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Getting Serious About Paying Off Debt | BiggerPockets Money Podcast

The BiggerPockets Money Podcast
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Getting Serious About Paying Off Debt | BiggerPockets Money Podcast

Phillip Taylor studied to be a CPA in college, just like his dad. He graduated with some debt and decided to add to it by buying a house. In order to afford his new house, he didn’t max out his 401k—he didn’t even contribute enough to get the full company match!

By the time he got serious about paying down his debt, it totaled $95,000. PT decided to journal his experiences on a blog he called PTMoney.com. And something amazing happened. He found his tribe.

PT soon discovered that there was a whole community of people with financial problems who were willing to talk about it online.

PT wanted to meet these people in person, have live discussions about issues they were all facing, and share ideas. He started a conference that has blossomed into THE money conference to attend, FinCon.

PT shares his story of going from a finance guy who made bad decisions to a guy who helps others make great decisions about their own finances.

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Welcome to the BiggerPockets Money Podcast Show number 38 where we interview Phillip Taylor from PTMoney and FinCon.

‘Our baby got to be one years old. We are about to come to have the birthday party there for the one year old. I was assigned to a trip to India three weeks over that whole time frame so her birthday was going to be right in the middle of that. I begged my boss like you got to get me out of this, I cannot leave the States while my kids turning one. I really could not bring them with me on that trip and so it was just putting us in a situation where I knew, for my wife, it is super important for me to be home. I said, ‘Babe, there is only one answer here. I need to quit and then I could be home for our daughter’s birthday.’

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

Scott: How is it going everybody. I am Scott Trench. I am here with my co-host, Ms. Mindy Jensen. How are you doing today, Mindy?

Mindy: Scott, I am so fantastic today. How are you today?

Scott: I am doing great. It is a very big privilege to interview PT who is one of the really early guys in this whole financial dependence and money blogging sphere.

Mindy: Yes. I did not realize he had started his blog in 2007. That is like he is one of the firsts. I think maybe there were some people doing it in 2005 but it was like two people.

Scott: Yes. I mean he is a very significant part of the reason why this whole community around financial independence exists today in its current state.

Mindy: Yes, he has certainly given us in the financial independence community, the financial blogosphere, a place to really connect and grow and realize that we are not alone, we are not frugal weirdos, we are not financial freaks. Well, we are but we are not alone.

Scott: But we can be amongst our own kind.

Mindy: We can be amongst our own kind and it is really nice to connect with people who are just like you. I have known PT even longer than you so I am fan-girling over here just a little bit more than you. But I have been attending FinCon since 2013 and I know that people who have listened to the show in the past will recognize the name FinCon because I think we have mentioned it on every single episode we have ever recorded. Up to this one and down the road we are still going to mention it because it is such a huge part of my life. It is such a huge… I got my job because of FinCon.

I have grown so much and met so many people because of this one conference. It has grown into this huge conference . The first time I went, there were 350 people. This year there is going to be more than 2000 attendees. Before PT created that, he was just a regular guy trying to figure out money. Today, we are going to hear from PT about his story. Before we bring him in, let us hear from today’s sponsor.

Scott: Today’s sponsor is FreshBooks. If you are an entrepreneur who is not on top of your business financials, you need to get a good dose of FreshBooks in your life. FreshBooks is the ridiculously easy cloud accounting software made specifically for small business owners that need to find a better way to deal with their paperwork. It takes literally about 30 seconds to create and send a polished professional looking invoice. With two clicks, FreshBooks can set you up to receive payments online. FreshBooks can even show you whether or not a client has looked at the invoice you have e-mailed. For a 30 day unrestricted free trial, go to FreshBooks.com/BPmoney and enter BiggerPockets Money and how did you hear about us section.

Mindy: Okay. Huge thanks to today’s sponsor. Let us bring in PT because I am really excited to get started. Alright, PT. Welcome to the BiggerPockets Money Podcast. How is going today?

PT: It is going great. It is so great to be here with you guys.

Mindy: I am so excited to talk to you because… For those of you who have heard the show before, we have mentioned FinCon, I believe on every episode. PT is the creator of FinCon. PT has been a part of my life for five years or six years now but I never really get a chance to talk to you because it is always in the middle of this conference that you are putting on. While it is really one of the smoothest conferences I have ever been to, it is still a big deal and you have got things that you have to do. I am very excited to talk to you today.

PT: Yes, I am excited to be on here. I love talking about money. That is kind of what got me into this whole thing and encouraged me to start a conference to begin with. Happy to share my story.

Mindy: Boy, do I have a good show for you.

Scott: Well, let us let us go ahead and dive in. What do you consider like the foundation of your kind of journey with money?

PT: Yes. I would say I grew up with a CPA as a father and my mom was a teacher and a writer. Naturally, I found my way eventually to financial blogging but I just did not pop out of high school and get started doing that. I followed in my father’s footsteps and without really any… It was kind of  a lack of decision on my part, just kind of fell into that. Like I will go be a CPA like my dad. I chased that part of my career and education early on. Left college with some personal financial troubles though. I left college with student loan debt, as well as like some credit card debt, and really just did not have a clue as to how to properly live within my means and manage my money. I just did not have many goals around my finances as well.

It was something I had a lot of head knowledge for. High finance, taxes, investing, but in terms of daily money management I really struggled I had to find new mentors early on and that was through folks like Dave Ramsey and David Bach, radio personalities, hosts who people who teach personal finance early on that really educated me and helped me to kind of move from this kind of financial dummy to someone who was kind of understanding it and getting it. Then I found financial blogs and that really turned my life around because who these normal people sharing their personal lives, personal finance lives with me, inspired me to then want to take myself to another level.

That is kind of me. I have got this like official financial certified background but it really was not bringing me financial success in my life. I needed to really take ownership of it and own the personal finance side of it.

Mindy: Okay. I have got like 27 questions based on just what you just shared with us. First of all, you said you graduated college with some debt. Some credit card debt, did you say student loan debt?

PT: A lot of it, student loan debt.

Mindy: Okay. What kind of debt are we talking about?

PT: Roughly $25000 student loan debt and then I graduated high school in 1994 to get people perspective here. I had full scholarships but I still took out money for room and board and things like that. Then I had some credit card debt as well as roughly around $3000.

Mindy: Okay. Not crippling but still more than you should have.

PT:  But I was so blind to you, I was not paying it off every month. I just thought, ‘Oh, well I will just pay the minimum and that is cool. I had no concept to the fact that here I was carrying this big stupid consumer debt.

Mindy: Okay. We talked to Jamilla… I do not think I made a good point here. She also has a finance background and she did not know what she was doing with money. She was not conscious about her spending either. I want to say that I think it is very interesting. So many people will e-mail me or send me a note that says, ‘Hey, I do not know what I am doing with money. I feel really bad that I do not know what I am doing with money.’ Well, here is a guy who is a CPA, you kind of studied money and you made some mistakes.

PT: Yes, yes.

Mindy: I guess I am still kind of making a ham handed point but I want to say that if you are listening to this and you are you are having problems with money, it is not just you. PT messed it up too, I messed it up to too. Scott has been perfect forever but he is…

Scott: Of course.

Mindy: But he is, you know, but there we go. It is never too late to turn your finances around. You can still do it. It is not like oh, well I guess I am bad with money. I will just never fix it. Start today.

PT: Right, right. Do not use that as an excuse that you were born with it or someone did not hand you the knowledge. Sometimes, for me, I just needed an experience to kind of kick me into gear, right? What really catapulted me was when I got married, we wanted to buy a house. That was in my late 20’s and that was really when like I was starting to build that knowledge but I was like, ‘Oh, I really need to know this now because this is going to affect the future of my life.’ To a certain degree, I think that like experience is the best educator and that is the time when you need to kind of act on it make sure you seek out information but I still think, yes, our education system is not necessarily set up to help us leave education with those skills.

Scott: I mean like your education. I studied finance and corporate strategy in college is my two minors. Nothing in there really was tied to personal finance. You are just not… You are trained to think how can I perfectly optimize business finance? But there is no thought given to like, ‘Oh, hoe do I optimize my own? It is kind of this like very weird mishmash of what you are kind of priorities are. We work all day making money for somebody else but not to give any thought to my own financial position.

PT: Yes, yes. It was some naivety with me leaving college thinking. ‘Oh, I am going to get this accounting degree. I am going to be a CPA like my dad. I am going to make money. Money is going to cure all my ails.’ Right? I left college thinking I will just kill it with income. Whatever problems I have with money management or debt or spending, I will just crush it with income one day. Wait until I start making money one day and that lasted throughout my 20’s unfortunately.

Scott: What were your habits like in your 20’s? Where you at least saving matching what you made with what you spent? Was that debt going anywhere?

PT: Yes, I did not start… I wish I had started that way. I think my first 401K, I did not even get the company match but then my dad found out about that a year or two later. He is like, ‘What the heck are you doing? You at least got to get that.’ When I started paying taxes, that was really what was a big trigger for me because I realized my dad was like, ‘You got to do this traditional IRA because if you do this your taxes are going to go down by this much. You are going to pay less.’ For me, that was a huge trigger. Okay, if I contribute to my time this much, my taxes will go down this much and I will basically get money back.

That is kind of how I felt even though I would not going to be able to use it to the future, I feel like I was getting that money back. That really started motivating me early on. I use things like the traditional IRA. I started investing through my company 401K and sort of believing those systems and pay myself first, putting those things forward. Slowly but surely starting to work myself out of debt. I was a Dave Ramsey. I kind of believed in some of that stuff. Got rid of the credit card debt of course first and then went after our car loans once we got married. That is kind of way down the line when I was 30. I kept car loans and student loans in life until I was 30.

Mindy: Okay. That is not uncommon theme unfortunately. I graduated just a couple of years before you did. I am sorry, did you say you graduated in high school in ’94 or college?

PT: High School in ’94.

Mindy: Okay. I graduated a couple years before you and our student loan debt is not anything like that current student loan and it is just amazing. I did not even have student loan debt because my parents were so generous, they paid for my college. But this is not about me, this about you, sorry.

PT: Lucky you.

Mindy: When did you finally pay off all of your debt? We started working on it when we got married. We had two incomes coming in and we decided to live off of one income. It wised up. We had read David Bach, The Automatic Millionaire. Told to get on board with Dave Ramsey and decided okay this is our time. We got both incomes coming in, we can crush both of our car loans and crush both of our student loans over the next three years and that is what we did. It took us about two and a half, three years, but during that time I was also starting PTMoney, the blog. I was journaling this process. I was showcasing what my debts were and really showing how we were kind of willing those down over the years there. I think I would say I was about 33 when I was completely debt free other than the mortgage.

Scott: Did you have kids during this time?

PT: We had kids our second year of marriage, right in the middle of all that.

Mindy: Okay. Did your wife continue to work after the children were born?

PT: she stayed home but by that point PTMoney was starting to produce a little bit of income and so my blog probably started replacing some of the income we lost in trying to knock out those debts.

Mindy: Okay. You were working as a CPA and working on your blog and your wife was staying home.

PT: That is it.

Mindy: Okay. Are you comfortable talking about your salary? What sort of salary were you making as a CPA?

PT: Yes, bring it on. My first job out of high school or out of college was $33000. By the time I left, I had work myself up to about $95000. When I left corporate, I was making that. When we first got married, I was probably making somewhere around 80 to 85.

Mindy: Okay. Your wife was making how much?

PT: She was making roughly, as a teacher in the school district there, I think she was making around $50000.

Mindy: Okay. That is a nice chunk of change to throw at the debt and it took you a couple of years and you paid off all the debt?

PT: We did.

Mindy: Except the mortgage. Now, do you still have a mortgage?

PT: We do, we have. We have taken our home that we were in, the one we bought for 20% down, which was a $200000 house. We put $40000 down and that was something else we were doing during that three year period. Not only we are paying off the debt, we were saving up for our first home and saving up just in general for our retirement or future. We still have that first house, it is our rental property now, we kept it as a rental property. Somewhat of an accidental landlord situation there, and we could talk about that since I know you guys like real estate.

Then we have since bought another property which is our home now and, again, try to put 20% down there as well. We are slowly paying down the one we are living in now, we are no longer aggressive in trying to pay down the old home because it is our rental property, we are just happy with that, but on our current home we are living in, we are trying to chunk big cash payments to that now but in general my philosophy on mortgage debt has been through the years to just kind of let it be something that is a part of our life and use the money we are not spinning to pay that down to invest as much possible.

Scott: As you are paying down the debt here, were you at any point like were you aware of like, ‘Oh, I am going to get to zero and then my investment approach is going to change to this or what were you kind of planning to do with excess cash as you got past the zero point?

PT: Yes. It was more about because I started blogging and I wanted just more freedom and I wanted this blog thing to maybe work out and be my full time gig. It was less about a particular finance goal and more about just a life goal of not having any burden in my life. In knowing that this is probably the only moment we are both going to be working full time and maxing out our income, so let us use this moment our life to like crush everything that is in our past that is a negative drain on us so that in our future we are set up to do whatever we want. That was kind of the mentality but in general, yes. I mean and knowing that I could do much more in terms of investing and give myself more of an off ramp for when I did jump to go do the blog full time.

Scott: What does an off ramp look like to you in terms of quitting a job, making $85000 or $9500 a year?

PT: For me, we were living pretty lean. I would say it was replacing getting in the income for the blog up to about a third of that is what we were at, third to a half. Then in terms of savings, we had roughly probably six to nine months before that point in. Then during those years we really try to stretch it out to about a couple years’ worth of living expenses. When I finally left the 2010, which is three years after starting the blog, we had about 18 to 24 months’ worth of living expenses saved up, I would say, in cash.

Scott: Plus, you had a third of your salary coming in from income from your side hustle at this point, the blog.

PT: That is it.

Scott: I think that is like a really good take on like financial runway. Like that amount of time you feel like you have before you can… Where you are comfortable, right?

PT: Sure.

Scott: Your income and that cash cushion.

PT: Yes. Well, not only that but as soon as I left to go blog full time I picked up a blog editing job. It was kind of like as a side hustle. I started freelance writing a little bit more. I was hedging my… I was super risk averse. I needed like a big runway and a big… A lot of these questions answered. I needed to make it safe and secure for me to jump because I was jumping at a time when my wife, we had a nine month old baby, another one on the way pretty soon. It is like this is the worst time technically the job but we had set ourselves up financially to make it and make it safe.

Scott: What do are you doing for healthcare?

PT: That was a big question and concern back then because back then there was no Obamacare. I had to search the individual market, and back then individual market health insurance plans in Texas would not pay for maternity. When we jumped, we were going to be facing… If we had another baby, we were going to be facing about $35000 payment for a baby essentially from a hospital. It was like do not get pregnant. But what we ended up doing is I did some part time work for my father the next spring and I jumped on his group plans for a little while there. We had the baby while on his group plan as a part time employee and then after that it was kind of off to the races.

Scott: I mean that is such an obvious little hack. Like I am sure that for many folks out there that are considering this leap, hey, if you can, any ability of time when healthcare expenses might come along. There is options out there, go get part time work. Go get something that has healthcare. In your case, it is through your father, but I am sure there is other organizations you could join particular skill and work something out.

PT: Now, there is Obamacare and then there is also the medical sharing community which is what we use now. That is totally resourceful for that.

Mindy: I want to talk about that. But before we talk about the medical sharing, I want to make a comment. You said you quit your job in 2010 because you are risk averse and I just think it is hilarious that you call yourself risk averse, yet you quit your very good paying job in 2010 when everything was going kind of into the toilet in the economy. You started FinCon which I kind of think is sort of a big risk. I mean I guess when you first started it was not… What was the first attendee list? Like 200 people?

PT: 200 people, yes.

Mindy: Okay. That is not nearly the juggernaut that it is now, but still, ‘I am risk averse but I am going to quit my job at 2010.’ That is why I was laughing. I am not laughing at you, I am just laughing at what you said.

PT: Sure, sure.

Mindy: I am sure I know the answer to this question but I want to just ask it anyway. How did your wife feel about you quitting? Because she is now a stay home mom and you have this high paying job that you are leaving. I am assuming you guys talked about.

PT: Sure, sure. We did. She knew my desires where I was kind of going in with my life. She knew the blog was playing around on the internet, as she used to call it, it was starting to pay the bills and she know that it was something I was super passionate about. She was supportive but she was also practical like I was for the most part. She said let us not quit for another couple years here. Let us keep going until we are really really safe. Then I used the situation probably looking back that it was kind of sneaky to allow myself to kind of make the leap earlier. I did a lot of traveling with this job. We would go international.

While my wife and I were young married, did not have kids yet, it was super fun. Even with our small little one, first born, we would take her traveling. We got to go to Singapore, to Ireland, all kinds of cool places. But then once our baby got to be one years old, about to kind of have the birthday party there for the one year old. I was assigned to a trip to India, three weeks, over that whole time frame. Her birthday was going to be like right in the middle of that. I begged my boss like you got to get me out of this, I cannot leave the States while my kid is turning one. I really could not bring them with me on that trip and so it was just putting us in a situation where I knew, for my wife, it is was super important for me to be home. I said, ‘Well, Babe, there is only one answer here. I need to quit and then I could be home for our daughter’s birthday.’

I kind of used that situation to kind of push her over the edge there and she is like, ‘Okay, stay home. Be here for the birthday and let us see if we can figure this thing out. If you cannot, you are CPA. You could probably always go back, find a work, let us go for it.’

Mindy: Yes. I was going to say I quote Joel from FI180, who was on our episode 11 a lot. He says, ‘When I quit my job, I was not totally financially free but what is the worst that can happen? I will go back and get a job. My worst case scenario is everybody else is everyday life.’ The idea that this is some huge leap, you are a CPA which is I would say kind of recession proof. I mean people are still going to need CPAs no matter what. The teacher is a recession proof job, policemen, firemen, and there is a lot of things you could do as a CPA. ‘Now, you walk me home. I guess I got to quit.’

PT: She loved it too because I have been obviously been able to be more present with our family and not have full control of our schedule. There has been some ups and downs too emotionally and financially but it has been a good run and we are totally thankful that we have been able to do it.

Scott: What happens to, this is that we do not often get a chance to talk to people about because a lot of people are on a journey to fine or just fine, I do not know if you can consider yourself as fine at that point but you consider yourself ready enough to go and pursue your blog full time and other ventures full time, right? What happens after that fact? What are the next couple years look like for your income and financial situation?

PT: That is a good point because even though I have been blogging for three years, fine was not necessarily something I put out there for myself as a goal. It was just basically maxed out as much as possible so that I would be prepared if and when retirement came. Then here I am faced with now a new life situation of being completely free for the most part, being able to kind of call my own shots. Wake up every… No more Mondays in my life. Work up every day and just make the best of it as I can. The blog was very passive in terms of income so it really kind of felt I had that feeling of being really financially free and independent in my life. I just discovered Jacob’s blog, I forgot when he started, but I was just kind of getting into fine.

Scott: It is an Early Retirement Extreme?

PT: Yes. Early Retirement Extreme during those years. I was like that is really cool, it is really radical. I was like really pushing the limits to the height but I did not really like own it at that point. But yes, whenever I left corporate, had my blog going and was financially free or financially, I guess, free is what you call. It certainly was independent but call them on shots. It kind of absolve me of like a future goal with fire in a way because I felt like I kind of arrived in a way to the lifestyle that I wanted. It was a complete ultimate independence but it has allowed me to kind of take the pedal off a little bit, right?

I was not pursuing my… I no longer and basically I guess was not going to be nudged to pursue financial independence as fast as possible because I was totally just happy running my blog and eventually then running FinCon and having kind of both things going on and grow my little family. But I want to say though that the fire concept I love and it has come back into my life as it has become blossom more in our community. I love it, like I said, because it really raises the bar for consumers and for people in general. For so long we have said, ‘Oh, say 5% or 10%, maybe 15% of your income and you will retire whenever you are 65 or whatever.’ In this new insurgents so far has really set the bar much higher.

I think, in general, as consumers see a higher bar, even if they do not hit it they are going to be sort of pushing toward that and that higher plane and even if they just get halfway there we are all going to be off in a better spot because there is more examples of people kind of pursuing more radical approaches to it. I just think it is all positive. It is pushing me to kind of think about him I really independent right now and do I want that in my life, complete financial independence? It is been interesting to kind of keep that idea around in my head when I feel so free already.

Mindy: Yes, yes. It is the freedom that you get from not having to work at a job that you hate or, maybe not even hate, just do not like all that much is fantastic. I still, every once in a while, I will talk to my husband who has quit his job and he will say, ‘Hey, how is work going? Do you still like it?’ I am like I cannot believe I get to work here. It is I am excited to go to work every single day. But I had jobs that that was not the case at all. Even just like not working for yourself sometimes could really be like oh I just do not want to do this anymore and I do not ever want to be a CPA. I cannot imagine not wanting to be there.

PT: I do not blame you. It is funny, I used to do tax returns for all these businesses right at my CPA or at the CPA Firm that I worked at. After I would do the return, I would bring it into my partner to get him to sign off on it. I said, ‘You know what? This is a really awesome business. This would be really cool to run one day? Do you ever feel that way?’ He is like, ‘Nope, I just like doing their taxes.’ Right then and there I knew I was not destined to be a partner in a CPA firm, I need to go find like my own thing.

Mindy: Yes, that is awesome. That is a fun story. Okay, a few minutes back you mentioned that you have a medical expense sharing kind of insurance. Without a doubt, hands down, this is absolutely the number one question I get through e-mail or Twitter on the BiggerPockets forums or anywhere people see me they are asking, ‘Can you do a show about insurance? Can you talk about this?’ Right now, it is kind of up in the air. They have taken some of the Affordable Care Act mandate away but they are still working on fixing it so I cannot really have a show based on all of that but I am really glad that you have this sharing. Do you want to name the company that you had the medical sharing with and then we can talk a bit more about that?

PT: Yes, absolutely. It is Medi-Share and we started with them in 2015, I believe.

Mindy: Okay. That is not the one that I was thinking of? Budgeting and the fun stuff, just had a baby, through a different sharing program. She said, ‘It was a great experience.’ She had no problems at it. They did not like baulk at paying the bills. It is not insurance, right?

PT: No.

Mindy: It is like a shared… I really should not ask these questions, ‘Hey, PT. Can you tell us all about this sharing experience? What is it and how does it work?’ That is how I wanted to ask that.

PT: Yes. Medical sharing is the best way to describe it. Essentially you are just sharing a community of people that have opted into this program who share each other’s medical expenses. Think about we all put our premiums, they are not called premiums, but we all put our monthly premiums into a pot every month. Then all the sick people raise their hand and say, ‘I have got this bill. I have got this bill. I had this surgery, give me some of the money out of the pot.’ That is how it works from month to month to month.

The sick people are the people who need it, at the time of need, get to use the money that is in the pot. Now, there is restrictions on who can kind of be involved in that. Medi-Share has certain requirements, lifestyle requirements, to get into that pool to participate and that is kind of how it works. After Affordable Care Act came out, we jumped on a Affordable Care Act plan and then a year or two later, or a year later maybe, I discovered the Medi-Share thing and realized that it was an exemption to the Affordable Care Act. If you got on Medi-Share or any of these medical sharing programs, even though it is not insurance, it is exempted out of the requirement to be involved in those Affordable Care Act plans.

I was like, ‘Whew, there goes that big massive premium I was paying for maternity which I no longer needed in my life.’ I was able to jump on these high deductible, like I paid… It is a $10000 deductible, they do not call it that, then we pay about $250 a month for our premium for our family of five.

Scott: That is a fantastically low premium to pay to cover a family of five, right? What are those lifestyle requirements that you were talking about?

PT: Particularly with Medi-Share, and I believe you mentioned budgeting in the fun stuff, maybe she uses Liberty Healthcare?

Mindy: I think she does.

PT: They are a non-religious, more of an open platform, I guess. But Medi-Share in particular is for Christians. You have to claim to be a Christian and claim to attend our church service regularly and then also claim to live by certain lifestyle which I basically bullet down to like do not have sex out of wedlock and do not drink alcohol in excess, I mean that is kind of the two big things. Basically, if you if you were to get injured driving drunk on your way home from the bar, Medi-Share would not pay for that injury. They ask that they do not have those risks involved kind of in their community. It is one part sort of about living a “Christian Lifestyle” and then one part sort of protecting the people who are providing money for the pool.

Mindy: Okay. This is something that they could do because it is a private organization. They are not discriminating against people? They are just saying, ‘Hey, this is our requirement.’ I guess that is not discrimination. I know that there are others that have different… I mean they discriminate against people who drive drunk, that is against the law anyway. Maybe the police are discriminating against people who drive drunk too by not letting them do what they want.

Scott: It seems like a great program and something that, I do not know, perhaps there are other options out there for lots of different situations. I do not see why you would definitely want to drive drunk. Why would you ever cover that, right?

PT: Right.

Scott: But for non-Christian, just by options as well.

PT: Go to Liberty. That is the one for folks who do not necessarily need or want to proclaim a religious aspect to it. Yes, absolutely.

Mindy: Right. I have heard a lot of people are on Liberty and they have a lot of success with it. Now, is there anything medically speaking that they will not cover? Like regular surgeries, do they cover? Is there anything they do not cover?

PT: Yes. Anything major unexpected, they will cover. As long as I have my $10000 deductible I have set. Anything above that $10000 for the family that they will cover. Up until that point, I am told happy paying for it. We just do not have medical expenses in our life. We just do not have other than annual checkups. It works out for us. People who have chronic health issues or having a baby in a few months or who have just something sort of they are expecting already, probably need to talk to Medi-Share first about like how they are going to kind of balance that. That “ongoing medical need” or the baby situation because it probably in those cases either have to pre-pay some of those costs or start pre-paying for those costs. I am not officially speaking for Medi-Share here so you have to ask them but…

Mindy: Yes, I wanted to make that point too.

PT: Prepaid some of those cost for the baby. If it is a chronic health thing, odds are they probably just will reject you at that point, like insurance used to do before the Affordable Care Act.

Mindy: Right.

Scott: Well, this is great. I mean if you are considering early retirement or you are considering just even going off being an entrepreneur or landlord full time or whatever it is that you are moving away from traditional full time work where your employer sponsor your healthcare, this is a great option to look into, Medi-Share and Liberty, right? See if there is a way that they can help you. Do you have any other challenges that people are overcoming when they are leaving work that you have come across over the last couple years?

PT: I would say two of them. Like managing cash flow for your business, right? When you got your employer, you have got the regular paycheck coming in. As kind of having your own thing, you have got kind of manage that cash flow coming in. I would read a book called profit first by Mike Michalowicz of how he recommend that it to any business owner out there who wants to basically apply the pay yourself first financial automation tactics that you think, ‘Oh, it is just practical for your personal finances.’ Everyone follows or meets… advice and David Bach’s advice of automating your finances and paying yourself first. Do the same thing for your business, that is essentially what Mike Michalowicz talks about and he sets up a system of bank accounts. Transitioning the money to make sure that you are setting yourself up to so that you can pay your taxes when they become due and so that you are basically guaranteeing profits for yourself in your business and treating it appropriately.

Then I would say making sure you do not neglect saving for retirement oftentimes and it took me a year. Even as financial savvy as I was, I just sort of sat around for a year thinking I will get to that solo 401K or set by IRA one day and then a year goes by and you realized you have not done it. Make sure you have a plan for that as well. How you are going to continue your retirement savings even if you jump to self-employment. I chose the solo 401K at first because I was self-employed and I was the only person in the business, as well as my wife. She can be on that as a solo. Then now that I have employees to FinCon, we run a simple IRA for that. Just investigate what plans are out there that you can jump on. Automate it just like you would your normal 401K and pay yourself first.

Scott: These are really good points. The first point just about cash flow and all that, we had a post on BiggerPockets a couple weeks ago. The guy is a landlord, he is running a business. He quit his job and he is reinvesting all the cash flow of his business back into the business and to living off the wife’s income. She is getting mad at him. He says this on a post, you can find this post if you are interested in looking for it folks, he is like, ‘She is not be fair. She says I am not contributing to the household.’ Every single person who is a retired landlord of this thread is like, ‘Yes, you need to contribute to the household. You have got to take money out of your successful business and use it to live your life.’ Some extent at some point, right?

I think that would be difficult, I think, for a lot of people who are used to saving all the money from their job and putting it into this to actually begin living on it. I think that maybe there is some merit to going to that thought exercise of how you are going to actually withdraw from your investments and your business after you leave.

Mindy: Yes. What you are forgetting, Scott, is that he had something like a $500 a month truck payment that he was putting the bill for.

Scott: Oh my God.

Mindy: It was like he was taking every penny that he was making and throwing it back into the business and not putting any of it towards the finances. His wife started feeling resentful and I would like to invite them to have a conversation and talk to each other. Talk about your hopes and dreams and maybe you are about ready to start taking money out and putting it or maybe you got this like really big deal you are working on, let her know in advance.

Scott: It seems there is a lot of lessons to apply there in general though. Just like if you are going to leave your job, how are you going to continue your contribution to the household? However that is, get along with your spouse. Whatever way that means to you. Taxes as well, I assume, are points that are made in Profit First. Actually, I have not read the book.

PT: Yes, yes. Totally, totally. Mike Michalowicz has a way of kind of creating a story, kind of around it as well. It makes it a total engaging book. I would highly recommend the audio version of the book though if you check it out because Mike has got a way of just riffing and presenting it in a real positive way.

Mindy: Nice, nice. Let us move on to the next stage of your life that you have quit your CPA job, you are working at PTMoney full time. Whose blog? Do you want to share whose blog you were editing because I think that is kind of cool that PT used to edit somebody else blog.

PT: Yes, I used to edit. It was actually a company blog, a bank, PeerStreet. I do not know if you are remember those guys.

Mindy: Yes, I know PeerStreet.

PT: A reward checking account.

Mindy: Okay.

PT: I was their blog editor for a while.

Mindy: That is cool.

PT: Yes, about six months there. It was a good paying gig. I got to basically just invite all of my blogging buddies to come get back links for their own blogs so everyone was happy.

Mindy: Wow, what a tough job. Okay. When did you get the idea to start a conference for Financial Media. The first one was it 2011. There were like five personal finance blogs at the time. How did you know that this was going to be a success or why did you think this is going to be the success that it has grown to?

PT: Well, I just fell in love with the community. I started my blog in ’07 and it was as a result of me just loving those five first finance blogs that you said. Actually, there were a lot more out there. Honestly, when I started in ’07, I thought there are too many blogs. I do not have permission to do this, they do not need another voice out there. That was in 2007 but, yes, it was just the community people that reached out to me and basically said you are doing good work at PT Money, let us collaborate. The blogosphere was very collaborative. We would comment on each other sites, we would guest post all the time, without it being very like financially motivated necessarily. We are just like we are totally geeking out about personal finance and sharing ideas with each other and supporting each other because we were the weird people online talking about money, right?

There is a natural bond like you are sharing what you are paying down, how you are paying on your debts, you are sharing kind of what your goals are for the future. You created this natural intimacy with each other even though I was just PT back then, I was blogging anonymously, I was building these relationships. Then we started forming little forum groups or basically online groups where we could actually just talk back and forth with each other in real time. It got really exciting nick, we started sharing ideas and helping each other’s sort of businesses grow. I started of go into Blog World Expo, affiliate summit, and checking out these other conferences and just saying to myself, ‘Man, this would be cool if it was just all the people I really want to talk to, all the other personal finance bloggers out there.’ It was like, ding ding ding, let us do this. I created a map, if do not know if you guys have seen it, but it is the personal finance bloggers world map. I have plotted all the personal finance bloggers in the world on a map and I will allow people to kind of self-submit to that. I just said this is cool. We are all over the world here, all the United States, likes seeing where kind of where everyone is. I said, ‘What if we just all got together?’ It was about a year after I had left PTMoney so I needed another side gig. I quit the blog editing thing and stop freelancing this much and I needed a side hustle.

I was up late at night talking to my wife and just said, ‘Babe, what do you think about this conference idea, Financial Blogger Conference? I think it is probably like the 16th conversation I had about with her about the idea. She finally just said, ‘Get up out of the bed and go start the darn thing right now. Back then, my office was literally in our bedroom. I went over to my computer and started registering domains, I remember, and even like install the theme that night but just started inviting all these people that had become my good friends online and had met at various conferences and just said, ‘Hey, let us do this. Now is the time. Our industry has grown to a place here where we need to have kind of an annual get together. Let us do this thing.’

Mindy: Yes. That has grown from 200 people in 2011 to… How many people are registered this year, 2000?

PT: Yes, we have over 2000 which is crazy.

Mindy: Yes, that is crazy. It is still the right people. It is people who are concerned about helping folks with their money. Guys like you and to have 2000 people in a room together who all have that kind of same mission, we are all out there fighting the same beast of financial illiteracy. It is pretty cool, it is a great group to serve. A good community really existed before I had the event for them. A lot of people give me credit for sort of fostering them or coming up with this idea but it really just came out of an outpouring of what this community has done for me and my life personally and it is really special each year to kind of serve them.

Scott: This is my favorite conference of the year. This is like the one that I do not miss. I will not in the future, I missed it two years ago, but it just so cool to see all of these folks that are changing the world financially all at one place, all of my heroes are at this conference. Yes, thank you for putting it together. It is one of my favorite times of the year.

PT: You are welcome. I had no event planning experience so it was just something I put out into the universe and said I will figure this thing out on the way. The good thing about a conference is like having a baby. Like you can kind of study up on it, you have got nine months to figure it out. It all comes down to those four days. You got to do it right in that little time frame but we had all this time to figure it out. I enlisted a bunch of help, a bunch of people that I knew from college who were kind of skilled in event planning and technological stuff. Then I just really reached out to the community as much as possible. I took surveys, did polling, got everyone on e-mail list, and said submit your speaking ideas or try to make it open source as possible so that when people got to the event, it was like everyone felt like they owned it. Everyone there was like, ‘We did this thing.’ I was like, ‘Yes, we did this thing. Ever since that point, people have a sense of ownership of the event and then they want to share it as well with the world. It is a really cool business to run.

Mindy: Yes. I have not talked to anybody who was like, ‘Nah, it is okay.’

Scott: Give us a quick overview of this year’s.

PT: Yes. This will be our 8th one. We will be in Orlando, Florida. This will be September 26th to 29th. It will be a great four days of fun. We will have great keynote speakers from Rachel Cruze, Jean Chatzky, The Today Show editor, Mr. Money Mustache on Saturday and then we have tons of breakout sessions, over 200 speakers, and tons of digital marketing and some personal finance topics there as well. We have a track called Money Conversations, that is entirely dedicated to the personal finance topic. We have got a great expo hall which we call Think On Central where all the brands to do business with the creators but also to showcase kind of what they are doing new in terms of product and service offerings. Lots of parties, lots of fun, lots of late nights, lots of meals. It should be a blast in Orlando.

Mindy: Yes. Speaking from the last five years, it has been fantastic. I see no reason why numbers…

Scott: Fantastic.

Mindy: Fantastic. I am not going to say that because I do not talk like that.

PT: In a way, we are starting to become way we are trying to become like the Comic Con of money because listeners, readers, followers, are also coming to the event. We have created a special pass just for non-blogger types who want to come to the event and just kind of be around all these financial geeks. If you go to FinConExpo.com and look for the community pass application. You can certainly join us there for a reduced rate.

Mindy: Meet all of your favorite bloggers because literally everybody in the money space is there. A couple of minutes ago you said you quit the blog. When I asked you how you started FinCon, you quit your blog and you were looking for something else to do. What did that look like financially? You only had this one job, right? Doing the blog at that time or?

PT: I do not know what I said but I did not quit the blog, I am still writing.

Mindy: Okay, okay.

PT: I guess I mean meaning I needed another side hustle. FinCon had become, I mean PTMoney, had become my full time thing and I no longer had a thing to do on nights and weekends so I needed FinCon. Yes, I still run both businesses. Now, my ability to run PTMoney has really waned in the past few years just because FinCon is kind of becoming a beast. I have got employees now and is always more to do there, it is fun. PTMoney is fun too, it is my baby. It is what kind of got me into this. I still enjoy going over there and writing occasionally and trying to grow that business as well. I run both.

Mindy: Okay. I am glad I misunderstood. I wrote down, ‘Quite the blog?’

PT: In some ways, I have quit it. I mean because I have not been able to dedicate as much time to it. That is my fault for not scaling it in terms of getting help to work on it and building a team kind of around it when I could have, I probably could have invested in it, but I think that for the soul on the blog had such a personal nature for me. It is really hard for me to outsource it. That is a beautiful thing about FinCon, it is from the start I knew nothing about event planning and I immediately enlisted help and it has been a great project ever since. It is funny when you start one business, you are able to kind of scale it and use other people to kind of help build it but then another one was so close to me that it has been a challenge to do that. It is interesting how the type of business you are running, I think, affects your ability to scale it.

Scott: I think this is a really good point that a lot of… I think in the financial independence community, there is a lot of pride almost around just completely doing it yourself, right? But really one of the big benefits of becoming fired, at least becoming confident financially, is that you can go on to build a business which is really the ultimate way to build wealth at long term and it is more fun.

You are going to have a team and a large event that you can run which is probably somewhat passive, somewhat involves your time at this point, but you can see all this going forward and kind of do exactly what you want. It is because you hired other people and built a business around it which is something that is really tough, I think, for folks that are starting to save their first $100000 still to kind of wrap their heads around. Some of that frankly, the owner of BiggerPockets, Josh Dorkin, it also did really well alongside you are on this kind of same similar journey.

PT: Yes, absolutely. Josh is a great community builder and so smart to have done it that way. I do not know what it is about those blogs, why we kind of keep them so close, but yes it is certainly a blessing to be running a business that where you are able to involve so many people and your ego does not get in the way of sorting, releasing some of it to allow others to kind of participate and grow it. It has been really cool to do.

Mindy: Yes. There is plenty of accolades to go around for everybody. You can involve everybody and hey this person did a really great job doing this and that does not diminish you at all. Since we are talking about accolades, we have to give a shout out to Jessica, the best ever, who is fantastic. You tell me.

PT: Yes, she is our official manager of events, I think that is what she is called or director of events, that is what her title is. But she started off the first year, she was my first contract hire for the business. She is a buddy from college who just has that organizing mind and kind of put together the party. She is been working with the business ever since and now she is full time with me. She is just great, she knows everyone, is a good relationship builder as well as a details person. I needed someone like that to help me grow it. She is someone also that I trust to do very well.

I tend to hire people that I have a lot of trust with first and so a lot of my hires are people who I have known a long time, which I think is different than a lot of people tend to hire, but that is just my comfort zone whatever. I can sort of absolve myself, not absolve myself, but sort of feel comfortable knowing that as more folks are kind of have their hands in the business, it is people at least I trust and I have known a long time.

Scott: Feel free to tell me if I am completely wrong in this assertion here but you hired your first couple of folks though. I assume you to put a lot more time and energy into these relationships with over the first year or so, maybe two, to get this up and running. Then you are kind of able to kind of hang back just a little bit more. Is that correct? Is there a kind of a reinvestment? Like almost like anti five for the first year or so while you are building this business? Particularly the trust in the first few employees?

PT: Absolutely, absolutely. I mean I love doing it. It is hard to pull me away from it, right? But there comes a point where there is just too much work to do and so hopefully during that time you got someone there alongside of you that you are kind of talking to about it or are “training” on the subject or you are there at least for questions for them regularly to kind of hold their hand while they are while they are doing it. But we are at a stage now, it is great now, where they are I would say let us get this done and then it kind of just gets done which is really cool.

Mindy: That is fantastic to have employees that you trust. It does not matter their qualifications if you cannot trust them.

PT: Yes, I would agree with that.

Scott: Yes, I just want to make that point though about, hey, you become fire and then you build a business and then there is a re-commitment and re-energy. You are not free and why you are training employees and all that stuff in the same way. But then it kind of gives you even more options after a couple years of investment. Which is kind of what I was thinking.

PT: I like it.

Scott: Also, is anything else you want to cover before we move on to the Famous Four.

PT: I am good. Whatever you guys want to talk about. I am an open book though, if you want to get into the dirty details of like am I actually fire? Like where we are actually in our retirement savings, road map, how these businesses have kind of affected that. I mean maybe think about the conversation that might be kind of a missing component.

Mindy: Okay. PT, what do your finances look like right now? This is kind of like I feel like I am asking the teacher about things that are none of the student’s business. But let us talk about your finances right now. Are you now at a position where you could quit everything and never have to work again? Are you financially independent? We are not quite there. We are close. In fact I like to say we are at a place where if I stop saving all together now, my money in, let us say ten years would be at a spot if the market continues as it has been the past hundreds of years. If we can expect the same 6% or 7% or 8% returns that we have been seeing, I would certainly be at place where I would declare like financial independence at this point.

We could totally stop everything and would just withdraw from that amount the rest of our lives and be okay. Yes, we have got the rental property coming in, it is about $4000 a year. We have got blog income from PTMoney which is waned up and down but right now it is probably on the high high five figures. In terms FinCon, that has taken off the past couple years and so income wise that is doing really well for us but it has only been a two year thing. The previous six years were really kind of up and down. But all that to say is allowed has to really fast track some of our mortgage pay down. We just did a big chunk on that, we have got about a third of that paid off with the expectation that we will pay another third in December and then possibly another third next summer.

We expect to be completely debt free for the house next summer, we are just kind of pacing ourselves there. Then I would say continue investing for retirement just because I like reducing my tax burden every year. I really let that drive me. I do not have plans to quit working anytime soon, I want to continue doing this. But we are at a sweet spot that I would say and if we stopped investing now or start saving now, our money would grow to a point to where we would be fine. If we put in a couple years of hard work, it is hard to know where the business but because the business is growing pretty rapidly here, but I would say with the next couple years, if we continue working as we are, the trajectory that we would definitely in a spot where we could live within those, that 4% for the rest of our life.

Scott: I got a question here for you. First of all, this third of your mortgage payments, is that for your primary home or your rental mortgage?

PT: Primary.

Scott: Okay. Do you plan to pay off the rental mortgage?

PT: I do not but if my wife pushed… My wife, she is pushing me on the home. We are doing that because she feel more comfortable with that so I am cool, but on the rental property I really do not have it on desire. In fact, I was actually looking at like taking money out of that because the equity has gone up so much in it. If you actually look at the equity compared to the return we are getting, it is pretty terrible. I have actually entertain like pulling money out of it and doing another real estate deal. If I was working on two businesses right now, I would probably go, I have done that already but yes no plans to advance pay that rental property mortgage.

Scott: The reason I asked is I got an observation here. You said, ‘Hey, I got a five figure income from the blog, high five figure for the blog.’ Then you have the conference, the business, then you have this $4000 a year from the rental property and I love to hear thoughts on this. But to me, it seems for someone in your position to be more of an annoyance than a real contributor to net worth from a cash flow perspective. I was wondering if you are going to buy many more of them to stack that up or what? I was just kind of wondering what your thought process on that.

PT: I have somewhat a desire to do that but like I said running both businesses, I feel like I just have not had time to chase that down. I have started investing a little bit with PeerStreet, kind of as a way to kind of scratch that itch. I like having the property. It is so little in terms of maintenance. I feel like we could jump back into it once our kids leave. It could be a place like a pre-retirement house for us to have. I agree with you. If you look at the math perspective, it is an annoyance because there is a maintenance issue once a year and it is inevitably when I am traveling or overseas or something. It is just not enough return for the money we have kind of tied up in it. I am on the fence about it but it was our first home so probably there is some of my personal emotion, I lay the force down in it, there is some of that kind of involved in it too.

Scott: It is great thought process and great problem to have. That is right. I was just interested. I just sometimes see that observation sometimes. Folks who bought one rental property, became an accidental landlord and what is their plan to use that going forward or how to handle it.

PT: Yes, good question. I love being challenged on it and I do on my blog, PTMoney, I do the income report for the rental property every year so folks can go check out kind of what I make every year how I have it all set up, how I manage it. I do it all too, I do not outsource any of it. I do as much of the process as possible because it gives me a lot of content for the blog and it has taught me some things and I really enjoyed it.

Mindy: Is it a business expense because you talk about it on your blog?

PT: That is a good question, that is a good question. I have not gone down that road but let me…

Mindy: Let me ask my tax preparer, okay. You are talking about a cash flow which is negligible. Like Scott said, when you said $4000, I am like $4000, you are so busy. I have never put on any sort of party besides a kid’s birthday party and that freaks me out. I am not a good party planner. The concept of putting out something as big as FinCon just gives me the heebie jeebies. When you say that you make $4000 on this, I am like, ‘Oh, whatever, FinCon has got to be taking up all this mental space.’ It is in Texas, correct? Can I say that you live in Texas?

PT: It is, yes. We are.

Mindy: It is a big state, good luck finding you. Texas is kind of going crazy, I know what city you live in, but Texas is kind of going crazy appreciation wise. I am assuming that this has appreciated significantly.

PT: Yes, yes. We bought it for $205000, I believe, it is now worth $370000, something like that.

Mindy: Okay. I mean that is a nice chunk of change in just a few years.

PT: Absolutely. Ten years, yes, but still.

Mindy: Still and it is bringing in money. It pays for itself. Does it cost you anything to own it every year?

PT: Just the regular expenses of mortgage, insurance and HOA and a little bit of maintenance. The air conditioner freezes up once a year inevitably.

Scott: It sounds like you live fun from your lifestyle off the blog and FinCon, right? Then you are paying down the mortgage, what do you plan to invest in or what are you investing in nowadays with an e-surplus?

PT: Right now, I have chosen to max out what we can do retirement wise each year through our plans and then we are putting the excess to our down payment on our home.

Scott: Okay.

PT: That is the extent of it. You could call it investing back in the business. I have done a little bit of that with FinCon the past year which I have taken my three contractors and basically brought them on full time. That has been a big investment there. Having a payroll is a lot different than having a contractor. That has been interesting but obviously worth it and been a good decision but I would consider that an investment of sorts.

Scott: Absolutely.

PT: But to answer your question maybe what you are kind of getting at is one area where I feel like I have lacked is because I have chased these taxed advantaged accounts for so long. I feel like I do not have enough in taxable accounts right now. That is probably all my horizon is to start putting more money into taxable accounts so that if and when I decide to start living off of my savings, I will have some money that I can pull out that is not handcuffed by the IRS.

Scott: But it also sounds like, from what you are saying, that you could pull more money out of the business but again you are choosing to make calculated investments that are going to grow that and that is a much higher return. I do not know if you have sat down and modeled out, maybe yes but it seems like to me that there is probably a much higher return for investing in a business that you really know and have a unique ability to scale rather than any other type of after tax investment you can ever think off.

PT: Yes. If you look at my whole picture, I try to think about in terms of just diversifying myself as much as possible. That is probably another aspect of why I have the rental property, that is why I have the multiple businesses. That is kind of my philosophy behind it but yes investing in my businesses has paid off big time. I would encourage anyone out there who has conquered their expenses, they are already living lien, and maybe they have got the five plan going. Man, do not negate the aspect of starting a business for yourself. Just start with that side hustle. Who knows what that is going to turn into, who knows when you get passionate? People may say I am not really the entrepreneur type or I am too risk averse like PT early on, man if you just keep going with some kind of income stream and that you can push the levers on, you can push and pull things. Man, it is exciting. Who knows you just might get into it and you can just crank that sucker up to eleven and make a lot of money, more so than you can typically in an employer based situation. It has been a real positive for me. I challenge folks to seek that side of the equation.

Scott: Just to chime in here, I have the privilege of being able to pull some of those letters at BiggerPockets and it is kind of fun. It is kind of fun to look at those things and figure out where can I could have apply pressure to this lever, move the business forward all that kind of stuff especially when your business is doing good things and people love it, right?

PT: That is right, yes.

Mindy: Okay. I want to tack on to your comment that oh maybe I am not the entrepreneur type. We interviewed Nick Loper from Side Hustle Nation and the Side Hustle Podcast on episode 28 of this show. He has an entire podcast dedicated to side hustles. JMoney from Budgets Are Sexy has a whole page of side hustles. What is it? Like 75 different things that you could do and they are not all just you going and starting a business. It is just another way to generate income but maybe one of those things that you are doing to generate income can turn into a business. It does not have to be this like all-encompassing 2000 person conference that you move every year. By the way, Denver is a lovely location. I know you have been here once but you should comeback. It does not have to be this huge thing. It could be a small thing that generates a lot of income. If you are thinking about adding to your income, check out those things that I just mentioned.

PT: Absolutely.

Mindy: Okay.

PT: Personal plug here from my own podcast, The Part Time Money podcast where I interviewed about 30 part time entrepreneurs, kind of on a similar subject of side hustling before it was called side hustling. But that is an old podcast I did back in the day but some of those stories might be inspirational as well.

Mindy: Can you still find that? Is it on like everywhere podcasts are?

PT: It is in iTunes, yes.

Mindy: It is in iTunes.

PT: Anywhere podcast is where you could find it.

Mindy: Okay. This is the fantastic and we have run very long again because it is PT and I never get to talk to him. Okay. Now, it is time for the Famous Four Questions. These are the same five questions that we ask all of our guests. The first one is what is your favorite finance book?

PT: Favorite finance book, I got to give credit to Mr. David Bach and The Automatic Millionaire. That really kick started it in and for whatever reason flipped the switch in my head to really think about the future and really make some big changes.

Mindy: Yes, that is a good book.

Scott: Awesome. What was your biggest money mistake?

PT: Biggest money mistake was pretty early on. Left college and I had the credit card debt and student loan debt and I went out and bought a brand new car. I did not realized like I was going to pay insurance through the roof. The payment was going to be like killing my budget. I got back home, total buyer’s remorse, called up the dealership and they were like, ‘Screw you, you cannot come back.’ It was a Montero Sport, one of the first nice Montero SUVs, it was pretty sweet. I called up my dad and I was like dad you got to help me in this situation. He calls the dealership up, I do not know what he said, but the next thing I know the dealer is calling me and said, ‘Bring your car back up here. You will lose your deposit but come on back up here.’ I got to take the car back and get my old one. Dad had totally bailed me out and I swear that was the moment I said I am so ashamed of myself for letting my dad fix my financial life for me. I have got to get my act together here. I screwed up but I was able to get out of it a little bit and it taught me a lesson that I have carried forward.

Scott: I got a little tangent here. How much did you lose your deposit?

PT: A $1000.

Scott: I think that is really like a smart decision. Hey, you have a car, it depreciates immediately off a lot. Can you pay to get rid of your car even though that kind of hurts inside to pay but that could be a really good financial decision if you have already got a nice car? Pay to get rid of that thing and get a better one.

PT: Way to put a positive spin on this, Scott. Had I tried to sell it right then, I probably would have had to knock $5000 or $6000 off of it. Good point.

Scott: But I am going even if you had had to sell that that car for $5000 to $6000, you might have still been better off taking that loss immediately.

PT: Yes.

Scott: Try off the lot selling it and then going back to your old car for the long term finance which I think is an interesting take away that I just concluded to my head when you told that story.

Mindy: Yes. That is a big question in the BiggerPockets forums as people say, ‘Well, I have this car and it is a lease,’ and I immediately cringe. Do not lease a car. I will get people who send me notes after I say, ‘Do not lease a car on here,’ they will send me a note and say, ‘Oh, well, I want to get a new car every year and a lease lets me do it.’ Why do you need a new car every year? You do not. Nobody cares what kind of car you drive. What is your best piece of advice for people who are just starting out besides do not buy a new car and have PT Sr. your call up and fix your problem?

PT: You know what has worked for me? What really worked for me? Because I struggled to save early on was, I am going to sound like I am repeating here, but really just automate some type of savings. Whether you are using your company’s 401K or an automated withdraw from your checking account into a savings account or an automated withdrawal from your checking account into a Roth IRA, just get there. Go on automatic, go right now and set that up. Like open up again. I do not care if you just start depositing like one dollar regularly.

If you get in the act of automatically savings, that will propel you to do more that the future. You have already got the system set up and people who report doing automatic savings and then retiring successfully always say, they say the same thing, they always say, ‘We never missed the money. We never thought about the money because it was happening in the background automatically.’ Get that going, forget about that money for the rest of your life until you need it and then move on. Pay yourself first, automatic.

Mindy: Okay.

Scott: I love it. We often hear track your spending in this category. This is you have to check spending if you just automate your withdrawal. You can just skip that whole step and you are going to save all this money for retirement. Whatever level you set up automatically at your pace and it will not even hit you, it will not hit your account and you will not be able to spend it. Tracking your spending is no longer an issue. Not saying you cannot track your spending but this is a way to get around it if you do not want it.

PT: Save first and relief in the rest. That is a good mantra.

Mindy: Okay. You said a couple of times, set up an automatic withdrawal. Excuse me. Is that something that happens like you could do with your bank?

PT: Yes. Several ways to set it up. Obviously, you can go to your employer first and say hey can you automatically sweep this part of my check over into a separate savings account. I got this IRA set up, please sweep some of my money over into that or you could do it from the checking account once your paycheck is a checking account then set up the automation. Either from the bank itself to push the money or from the financial institution to pull the money. Vanguard is really good because they know your annual maximums that you can hit from a tax perspective. Setting it up for on their side I think is best if you are trying to hit that annual maximum for instance with your Roth IRA and it just pulls out of your checking account. Maybe the day right after you get your paycheck or the same day or something.

Mindy: Yes, I like that tip a lot. The. The further you could push it on the front end of the transaction. If you can get your employer to do it, that is the best. You literally will never see it. But outside of that, use it from the checking account and move it.

Mindy: Okay.

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

PT: We got Halloween coming up sort of and I am a dad so it is a cheesy dad joke for Halloween. Why could not the skeleton go trick or treating?

Mindy: I do not know.

PT: Because he had no body to go with.

Scott: Nice.

Mindy: Okay. I will laugh at that one, it is not a pun.

Scott: That was a good joke, no bones about it.

PT: Yes.

Mindy: Oh God.

Scott: That is steal right there.

Mindy: I just want to tell everybody, Scott does not know these jokes in advance. I do not ask and I do not put them in the notes.

Scott: It took me up three seconds at least to come up with that. I can go faster.

PT: That is scary good, Scott.

Mindy: God. Okay, I quit. You go. PT, where can people find out more about you?

PT: Hit me up on Twitter at PTMoney or just go to PTMoney.com, it is my website. Of course FinCon is at FinConExpo.com and that is a fun event we would love to have you at.

Mindy: Yes, I can vouch for that. FinCon Expo is the best event. I go to several every year and that is the one that I make sure is on my list. I do not have family that lives near me so I have to kind of dole out my requests judiciously, is the right word, when I am asking my in-laws to come and visit or come watch the girls or my parents or come watch the girls then it is always. When is FinCon? In September or October this year? Then when they figure it out, that is the first request that I get covered every year.

PT: I appreciate that, Mindy. It is the best conference, I learn so much every single year.

Scott: Same for me. I am not available that week.

PT: I look forward to hanging out with you guys and hopefully you will do the podcast maybe live from FinCon.

Mindy: We sure will.

Scott: Yes.

PT: Yes? Awesome.

Mindy: We will. We just need to find a really awesome guest.

PT: I think I can help you there.

Mindy: Yes, out of 2000 people, I am pretty sure we can find somebody who would like to talk about money on this show, live. Alright, PT, thank you so much for your time today. I know that we do record these a couple of weeks in advance. This is actually happening before FinCon and release right before FinCon. I am sure you have a lot of things to do and I appreciate your time.

PT: Absolutely, my pleasure being on.

Mindy: Okay. Thanks so much. We will talk to you soon.

PT: Bye, guys.

Scott: That was PT from PTMoney.com and FinCon. You can find FinCon at FinConExpo.com. What did you think, Mindy?

Mindy: I love his story. I mean I do not love that he graduated with debt and bought a car, a brand new car. I love that he was able to get out of it, that is awesome. Call PT Sr. when you need to get out of your card debt.

Scott: It is a good story and he is really good with money and he did make a lot of great decisions and it sounds like, like him, for so many of our listeners, there is a book that turned them on. It was an unusual one. It is not one that we hear all the time on the show, The Automatic Millionaire, it is not unheard of but go check that one out. It is a good book, it is very exactly what he says to do. Automatically save and invest and you will win, right?

Mindy: Yes, yes. I love his tip. He did not say track your spending, which is a great tip, I do not like dog that tip. That is a great tip, that is my tip, but automatically start saving, that is fantastic. I actually do not automatically save in the way that he is suggesting. I do max out my 401K every year and I do different types of saving but I do not automatically save and I never automatically saved and I think that would have helped propel me even more because if you can get your company to do it, you never see the money, you do not miss it. If you are having a hard time saving, if you are having a hard time just not buying things when you have cash in your pocket, do not have cash in your pocket. Get it out of your account, put it right into the savings account automatically and then do not ever touch that savings account. Put it into a pre-tax or a post-tax investment. Put it into just a savings account for a rainy day or whatever you need but automatically pay yourself first is a great tip.

Scott: Absolutely. Then one more time, we will give a shout to FinCon which has been just such a resource for the financial independence community and the bloggers and folks like us, the podcasters, that talk about financial independence. This is just where we share ideas and really kind of challenge concepts or constantly learning the new best practices. Sometimes we are wrong about things that we thought were really like effective ways towards fine and this is where that kind of sharing goes on. Big thanks to PT for putting that together and really helping us share ideas there.

Mindy: Yes, I cannot thank him enough for putting this show together. It was such a big part of my life. I do not know if you caught it Scott but there is now a community pass that you could get to go to FinCon and to just kind of meet all of your favorite bloggers, favorite podcasters. If you are interested in attending, we will be in Orlando, next week I believe. This comes out a week before the actual FinCon. You can go to FinConExpo.com and get a community pass. Look for me, I will be there. I look like this.

Scott: Yes, me too. This is what I look like. Have fun if you are listening to audio only. Sorry, alright.

Mindy: You can go and see us on YouTube. Okay, alright, from episode 38 of the BiggerPockets Money podcast where we interview Phillip Taylor from PTMoney and FinCon. This is Mindy Jensen and Scott Trench and we are out of here.

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In This Episode We Cover:

  • PT’s money journey
  • What inspired him to start financial blogging
  • What he realized when he started to pay taxes
  • How he paid off his debt
  • His philosophy on mortgage debt
  • What he intends to do with his excess cash
  • What he did with his healthcare expense
  • The reason he quit his job and worked on PT Money full-time
  • His medical sharing experience (& what medical sharing is)
  • Tips for managing cash flow for your business
  • A conversation on saving for retirement
  • How he got the idea of starting a financial media conference
  • A quick overview of this year’s conference: #FinCon18
  • Thoughts on hiring his employees
  • His financial position right now
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “For me, I just needed an experience to get me into gear.” (Tweet This!)
  • “Experience is the best educator.” (Tweet This!)
  • “Money is going to cure all my ails.” (Tweet This!)
  • “Don’t negate the aspect of starting a business for yourself.” (Tweet This!)

Connect with PT

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.