BiggerPockets Money Podcast 29: From $200,000 in Student Loan Debt to $150,000 Net Worth in 3 Years with Nick and Alyssa Paros

BiggerPockets Money Podcast 29: From $200,000 in Student Loan Debt to $150,000 Net Worth in 3 Years with Nick and Alyssa Paros

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Nick and Alyssa were high school sweethearts, who went to college where their family attitudes toward money came to light. Nick’s “save up for it” mindset saw him graduate with around $50k in student loan debt, while Alyssa’s more spendthrift attitude towards the college lifestyle had her graduating with $80,000 in debt—and her graduate degree piled another $60,000 on top of that.

They got married and quickly discovered their vastly different views on money.

Through budgeting, communication, spreadsheets and more spreadsheets, they are now on the same page and working toward financial freedom. Their curveball pregnancy didn’t derail them—it strengthened their resolve to get to FI through real estate and traditional investments.

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 Welcome to the BiggerPockets Money Podcast show number 29.

Don’t get overwhelmed with I feel like people get overwhelmed with oh my gosh this person is doing 700 different things and I don’t even know where to start. Start with one thing. Start with writing down what you’re actually spending. Start with something. Start with packing your lunch. You know start there and then keep building.

It’s time for a new American dream. One that doesn’t involve working in a cubicle for 40 years, barely scraping by. Whether you’re looking to get your financial house in order, invest the money you already have or discover new paths for wealth creation. You’re in the right place. This show is for anyone who has money or wants more. This is the BiggerPockets Money Podcast.

Scott: How’s it going everybody I’m Scott Trench. I’m here with my cohost Ms. Mindy Jensen. How are you doing today, Mindy?

Mindy: I am doing fantastic today Scott. I’m talking to you from beautiful southern Utah. I’m getting ready to attend a family reunion. There’s really a big bunch of us and we’re kind of spread out all around the country so we sort of threw a dart at the map and tried to find a place that well on Air BNB we tried to find a house that could fit us all. Two years ago we found one, but then it burned down to the ground in the fires in and around Tennessee so we settled on Utah. We’ve got actually four houses because we can’t they don’t have a house here that fits us all.

Scott: Oh man. We’re going to talk about a different type of fire on today’s podcast.

Mindy: Oh that’s terrible.

Scott: With Nick and Alyssa Paros. Yes yes yes well that’s my transition today. We’re sticking with it. Nick and Alyssa actually have a very remarkable story where they accumulated a lot of debt in college and had a lot of conflict within their relationship in their marriage about spending and how to manage their money and this is a great show that kind of goes in like hey we start with a couple of disadvantages, some student loan debt, and maybe some different philosophies on how to manage money and how they come together, get that philosophy together and get on the same page. Then they go on to produce outstanding financial results over the last few years so very excited to talk to them.

Mindy: Yes, they’ve really knocked it out of the park. They’ve only been married for three years and it sounds like they didn’t really have a lot of deep conversations about money before they got married, but realize that they did want to make it work so they did. The problem with recording the intro after you actually do the interview is that you tend to give away some of the parts of the interview. I don’t want to do that so what I would like to do is bring in Nick and Alyssa and let them tell their story because they’re going to do it way better than I am. First let’s hear from today’s show sponsor.

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Mindy: Alright big thanks to today’s show sponsor and now without further ado let’s bring in Nick and Alyssa. Nick and Alyssa welcome to the BiggerPockets Money podcast. How are you doing?

Nick: Good.

Alyssa: Good.

Nick: Thanks for having us.

Mindy: Oh thank you for coming on. I would like to start off with a little bit of your background so people know who we’re talking to and why we’re talking to you.

Alyssa: Nick and I met in high school. We’re from Johnstown Pennsylvania so you probably haven’t heard of where we’re from. It’s a city of I think the Metro area is 130,000 people. We live in Richland. That is 20-12.

Nick: 12,000.

Alyssa: 12,000 people so we went to school together, went to high school together. I was a sophomore Nick was a junior and we met in foods class so and that is history. We graduated a year apart from each other obviously. We both ended up at Penn State and I found out very quickly in college not only was I interested in nutrition, but I was very good at spending money. In my undergrad I studied nutrition, went on to a dietetic internship at University of Buffalo, State University of New York and I got a Masters in nutrition and I’m a registered dietitian.

Through all of that I graduated my undergrad a year early so I graduated in three years. Got my Masters and my RD license in a year and a half. I managed to rack up about $115,000 in student debt. I was very good at acquiring student loans. Nick was in college at the same time so.

Nick: I pretty much always knew what I wanted to do for whatever reason I was always mechanically inclined so I took mechanical engineering for my undergrad. As Alyssa said we both went to Penn State. I did four years at Penn State and then started working right out of college and I still work at the same company since got a couple of promotions. I did go back to school and got MBA. I did that online and my undergrad I only had about $50,000 worth of college debt.

I did that through a combination of working a little bit through college to pay for a lot of my expenses. I had a little bit of money saved up from parents’ contributions and my savings through high school, that kind of thing. Then actually my Masters degree, my work paid for the whole thing so that was really nice. I did it over a pretty long period of time. It did take about four years. I did about one class.

Alyssa: Yes.

Nick: At a time. Working in the evenings, but it was completely covered through my work, which was pretty nice.

Mindy: That’s a sweet gig if you can get it.

Nick: Yes.

Scott: Alyssa you mentioned that you were saying that you are really good at spending money. You got some accumulation of student loans debt. Was that mostly just tuition or was there other spending issues that were contributing to that?

Alyssa: I fell into kind of not only taking money out for tuition, but also taking out loans for the lifestyle of college so I would get my nails done and go out with friends and you know do all of that stuff. Not really paying attention to what I’m really spending my money on. Like Nick and I were dating that whole time and Nick would like go grocery shopping and be like I spent $20 this week. I’d be spending like $100 for myself, which now is bizarre. I was doing it so I just was not budgeting. I was not following any sort of path that I should be following. I was just okay you’re going to let me take out that much money sounds great.

Mindy: Did your parents talk about money at all while you were growing up?

Alyssa: My parents so all four of our parents are well I guess your dad went to college. He is not doing a career with his degree.

Nick: Right.

Alyssa: My dad went to college, didn’t graduate and both of our moms went to technical school. My mom is a cosmetologist and his mom is a phlebotomy tech. College was kind of I think pushed in both of our families.

Nick: Yes.

Alyssa: Not a lot of experience I think.

Nick: It was pushed I think in both of our families as a yes you definitely should go to college, but not really a here’s a plan for college. Here’s what you should do. It was more just like yes, if you want to be successful go to college and do that and you’ll be successful, but not really a method of how to do it. From my background I just spent a lot less. As Alyssa said I didn’t spend a whole lot of money. I was not health-conscious at all in college so I ate a tremendous amount of Ramen noodles and I found that local store had a pack of like 40 hot dogs for like four dollars so I ate those a lot. I have no idea what was in those hot dogs. They were definitely not the best, but I mean they were super cheap so they’d last me a while.

Mindy: Lips and eyelids in there.

Alyssa: Yes and I think.

Nick: Honestly there was some crunchy stuff every now and again.

Alyssa: Oh gosh no. I think my family if I were just like just boil it all down my family was very they didn’t want me to worry. It was like we have money for this like don’t worry about it. You’ll be taken care of. Everything will be okay. Like that we didn’t have and I mean we don’t have like four houses and like vacation.

Nick: Right.

Alyssa: Like all the time. Like and I know that that’s financial independence in all of that that we’re working towards, but not in the spend more than you make kind of mindset. I just never had to worry about it if that makes sense.

Nick: From my upbringing with money it was more so like we don’t have a tremendous amount of it so don’t abuse it and if you want stuff you’re going to have to save up for it yourself a lot of times. That’s kind of where I got my like saving habits, but I never really until after college built any type of foundation as to what to do with your money once you save it. That was kind of all figured out after college.

Mindy: Okay and you mentioned that you have always been handy and like mechanically inclined and all of that so you studied engineering. Travis Hornsby during episode 22 of this show gave a really great piece of advice about choosing a major and this is obviously before you’ve already gone to college. Is this the only thing you’re going to ever be happy doing because you know some of these majors come with these huge student loans. I didn’t realize that dentists had they came out of school with some of the highest student loans. Veterinarians I mean I don’t want to belittle animals because animals are a very important part of a lot of people’s lives, but this is like an animal doctor versus a people doctor. You’re coming out with student loans as much or even higher than your you know average people Dr. is coming out of school with and that’s not something that I would’ve even known about.

Nick: Exactly yes.

Mindy: When I was going to choose majors and you know having him share that was really really powerful because if that’s the only thing that’s ever going to make you happy and then it’s going to be a lot easier to swallow that debt or at least.

Nick: Yes.

Mindy: Just knowing what the debt load is going to be before you get going into in this major. Alyssa did you know that you wanted to be a dietitian or was that you said you really enjoy it.

Alyssa: Yes, I actually went to college as I thought I wanted to be a doctor, but I didn’t want to go premed because my parents talked me to them. They’re like, “Well what if you don’t become a doctor and you just have a bachelors degree in premed? Like what are you going to do with that?” I found out that Penn State had a nutrition program that was a track to medical school. Ended up shadowing a doctor, an endocrinologists actually who was fantastic, love him. I realized that when I went home, when the office closed at 4 o’clock he went to the hospital for another six hours.

I realize that was not what I wanted to do with the rest of my life. I decided to be a dietitian and I just pivoted from a medical school track to a dietetic intern track. In an internship for a dietetic student unlike Nick had an internship between his junior and senior year of college and did you do one over Christmas too?

Nick: Yes, I went back and worked over Christmas.

Alyssa: He got paid. Dietetic interns do not get paid. Also a dietetic internship is not considered postgraduate work. Once I graduated from my undergrad my student loans came out of deferment. Whether I went into an internship or not, not all dietetic internships are paired with a Masters program so if I went to an internship that didn’t have a Masters program I would not be getting paid and paying to be in an internship and my student loans would be coming out of deferment. At that point I think I had probably an $80 or $90,000 worth of student debt that in the internship I could not have a job and do the internship at the same time. I had to find a Masters program that coincided with my internship because I couldn’t afford to start paying back student loans.

Scott: That’s fascinating you’re basically forced into this very specific situation because of the way that the student loan program and.

Alyssa: Yes.

Scott: Postgraduate degree works.

Alyssa: Yes.

Scott: I guess is a good time here then to transition into kind of what happened after you graduated college. What was your kind of path like from that position?

Nick: Graduated college, started working as an engineer at the same company that I interned with. Same company I’m still working with. I really kind of through my internship learned a lot of the ropes so I kind of hit the ground running pretty well and the way that that kind of led me into financial independence is kind of—or the mindset of that is kind of interesting because through college like I was one track mind thinking engineering. Like I’m going to graduate college. I’m going to be an engineer.

That’s like what happens. Didn’t think of anything else. Well pretty much instantaneously once I started working I started thinking of okay like what’s next? I got my first paycheck, I had a 401(k) plan, matching 401(k) so for the next 40 years of my life I’m going to put this percentage of my paycheck into my 401(k). My company is going to match this percent.

That’s going to compound over 40 years. I’m going to get pay raises of approximately this per year may be every X years or so. I think I forecasted like every 10 years I get a promotion that jumps me up another sizable pay grade and factor in for inflation in 40 years from now when I’m like 62 I can retire with this much money. It was kind of like wow that’s kind of anticlimactic. You know here’s the next 40 years of my life in a nutshell so then it was kind of like what other options are there?

How else can I make money other than doing this for the next 40 years and granted I really still do enjoy what I do. I have enjoyed all of the positions that I’ve held thus far, but you know kind of what else is there? My first thought was the stock market like I can to become a genius in the stock market. I’m going to make tremendous returns. I started doing that.

I think it’s a Mark Cuban quote, “Everyone is a genius in a bull market.” I figured that out that I was a genius. I made some pretty good returns right away, but didn’t realize that it was a bull market and everybody was making great returns so I thought I was a genius. Pretty much it seems when you’re investing aggressively you can make really good returns when the market’s doing really good, but then when the market starts doing bad a lot of times you start doing way worse than the market so I’ve been on both sides of that.

I started reading some books on investing and learned pretty much if you’re investing in the stock market the best you can really hope for is to do average so you know pick the S&P 500 about averages 7% return give or take. It’s kind of like okay we’re back to anticlimactic you know that’s not really a needle mover. It was actually during work one day, I think it was during lunch I was watching some YouTube videos when I stumbled upon a Robert Kiyosake video and pretty much his video was just summing of Rich Dad, Poor Dad book, which I later read, but it really kind of got me thinking of okay so like maybe there’s other ways of going about this and that’s what got me looking into real estate and I researched it for a little while until I kind of worked up how I was going to pitch this to her and how am I going to get her to trust me on this. Did some research and then pitched it to her and I was really quite surprised she had liked next to no kind of questions or pullback about it or anything. It was pretty much just like I think we should do this and she was like okay let’s look into it.

Alyssa: Then kind of my side when he started investing in stocks, we were still unmarried at the time. He graduated in 2012. I went into my Masters degree at 2012 so I moved to Buffalo. I graduated in December 2013. We got engaged December 2012 huh. I graduated with my Masters December 2013. We both lived with our parents until we bought our house in August of 2014. Got married in September 2014 and then I think that’s when you live with someone and you realize like how different you are. I know you have.

Nick: Yes.

Alyssa: A story.

Nick: I think it was the first weekend we moved in together. She was like okay well I want to run to T.J. Maxx and get like some decorations for the house and stuff. Like for me whenever I want to buy something like I plan it out like six months and a head and I’ll have like three to five times as much as I want to spend saved up like just in case. She was like okay I want to run out and buy some stuff for the house. She went out and bought like I think it was $800 worth of like decorations for the house and came back and I was like, “Oh my God like what did you do?” She’s like, “What?” That’s when we were kind of like okay we need to like think about what like how this is going to work and how we’re going to get past the next 50-60-70 years of living together because this is like weekend number one.

Mindy: Yes so I think I’m married to you as well. My husband will also plan out well in advance any purchase that he wants to make. He’ll compare and contrast all of the different options and $800 on house decorations would never come out of his wallet.

Scott: I’m interested how did you figure this out? How did both of you guys figure this out? What was the conversation or agreement that you came to about spending?

Alyssa: I think at first it was a lot of probably fights.

Nick: Yes we had a couple initially.

Alyssa: I’m trying to even think like I think it was just sitting down and talking and saying you talking and saying this is what we may make. This is what we’re saving. This is what we have left. Like this did not fit in the budget so we and as I think where we really started budgeting hard and really laying out I think from my perspective I was thinking well I’m going to work five days a week, 40 hours a week. You’re telling me like I have to sit here in my house and do nothing for the money that I’m making at that point. You know in my mind and so that’s when we came up with our mad money accounts and now it’s like our Bible.

Nick: Yes.

Alyssa: That’s really how we survive.

Scott: What’s a mad money account?

Nick: The way that we’ve got our budget to initially I had this crazy complex spreadsheet that tracked like everything you can imagine and we got married and I was like okay well I’ll do both of our funds in this spreadsheet. I’ve tried I don’t know how many times to show her and she just like hates like spreadsheets because they’re way too boring for her.

Alyssa: I don’t hate all of the spreadsheets.

Nick: I can certainly understand. It’s an acquired taste. We do six different accounts that each kind of have their own purpose and the mad money is part of that. The first main account is what I call our billing account.

We get paid into that account and we pay all of our regular monthly bills out of that account so you know the water bill, the sewage bill, the house mortgage. You know all of those bills come out of that one. Then there is what I call our main joint account which we buy our kind of monthly expenses that fluctuate, but we still have a general idea of what we’re going to spend so groceries, gas money, now daycare. That all comes out of that account and I feed that account out of the billing account so I say like every week I’m going to put this much money into the main joint account.

Our two mad accounts is I get $60 a week. She gets $60 a week into our mad accounts and she it’s pretty much no questions asked. This is your money to spend on what you want. You can save it up and buy something that your you know really wanting. You can go out and have lunch with it, kind of whatever you want to do with it.

Alyssa: I will say people whenever we say like it’s no questions asked we both have access to each other’s accounts so I can go in and look. Not that I really ever have, but I know that some people are like well how do you trust like that they’re not doing something crazy with that money. Like when it’s not that much money, but we both all of our accounts are together so I have access and he has access. There is no hidden money anywhere.

Nick: The last two remaining accounts there’s a call it long-term investing so that’s what we used to invest in stocks, mutual funds, real estate, that kind of thing and then what I call short term investing, which we use to upgrade our house. Buy stuff that we kind of need and kind of want you know like if we want to upgrade our appliance or put something else onto our house. That kind of thing and then there’s actually two additional accounts that I’ve added just because they make life a little bit easier. They’re actually in a different bank, but I call one accruals, which are all of our bills that only happen once a year. I kind of add them all up divide by 12 and pull out one twelfth of that every month and then whenever we pay them I just feed that back into it and then family savings which we save up for Christmas, birthdays, vacations, that kind of stuff in that account.

Mindy: Okay I love the accrual account and I think that’s really important and a lot of people overlook it. I only pay my car insurance once a year or maybe twice a year. I don’t remember so having that you know $600 every six months is not something that a lot of people are going to be able to come up with you know instantly what is the what’s the statistic people only have a $1,000 in savings or whatever so one unaccounted for bill is going to kind of knock you off. I really like that accrual. What sort of bills are in there besides like house and car insurance?

Nick: We do car registrations. Like we have an Amazon Prime subscription, which is only a $100 bucks, but we put that in there as well. You pay that once a year.

Alyssa: My license.

Nick: She has a license for her RD that’s for dietitian.

Alyssa: Nationally I have an RD certification and I am licensed in Pennsylvania and Maryland so I have two license certifications. Those are by—they only come out every other year, but I have those and then I have an Academy membership, which is like journals and they do a lot of continuing education so I need to do a lot of that for my license. That’s $300 a year to do that too. That’s all in there.

Nick: We also add in stuff, if it’s something we know we’re going to have to buy over the next year we’ll just add it in and then divide by 12 and put like one twelfth of it in until we save up for it. Like for example tires if we know we’re going to need tires on a car or something. That’s a $400-$800 expense so that’s another thing.

Scott: What I think is awesome about this I want to point out is that it sounds like you guys were having a little bit of conflict in your relationship about money prior to implementing this system. That this system I mean there’s a lot of ways to budget. There’s a lot of ways to set up accounts. There’s a lot of things, but this seems it seems like you’re very clear now on where your money goes, where your priorities are, and what you get to spend and with no questions asked.

Alyssa: Yes.

Scott: That’s what I think is so powerful about the system for you guys and managing towards FI within the constraints of what you guys need to keep your relationship happy.

Alyssa: Yes, I think like the understanding and knowing like where the lines are is really important and even yesterday I went to Five Below and picked up some like knickknacks for my nephew. It was 10 bucks. I knew that it was coming out of main joint, but I had bought a couple of things just for me so I called him on the phone. I was like hey $10 bucks is going to be coming out of the account. It’s not all main joint. I went and bought col—da, da, da and seven of it is going to be from mad money. I’ll transfer it later. Communication—that I was drawn of I know what’s supposed to come out of here and not all of it was supposed to come out of here so it’s going to come out of this account.

Mindy: Yes so I think that’s really really really important and there’s a lot of you know money is the most fought about thing among couples. It’s like the leading cause of divorce and yadi-yadi-yada. I think this is so important. You could have taken the stance well it’s my money I don’t need to account for every single dime to him. He’s not the boss of me, whatever and that’s not how you grow a partnership.

I’ve been married a lot longer than you so I feel like I can go ahead and give you advice, plus it’s my show. I can say what I want. You know, you’re a partnership and if you looked at it as an adversary to relationship you’re always going to have problem. It’s for looking at it as this is my money then you’re always going to be offended. There are so many things to be offended about. Don’t look for reasons to be offended. Don’t look for fights because they kind of come whenever they come and you know.

Nick: Right.

Mindy: Leave money off the table and I still call up Carl and say, “Hey do you mind if I spend $15 on a purse?” He’s like, “No, I don’t care.” I know he’s going to say no I don’t care, but I still want to just double check with him.

Alyssa: It’s the respect.

Mindy: That is absolutely perfect. It is the respect. If you don’t have respect for your spouse your marriage is going to fail. Why are you getting married just to go to a divorce?

Alyssa: Yes.

Nick: Right.

Mindy: I’ve heard I don’t know, but.

Scott: Let’s transition here and you know it sounds like you guys graduated from college with about $200,000 in combined student loan debt. Maybe like six enough cash to get by to move on with things. This system that you’ve put in place has helped you with your relationship, but let’s talk numbers. How has this helped you as a you know a couple that I think many people, many of our listeners can relate to. How has this helped you guys attack that student loan debt and grow net worth in investable liquidity?

Nick: I do have the numbers here. When we first got married our what I called our savings right or really the money that we made every month that wasn’t accounted for somehow was about 15%. That’s 15% of the money that we brought in that we could put towards paying extra on loans, putting towards long-term investments, that kind of thing. We’re now up to a 30% savings rate so 30% of the money that we bring in can go towards those types of things. That’s not including what automatically goes towards my retirement though because I don’t include that as income. That kind of just automatically comes out.

Mindy: Even better to not include that.

Nick: Tes. We were able to pay off up until now we’ve paid off about $80,000 worth of college debt.

Scott: Wow congratulations.

Alyssa: Thank you.

Nick: I actually heard this tip. I forget where it may have been, I don’t remember.

Alyssa: Okay anyway.

Nick: People worry about planning for their children’s college a lot of times, but this person said why don’t you just figure out how to pay off your home before your kid goes to college and then that money can go towards their college. I kind of worked backwards to say okay well if we pay at least this much towards college debt how fast can we pay it off and then if we pay that off how much do we need to pay to pay off our house before our oldest child goes to college. Okay well we can definitely do that and that’s without putting anymore towards it than we are currently, which the plan is you know our living expenses are pretty well fixed as I get a raise. She gets a raise as we make more money through real estate we can put more of that towards paying off loans and getting out of that so. We can definitely achieve paying off college, paying off our house, getting completely out of debt by the time our kids are in college and then that unlocks a tremendous amount of money to help with college for them and you know hopefully keep them out of them the same.

Alyssa: Cycle.

Nick: The same boat that we were in.

Alyssa: Yes.

Nick: Then another number that I have so we didn’t start tracking net worth immediately. We only started tracking that January of 2017 is actually when I started looking.

Alyssa: Oh and Kiyosake’s right there.

Nick: That was actually right around the same time I started looking into networth because he had his whole if anybody has watched any of that kind of thing it’s you know your income, expenses, and then assets and liabilities. I was like okay I wonder what our net worth is? Well, January 2017 it was negative $6,000. Now we’re at about a $150,000.

Scott: That’s awesome. Okay a round of applause here.

Mindy: Fantastic. I’ll give you a round of applause too. That’s amazing and.

Alyssa: Thank you.

Mindy: I mean well even looking at the January 17 net worth of negative $6,000 when you came out of school with negative $200,000 I mean that’s really fantastic. Nice job.

Scott: How old is your oldest?

Alyssa: He just turned two in April. Broderick, we call him Brody for short. We found out we were pregnant with him in August of 2015.

Nick: Yes.

Alyssa: Which was a surprise. I was actually at work feeling sick. Something in my head was like just maybe and my first person to find out was my boss. I went into her office crying like what I do? She goes do you want to go home? I was like no I’m just going to do this there. I might as well get paid for doing this. As luck would have it Nick happened to be on a business trip and the doctor wanted to see me right away so I had the happy pleasure of telling him over FaceTime. I put up like a random picture. I think was a pregnancy test and it says like you plus me equals three or something. He was like oh.

Nick: I remember.

Scott: What noise was that again?

Nick: I was laying down in my hotel bed at the time. If I wasn’t laying down I probably would’ve passed out. We were in the process of talking about you know like when do we want to have children and that’s kind of funny because I feel like the weekend before that we were like talking about like oh maybe like six months or a year from now or something. You know we start to look into that so it was like the week after that I was on a business trip down in Western Virginia and then this happened. I was like holy cow is this a joke or?

Alyssa: Yes, it was not a joke so yes so I thought he was going to have to take off work. We had an appointment that Friday so this is Monday and he was supposed to come home Thursday so I knew that he needed to be there so he needed to know so that he could tell his boss he was not going to be at work on Friday. How else do I tell you than tell you?

Nick: Yes.

Scott: That’s awesome. The reason I was asking that is with your plan is really admirable here. You’re going to pay off your student loan. Get out of completely out of debt by the time your kid goes to college. What this brings to mind the concept that Brandon Turner who’s one of our colleagues and host of the BiggerPockets.

Alyssa: Oh yes.

Scott: Has for getting his kid through college, which is he bought a fourplex. He’s putting it on a 15 year mortgage and.

Nick: Yes.

Scott: His goal is to pay it completely down and then either refinance, take another loan to pay for college. Use the cash flow to help or sell it and pay for college.

Alyssa: Exactly.

Scott: You’re doing that same approach with your home it seems like. Pay it off so that you can.

Alyssa: Yes.

Scott: Refinance or sell it for college education so I think that’s an interesting way to use real estate as a savings vehicle for college education.

Alyssa: Yes.

Mindy: While also reaping the benefits of the cash flow until the kid goes through goes to college.

Nick: Yes.

Mindy: In Brandon’s case and you know you might move up and keep this house to.

Nick: Yes.

Mindy: Foot the bill for the other.

Nick: We discussed real estate and research it for about a solid year until we actually made our first real estate purchase. In that year there was a lot of you know reading books and listening to BiggerPockets I believe. That was before the BiggerPockets Money podcast, but then BiggerPockets Money once you guys came out with it. We’re very familiar with you know Brandon’s kind of plan. We’ve kind of discussed that similar thing. We might.

Alyssa: I actually think his daughter is about Brodie’s age.

Nick: I think so.

Scott: In the years after you graduated college it sounded like you started with around $200,000 in student loan debt and then you worked to begin paying that off and incrementally reduce your savings rate from 15% to 30% through good budgeting and money management. Then you read Rich Dad, Poor Dad and those concepts seemed to register and your net worth explodes. You go from negative $6,000 to a $150 in wealth, which I have to imagine is a drastic acceleration of the rate of wealth that you’re building. What did you do to drive that?

Nick: Around that time I got my first promotion so this was almost around the time I was graduating my MBA. That was part of my.

Alyssa: No, that was a year before.

Nick: It was a year before. You’re right.

Nick: That was part of my kind of leverage in the interview process and one of the things that I said you know hey I’m almost done with my MBA. You guys are investing in this in me. This is going to be a great opportunity for me. I started out as an engineer. I applied for a position as a manufacturing manager so I got that job in.

Alyssa: I think it was in November or December.

Nick: No, it was August 2016 I believe. That gave me a pretty decent pay bump and we were able to put pretty much all of that towards investments. I know there’s different trains of thought you know one put all of your money towards paying off debt right now after you have a small amount of savings. Another put all of it towards investments in real estate.

I kind of split it right in the middle. We do some with stocks. We do stocks, mutual funds, index funds, that kind of stuff. Some towards real estate, some towards paying loans off. It was really dividing that money out. Once I got put into management I was on our managerial bonus plan. I got a bonus that year, a pretty good chunk. We use that for down payment on our first property we bought and I believe you got a different job. You took a different job that was a pretty good pay raise around the same time so those stars all kind of aligned at the same time and then since then I’ve actually accepted another position. I’m now the engineering manager for my company so that was another promotion for me.

Scott: That’s great because you had a it sounds like you got some raises and additional cash inflow. I find that there’s got to be some other things that play as well when you have $150,000 in net worth increase. I imagined you didn’t get $150,000 in cash saved.

Nick: Right.

Scott: In those 18 months right.

Alyssa: No.

Nick: Our first property we bought played a pretty good role into that. We bought a triplex of value. It was probably around a $100,000. It was on the market for a while, in a little bit of rough shape. We got it for I think around $70,000.

Alyssa: That was 72-five.

Nick: 72-five. I did a lot of renovations to it. Putting in new flooring, new fixtures, the countertops.

Alyssa: Just kind of fixed up pretty much.

Nick: Yes, a lot of different stuff to new paint that was a big one appearing immediate look a lot nicer. That was our first one and then just recently came into our second property, which is a five unit also locally, but I’m buying that from actually a family member that whenever I got into real estate didn’t even kind of really think of until one night he was back in town and we were just kind of talking and I had mentioned that I had bought a triplex and he was like well why don’t you buy my house? I want to sell it you know I’m getting close to 70 years old I’m done with this. I’ll give you a good deal you know being that your family and that was another it’s worth over $100,000 and we got it for around $65,000.

Scott: That’s awesome.

Nick: Pretty. Yes.

Alyssa: Yes.

Mindy: Wow and how are you financing that? Because I know a five unit property is commercial. Are you getting commercial loan? Is he being the bank for you?

Nick: He is the bank for us so it actually worked out for this, but yes. Really nice.

Mindy: That’s nice.

Nick: Kind of how we talked through it because his initial pitch was like well you just manage the thing and pay for all of the expenses and then in five years you’ll own it. Expenses are around $10,000 a year so I was like well that’s kind of a lot to pay per year.

Alyssa: And you’re not getting, you wouldn’t be getting any profit either.

Nick: Right, I was like if you’re looking for a monthly income I can pay you over a little bit longer of a term. I’ll even give you you know money up front and then give you a monthly payment, but I still need to be able to cover all of my costs and still make a little bit of a profit while I’m doing that. He said, “You know what that works so we agreed to like a 10 year term with a small down payment.” That worked out for him. He said, “Well you know what this is working out for me too. I’m getting 10 years of income still from this property even after I don’t have to deal with it.” We have ownership then after 10 years so.

Mindy: Okay so the bossy mom in me is just wanting to say, “Did you get that in writing?”

Nick: Yes.

Mindy: Okay, okay good.

Alyssa: We’re actually still doing paperwork for it all, but yes.

Nick: I have an attorney. He has an attorney so.

Alyssa: Yes.

Mindy: Perfect. Yes, the best time to do a deal is when everybody is still friends. You hammer out all of the details when everybody still likes each other and I am in the BiggerPockets forums all day every day talking about real estate and people are like, “Oh hey I got into this partnership and I didn’t do you know anything in writing and now they want to do this and I don’t want to do that.” I’m like ooh it’s kind of too late for you so it’s not too late for you and I don’t want to dwell on it, but I just I am so bossy I just have to say that so. Okay.

Nick: I don’t think I mentioned our first property was through just a regular bank loan. We have a mortgage on that one.

Alyssa: We actually even though it’s a triplex we did a commercial loan on it. It’s a 25 year loan, amortized over 20.

Nick: 20 year loan amortized over 30 with a balloon at the end of 20 years.

Mindy: Oh at the end of 20 years. That’s a good commercial wow.

Nick: Yes.

Alyssa: Yes.

Mindy: We need to have you on the BiggerPockets real estate podcast too.

Alyssa: That’s me.

Mindy: You have eight total units or will have once the fiveplex.

Nick: Yes.

Mindy: Goes through.

Alyssa: Yes.

Nick: Yes.

Mindy: Okay, okay.

Scott: That’s awesome. That sounds like you just leveraged some great advantages, continue to accelerate your savings rate and intelligently deployed the excess capital that came into your situation so congrats on all of that rapid success there. What’s next for you guys over the next couple of years? What are your goals financially?

Alyssa: For as far as us we want two double units every year so initially our goal for this year so we closed on our first property on December 29th, 2017. The last business day 2017.

Nick: It was my New Year’s resolution to buy.

Alyssa: For 2017.

Nick: A property in 2017 and I made a thousand Excel sheets and dragged my feet the whole way and she said we were getting towards the end of December. She’s like, “Nick this is a good property and you know it. All of your numbers say it’s good even your worst case scenario say it’s good. Are we going to buy this or what? We only have a couple weeks left.” I was like, “Okay, yes we’re going to buy it.” We closed the last business day of 2017.

Alyssa: For 2017, we had three units so our goal for 2018 was to get three more and double. Now we have eight so then next year I guess we’ll go to 16. If we don’t buy anything else for the rest of the year because of the way we financed this property we still have some cash in the bank that we could do another down payment on a another property before the end of the year. Just because you didn’t mention, but instead of doing the down payment in one lump sum we’re actually doing part of the down payment, beginning of the loan and at the end of 10 years we’re going to do part of the down payment at the end. We are only paying like a third of our down payment at the beginning. Because of that we still have a lot of money in our reserves that we could actually deploy into another property if we so choose.

Nick: If we find one.

Alyssa: Yes.

Mindy: Okay I’m going to jump in here with a real estate tip. I wrote our whole article on the BiggerPockets blog called “Do Ask, Do Tell.” The number one way to get I shouldn’t say number one. I use that too much one very great way to get more properties is just to tell everybody you know what like uncle say if you don’t tell him cause guess what everybody is terrible at reading minds. Nobody is going to know what you have in your head unless it comes out of your mouth. Tell everybody you know that you are interested in investing in real estate or you want to be a babysitter or you’re trying to start your catering practice or whatever it is that you want to do, tell the world.

Nick: Yes.

Scott: The real question though is when do you get to increase the amount of money you put aside in your mad accounts? How much money do you need for that?

Alyssa: I am talking to this good.

Mindy: Nick is like stop stop stop.

Nick: Once we get a sizable enough pay increase usually what I’ll do is if we get to the point where we say okay I can put another you know $100 towards paying off loans and $100 towards savings, maybe we’ll put another five or $10 a week towards.

Alyssa: I remember a conversation. Every property we get, we get five dollars a week.

Nick: I don’t remember that.

Scott: Is that every unit?

Alyssa: Every property.

Nick: She didn’t get it in writing.

Alyssa: Yes, I don’t have that in writing.

Mindy: Suddenly Alyssa starts recording every conversation from here on out. Okay so.

Scott: This is great. It sounds like you guys I mean you guys have a great story here of getting into a lot of debt slowly and consistently putting in a system that works for your relationship and your financial picture to begin over time increasing that savings rate then the light bulb seemed to have clicked on in early 2017 and you made some really big significant strides in both of your career and your investment portfolio over that time to dramatically accelerate your net worth. It seems like that’s something that you expect to be able to continue going forward with these purchases now that you’re kind of getting comfortable. Where’s the finish line for you guys? Is it just going to double for every couple of years or?

Alyssa: We talked about this and we’re not quite sure. There may be a point where we reach I think we’re estimating maybe 10 years from now reaching financial freedom and just saying okay this is it. Like we’re done. We’re just going to manage our properties for the rest of our lives and we’re just going to be happy or right now we might just keep going and see where this takes us.

Nick: I’ve said you know having the ability to be able to say.

Alyssa: No.

Nick: You know I’m free. I can do whatever I want is a nice thought that I want to be able to have, but at the same time I still enjoy what I do. I’ve always enjoyed what I do so I don’t have any plans to not do what I do or kind of you know try to climb the corporate ladder. Ultimately my drop dead goal is so we are planning on having another child eventually.

The thought is when that child is out of college I want to be able to retire, which would put me in my early 50s. Certainly, we might decide I want to go before that if I want to, but it’s still kind of up in the air and then as far as how many properties you know maybe we get to 50 and say you know what that’s good. It’s enough work for us, but not too much. Maybe we build a team and you know keep going to a hundred or more. It’s all kind of up in the air right now, but we at least know the direction we’re working towards.

Mindy: Okay so you said in the beginning that you really enjoy your job. Alyssa you said that you also really enjoy your job. Just because you get to financial independence doesn’t mean you have to quit. I saw an article this past week on Yahoo finance written by a guy who said, “Oh financial independence isn’t this you know great thing. This is why I hate the financial independence movement.”

He goes on to talk about how people they seem to assume that you hate your job. Well there’s not that many people out there that really love their job. I really love my job. I said this a ton of times. It’s like my favorite thing. I feel guilty when I go to work because I’m leaving my husband to you know home with the two fighting kids.

I’m like well sorry I’m going to go have fun. I’m going to go record a podcast. Wow what a horrible life I have. You know but you don’t have to retire. Just getting there you know getting there is really really fantastic and then it gives, it’s freedom to do whatever you want including continuing to work. Now you had mentioned that you have one child. Then you said you might want to have another one. Kids are really really expensive and they can kind of well okay if you read all of the stories and you believe what you read on the Internet I can’t put it there if it’s not true right.

Nick: Yes.

Mindy: One of my favorite quotes—oh my kids think it’s for them. The path of things. How are what are some of the things that you do to kind of mitigate those circumstances because one of the things that I get a lot, one of the questions that I get a lot is you know how do I handle daycare expenses? How do I handle all of these child expenses that you know maybe I had a child unexpectedly or maybe I even planned out and I have like oh yes wow they really are expensively you know because the expenses just add up.

Mindy: Yes, as far as actually having him saving into, if you are lucky enough to have a saving into it helped us tremendously as far as actually paying for having him. Now budgeting to have a baby, like to live with a baby is different, but I don’t think I think we set it up in a way that he is not that expensive.

Nick: Knock on wood so far we’re doing a pretty good job with him.

Alyssa: I put a couple of bullet points down like things that I can think of ways that we really mitigate the cost of having a baby. Buying clothing purposefully is one so simple things, mix-and-match. Separates that you can wash and wear and if you need to change a bottom you don’t need to change the top. I am very particular you know in my closet like I am not we might be getting a walk-in closet, but I don’t really need one because I really don’t like clutter. Whenever I’m buying clothes for him in one size this is summer season so he gets 14 short sleeve shirts, seven longsleeve, 14 shorts, seven pants, two pajamas, one jacket, and two pairs of shoes. That’s his wardrobe for this size. He’s in like 24 months to tee right now. Then in the winter months like I’ll alternate you know 14 longsleeve and seven short sleeves. That’s like our simple formula to keep me from overspending. Like I don’t buy like I’ll buy him Christmas pajamas. I will not buy like a Halloween pajamas. I won’t buy him like a—like he dresses up.

Nick: Right.

Alyssa: The clothing that you can wear for one day like Bernie does not own.

Scott: Right. My parents still buy me Christmas pajamas every Christmas.

Alyssa: Mine too. I get Christmas pajamas.

Mindy: That’s my favorite statement from you ever Scott.

Scott: I get pajama—I have a whole drawer full of pajama bottoms. That’s like my like half of my clothes seem to be Christmas pajamas. I’ve collected over the last you know 15 years.

Alyssa: I will say one pair so he gets fleece pajamas because we live in Pennsylvania so we get quite a bit of snow. We’re the what second snowiest city in Pennsylvania or something.

Nick: Yes. Third.

Alyssa: Third. Well we’ll get an official count later, but I will get like one winter set not that you’re really going anywhere in pajamas, and then he gets like one like Santa’s coming pajamas. Just a little one.

Mindy: I love it.

Alyssa: That’s one may—second thing is so if you can as a dietitian if you can breast-feed that is a huge cost saver. If you cannot breast-feed that is best. I stand by that. I was formula fed. Nick was formula fed for part of his childhood.

We both came out okay. I am not shaming anyone who needs to formula feed or chooses to do so, but it is expensive so talk to mom groups. I am a member of a bunch of mom groups on Facebook there are all these people with coupons and they’ll say like who needs this coupon I got it in the mail. I don’t need it. Check your doctor’s office. They have a lot of coupons or ask your doctor.

If you are a parent of a baby who needs like a special formula that is broken down so you have like a premade that needs or you have like gastric is used where allergy is a need to get a special of formula. Those are even more expensive. Talk to the hospital. Talk to a NICU or even called the formula company directly and see if there’s anything they can do. Also check your insurance sometimes your insurance if it’s a medical necessity you can get it covered under your insurance too.

Mindy: Ooh that’s a good one. I didn’t formula feed my children so I would take they inundate you with coupons if you sign up for one thing all of the sudden you’ve got like and every coupon was like five dollars off. It’s not even a small amount.

Alyssa: Yes.

Mindy: It’s a considerable amount of money off of the formula and I did give them to people who needed them because I didn’t need them.

Alyssa: Yes.

Mindy: I didn’t know that you could go like call the formula company itself or the NICU. That’s a great plan.

Alyssa: Yes.

Mindy: That’s a great tip.

Alyssa: What else was I going to say? There’s I can’t remember it might be Similac, I can’t remember but we signed up for something right when I was pregnant. They sent us two cans of formula. I mean if you’re from feeding—three times like Brody needed so Brody had jaundice. The kind of jaundice he had I needed to formula feed him and alternate breast-feeding, which is super fun so I had to utilize that formula.

Even if you think you’re going to be breast-feeding it’s not a bad idea and I ended up having some leftover and our church actually had a formula drive. I got to donate the rest of it to another family that could use it. It was all still in date and still not opened or anything so check your churches. That’s another good point. I should say that check your churches.

Scott: What about childcare expenses. How do you care for Brody?

Alyssa: Childcare is a puzzle. We mentioned that I got a different job. I was very lucky to get a different job where I went from going five days a week now I work four days a week and I actually make the same amount of money that I did at my old job. I am with Brody one day a week and then my mother typically once in a while she can and once in a while your mom can. Typically my mom and his mom both take a day during the week and then he is in daycare two days a week most weeks.

Otherwise three days a week if one of them can’t do it so daycare we looked around for a while because we knew that he was going to be able to be part-time, which is hard to come by. Most day cares if you look into them they might let you go part-time, but they will charge you as if your child is there five days a week. We had to do some research and living in a town of only 12,000 people there’s not that many daycares around here. I went to see one. I talked to a few.

This was the second one I actually went to see and it was the one we ended up with. I think the biggest thing now two years into being a parent of a child going to daycare he’s been going to daycare since he was 10 weeks old, interview them. You are you know you are the parent. You are entrusting your most precious gift with people.

You need to feel comfortable with who you are leaving them with, who you are leaving your child with. Be honest with what you’re looking for. We cloth diaper, which is another hurdle to get over in the childcare realm. We are so fortunate that we have a daycare that will cloth diaper him because it’s another way that we can save money.

Ask those questions and anything else that you’re looking for they were really open to I was really particular with how he was fed. You know sitting him up versus laying him back because we didn’t want him to be a lazy eater. We still wanted him to be a good nurser. Start early. We started I think I was due in April.

This is actually kind of late by pregnancy standards. We started like around the holidays so like Thanksgiving, Christmas we were looking. I know people who start like the day that they find out they’re pregnant. Like hugest start early and get on that track.

That way you’re not really settling. You’re not trying to like scurry around and find what works best for you. Understand that you’re going to be giving up control so no facility will be perfect because it’s not going to be  you and that’s something that as a working parent and as myself a working mother you have to like the first days are rough, but you will get through it and you will get over it. I think as time has gone on I love the socialization that he gets. I love the mix of childcare that we have and I know that we are so fortunate to have that, but understand that you’re going to be giving up a lot of control when you look into daycares. As far as cost for daycare now we’re at what you would know that.

Nick: It costs.

Alyssa: You’re very lucky.

Nick: $26.50 for the two days that he’s there, but we have to reserve a third day even if he’s not there, but that’s half-price so.

Alyssa: It’s like $70 a week.

Nick: A little less than that.

Alyssa: With taxes and all of that.

Nick: It just recently went down because he turned two.

Alyssa: Yes.

Mindy: $70 a week.

Alyssa: Yes.

Mindy: That’s a lot less than I thought it would be. That’s awesome. For a two and a half or three days a week depending on what you have. Okay.

Nick: It’s a lot less than comparable ones. I know her sister lives down in the DC area and it’s easily double what we pay per day.

Alyssa: I think she pays $250 a week.

Nick: Yes, kind of the densely populated areas you pay a lot more than the more rural area is.

Alyssa: Yes.

Scott: Well let’s also point out that you guys, your professions could have probably taken you to other places. Like I assume you could get.

Alyssa: Yes.

Scott: Similar jobs in the city that would pay more, but you’ve chosen to live close to family it sounds like and.

Alyssa: Yes.

Scott: You reap the reward of that by having you know grandma involved in the child’s life and also.

Nick: Yes.

Scott: There’s a financial benefit to that as well so I think that there’s.

Alyssa: Right.

Scott: You know that’s a choice you made, which I think.

Nick: Yes.

Alyssa: Yes.

Scott: Is to your benefit.

Alyssa: Definitely.

Nick: Yes.

Alyssa: I mean I think everything down there is probably about twice the price.

Nick: Yes.

Scott: Anything else that you want to add in about your journey to you know where you started, how you’ve scaled, what your goals are in the future, how you’ve kind of taken your lumps and you know I guess a baby is not a lump. A baby is in an unexpected.

Mindy: Delight.

Scott: Wonderful delight.

Alyssa: Yes.

Scott: Yes, but.

Mindy: You got his childless.

Scott: Yes, I’m childless so sometimes I phrase these things poorly. Anything you want to add before we move to the Famous Four?

Alyssa: I think having a child for me was delightful. Nick I think was more in that direction already, but having a baby really changed everything to me. I loathed coming back from maternity leave and I said previously now I’ve come to know that I need that time away. I don’t know that I need to be full-time, four days a week works pretty well for me right now, but that was the click that I needed was I don’t want to have to leave you. Like it’s okay if I choose like you said Mindy like I love my job I want to go, but there’s a difference between wanting to go and having to go.

That was that light switch where when we found out we were having Brody and I actually had to leave him. Having these things set up like using cloth diapers instead of using regular diapers, that’s a big difference. I have the numbers here. I actually did my own spreadsheet. Let it be known.

Mindy: Let it be known Nick rubbed off on Alyssa.

Nick: I did.

Alyssa: I did a spreadsheet of so I did Pampers. Diapers are the most popular. Cost for Pampers, this is from Pamper’s website it takes 36 months on average to diaper baby. That’s the now the average is three years old they potty train. Brody’s potty training right now so whoah.

Mindy: Yay! That’s huge Scott.

Scott: Yes, I don’t know.

Alyssa: 27 months old it’s a big day. You’ll never talk so much about bathroom habits in your life. Pampers are the most popular diapers and from their website 36 months and from their website I went through the average amount of diapers you will use every day so it depends on the size of the baby and the cost to have one baby in diapers is $2,200 for three years.

Mindy: Wow.

Scott: Oh my gosh.

Mindy: Oh my God I can’t. You know when you’re spending it $50 at a time $30 at a time. It’s been a while since I bought diapers, but when you’re spending at $30 at a time you don’t add it up like that in your head.

Alyssa: Yes.

Mindy: I think one of the big things I also cloth diapered. Well I did like a combination and I think one of the big things that is such a hurdle for the cloth diapering aside from the laundry, which is not that bad. If you’re already if you have a baby you’re already doing way more laundry than you are going to. Aside from the laundry is the cost. There’s an upfront cost and I’m not going to steal your thunder, but that’s and all upfront.

Alyssa: Right.

Mindy: Then you never pay for anything again.

Alyssa: Yes.

Mindy: Share the cloth diaper comment.

Alyssa: Our diapers we spent $575 on cloth diapers and that was with they’re the company we use is called GroVia. I’m not affiliated with them. I just love them so much. They’ve been with us for two years and so they have either Earth Day or Black Friday.

They have two sales where you get 20% off and so that’s what we did. We bought them around Earth Day. $575 I think we had about 12-ish diapers—12-20 diapers. GroVia is a more expensive cloth diaper company. You do not need to spend that much. There are people who have been less. I bought them all new, which you can actually buy used cloth diapers, which I will get to so that is and that’s it $575.

Like I said GroVia is a more expensive brand. They have a very active BST, which is buy, sell, trade and you can actually sell pretty well used diapers for half the cost so not only will can we use these for our next baby, but we can sell them afterward so 575 divided by two babies is what $200 and say $30 something dollars. Then divide that in half again for selling them it’s like a little over $100 bucks a baby. It’s crazy.

Nick: Yes.

Alyssa: It’s not that hard.

Mindy: It’s not that hard and you can’t reuse those disposable diapers.

Alyssa: No.

Nick: No.

Alyssa: That was my that was part of me. My little bleeding heart with the diapers we are going to move on to the famous four. This is the new famous four. These are the same four questions. That we ask everybody who comes on the podcast. There’s actually five because we don’t count properly. It’s only a money show. We only talk about numbers, but let’s not count. Okay what is your favorite finance book?

Alyssa: I will go first. I have two Mr. Scott Trench is one, Set For Life. I read it I think I think as it came out. I read it. I actually listen to the audio version, which I like when authors read their own books so.

Mindy: Yes.

Alyssa: That is a good one and the second book that I listen to on audio on audible it is The 10 X Rule by Grant Cardone. I highly recommend this one too. It’s he does a lot of ad-libbing in Audible which I think I forget what podcast I listened to. Maybe it was BiggerPockets he was on. He talks about how he just adds in all of these things and I loved it. It really changes my your perspective on what goals you want to set and how far you want to reach so I loved both of those books. I couldn’t choose.

Nick: My favorite was Cash Flow Quadrant actually by Robert Kiyosake so I kind of read them out of order. I watched that YouTube video, which really kind of summarized what Rich Dad, Poor Dad was. It really seems like Rich Dad, Poor Dad is really kind of a good story to get you in the right mindset, but Cash Flow Quadrant really kind of goes a little bit more detailed in to ways to make money so that’s kind of what I liked it better.

Scott: Awesome. What was your biggest money mistake?

Alyssa: No, this is an easy one college debt. I wouldn’t say going to college, but the way I went to college. However I will qualify this with I don’t know if I can say it’s a regret or a mistake because I might not be sitting here with you lovely people today if I had not made it so I work with it. Some days I struggle more than others. I’d be lying if I didn’t have a guilt trip every now and then over college, but it’s gotten us here so.

Nick: My biggest financial mistake was actually back close to when I started working so it was probably my first big boy car that I purchased and I only had it for about a year because I didn’t like it and I lost probably like $3,000 by buying it and selling it within the same year. The reason I didn’t like it is I drive about 45 minutes to work and we have a good bit of snow in Pennsylvania and they throw rocks all over the road and it had this design at the back of the back door where it like just kind of caught all of the rocks. I am not going to say the brand because I don’t want to damage the brand, but it rusted like and it was only a couple year old car and it rusted there like immediately and I’m pretty handy so I ground the whole thing down to like bare metal. Got all of the rust off, primed it, repainted it, and everything. I actually put like clear that clear like plastic car protection tape over it and by December of that year it was already starting to rust in that spot again so I sold it. I think I bought it for like $16,000 and then less than a year later I sold it for like $13,000.

Mindy: Wow yes, cars are always a big.

Nick: Yes.

Mindy: Money mistake. Almost everybody has a car money mistake story to tell.

Scott: It sounds like you did a pretty good job salvaging the situation so.

Nick: Yes and now I actually do pretty interesting stuff with my vehicle so I still use mechanical abilities, but what I do as I said I drive a lot to work and so the fact that my cars were always depreciating kind of bothered me. I figured out that if I buy salvage title vehicles which are wrecked vehicles, I can buy them for what they would be valued higher than what I could purchase them for after I fix them. Then say okay if I drive it for a year to a year and a half and put 15 to 20,000 miles on it what will it be valued a year from now and what can I sell it then for? I buy a car for let’s say $5,000 into it for the car parts, paint everything to fix it.

It’s worth $6,500-$7,000 all fixed up. Once you fix it it becomes in our title and then I can sell it a year from then for you know $5,500-$6,000 and buy another car and do the same thing again. Theoretically not really depreciate my car so.

Mindy: Wow that’s a nice hack. Yes, flipping cars instead of flipping houses. Okay what is your best piece of advice for people who are just starting out?

Alyssa: Okay so my advice is for the suspenders. Don’t get overwhelmed with I feel like people get overwhelmed with oh my gosh this person is doing 700 different things and I don’t even know where to start. Start with one thing. Start with writing down what you’re actually spending. Start with something. Start with packing your lunch you know.

Start there and then keep building. If you are the saver in a relationship and you’re trying to get a spender to come to your come to the I guess bright side not the dark side. Come to your side of the fence. Trusting, gaining that trust in your relationship and the best advice I actually work in long-term care as a dietitian and I love working with people wiser than I am.

The best advice I heard was from my 95-year-old man who was married to his wife and she had passed away, but the advice he gave me was in a marriage you always need a leader and a follower. You don’t always need to be the leader and you don’t always need to be a follower, but you can’t both be one of them. You can’t have two beers or you’ll butt heads and you can’t have two followers or you won’t get anywhere. Trust you spouse and lead and follow when you need to follow and you’ll get there.

Mindy: Perfect. That’s good advice. That’s great advice.

Alyssa: Yes, it’s best.

Nick: My advice is make a budget. It might not look good at first, but if you had at least make it and can figure out what’s coming in and what’s going out you can figure out where to look, but you can’t really get ahead until you know those numbers and know what your current state looks like. You have to you figure out in your day-to-day month to month life how much money are you spending and how much money are you making before you can start making tweaks and getting yourself on the right path.

Scott: Awesome love it. The hardest question here what is your favorite joke to tell at parties?

Alyssa: I am not funny at all. I am like standing in the corner talking to one person, but if I talk at all it will be a friend’s reference. That’s all I have. That’s all you’re getting. I can’t. I’m not funny. I’m really not. I’m normally sticking my foot in my mouth.

Nick: Since she doesn’t get to tell a joke I got to tell two because I love telling jokes and after I told the first joke I’ll tell you why I wanted to tell the second one. The first one there is three kids and they’re arguing about whose dad is the cooler dad and so the first kid says my dad is the fastest dad in the whole world. He can take a bow and arrow and shoot it at a target and run and catch the arrow before it hits the target. The second kid goes no no no my dad is the fastest dad in the world. He can shoot a gun at a target and go catch the bullet before it hits the target. The third kid says no you’re both wrong. My dad is the fastest dad in the world. My dad is a contractor he gets off work at three and gets home at 2:30.

Scott: That’s very appropriate real estate joke.

Nick: Since I’ve offended all the contractors I now have how to tell an engineering joke to make fun of myself so people don’t get mad at me. How do you tell an introverted engineer from an extroverted engineer?

Scott: I don’t know how do you tell?

Nick: The introverted engineer will stare down at his shoes while he’s talking to you while the extroverted engineer will stare at your shoes while he’s talking to you. Yes.

Mindy: As someone married to an introverted engineer I can say yes. That’s hilarious. Okay since you sure you don’t have a joke Alyssa?

Alyssa: I don’t.

Mindy: Where can people find out more about you guys?

Alyssa: We don’t have a website right now, but I’m active on Facebook. You can find me at Alyssa Paros. I guess my name A-L-Y-S-S-A P-A-R-O-S. On Instagram I am Allysa.Paros. I’m really active there too. On BiggerPockets Alyssa Paros. On LinkedIn, that’s where the best place is to find me.

Nick: For me, I have a Facebook as well. I don’t do a whole lot of Facebooking, but also Nick Paros and Biggerpockets I do try to talk a good bit now that I am kind of knowledgeable at least a little bit in the real estate market so I try to answer people’s questions. I feel good when I can help people out so I definitely am active on BiggerPockets.

Mindy: Awesome and we will have links to all of these all of your social media and all of your like your Facebook and your BiggerPockets links in the show notes of this show, which is

Nick: Awesome.

Mindy: Alright well. Thank you, Nick and Alyssa for taking the time out of your day to share your story with us. I really appreciate it and thank you for reaching out so that we could chat.

Alyssa: Yes, thank you so much for having us.

Nick: Thank you so much. Thanks for having us on.

Mindy: This is a lot of fun okay.

Scott: This is great.

Mindy: We will talk you later.

Alyssa: See you.

Nick: Bye.

Scott: All right that was Nick and Alyssa Parros. They have been doing a great job and I thought that was a fantastic show. I mean what a lot of great lessons there about how to manage your financial philosophy within your family and how to you know construct a budget, how to change your mindset from just budgeting and paying off debt to building networth and then take the strides necessary to make that happen while working full-time jobs with a child and potentially planning for a larger future family.

Mindy: Well and not only that, but even more basic is just figuring out how to work together with your spouse when you have a disagreement. You know this was a pretty big disagreement about money that they had right at the very beginning like what did he say the first weekend and she goes out and spends $800 on supplies and I can totally see where she’s coming from. This is our first house, I want to make it great. If you don’t make conscious spending decisions money just kind of flies out of your pockets. You know instead of saying, “Hey this is going to be a really big problem” or instead of having like massive fights about it, they figured out how to work together and now they’re both on the same plan.

Scott: Yes and that plan is working and producing real results, $80,000 in student loan debt paid off—$150,000 in net worth in 18 months—$156,000 at least net worth created in the 18 months. Using the advantages that have that are there for them with family in the same town, getting a great deal, having a grandma come in and help with the childcare and watching their baby. I mean they’re just making smart decisions left and right and I think it’s just a fantastic example that’s got a lot of great things that are repeatable for a lot of people out there.

Mindy: Yes and you know having a kind of a curve ball thrown at you with an unplanned baby can really derail your plans and they didn’t let that stop them. I really like that part of that story too.

Scott: Awesome well shall we get out of here?

Mindy: We should. I am going to go hang out with my family and you are going to go? What are you going to do Scott?

Scott: Do whatever it is I’m going to do this evening you know.

Mindy: Ooh mystery.

Scott: No, my girlfriend runs a summer tech camp. It’s a really prestigious program and she runs the whole thing with hundreds of students and dozens of employees. She actually has to stay over there a couple of nights a week and so tonight I have a lonely house to myself so I’ll probably I don’t know, play video games and make popcorn and be depressed.

Mindy: I was just going to say let me guess, you’re going to play video games, Scott.

Scott: Yes, something like that.

Mindy: Okay well I will not keep you from your videos games. From episode 29 of the BiggerPockets Money show this is Mindy Jensen over and out.

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In This Episode We Cover:

  • How Nick and Alyssa met
  • Nick and Alyssa’s college journeys
  • Challenges they encountered early in their marriage
  • The conversation and agreement they had when it comes to spending
  • What a mad money account is
  • Honing their budget to “six accounts”
  • Paying off their home before the kids go to college
  • Tracking their net worth starting January of 2017
  • Putting money towards investments and debts
  • The properties they purchased
  • Handling child expenses
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “Everyone is a genius in a bull market.” (Tweet This!)
  • “If you don’t have a respect for your spouse, your marriage is gonna fail.” (Tweet This!)
  • “Nobody is gonna know what you have in your head unless it comes out of your mouth.” (Tweet This!)

Connect with Nick & Alyssa