers and fries as well, and they had a grease trap. And I don’t know if you’ve ever experienced cleaning out a grease trap but it is disgusting. And it is not… So, it wasn’t beneath me. But it was a humbling experience of like I’m doing this because I am dedicated to paying off my debt. And I’m just going to do whatever is necessary. And so, it is hard, and it took a mindset shift. But it was worth it, for sure.

Scott:
What was life like before and after the pivot to this dedication?

Deacon:
Yeah. There’s a lot of stress before because actually… We’ll talk about this probably towards the end. But I had bought some properties at the height of the market in 2006. And so, I had a lot of mortgage payments. I had a lot of stuff that I was trying to figure out. I had this student loans, credit cards. So, it’s very stressful. It’s very much like, “How are we ever going to get ahead?” Felt like we’re living paycheck to paycheck.
Afterwards, we love to travel. So, kind of one of our goals was how could we figure out how to travel internationally and pay cash for it? And so, that was one of the first things we did. We celebrated by going to Hong Kong, Indonesia, and Singapore paid cash for a trip there, and went to Disneyland in Hong Kong which I didn’t even know existed. But we had to get ourselves out of debt. We had to create some new money habits so that we could save, and we could invest and so that we had money to go do these things, where before, I would have put on a credit card. And then, we’d have to pay 20% interest on that trip.
So, it’s very much like the piece was there because we didn’t have the debt. So, we had less stress. We had more freedom because we had more choices. And we could come back from a trip and not have to continue paying for it.

Mindy:
Okay. So, you are in 2010, paid off all your debt. You went to Hong Kong and Singapore. And where do you go now because I know that you are still working for somebody else at this time. You’ve got mortgage payments. Were you underwater on your rental properties?

Deacon:
Yeah. So, one of them got foreclosed on. I lost my tenant it. The land lease went up. There’s a lot of components to it. But, yeah, it was severely underwater trying to get a short sale, wouldn’t go through because the land lease had increased like five-fold. And so, that one got foreclosed on. So, that was also another stressful point at that time.

Mindy:
Yeah. Foreclosure really sucks.

Scott:
And this is happening during your debt payoff journey.

Deacon:
Yeah. So, this this was shortly after because we have been floating it with tenants as long as we could. And so, it probably would have been, yeah, around that same time, like, 2008, 2009, something like that.

Scott:
So, when does your journey conclude, 18 months, 2008 or 2009, 2010 at that point?

Deacon:
Yeah. I mean as far as that part of the journey.

Scott:
[crosstalk 00:09:36] Yeah.

Deacon:
Yeah. 2010. So, yeah. Go ahead.

Scott:
What’s the situation you’re left with at that point? Do you still have a few rental properties? What’s the overall picture?

Deacon:
So, I had one property left that was still underwater. But I was like, “Hey, we could afford the payment. We’re going to just keep paying it. And we’ll figure it out.” And so, it was just, “Hey, we’re going to pay this down as fast as we can.” And we ended up refinancing it. So, a lot of components. They had 80/20 loans back then. So, I had 100% financing on it. So, the idea was like, “Hey, I wanted to get out from that. I wanted to have just the one loan.” So, we refinanced. So, we had 20% equity.
We started to kind of do things differently. We’re like, “Hey, we need to be wise about money.” So, kind of went from having all this stress, having this rental property that I couldn’t float. So, just having one property, that was our only debt. And that’s kind of where we go from there.

Mindy:
And what is the biggest influence on you? You said you read some books. Was there one or a couple of philosophies that really stuck out and changed your mindset and approach?

Deacon:
Yeah. So, the Dave Ramsey’s Total Money Makeover was kind of the key thing for me. I’m a very simple guy. So, it was like, “Hey, pay off your debt. Invest. Give money away to worthy cause.” I was like, “This seems like a simple plan. I could follow this.” So, that was a huge kind of it gave me structure. I’m also a visionary. So, I need someone to say, “Hey, here’s seven simple steps.” And so, that was super helpful for us.

Mindy:
And at the time, were you renting as well or did you own your own house?

Deacon:
Yeah. So, I owned one. And I rented out the other. And so yeah. At that time, we just had that one property that we owned.

Scott:
What is Dave Ramsey’s position or approach when you have a rental property like this with that? Is it to sell the property? Is it to refinance it and pay it off like that? I’m actually curious.

Deacon:
Yeah. I would say he’s very much like if you owe the money, pay it. But if you can’t pay it, you got to do what you can to make it. And so, the only thing that I could see at that time was a short sale. I was like, “Hey, this is a way where a non-recourse state. We have the ability to get out from underneath it and kind of start out fresh.” And so, that was our best shot. And I was so just discouraged when we had an offer. And then, when they went through their due diligence, and they noticed the land lease, it just dissolved. And I was like, “I was hoping to do everything I could to make it right.” And so, that was definitely a kind of a hard season there.

Scott:
What state are you in?

Deacon:
Arizona.

Scott:
Arizona, okay. And so, in Arizona, when you say non-recourse, that means they can’t come after your personal assets when they foreclose in that property with that rental property loan. Is that unusual or is that one of the few states? Are there a number of states like that?

Deacon:
I think as far as when that happened, I want to say there was like 11 states. So, it was more unusual. Yeah. It was basically the property stood for the loan. So, if you can’t pay for the property, then the bank takes the property back, and that was kind of the idea behind it. Yeah.

Mindy:
And what’s a land lease? I know that there’s people listening who are like, “What does that mean?”

Deacon:
Yeah. It’s funny. My grandpa even warned me when I bought the place. He’s like, “You need to read the CCNRs and figure out what are all the details.” So, the land lease is basically saying, “You don’t own the land. You own basically inside the walls.” So, it’s kind of this idea that somebody else owned the land, and they’re just renting it to you, and you can have the property on top.
Well, you’re at a real disadvantage because if they owe the land, you need the land to live there, and they make the rules. And so, there was some sort of statement in the CCNRs that said after 30 years, they can renew it at whatever, is a reasonable market rate, whatever the term was. And they determined that it was like 5X we were paying.
So, I was paying like $370 a month or something for an HOA fee where I was paying like 150 before that. It was substantially different. And part of that was the land lease and part of it was just fees going up or whatever. But that on top of not being able to find renters, it was just a disaster.

Mindy:
So, you bought a single family home that-

Deacon:
A condo.

Mindy:
Oh, a condo. Okay. Okay. So, you bought a condo where the building didn’t own the land. Somebody else owned the land. And then, you rented the land. That’s very interesting. We’re not here to rehash all of that. But I just want to share that with people who are considering condos because I’ve never had that condo disaster. I’ve had my own condo disasters. The CCNRs are the covenants, something and restrictions. And I mean this every day. And I can’t remember what they all mean.
Basically, it’s the rules that surround what you can do and how the whole thing works. So, if you’re considering buying a property and you get this giant like hundreds and hundreds of pages document that’s the CCNRs, read every single one of those because there’s a lot of things in that… Nobody ever reads those, first of all. So, you’re not alone in that.
But if you’re listening to this, read those and read every single word and question what it means, and keep questioning until you know what it means because, yeah, were you in year 27 of this 30-year rental?

Deacon:
Yeah. It was towards the end of that rental. And so, it was across the street from Scottsdale Fashion Square which is the premier shopping center in the southwest. So, I think what their idea was at 30 years, if they wanted to demolish this thing and build more retail, that they had the flexibility to be like, “Okay., “Hey, we’re going to basically not least land out anymore. And we can do that.” But thankfully, they renewed it. But in order to keep it, we’re like, “We’re going to have to pay a premium to live in this location.”

Mindy:
Yeah. When somebody can’t do some legal documents, read them, and read all of them even when they’re this thick especially when they’re that thick because when they’re this thick, it’s never going to side in your favor. And I’m saying that to people listening, not you, Deacon. I know that-

Deacon:
I’ve learned my lesson now. Yeah.

Mindy:
You’ve learned your lesson now, yes. You learned. Learn from Deacon’s lesson too. Okay. So, go ahead, Scott. Sorry.

Scott:
I was just going to bring us back to the story where we’re in 2010 and you’ve paid off all your consumer debt and all these types of things. You still have a mortgage, it sounds like, on a rental property. Do you own a primary at this time as well?

Deacon:
Yeah. So, we had another condo that we owned as well.

Mindy:
Okay. And so, what’s the total… You’re debt-free. Do you have a positive net worth with equity in these things? Are you still negative because you’re under water or what does that look like?

Deacon:
Still negative. Yeah. So, we’re talking 2010, still post-financial crisis. I think values were 40% down. So, I mean it was worth… I think I owed 180, and it was worth 120 or something. It was significantly less.

Scott:
So, what do you do from there?

Deacon:
So, the idea was, “Okay. Let’s figure out. We need to have some savings.” So, that was part of our deals. Let’s figure out six months’ savings. Let’s figure out how we can start investing because my strategy for investing in real estate wasn’t working out well. So, we started opening an IRA and started contributing to that regularly.
So, started to figure out just kind of those simple money habits of like, “What should we be doing differently than we were doing before to better our financial position?” And as well, we wanted to expedite paying off that condo which eventually we moved into a house. So, we paid off our house in full. But it was kind of like that was the next steps, was how do we figure out how to pay this off.

Mindy:
And what was your job at the time? Were you getting raises? Were you still making 70 gross?

Deacon:
So, I was actually in wood flooring sales. And it was actually-

Mindy:
Oh.

Deacon:
It was horrible because it was post-recession. And we were doing luxury wood floors. So, these floors were $40,000, $80,000. They were ridiculous floors which was… They were beautiful. They’re like reclaimed wood from the 1800s in these multi-million dollar homes. But just the impact of the financial crisis just totally drove down that market. And so, no. Actually, I had to look for outside sources of income.
And one of the reasons that kind of started a website was like, “Hey, could I share my knowledge and somehow make a living with it someday?” That was kind of the hope. So, at that time, I started a site called wellkeptwallet.com. And I was just really sharing tips, like, here’s how I sold my upside down car. Here’s how we live on 200 bucks a month in groceries, whatever it was at the time.” It was like, “How could I figure out a way out of this industry to doing something on my own?”

Scott:
How do things evolve from this state? you’re starting a business. You’ve got this luxury wood floor sales job with this. You’re building your savings with that kind of stuff. Is it a grind for a couple years or what’s the next kind of an inflection point in the journey?

Deacon:
Yeah. So, honestly at first, that business wasn’t the main thing. It was like, “Hey, it was really just a blog.” It’s like, “Hey, this is going to be a way that I can share tips.” And if I can make money with you, great. But I didn’t really know much about it. It’s 2010. So, I was like, “Hey, how could I get into personal finance and help people?”
So, I became a licensed financial planner. And I was like, “That’s the natural next step.” Get into financial planning. And then, when I got into that industry, I realized that they really only service high net worth people. If you want to make money in financial planning, you’re servicing people that are good with money. I mean they literally have millions of dollars. So, I’m here making these financial plans. And I’m like, “These aren’t the people I want to help.” These people already know how to manage money. To some extent, they know how to make money. They know how to save money. They’ve got a decent net worth. So, they have something figured out.
It’s like how can I help regular people. And so, this is actually a funny story. So, I’m a financial planner. And I get this email from Fox News saying, “Hey, we’d love to have you on our show in New York City to share your story paying off your debt.” I was like, “Wow. Me? Really? Let me bring that to my supervisor at my job because I said as a financial planner, you’re a representative of that company. And so, if I’m on TV and I’m talking about financial stuff, they need to know about it.”
So, I go to my boss, and she’s like, “Why are you going to be on TV?” Oh, we paid off this debt, and I’ve got this site, Well Kept Wallet. But it doesn’t really make any money.” And she’s like, “Oh, interesting. I feel like your site is a compliance issue.” So, just to kind of like put this really cool experience that I’m like, “We’re going to fly to New York City and be on the news,” to like, “Hey, you could lose your job now.” And I’m like, “Really?”
Well, so thankfully, I had this one instance where I was on a local channel. And I had Google AdSense back then. And they said, “Hey, what did you use to track your debt?” I was like, “I have this budget form. I have it on my website.” They’re like, “Hey, can we film it?” And I’m like, “Sure.” So, I call it a starter budget. Well, no joke, I made $3000 in a week from Google ads because I got this media exposure.
So, I had this one experience where I had made some money, but it dwindled. So, anyways, when she asked me like, “Deacon, what do you want to do with your life?” I was like, “Well, I don’t really want to be helping high net worth people, to be honest. I love this company. You, guys, are great. But I really would love to figure out how could I help the everyday person.”
So, she’s like, “Well, we want to help you do that. So, you’re fired. But we’ll give you a severance.” And I was like, “Okay.” Well, that didn’t come out the way I thought it would. So, I kind of had this experience where I was forced to kind of figure it out. It’s like, “Hey, I paid off my debt. We had six months emergency fund. We got this experience to be on national TV. And I had a little bit of taste of local stuff.” I was like, “Hey, I probably could figure this out in six months. And so, that’s kind of where it evolved to.

Scott:
What year was this?

Deacon:
2013, I want to say.

Mindy:
And they just let you go. I mean I get what you’re saying. It can be less than fulfilling to help somebody who already has a bunch of money, make a bunch more money. But still like, “Oh, we want to help you. You’re fired.”

Deacon:
Yeah. It was much more diplomatic about it. But I mean that’s kind of like the nuts and bolts of like, “Hey, they got a business to run. They want people.” Their average employee was 10 years. They want people that are long-term people. And so, I got it from their position. It took me a while to get it though. I was definitely kind of hurt by it.

Mindy:
Yeah. So, when you lost your job, what was your personal financial position? Did you have a mortgage? You had said something about six months of savings.

Deacon:
Yeah. So, we had saved up kind of our six-month emergency fund. We paid off all our debt. We had just that one mortgage. And we had refinanced it. So, we just had the one. And so, it was a low cost at that time. I mean I think it was like a thousand bucks a month or something. For being a condo, it was a decent deal.
So, I felt like I was in a very low risk. My wife was a teacher. She didn’t make a lot. I think she made 30 grand a year or something at that point in time. But it was one of those things where… So, she had a stable income. And I had this severance. And so, now, “Hey, let’s figure this out.”

Mindy:
Okay. So, what was your first task?

Deacon:
Well, okay, so here’s the funny thing. I didn’t have the Well Kept Wallet thing figured out. But what I knew is how to build websites. And so, I had a buddy that his family had a sod company which is grass for yards where they put sod down. And he’s like, “Could you build me a website?” And I was like, “Probably. I built Well Kept Wallet the first time.” It’s a WordPress site. And so, I kind of did some research. And I was like, “What do people charge for blogs.” And it was like error for websites. And it was like a thousand to $5000.”
And I’m like, “Well, I’m new.” I’m like, “Hey, would you pay me 1200 bucks to do this?” He’s like, “Yeah.” So, I was literally just like, “Hey, here’s the skill that I developed to build this website. I’m going to try to help people do that while I’m figuring out Well Kept Wallet.” So, I did that. And then, I offered some marketing services and how to get their blogs out there and stuff like that. And so, I just figured out how can I make money while I’m building up this website.

Mindy:
When did Well Kept Wallet start to take off?

Deacon:
That, about 2016. So, it was about three years later. But I was building up the entire time. So, one of the things that I realized was this thing called Google and organic traffic. I was like, “Oh, my gosh. This is amazing. Google just sends us people to our website” How can we get more of that?” And so, I actually ended up creating an SEO company because I figured it out for my own site to get visitors to our site. And so, I was like, “Hey, I built these websites for people that were businesses in the area. How could I now get traffic to their websites?
And so, I built that up. And that revenue kind of sustained me. Well, I’m like figuring out Well Kept Well AB testing. So, probably from 2013 to 2016, that was my primary source of income, was this random business, I never thought I would create but helped kind of get me to a point where I could invest the money into Well Kept Wallet to grow it, get more reach, et cetera.

Scott:
How much revenue is this business doing? And are you building wealth during this time or just kind of like staying afloat?

Deacon:
So, that business was making about 150 a year. And as a financial planner, I was only making 50 a year. And so, it was about 3X what I was making in a traditional business. But what I learned was it’s a service-based business. It’s very demanding.
I would get texts from business owners at weird times. I would get calls. I’d have to answer the phone. I’d be like, “Hey, this is Deacon from Phoenix SEO. How can I help you? It felt a little bit like slavery because it was like, “Gosh, I’m attached to the hip 24/7, it feels like, to this business model where I felt like, “Hey, I wanted to build something a little bit more hands-off that didn’t require so much my attention, and that’s kind of how I shifted to Well Kept Wallet and what it is today.

Scott:
And when, later, you’re putting a lot of work into this, what are you doing with the surplus dollars and how do you reposition your business around something more scalable and do you take an income hit? So, there’s a couple questions in there.

Deacon:
Yeah. So, one of the things I want to do is reinvest into the business. So, I hired people at least for the SEO company. I also was maxing out at that time was probably just the Roth IRA. I was like, “Hey, can I do at least max out a Roth which is like five or 5500 or whatever it was back then?”
So, that was kind of our deal was like, “Hey, let’s do that and grow the business. So, at the same time, we were making extra payment, I think. I would say probably about a thousand bucks a month on our residence. So, we’re trying to snowball the mortgage. We’re maxing out the Roth. And we’re growing the business. That’s kind of my mentality at that time.

Scott:
Do you still have the rental property during this period?

Deacon:
No, although the rental property’s long gone at that point.

Scott:
Okay. You sold that. Did you get a loss or something and pay off the debt or how did that go?

Deacon:
Yeah. So, that one was when I tried to short sale. It got the foreclosure. So, we were just basically free and clear of that one. And so, then, we just had the one property that we lived in where we refinanced, had the one mortgage and made it super simple.

Mindy:
Oh, I think that Scott and I thought you owned two rental properties.

Deacon:
No. So, I owned two properties. One was a rental. One was primary.

Mindy:
Oh, okay. I think that’s where the confusion was.

Deacon:
Yeah. And I think because I said multiple mortgages because I had a 80?z20 loan. So, I had like three mortgages. But I only had two properties.

Mindy:
Okay. Okay. That helps clarify things a lot. I thought you still had another rental. Okay. So, let’s see. You reinvested into the business. You’re doing the Roth IRA. Does your wife have… As a teacher, is she investing in the teacher pensions and investment funds as well?

Deacon:
She is. Yeah. So, the way that Arizona works, they mandatory take it out of your paycheck. And it’s like 11%. So, she has a pretty good pension from the state. So, we were doing that as well because you didn’t have a choice. And then, in addition to that, we were doing the 5500 and the Roth.

Mindy:
Okay. So, where does the turning point come from this SEO full-time job into your now life of leisure?

Deacon:
Yeah. So, I went to this conference called I think it was called Digi back then, Digital Collab. And Kyle Taylor from the Penny Hoarder spoke. And he was like… And I’ve known him for a long time. And he started talking about how they were doing like, I forget, it was like a million dollars at that time. I think it’s like 2015. I was like, “A million dollars a website? How is this possible?” And so, he talked about Facebook ads and trying to get more traffic and how he’s arbitraging the cost per lead and all this kind of stuff. This is amazing.
I’m not doing this right. I could turn this into a business. Like here I am servicing other businesses on how to grow their business. I’m like, “What if I just re-focused onto my own business and figured out how to grow that?” And so, that’s when I created a pro forma. And I was very serious about, okay, in month one, I’m going to try to make four grand. In month two, I’m going to try to make six grand. I kind of had this month after month, this is what I’m going to do. And here’s how I’m going to execute.
And that really changed it from this hobby kind of on the side. I hope it becomes a business someday to, “Oh, wow, this actually is a business. And I can grow it.”

Scott:
And this is in 2006, you said?

Deacon:
Yeah. Well, 2015 is that like epiphany, I think. In 2016 is when I started putting it to like pen to paper.

Scott:
What’s the profile look like from there? Does it match your pro forma? Do you beat it?

Deacon:
Yeah. So, here’s the interesting thing. So, there was a lot of dollar training because I was trying to figure it out. At first, I was doing Facebook ads. So, I hired someone to do Facebook ads. You got to pay for that. I had to pay the cost of the Facebook ads. But what I realized is I would take my profit. And then, I put it into creating new content to rank in Google because I was like, “Hey, I figured out that part of it.”
And so, I was pretty much breaking even probably for the first two or three months. And one month, I think I was negative. But then something interesting happened. It was around like month six where it started to have kind of like this hockey stick approach because what I was doing was I was reinvesting the profits into content. And because I had this SEO business, I didn’t need the money from Well Kept Wallet. So, I just kept on putting money into new content.
Well, I started to get exponential growth on organic traffic which meant that I didn’t have to pay for Facebook ads anymore. I was like, “Gosh, Facebook ads. It’s like you pay, you get traffic. You pay…” It’s like this is not passive. This is very like you have to continually grind at it versus the SEO traffic seemed to be very stable. And it was growing. So, I started to wean off of the Facebook ads which meant my costs were a lot lower and kind of focused more on how do I grow a content team? How do I get writers, all this kind of stuff, to make it more passive. And at one point, I was like, “I want to hire a blog manager so that I don’t even have to do any of this stuff,” and that’s pretty much when things started to change.

Mindy:
So wait-

Scott:
And that whole timeline is six months.

Deacon:
I would say a year would be to where I hired a blog manager within that year. I don’t remember exactly when. But it was like, “Hey, I need somebody else to kind of take this over.”

Mindy:
Were you doing your SEO company work as well while this was happening or were you focusing on this full-time?

Deacon:
So, here’s something cool. So, I hired a guy to run the SEO company while I was doing this. And so, that ate into my bottom line. But I still made close to six figures hiring somebody. And I was able to kind of focus my efforts more on Well Kept Wallet.

Mindy:
Wait, you made six figures to do nothing with your SEO company. You hired somebody to do all the work, and you’re making six figures doing nothing. And I’m oversimplifying. But-

Deacon:
Yeah. Well. So, I would do like once a week. We’d do once a week meetings. So, I’d catch up what problems do you have. Every once in a while, he would ping me about a client. So, this is where I would say that idea of passive. It wasn’t entirely passive. But I am talking about maybe a couple of hours a week worth of work to make six figures. Yeah. It was a pretty sweet setup.

Mindy:
I do that.

Scott:
Well, what you did is you gave up hundreds of thousands of dollars in income from the job to pay this person, to make it passive. Is that right?

Deacon:
Well, so, here’s the cool thing. So, not hundreds of thousands. So, one of the things that I realized is outsourcing. So, website building. We can get in technical details if you want to. But I realized I’m not really skilled at building websites. I was like, “Hey, what if I could find someone on Upwork or something that could make websites?” And then, I would just kind of fine-tune the process.
So, I found a guy that would make a website for 200 bucks in Bangladesh. And I was like, “This guy, [Hemu 00:33:42] was amazing. And I’m like, “Okay. Well, I can manage the process. And my hours are still valuable.” The site’s still worth $2000 or whatever it is. But I don’t have to do the grunt work. So, it was a very high margin business, but didn’t require a lot of hours.

Mindy:
Okay. So, yeah. I don’t like the way you phrased that. You gave up hundreds of thousands. No. He freed up a ton of time by providing a job for someone else.

Scott:
I thought you were saying you hired someone to manage the business for you. You’re saying you contracted out the work.

Deacon:
Well, no. So, I did. So, I hired employee. But he was only working Monday, Thursday, Friday. And so, there was kind of like this. The cool thing with SEO is there’s not an overnight demand. It’s a, “Hey, we’re going to work on this at this time for this client. We’re going to work on this at this time for this client.” So, it was very much like it wasn’t a nine to five. I need someone salary that’s available.
I think I was still answering phone calls at that time. So, I wasn’t completely freed up. But you’re talking about a couple phone calls, maybe a week. And maybe those would be like 15 minutes and be like, “Hey, you know what? You should talk to Steve. He’ll get you set up.”
So, it was very much like I read the book, 4-Hour Workweek. And I was like, “Hey, how could I figure this out?” That was kind of the idea behind it, was how could I hire someone. And this guy was looking to do something that was paying 15 bucks an hour. And I was like, “Dude, I could train you and pay you 25 bucks an hour.” And so, it worked out great. It’s a very unique thing. I don’t feel like a lot of people are like, “Hey, how could I create a passive income business that makes six figures and hire somebody else and make this all work?” And that wasn’t my goal.
It was just kind of like, “Hey, I don’t like this. I like personal finance. How do I help people with money? And this guy needed a job. And he was really talented and had an experience in marketing.” And so, just kind of all the signs aligned.

Scott:
I don’t like how I phrased it either. Now that I hear this, I was figuring what you’re saying is, “Oh, I hired somebody out to do a lot of this work. Therefore that’s going to cut into the profits in there, but free up tons of time.” So, it’s the right investment with that. But that’s the trade-off. You’re saying you didn’t really even have to make that trade-off because of the creative way you structured, the employment, and the workflow for your business.

Deacon:
Yeah. What I found is I like to hire people that appreciate it. I feel like there’s two different types of people. There’s people that are really over qualified. They go to the best schools. They spend all the money to get the degrees. It’s like they got all these certifications. You’re like, “I can’t afford to pay you 100 a year.” This guy, he used to work in marketing and had Motorola as a client. But that was 20 years ago. And he’s like, “I just need something.” He’s closer to retirement age. He’s a sharp dude. He’s like, “I just need something to keep me busy, that I’m enjoying, and make more than 15 bucks an hour.”
And I was, “Dude, you are a savior to me because I need you. And I’ll pay you 10 bucks more than what you’re going to get. And I’ll train you everything you need to know so that you now have a valuable skill set that you can go and use somewhere else.” And so, yeah, that was more my route is find the people that are hungry that want it versus the people that are overqualified that I can’t even afford anyways.

Scott:
And is this person still working with you?

Deacon:
So, I sold that company. I sold it for 100 grand. I sold it for less probably than I should to a friend who wanted to get out of the corporate world. Him and his wife worked in the corporate world. They wanted to not be a slave anymore. And so, we just figured out, “Okay. It was like one times net profit,” was what I sold it for which is crazy in the business world. But I just thought, “Hey, I don’t want to go through a broker,” have to pay the fees, have to go through, hey, provide all the financials. Hey, tell me how you don’t work in the business because most companies when they buy something, they’re like, “No. You actually do work in the business. So, therefore, we’re going to value your time, and therefore, we’re going to take that out.”
So, anyways, I sold it to a friend. But he still works for my friend. And he loves it. And he works right upstairs actually. I’m in it’s like a four-story building and then on the fourth floor.

Scott:
That’s awesome. That’s a great story.

Mindy:
Okay. So, the way that I hear it, Scott, is that Deacon took your four levers. And he took the create a company lever and created it, then hired somebody to come in and do a lot of the day-to-day. He stepped back. He’s still involved in it. He said he’s making six figures working a couple of hours a week. I will take that job all day long. You come in, and you smooth over or you fix the problem or you give advice. And then, you step back again. And the person that you trust is running it.
You said he wanted to make 15 an hour, and you’re paying him 25. I have always subscribed to this theory of passive income by creating a business where you get it all up and running, you know how everything works. And then, you hire somebody that you pay very well to handle all this day-to-day as long. As you can still make money doing literally nothing, who wouldn’t sign up for that all day long? That sounds fantastic. I love that story.

Scott:
Yeah. It’s a great gig. So, what happens with your core business that you’re refocusing your attention to?

Deacon:
So, for Well Kept Wallet?

Scott:
Mm-hmm (affirmative).

Mindy:
Mm-hmm (affirmative).

Deacon:
Yeah. So, it started to grow exponentially. And it was as crazy because I like looking back at the sheets because it started to grow to places where I never would have thought. So, at one point, we were at 1.2 million visitors a month making over 100 grant a month in revenue. And it was like this is crazy because like I told you, when we were paying off our debt, we made 70 combined. So, that’s my wife’s salary, my salary. I was making 40 grand a year. To make over 100 grant a month was just ridiculous.
But it then became with a lot of challenges. With growth, I’m not a very detail-oriented person. So, figuring out how to make the ship run at that scale was a lot more difficult. So, I was like, “Hey, I’m going to sacrifice some things for quality over quantity.” And so, basically, we stopped doing sponsorship deals. We stopped doing a lot of things where I felt like a lot of things were going by the wayside. And we really streamlined things to where it didn’t require a lot of my time and attention. And so, we took a little bit of a revenue hit from it, but still made more in a month than what I would make at a full-time job and most of it passively.

Mindy:
So, you said that you hired people to create content, and you streamlined things to not require your time and attention. At this point in time, what are we, at 2017, 2018? How much time are you spending there versus it’s bringing in $100,000 a month?

Deacon:
Yeah. So, at that point in time, I still had a graphic designer that came in the office who was an employee. And so, I was actually spending a lot of time at that time. So, it was probably 20 to 30 hours a week. But that’s when I decided that I kind of wanted to step back. I was like, “Hey, gosh, I’ve created something bigger than I ever imagined.” I don’t want the pressure of like these big companies. It’s just a different level when you get to that point.
And so, that’s when I started to develop, okay, here, I want my blog manager to do this. I actually ended up firing my graphic designer because I felt like she was overcharging me and under-delivering. And I found Design Pickle which is much more hands-off. I don’t know if you heard of that, but it’s like an outsourced design firm. So, I was like, “Hey, I read this book called The ONE Thing by Gary Keller. And I decided I’m going to try to do like what’s the one thing that if I do it everything becomes easy or unnecessary?
And I literally removed myself from the equation after that point which brought some different challenges. But, yeah, so, probably the end of 2018, 2019 is when I was like pretty much I didn’t have to do anything. I had people doing editing, SEO, graphic design, kind of remove myself from the business.

Scott:
One thing I want to point out is as you’re doing that, the Well Kept Wallet brand, I don’t think, needs you as an individual. The brand stands for itself. The content stands for itself to a large degree. Is that right to a certain extent?

Deacon:
Correct. Yeah. I kind of removed myself as the figurehead. And it’s more of a brand that has multiple different writers.

Scott:
Yeah. So, what you’re doing here is both very challenging, I want to observe. Everything you’re doing is both increasing your profit, increasing your dollar per hour value of your time because you need less time to sustain the amount of profit and making your business more valuable. And a lot of people, I think, fall into the trap of entrepreneurship in this industry, the world of personal finance with this where it’s all about them. And that creates a tremendous amount of work. And it takes a lot of courage and a lot of reading, and these types of things to pop out of that and do the things that you’re doing which not only increase your profit, your dollar [inaudible 00:43:12] time but also the value of your business.
Your business can be sold when it is not all about your personal name, and those types of things. So, these are all things I’m observing about your story and admiring about the way you’ve constructed a lot of these things over the last couple of years.

Deacon:
Well, thank you. Yes. I will say I don’t know if you want to go into this now. But I mean it created some challenges in like self-worth. You’re like what do I actually do? What value do I bring? You know what I mean? How do I spend my time? I like playing Fortnite. I’m not going to spend eight hours playing Fortnite.
So, there was this kind of like reckoning mentally, emotionally like what should I be doing with my life? There’s more to it than just outsourcing everything. So, that started to kind of get the wheels turning of like what should I be doing?

Scott:
Yeah. So, I want to get into that before. We do, you were making $100,000 a month which just even saying that sounds so ridiculous. At the end of 2018, 2019 where you were completely outsourced, how much were you bringing into the business?

Deacon:
Yeah. So, we did take a revenue hit. There was a Google update. And that’s the nature of our business, is Google changes the way that they view websites. So, I want to say we’re probably still 70, 80 at that time. So, not peak, but still comfortable. You can still have a lot of money to grow, still decent income to invest. And we were using it to pay down our mortgage on our primary residence. We had moved into a bigger home. But yeah, we were probably making about 70, 80 at that time.

Scott:
Is this revenue or net profit?

Deacon:
So, revenue. But our margins are pretty good. So, probably on 70, I’m bringing out around 40 to 50.

Scott:
Oh, wow. That’s immensely profitable.

Mindy:
Yeah. Well if you need help trying to live on 40 or $50,000 a month, I can help you out. You can apply to be on our Finance Friday Show. And Scott and I can look at your expenses and see where you can cut some things. So, that is fantastic. But like you said, it comes with some, wow, they don’t need me anymore. What am I going to spend my time doing?
Scott has said that should he ever retire, he’s going to spend the first months playing video games which I think sounds awfulness. So, what do you do all day, Deacon, besides play Fortnite?

Deacon:
Yeah.

Mindy:
That’s a video game.

Deacon:
I play video games. Yeah. I play video games I have young kids. So, I was helping out the kids going home early and which was good to spend time with the kids and the family and stuff like that. But there’s this definitely this itch of like is this what life is about. I actually feel like we’re created to work. I personally have this desire to be productive to add value. And I felt like I wasn’t doing that. I was like, “Yeah. Okay. That’s great.” It is amazing. And I will not discount like the revenue and creating a business that’s self-sustaining is amazing.
But if you can’t spend your day doing something where you feel like you’re adding value to the world, it becomes very empty. It’s very disconcerting. So, that was where I’m like, “Hey, I want to get back into the business. I want to figure out what could I do.” And I like making videos.
And so, I just thought, “Hey, I could start doing some YouTube videos.” I would embed them on the website. I didn’t want to be a personality. But I thought, “Hey, if there were some natural ways that we could kind of do this to where it’s not like me just trying to be on the front of the site, it was more, “Hey, we have a passive income post. I’ll do a video on passive income on YouTube. And we’ll just embed it on the site.”
So, it’s less about me being a personality and more of like, “Hey, this is just additional content that we could add. So, I started to figure out ways that I could kind of implement stuff that I liked. I did some financial coaching calls. I was like, “Hey, I’ll just do free financial coaching and just find out what people…” Probably similar sounds like what you ought to do on your Finance Fridays where it’s like, “Hey, how could I just help people that are struggling with their money?” And so, just kind of played around with some different things until I landed on what I’m good at.

Scott:
Yeah. I think that makes perfect sense. That’s what the founder CEO should do, thought leadership with this kind of stuff when your business is scaling with those types of things. I love it. Go ahead, Mindy.

Mindy:
I was going to say well this is kind of what the whole purpose of financial independence is about you take yourself away from the obligation of working to put food on the table and working to finance your life. You’ve got the money taken care of. And now, you can go do the things that you like. You said you like making videos. I bet you don’t really like calling up people and asking them to pay their invoice. I bet that’s not part of your day-to-day life.
So, once you have your finances taken care of, you can focus on the things that you like. When you focus on what you like to do, you’re doing it better. I’m sure you’re making way better videos than if you were trying to run the SEO company and trying to run all of Well Kept Wallet all by yourself. Your videos would be haphazard and like, “Hey, you should make passive income. Follow me on Twitter.” It won’t have the passion behind it because it’s more of a slog.

Scott:
Yeah. I also wonder if there’s a phenomenon we’ve observed with a lot of folks. And perhaps Mindy and I and you have all gone through it as well dealing with this where it’s like, “Okay. Financial freedom is the goal for so long with a lot of this stuff.” And it’s such a grind. And it takes so many years. And then, one day, you pop up after you’ve approached these fundamentals, and you’re like, “Oh, I’m there now;” What am I doing? It is hard to reset and be like, “No, I’m doing exactly what I want to do because I want to do it because I choose to be here, and all of my decisions have put there,” versus I have to be doing this because I have this goal looming ahead of me. I have to provide for the family or whatever that is.
That is a great problem to have, the problem that everybody probably listening to this show or most people want to have. But it’s still a problem. And it’s still a self-actualization concept with that. So, I think it’s definitely worth discussion with that.

Deacon:
Yeah. I have a mentor. And he said something, he’s in his 70s, that was really impactful to me. He’s like, “People should be retiring towards something, not away from something.” And that really stuck with me because I feel like I kind of got to a place where I was like, “Hey, I want to get away from the SEO company. I want to get away from working the nine to five. I want to have my own business.” And then, when I got there, I’m like, “Wait. What am I going to do now?”
And so, I think that there is this almost like vision boarding where you’re like, “Hey, where do I want to go,” and actually retire towards something versus like, “Hey, I don’t like this. And I just want to get away from it. “And so, that was very helpful for me.

Mindy:
Do you know who he reminds me of, Scott? Tiffany Aiche. A lot of your story is similar to a lot of her story. But you just said something so profound. You should retire to something, not away from something. And I’ve said this before. So many people focus on the retire early part of the financial independence. My husband is retired. And once he retired, he’s like, “Well, what am I going to do? Now, I have to do all the things.”
And he does. And I wish he would stop. But if you just sit around and do nothing, you’re going to have such a horrible existence. It’s really fun. I’m sure Scott has said, “I’m going to do video games for six months.” I bet Scott would really, really enjoy. He says he’s not going to. But you’ve got a high stress life right now, Scott. I bet you would really enjoy video games for a solid week, maybe two weeks. And then, after that, you’d be like, “Well, I got that out of my system now. what?” And you’ll probably still pick them up. But you’re not retiring to play video games forever. You would retire to go create something else just like Deacon, just like Tiffany.

Scott:
So, yeah. When was this epiphany? Was it 2018 or [crosstalk 00:51:57] time?

Deacon:
It would have been like 2019, 2020, probably before the pandemic. Yeah. It was very much like, “Hey, I need to get back into things.” And that’s when TikTok happened. I was like, “This is the thing that I never thought that I would enjoy.” One good thing that came out of COVID was TikTok for me.

Scott:
So, what happens here? So, you come back. You’re doing thought leadership and video, and these types of things. And you’re really enjoying it and bought back in, is what I’m gathering with this?

Deacon:
Yeah. So, it was more like, okay. So, I read this book, Traction. I know there’s a lot of stuff in here. But it was more like how are you wired? I’m a visionary. I needed an operator. So, literally, my blog manager had quit right before COVID happened. And I’m like, “I need a blog manager because I’m not good at this.” And so, I put a thing on Facebook saying, “Hey, this is what I need specifically.”
And I found this lady, Julie, and she is just a huge blessing. She is amazing. So, she took over as the blog manager, and she’s very much more organizational. So, like, “Let’s put structure to things.” And so, now we use Asana. And I’m involved in Asana. And I understand what is happening versus being kind of clueless and being like, “Hey, you’re just taking care of stuff.”
So, anyways, that’s a side note because that’s part of the story. But TikTok, I love rapping, so lyrically rapping. And so, I’m delirious. It’s the pandemic. And I’ve got young kids, four and six years old. And they have books that rhyme. And I’m like I wonder if I rap children’s books on TikTok to old school beats like Warren G, Snoop Dogg, Eminem, whatever it was. It’s like, “I want to rap these books.”
And so, they started getting some traction. And I put them on Facebook. And people will be like, “Oh, I love those.” And I was like, “This is cool. But once again, I don’t feel like I’m transforming people’s lives.” It’s entertaining. But it’s not like where I’m at. So, I’m like, “I wonder if I actually started doing money tips on TikTok.” I’ll transition from being the guy that raps children’s books to giving money advice.
And so, no joke, within six months, it grew to 14,000 followers on TikTok by giving people money advice. And I was like, “This is amazing,” because I’ve had a YouTube channel forever. Never experienced that kind of growth. And so, it kind of gave me this new… Over the past year, I’ve been excited. I bought equipment. I’ve done more videos. I’ve hired people. I got this vision board over here with all these different ideas for TikTok where it kind of gives me new life, a new direction for how do I help people when it comes to their money because I also like short videos.
That’s why TikTok is awesome because they’re like 15 to 60 seconds where YouTube is 10, 15 minute videos, maybe an hour long because you’re probably watching this on YouTube right now. But I love that. Thank you. But for me, personally creating content, TikTok has been awesome.

Scott:
That’s really cool. We do not really do much on TikTok at BiggerPockets. But I’m really interested to learn about it. It’s like one of those whole mystery boxes for me because I don’t use it with that. But what have you found people people like with what you’re doing?

Deacon:
Well, what I found is I wanted to be a user of TikTok first. So, I understand how it works. And really, it is super fascinating. People want simplicity. And if you could break down something complex in less than 60 seconds and make it simple, just helped somebody. I watched a parenting video on TikTok that I was like, “This changed my paradigm on parenting in 60 seconds,” because the way that you have to think as a content creator is I only have a short period of time. And I have to really break this down step by step.
So, I get someone to where I want them to be. And so, they show this picture of a kid just like waving one of those kitchen faucets around and spraying water all over the kitchen. And the original TikTok guy said, “Oh, yeah. And I shouldn’t spank this kid.” And then, someone responded, and they said, “No, you shouldn’t. And here’s why.” That kid is two years old. They don’t understand what a faucet’s for.
You need to be able to understand that you need to train them that the water goes in the sink, not out… So, it changed my perspective on when you’re giving people information, we’re trying to change their mindset, their behaviors when it comes to certain habits, and kind of making it in such a way that it’s entertaining, but simple and easy to understand so that you can execute. And so, that’s what it’s done for me, has helped me to create content that can do that when it comes to saving for retirement, understanding diversification, investing, paying off debt all those things.

Mindy:
That’s what we’re trying to do except really long form.

Deacon:
And I love that too because I mean there’s definitely a need. You have different types of people. Some people need like, “I need the depth.” And some people are like, “No, just give me the practical stuff. And then, I’ll go.”

Scott:
So, two more questions here. First, what is your TikTok handle?

Deacon:
It’s thedeaconhayes. I’m like, “Is there another Deacon Hayes in the world? How is this possible?” I have such a unique name. But somebody has it. So, it’s the, T-H-E, deaconhayes.

Scott:
Okay. And we will link to that in the show notes at biggerpockets.com/moneyshow225. Someone can go check out the rap videos first. And then, the second-

Deacon:
Awesome.

Scott:
And then, second, what are you doing with your financial journey at this point in time while your business is very profitable and over these maybe four, five, six years where you’re really bringing in a tremendous amount of revenue and have a large business? How are you deploying that cash?

Deacon:
Yeah. So, the first thing we did last year we paid off our house. And we’re completely debt-free now. So, that was a huge thing for us to be like… It was a couple of thousand dollar mortgage that we don’t have anymore. That’s gone. And then, investing. So, for us set by array, maxing that out when my accountant lets me. I don’t understand like not maxing out on SEP IRA would be an idea. But apparently, my accountant didn’t want me to do that last year.
And the other part is we’re going to stack some money up for real estate. I personally want to buy an office building because I’m like, “Hey, I’m paying rent in an office right now. I’d rather just own the building and rent it out to other tenants. And I can get my office for free.” It kind of what I did back in college. I bought a place and rented out rooms, and they paid the mortgage. So, that’s kind of the idea, is investing in the market, investing in real estate, continuing to grow the business. That’s kind of where we’re at.

Scott:
Awesome. So, would it would it be fair to say as a business owner, you allocate most of your wealth into the business and then your home equity in the SEP IRA, and that’s broadly speaking what you’re doing?

Deacon:
Yeah. So, I would say investing is a large bucket outside of the business. Inside the business, I’ve actually started creating different categories for marketing, new content creation, updating old content. I mean I don’t know. You guys have experienced. But for just the online publication side, it’s not very expensive to run relative to the revenue that comes in. So, we are investing in growing the business. But a lot of it now is going and investing outside the business because I felt like I did that for a number of years for about five years. And so, now it’s like we have a system. Most of it’s going to start going into either real estate or stock market.

Scott:
As an entrepreneur how much cash do you keep relative to your annual spending? Is it six months, a year, longer? [crosstalk 00:59:40]

Deacon:
Yeah. I’d say ours is probably closer to 18 months’ expenses. But also, I have some of that money to deploy if a deal happens. I was telling you earlier there’s this fintech company. I was like, “Man, I kind of like the idea of this. I want to be able to have cash accessible.” So, I’d say 12 months is kind of our emergency fund. And then, I’ve got this other six months that I have to work with.

Scott:
We’ve observed that a lot of entrepreneurs have that much larger emergency fund when they’ve established the business much more than six months and, in your case, 18 months. So, I think it’s not always… It’s not a rule. But it seems to be a tendency for folks like yourself to keep a very large cash position which I think makes sense when you own a business and have all these other things with that. So, you’re in a very conservative financial ship, it seems like, with the exception that you’re an entrepreneur with an enormous concentration of, I would imagine, wealth in the business.

Deacon:
Thank you. Yeah. No. It’s been fun. It’s been a learning journey too because I feel like… I didn’t tell you guys this before. But I did have an eBay business at one time. And I sold 40 grand worth of product. And I made no money. But it was a huge learning experience because I was like, “I drove to the post office.” I can’t tell you, I mean, 100 times that year. You know what I mean? I answered so many emails. I was like, “This is a grind. This is not the kind of business that I want to start.”
So, it kind of was this evolution of going through these different business ideas to get there. And then, once you get there, then, it’s just fine tuning it. But it’s been a great journey.

Scott:
That’s awesome.

Mindy:
Yeah. I also did that eBay business that I made like a dollar fifty or something. It was awful. It sounds great. The yard sale arbitrage and the thrift store arbitrage, go and grab something and then sell it for hire. But you’ve got all sorts of expenses, and you got to go to the post office. I mean that’s a really, really difficult way to make a couple of dollars. I’d love to talk to somebody who has been able to make a lot of money on it. But I really want to see the numbers and see how they are able to do it because I don’t have the time to spend to make the dollar fifty. Deacon, what is your favorite finance book?

Deacon:
Yeah. So, the total money makeover by Dave Ramsey was just I have to give it credit. I’ve read a lot of finance books. But I think just for our position where we’re like we knew nothing about handling money. My wife and I need to get on the same page, that was the one that really did it for us.

Mindy:
That’s a great book.

Scott:
Yeah. I love that one. it doesn’t get enough credit sometimes. But I want to also observe that you have referenced six books over the course of this podcast. And each one of them was referenced at an inflection point with your journey, with a lot of these things and giving you new ideas. And so, I think that a big takeaway in addition to the great book from Dave Ramsey is people should just read a dozen or several dozen of these business books and read them every year and keep them up as their careers go because they give you these ideas that I think really have driven your decision-making process across parts of your journey here. Is that fair to say?

Deacon:
Absolutely. And I also say I am not a reader. I’m an auditory learner. And so, I was really bad in high school and in college. And if I would have known this, it probably would have changed things. So if maybe you’re listening to this, you’re like, “I don’t like books. I don’t want to read books.” Well, listen to them then. And the cool thing is you can listen to them at a faster speed so you can do like 1.2. So, you’ll get through it even faster.

Scott:
Yup. I love it. What is your biggest money mistake?

Deacon:
I would say buying the two properties at the height of the market in Arizona. That was by far. But I will say it was a huge catalyst to be like, “I don’t know what I’m doing. I need to figure this out. I need to slow down and make different choices.” So, even though it was the worst mistake, it was also the best mistake because I learned from it and made drastically different choices. And I created a website to help other people. So, I feel like, yeah, it sucks. But a lot of good came from it.

Mindy:
What is your best piece of advice for people who are just starting out?

Deacon:
Put it down on paper The apps are great. I use an app currently for managing money. But like writing it on paper and just saying, “Hey, what are my expense? What’s my income,” And knowing if you have a surplus or deficit. That is the key thing because I think for most people it’s just, I don’t know. I make this much money. And I don’t know where it all goes.
So, just putting it all down on paper, so, you have clarity because once you have clarity, that’s why we were able to up… We had an upside down car. And I was able to sell it because I had clarity. I was like, “Well, I’m making this monthly payment. I owe more than it’s worth. But I can come up with a thousand bucks to get rid of it,” not get the monthly payment. So, really putting it down on paper is key.

Scott:
Love it. How many times we heard track your spending or a variation of that on this show? And here, you’re hearing it yet again from a true expert here. So, thank you, Deacon, with that. What is your favorite joke to tell at parties?

Deacon:
Okay. So, I’m really into dad jokes now. TikTok is perfect for this.

Scott:
[crosstalk 01:05:00] maybe I should get on TikTok.

Mindy:
Oh, god. Thanks.

Deacon:
You, guys, I really don’t like Russian nesting dolls. They’re so full of themselves.

Scott:
That’s awesome.

Mindy:
Also, I’m now mad at you for sharing that TikTok is full of dad jokes because now Scott’s going to be reinvigorated.

Scott:
Yeah. I’m going to get on there now.

Deacon:
Okay. Here’s one more, just a bonus one. So, what happens if you touch Dwayne Johnson’s butt?

Mindy:
Oh, The Rock. Okay. I don’t know. What?

Deacon:
You hit rock bottom.

Mindy:
That one’s funny. I was like, “Wait. Which one’s Dwayne Johnson? Is he a basketball player?”

Deacon:
It takes a little bit of time for that one.

Mindy:
You know what they call the study of his family’s history? Geology.

Deacon:
The rock, I get it.

Scott:
[crosstalk 01:05:56] Moving on, where can people find out more about you, Deacon?

Deacon:
The best place, wellkepwallet.com or on TikTok, thedeaconhayes.

Scott:
All right. And we will link to both of those like I mentioned earlier at the show notes here at biggerpockets.com/moneyshow225.

Mindy:
Deacon, thank you for joining us today. This was a lot of fun. And it was so good to see you.

Deacon:
Good to see you as well. Yeah. Thanks for having me on.

Mindy:
And we will talk to you soon.

Deacon:
Awesome. Thanks, guys.

Mindy:
Okay. That was Deacon Hayes from Well Kept Wallet. Scott, what did you think of Deacon’s story?

Scott:
Yeah. I was fascinated by it. I think like we mentioned earlier, he was in debt by a tremendous amount. He was willing to hustle and just bust it to pay that off with whatever means necessary. You were saying he reminded you of Tiffany Aliche earlier. And I struggled for a minute to come back to that reference. But, yeah, there’s a lot of parallels between his story and Tiffany’s and the way that they approached and attacked their debt and situation with those types of things, and then built scaling enterprises with that. So, I do think that’s a great parallel between the two stories here.

Mindy:
Scott, I completely agree. This episode ran a little long. So, should we get out of here today?

Scott:
Let’s do it.

Mindy:
From episode 225 of the BiggerPockets Money Podcast, he is Scott Trench. And I am Mindy Jensen saying, “Be sweet, parakeet.”

 

Watch the Podcast Here

Help us out!

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds. Thanks! We really appreciate it!

In This Episode We Cover

  • Getting rid of debt as fast as you can so you can start saving and investing
  • Foreclosures, land leases, and other real estate predicaments
  • Making sure you keep a large emergency fund (especially if you’re an entrepreneur)
  • How to hit “hockey stick” level growth and what to do when you want to step away
  • Firing yourself from your business and learning to outsource
  • How to establish self-worth after you “retire”
  • And So Much More!

Links from the Show

Book Mentioned from the Show

Connect with Deacon: