Log In Sign Up
Home Blog BiggerPockets Money Podcast

2018 Financial Freedom Lessons With Scott & Mindy

The BiggerPockets Money Podcast
54 min read
2018 Financial Freedom Lessons With Scott & Mindy

Today, Scott and Mindy go guest-less to recap and review the things they’ve learned over the first year of podcasting.

Topping the list—and surprising no one—is tracking your spending.

But we did learn some new things this year too, like how money dates are a great way to bring your spouse on board.

Looking for change your financial situation in 2019? THIS is the episode that can start you down the path to financial freedom.

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Welcome to the BiggerPockets Money podcast show number 53 with just Scott and Mindy.

Scott: Every single guest right, every single guest has either spent less, made a change to spend less. Figured out a way to earn more money right. Invest it in a way to take an outsized returns if they had a portfolio or undertaken some sort of entrepreneurial pursuit. Right every single guest.

Mindy: Yes. Every single one.

Scott: Has done that. Right? There is again. There’s nothing tricky about it. There’s no surprises. There is no secret sauce.

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 and 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: Scott, I am doing fantastic. I went to the waterpark over the weekend with the girls and had a great time splashing about. It was a lot of fun, and down in Colorado Springs. I don’t know if you’ve ever been to great Wolf Lodge.

Scott: You went in December?

Mindy: It’s an indoor waterpark.

Scott: Ah, okay.

Mindy: So many people are like you went in December? No, no it’s indoors. Anyway we had a great time. They do a lot of things great. There’s a lot of opportunity to separate you from your money if you want to take advantage of that, but they’re not super over hard sells, which has really made me feel good about that.

Scott: Oh nice.

Mindy: Because you know it’s really hard to say no when your kids are like, “Hey, I want this. I want this.” You’re like, Mmm. When they don’t even ask, that’s better.

Scott: Ah there you go. Teaching them well.

Mindy: I’m trying. They still ask for everything though. I’m super excited for today’s episode. Not because it’s just you and me although I do enjoy talking to you, Scott. You’re a smart guy and I feel honored to have you on the show with me, but I’m excited because when we were first talking about releasing a podcast I wanted to put it out at a time when it wouldn’t compete with the BiggerPockets real estate investing podcast that’s you know the already existing podcast.

I wanted to come out on Mondays and then I looked at the calendar, ooh January 1st is a Monday. Hurray. Then luck would have it December 31, 2018 is also a Monday so we get this bonus episode and I wanted to take an hour or so to go back over all of the things that we’ve learned over the last year because what I thought was really interesting over the course of recording this episode, this show is that there’s similar concepts in everybody’s story or similar concepts in like half the stories or you know there’s just, there’s so many things that are not different. It’s not you know nobody came on the show and said, “Oh I won the lottery.” That’s not repeatable. Everything that we’ve heard is repeatable.

That makes it like possible for some people. I mean I’ve had this money mindset for a while, but there’s other people that are just coming into this space and thinking you know, “Oh I could never do that. I’m not a software engineer.” Yes, the majority of people that are in this space, in the you know that have already retired early were software engineers are making high dollar figures, but not everybody. This is still achievable even if you’re not $400,000 a year.

Scott: Yes, I love it. The goal of the show right is to make financial freedom accessible to everyone right.

Mindy: Yes.

Scott: Why is that important? Well it’s not like we’re not here trying to help people just so they can retire and sip margaritas on the beach in Mexico you know all day long. No, once you achieve a financial independence that you know a level of wealth capable of sustaining financial freedom indefinitely. You go on to have an impact.

First yes you’re living a happier, healthier life on your terms, but you can go on to have an impact that few else in society really can have. Kind of what we’re doing here is hey how do we get as many stories as possible from as many different people as possible that are all relatable that you can kind of understand and see how they’re moving toward financial freedom. You can see and exactly this episode, we can see the patterns that are going by. Hey this person started with this kind of income, these kind of debts, this kind of stuff.

This is you know how they move toward financial freedom. Maybe that relates to you as a listener right and then maybe another episode is someone with a higher income or a lower income than you and achieved it in different way. By gathering all of those perspectives I think that helps make this like you said achievable, relatable, and repeatable. That’s the goal here is just how do we make this as repeatable as possible so that everybody can efficiently move toward this goal without losing anything from their lifestyle or whatever and again experience the power and freedom that come with having a passive income and a growing personal financial position.

Mindy: Yes, without losing anything important. You will probably lose something out of your lifestyle, but it’s not something that’s going to matter to you now or in the long run. I really like how you mentioned that the goal of this isn’t just to quit your job and sip margaritas on the beach, which totally sounds like fun. Given that it’s like 30° outside.

I would love to be sipping margaritas on the warm beach in Mexico or Hawaii or wherever, but that would get really boring after a while and I think what are the personality traits that makes you able to be so driven and focused and reach this goal isn’t going to prevent you from doing that forever. You’re just going to get bored. You’re a go-getter, you’re a doer, and you’re going to want to do something, but this concept of financial independence frees your life so that you’re not worried about continuing to bring in money so you can put food on the table. Now you’re worried about what’s the thing that’s going to make me the most happy? How can I live my best life?

Scott: Yes, exactly.

Mindy: Okay.

Scott: Mindy what kind of are you picking up, what are you thinking and I think we both are on the same page with this one, what do you think is the most important single thing that our guests have done across the board that has been critical to their success in achieving their financial goals.

Mindy: You know what, I think it is tracking your spending especially when you’re first starting out, but also as you’re continuing on the path to financial attendance and way back in episode seven we interviewed the couple from Waffles on Wednesday and they talked about making a spending tracker. They have an article on their website that it’s so easy to follow even I was able to do it. I actually taught my computer programmer husband something was you take a Google form like a Google survey or whatever. You take a Google form and you ask the questions that you want to answer, what you’re tracking in your spending.

What store you spent at. How much you spent. What day was it? What was the category, groceries, clothes, whatever and you keep track of this. They actually went further and said, “Hey we put this on our phones.”

That’s when my computer programming husband came in to the rescue and put it on my phone for me because that’s not something I have a skill for, but Waffles on Wednesday gives you all the information that you need to make this spending tracker. You put it on your phone and basically every time you spend money you write it down. You track your spending. The form puts all the answers into a spreadsheet so you don’t even have to go onto your computer and enter all your numbers in. They’re already there once you enter them into your spending tracker of course.

This is now, we started doing this. We’ve made it into a game. How little can we spend every month? That makes me question every purchase that I’m making. Ooh do I really need this shirt? You know what, I don’t. I just need the chips that I came to Target for. I don’t need to buy this shirt and those shoes and you know how easy it is to spend hundreds of thousands of dollars at target. Sorry Target, but I’m looking out for my bottom line, not yours. Yes, tracking your spending is something that has popped up in so many episodes. What is it like literally every episode?

Scott: Yes, I can’t recall very many episodes that didn’t start with this in some capacity. You know I either at the point when the guest became serious or when the guest just was kind of just starting out on the journey and just kind of dipping their toe in the water of getting their finances in order. Almost every single person has called this out as a critical component. I know it’s critical to me and I know it’s critical to you. I just don’t think there is a single better thing you can do and it’s 10 minutes. You know you don’t have to go back five years with all your spending. Just set up a system and start tracking this month’s spending or the last month’s. You know go back and see what you spent last month. Right it’s not hard and it’s just having this information will open your eyes to the problems to potential opportunities to save more money with your finances.

Mindy: Yes and even just knowing where your money is going, another tip that I have heard from several different people on this show is to write down what you want your life to look like. What your ideal life looks like, what your day looks like and then look at your spending and see if you’re spending is reflecting your ideal life. If you want to spend more time with your kids then going out concerts and going out to dinner with your friends and all of this isn’t necessarily the best choices you could be making in order to live your most happy life. You know Scott another thing that comes up every episode is self-education.

Nobody who has been on this show, is on the financial education path said, “You know what? I bet this will just work. I don’t have to do any research. I don’t have to do anything. I’ll just change my life.” You can’t really change your life unless you have some guidelines to help you out. Every episode a guest has recommended at least one book, many have recommended more than one book. A lot of books come up over and over again. The Richest Man in Babylon, The Millionaire Next Door, and Your Money or Your Life. Oh my goodness I almost forgot. Like one of the most important books.

Scott: We could make a huge list. You know Total Money Makeover right? I Will Teach You to Be Rich. Rich Dad, Poor Dad right. I mean these are books that come up all the time. Rich Dad, Poor Dad has more so on the BiggerPockets real estate podcast, but we hear it on this one as well.

Yes, I mean the saying is you’re the average of the five people that you hang out with the right? You can’t change who you hang out with like right overnight sometimes right, but they’re in your head. You can start listening to these folks on an Audible, audiobook our podcast. You can read those books and get those concepts every single guest, we have not had a single guest who did not have a book to recommend.

You know and most of the guests I would say the vast majority have referred to a piece of content that they read that change their thinking about money in some dramatic fashion that move them towards you know financial independence. Again, this doesn’t have to be a book. It doesn’t have to be a podcast. It could be a blog. I mean it could be a variety of different sources that you’re acquiring information from, but I think that this is a critical component that has driven action for basically everyone we’ve had on the show.

Mindy: Yes, you said a blog. How many people have recommended the Mr. Money Mustache blog. That’s such a foundation peace for this whole movement is this guy who decided I don’t need to spend every cent that I make. I could live my best life spending I think he spends $25,000 a year- $30,000 a year. He likes good beer. He likes good coffee. He doesn’t care about fashion. He does old fashioned workouts. He doesn’t have his job. He doesn’t care what people think about his car so he has you know some just, I think he’s got Nissan Leaf. Just like random things. He doesn’t care about specific things that everybody else in America cares about. He just wants to be happy so he’s like this is what I want to do and I’m going to do it.

Scott: Yes, I think that it takes a genius, a genius to figure out all this stuff and pave the way right. Really kind of go out and a pioneer and go out on a limb and do that right. Thankfully other people have done this for us so we can literally just see what works and follow in their footsteps. It’s easy right. We haven’t heard a lot of truly terribly difficult stories on the show, but it becomes really easy if you just have the plan laid out for you by reading a couple of these folks who have already done it and know what they’re talking about. Right it’s a very easy, several step system to get to financial independence. You know if it takes some time, it definitely takes some time. Maybe easy is the wrong word. It’s simple right and it becomes simple if you self educate and buy in.

Mindy: Yes, it’s not complex and you know what’s—what I think is really important to point out is not only do they share what works, they share what didn’t work and this is true in the real estate investing podcast as well. People learn so much more from your mistakes than they do from your successes and all of these bloggers, all of these books, all of these podcasts, they will share what didn’t work as well. I think that’s really important. Something else that really works that we’ve heard a lot about is money need dates.

Having your spouse on board it is absolutely the most crucial element of this whole financial independence journey because if you’re a saver, and they’re a spender and all you do is butt heads all the time you’re going to have a miserable life. How do you get your spouse on board? Show them the life that you can have by sitting down with them and asking you know what is your dream life? What do you want to do all day every day?

Where does your happiness lie? Rosemary Groaner from the Busy Budgeter episode number four. Liz from Frugal Woods, episode number 10. Aaron Lowry, episode 24. What’s Aaron’s?

Broke Millennial. Every single one of these ladies has a money date with their spouse and there’s a lot more that talk about money dates too. I just couldn’t remember everybody. I think Aaron Chase from episode three also talks about having a money date. You sit down and you go over your budget. This isn’t a time to harass your partner or you know point fingers or anything.

Just hey, this is where we’re at right now. This is where we want to be. This is where we’re at. Here’s our successes for the month or the week or you know however frequently you have to have these. Here’s our successes. Here’s where we could have improved a little bit. Let’s come up with a plan to work on during the next timeframe. Like if you’re having these weekly, if you’re having these monthly. You know this is what we need to work on. Being open and honest with your spouse is so important in this journey.

Scott: Yes and I think that one of the things that we’ve noticed or at least I’ve picked up on is that often almost every single time there’s one spouse that seems to be more in or at least initially more in on the concept of moving toward financial freedom aggressively than the other. Guess what if that’s you, you’re probably the one listening to the BiggerPockets Money podcast here so the you know if that’s you, understand you’re going to have to make some compromises. The key thing here is getting on board, making sure you both have to share the same goals, are tracking towards it, and that you’re doing enough of the big things right to move towards that in a timely manner. Maybe you can’t do what I did and move into the bottom half of a duplex with a roommate in up-and-coming neighborhood and make every single meal five days in advance for the first year on your journey to financial freedom right.

Of course not. You can’t do that if you’re well into a marriage and have a family going, but you can begin making some steps and we see time and again people who have made tremendous progress in just 3 to 5 years by getting their spouse on board and taking them, the correct steps forward.

Mindy: Jamila Souffrant from episode 39 talked about how her husband really wanted to have a nice car. She said you know what, I don’t want to deprive him of this. I also want to show him that by spending that money now we are costing ourselves this life for another three years or five years or I can’t remember exactly. Go listen to episode 39 and you can hear her story about this and once her husband was finally on board and could see you know what that sounds mean.

He wasn’t finally on board. Once her husband was on board because she was the driving force behind it. Once her husband was on board he’s like you know what, I really don’t want that fancy car. I’d rather have time with my kids. I’d rather have time away from work. I’d rather just do this so it’s not necessarily an overnight conversion to get your spouse on board. Start small and be supportive of every positive step they’re moving towards financial independence or you know changing their spending habits or whatever. Just start off by asking them what does your ideal life look like? Is it sitting in traffic for an hour every day? Probably not.

Scott: Yes, if we kind of just take a quick moment and recap what we’ve talked about right. The three big, I think these are the three biggest takeaways that we’ve gotten from the show so far over the course of all the episodes right. Now first is that tracking your spending is absolutely critical to success. Right. Second, is that every guest, every episode has a book to recommend.

Everybody practices self education and you need to as well if you want to begin moving toward financial freedom. The third is get your spouse on board. Right so the fourth one, which I think is appropriately placed here is that there is no secret to this right. Those are three remarkably easy things and if you just do those three things you’re going to move toward financial freedom in a pretty timely manner. You’re going to figure it out and make the change necessary to move towards this right.

I mean we’ve interviewed 50 guests and none of them have had a secret that shocked you know that was like oh wow I didn’t believe you could do that. You know I mean maybe there’s been some tips here and there and some tricks, you know some ways to defer extra money or take advantage of some tax situations and all that kind of stuff, but basically everybody has said, “No I started tracking my spending. I read a book or a blog or listened to a podcast that changed my life and then I got my spouse onboard or I settled down and got into a rhythm. Then I hustle and work through it.” Right there is no secret sauce.

Mindy: Yes. Mr. and Mrs. Planting Our Pennies from episode 32 talked about increasing your savings rate. They talked about increasing your income so now you’re making a lot more money. Mr. PoP was in sales. He said anybody can be a salesman. Anybody can be good at sales. He I mean he could sell a ketchup popsicle to woman wearing white gloves. He is an amazing salesperson, but anybody can be an amazing salesperson.

They decided that they could actually achieve this. I think Mr. Planting Our Pennies discovered it, spoke to her and she’s like no way. She’s the numbers girl. She ran all the numbers and she’s like wait a second. This will actually work. We could do this and now they have reached financial independence. He has quit his job. She has not yet because she still enjoys it. She has the opportunity to should something change in her job. Should she decide that she doesn’t like it anymore, should she just decide okay we’ve got something else we want to do. We want to hop on a boat and sail around the world or whatever. You know she has the opportunity now. She just still likes her job so she chooses to stay. I can relate to that.

Scott: Yes, I mean every single guest right, every single guest has either spent less, made a change to spend less, figured out a way to earn more money right, invested in a way to take an outsized returns if they had a portfolio or undertaken some sort of entrepreneurial pursuit right. Every single guest.

Mindy: Yes, every single one.

Scott: Has done that right. There’s again there’s nothing tricky about it. There’s no surprises. There is no secret sauce, right.

Mindy: There is no secret sauce. It is repeatable and it is doable and one of the things when you first stumble upon this concept of retiring early by becoming financially independent. You’re like ugh that’s a bunch of crap or I’m going to have to give up everything I love and leave this life of complete poverty and misery just so I don’t have to work. Then you start running the numbers, you’re numbers guy Scott. Does math lie?

Scott: No.

Mindy: Is two plus two ever anything but four?

Scott: No.

Mindy: No. It’s never anything but four. Numbers don’t lie. You run these numbers and you’re like oh I really could get myself to a spot where I don’t have to work anymore for money. I mean you can’t really I guess you could just decide you’re never going to work again, but that’s.

Scott: Why you don’t have to it is helpful if you can bust out Microsoft Excel or some sort of spreadsheet and build this for yourself and see the numbers work right. You don’t have to do it. That’s not the secret to financial freedom, but if you can do that you’re going to really see it for yourself working and you’re going to see your path right through to the finish line so maybe that’s a secret sauce that a lot of our guests have shared is spreadsheet skills and that tracking your spending component.

Mindy: Yes, and something that I hear from a lot of people. I get a lot of emails that are sent to [email protected] if you have a comment or a question I’d love to help you out. I see a lot of emails from people who say, “I don’t know that I can do this. I have this huge past problem. I have a money issue. I went bankrupt.

I lost my house to foreclosure. I spent a lot of money on this. I did that. Every single guest that we have interviewed has had a biggest money mistake at the end of every episode we ask our famous for questions. What is your biggest money mistake? I bought a car brand-new. I financed, I cosigned, there’s a lot of problems, but just because you made mistakes in the past does not mean that your future money life is over.

Tiffany Aliche in episode number eight, she’s the Budgetnista. I love her story. She was on top of the world. As a teacher, she had her own house and then the bottom of the market fell out. The school she was teaching got closed. She ended up living on her sister’s couch and she hit rock-bottom when her sister said, “Hey could you move out?” She’s like, “Wow.”

She moved back to her parents house and she’s like how do I overcome this? Oh I know and she picked herself up and she started teaching other people about money. I know about money. I know I can fix these problems. She started hosting for the United Way, these free money seminars. She’s like, “Ooh I wonder how I could do this. I wonder how I could do that.” She just kept questioning how can I do this for myself? How can I make this better? She has an amazing program now and has helped hundreds of thousands of women fix their finances, move down the path towards financial independence or at least financial.

Scott: Stability?

Mindy: Financial stability and she can help you too. She’s just an amazing person. Joel from FI180, he was what were they making? Six figures and spending six plus figures.

Scott: Yes.

Mindy: Like every dimed that came in they had to get it out of their pockets as soon as possible and he has my favorite quote of all time. When he left his job, he figured out his finances. He left his job and he said, “What’s the worst that can happen? I have to go back and get a job.” My worst-case scenario as everybody else’s everyday life.

Scott: One thing I will say that a lot of the folks who have come in and have had you know a lot of the money mistakes we hear are credit card debt or bought too much car. Right?

Mindy: Yes.

Scott: We’ll talk about housing in a little bit, but if you’ve made a lot of those mistakes and have that kind of personal o1r consumer debt piled up in the $10- $20- $30,000 range you know we’ve heard time and again mention as a great resource Dave Ramsey and the total Money Makeover. Right that’s come up with almost every guest that’s going to come from that sort of circumstance who’s made a lot of progress in a short amount of time. That might be a good resource to check out right? You know I’ve never debt like that right? A lot of the people in order to get back to that starting point have found that to be really helpful place to start with that self education.

Mindy: Yes, you know the Dave Ramsey total Money Makeover or the baby steps is baby steps part of the total money makeover?

Scott: Yes.

Mindy: Okay so he’s got these baby steps. Look what is it like 4% of Americans could weather a $1,000 emergency expense or something like that?

Scott: I think it’s 4%, but yes and there’s not very many.

Mindy: Yes.

Scott: It’s surprising the large number of people who can’t handle financial emergencies.

Mindy: Yes and I mean a thousand dollars it could crush somebody and it’s a really low number of people in America who could handle that amount and that’s I think that’s baby step number one. Save a $1,000 emergency fund and then you know start paying off your debt and save up for retirement and all these things, but I think Dave Ramsey is an excellent path for people who are negative net worth. It’s a great way to get you to zero debt and it’s a great way to start you on the path towards positivity. I don’t agree with his pay cash for everything business. I do enjoy a good mortgage on my own house, but hey if you don’t want to have a mortgage then don’t have a mortgage, but he’s excellent for getting you out of debt.

Scott: Yes, absolutely and then for the last kind of thing here about the past momey mistakes is that a lot of our guests who have accumulated larger net worths right maybe a million plus seem to indicate that their biggest mistake was an opportunity cost, a failure to invest at an appropriate time right. Not always like hey I didn’t invest in Amazon back five years ago when it was really low because I’d be a millionaire now, but it seems you know something I’m picking up on is a failure to adhere to their investing philosophy in a strict manner. I forget which episode it was, but Harry Mix he had his personal written investment philosophy written out and he sticks to it. Even if you have a lot of past money—even if you don’t have a lot of past money mistakes you know a failure to continue applying your financial philosophy to your investments can be a big mistake that can cost you a lot of money down the road as well.

Mindy: Yes, it can and Patrice Washington from episode 50 had a million dollars in real estate portfolio more than a million plus. I think it was multimillions in real estate portfolio and she got pregnant. She had a high-risk pregnancy. She was in the hospital on bed rest while the real estate market was kind of crumbling and she lost everything and for years she had tried to fight her way out of it. You know I don’t want to declare bankruptcy.

I want to pay off my debts and I want to do this and finally she had a financial mentor that said to her you know what you cannot nickel and dime your way out of two and a half million dollars of debt. The only way to wipe this off is to declare bankruptcy and one of the things that I love so much about her story is that her husband didn’t feel like he was too good for any job. He needed to put food on the table so he went and became a manager at Taco Bell, which is not the glamorous job that being your own real estate agent/mortgage broker driving around in a BMW you know living in a fancy house. That’s not the same thing as working at Taco Bell, but he’s not too proud to work at Taco Bell and he wants to provide for his family so he’s going to do it and they pulled themselves out of their I don’t want to say hole, but it was a pretty big financial hole.

They finally said we are going to declare bankruptcy. We’re going to work towards getting past this and now they’re past it. It was a dark point in their life and now they’re living their best life possible. She’s teaching people how to manage their money and she’s doing, she’s America’s money maven. She’s doing a really great job of it.

Scott: Love it. Alright let’s move on so again we’ll take another quick recap here so the five points that we’ve brought up now right are tracking your spending, relentlessly self educate, get your spouse on board and consider doing money dates right. There’s no secret sauce, nobody has come up with a secret plan that’s unrepeatable here for making more money and that you can overcome your past mistakes to move toward financial freedom. Right?

Mindy: Your past money mistakes do not dictate your future money life. Just like Patrice Washington’s husband worked hard and did what he needed to do, hard work pays off. David Greene’s episode 12 is fantastic. David Greene is the cohost of the BiggerPockets real estate investing podcast and his story of being a waiter, which is and please don’t think that I’m talking down about waiters, but being a waiter it is not something that every little girl lays in bed poor little boy lays in bed and thinks ooh I hope I get to be a waitress when I grow up. Like it’s hard work. You’re on your feet for 12 hours a day and David Greene’s story is it’s specific to being a waiter, but it encompasses the whole world. I worked hard.

I identified the problems that my boss was having and I fixed that. I look like a genius. I look like an extra super hard worker simply because I’m making sure that I’m doing my regular job, but I’m also doing extra that’s very important to my boss. He would come in early and take like the last shift table from the previous shift.

He would stay late and take all and every single thing that he did netted him hundreds of extra dollars every night that he was there.

Scott: Yes, David Greene exemplifies working hard and working smart. Right.

Mindy: Yes.

Scott: Having a rationale behind that right. David Greene I think applied all four levers I described earlier of the personal finance equation right to the maximum effect. He lived extremely frugally right? He went above and beyond and did everything he could, all the little extra things that he could to give himself a chance to earn more money and have a better odds of success at his career as a waiter. Right he certainly applies that today is a real estate investor and as a real estate agent right. Then he invested.

Mindy: Yes.

Scott: Aggressively in real estate right and he’s turned his attention now to his own business in entrepreneurial pursuits right. Saves, spent little, tried to earn as much as he could from his day job, invested, eventually built his own business. I mean that’s how you do this right? That’s total dedication and hard work and I think the really big lever that’s moved the needle for David Greene has been his work ethic and his ability to apply that work ethic and intelligence to earn more income in a dramatic fashion.

Mindy: Yes, David Greene is a really amazing story of just working hard and working smart. He worked very smart and it he reaped huge benefits. He was the best waiter, the favored waiter. He was able to get you know pretty much he made his boss happy, his boss made him happy.

Scott: Yes, I mean I think that people who earn high incomes right. There is exceptions right, but David Greene is a good example of someone who is in a profession that had the opportunity to scale right and when you’re in a profession that has an opportunity to scale that’s really I think where your effort and concentration need to be. Right if you’re an accountant, if you’re an accountant and you’re looking to be— achieve financial freedom in a few years. Applying that extra effort diligently to your job may result in a five or 10% raise on the annual basis right. You might get a slightly better performance evaluation on the end of the year.

I’m not saying don’t work hard at your profession right? If you’re going to go that extra mile and really apply it in that 10-12 plus hour days like the way kind of David Greene did building up his career right. That’s where you got to apply that to a career that has the potential to scale and if that opportunity is there for you and you can put the pressure there that may be the fastest lever in driving you towards financial freedom.

Mindy: Yes, David Greene is a real estate agent and there is no shortage of real estate agents. It’s not that difficult to become a real estate agent. You and I are both licensed agents. It’s in Colorado, which is one of the strictest states it’s a 168 hours of course work plus you have to pass a couple of tests. The tests aren’t that hard too pass. It really isn’t that difficult to become a real estate agent. Real estate agency has a huge turnover rate because it’s not easy. It’s not hard. It’s work. The harder and smarter you work, the better you will be at your job. The more success you will have. You need to learn your market. You need to be able to read people. David as an excellent reader of people. How do you say that?

Scott: He understands what people wants and he works hard to give it to them.

Mindy: Yes and he knows how to give it to them. Based on his experience as a real estate investor and as a real estate agent.

Scott: There’s a number of ways to command a very high income. Right let’s call it over $250K a year. Right and some of those ways just encompass like becoming a doctor right. You apply 10 years of extremely dedicated work. You get straight A’s the entire time through high school, college, and then med school right. Finish your residency and then that’s a path to making over $200, $250 a year right. The other ways to get they are that are faster or that are outside that kind of academic track right are going to all require the smart application of the skill set that David Greene exemplifies right.

Mindy: Yes. Speaking of real estate how many of our guests had as story that involved real estate? Episode two I think you’re familiar with the guest from episode two. His name as Scott’s Trench. Kind of looks like you. Does a really bad Deniro impression.

Scott: How about the guest from episode one?

Mindy: Oh the guest from episode one, Mr. Money Mustache. The guest from episode five looks like me.

Scott: Mindy.

Mindy: Sounds like me is me. Guy on Fire from episode number nine. He house hacks in Washington DC, a notoriously expensive market. I actually have a friend who just moved to Washington DC and she’s like what is with all these people wanting to share rooms like two people on the couch and one in the closet or whatever. Very expensive market and he’s found a way to make it work.

Scott: Yes.

Mindy: Joel Larsgard from episode 16 also a house hacker. He and his wife lived with a friend and they rent out kind of the back half of their house to her and they all share a kitchen and it works really well for all four of them. Five of them. They have two daughters now.

Scott: One of my favorite stories was Tony Gayden, from episode number 21 in aside from losing like 250 pounds and building a $500,000 plus net worth in just a few years. He also got started with a house hack I believe and began investing in real estate.

Mindy: Now he invests in long-distance in a different market, but yes his entire story is just amazing. Do you know anybody named Chad Carson?

Scott: No, who’s that?

Mindy: I think he wrote a book what’s it called?

Scott: Retire Early with Real Estate?

Mindy: Oh yes. Look you can retire early with real estate. Chad Carson is an unemployed bum. He’s never had a real job since college. Since graduating from college. He just decided hey I could be a real estate investor when I graduate from college so he did. He bought a property then he bought another property and then he bought another property and another and another. He’s got what? Like 90 units under him now? He periodically goes through and like gets rid of the dogs and keeps the really good ones and he doesn’t work. He works what? Like an hour a week or something like that? Didn’t he say?

Scott: Yes, and what I love about Chad in particular is he really had a good why behind that. Right he wanted to build a passive portfolio that would support a lifestyle that he and his family wanted right. I think a lot of folks that when you hear them talking about real estate they always want to go really big right. Right they’re continuing to build bigger and bigger and bigger portfolios right. Chad knew exactly where he wanted to stop and has really kind of built a portfolio that meets and exceeds his goals and he’s not trying to aggressively expand it to the next level because it gives him what he wants. It gives him that financial independence that he’s looking for.

Mindy: Yes and when I say 90 units, some people might think that ooh that’s a lot of units. You know that is a lot of units, but he owns a lot of them with partners, but that provides him enough income that he doesn’t have to have a job. He and his wife, his wife is a Spanish teacher I think. They wanted to immerse their daughters in the Spanish language so they moved to Ecuador for 15 months and their daughters attended school and learned perfect Spanish. He jokes that the girls will correct him when he uses a word or a phrase wrong, but you can’t just take off for 15 months and go live in Ecuador if you have a job. If you have a job that you, if you need to have a job to provide income and food for your family.

Scott: Yes, absolutely.

Mindy: Craig Kurlop was episode number 35, he’s what is he like 26 years old? He owns two properties or three.

Scott: He owns two properties right now.

Mindy: Okay so he and in the Denver market, which is very hot. You can’t make any money in the Denver market. I don’t know if you’ve heard that Scott. Everything is too expensive and nothing cash flows. Craig bought an up down duplex and rented out his bedroom of his half of the duplex and slept on the couch and was cash flowing something like $1,700 a month. I can’t remember his exact numbers, but he was making money in a city where you can’t make money, in a superhot market. He also then lived there for a year, bought another property, a five bedroom property, rents out all the other bedrooms. Lives in one and cash flows something like $1,500 a month they are too.

Scott: Yes.

Mindy: All of his living expenses are paid for because he’s a frugal guy. Are paid for by these two rental properties and yes he had to sleep on the couch for a year. He was 24 at the time. He could sleep on the floor if he wanted to. You know I don’t want to sleep on the couch and I have young children so I don’t want to invite people into my home that I don’t know.

This works great if you’re a young kid and what did he say he’s got $80,000 in student loan debt and this question pops up a lot in the BiggerPockets forums, BiggerPockets.com/Forums where people will ask I have debt. Should I invest or should I pay off my debt first? Until I heard Craig’s story my thought was always well why would you invest? You should you know at least invest to get the company met if you’re doing a 401(k), but you should focus on being down your debts and Craig didn’t focus on paying his debts. I think he paid the minimum or even maybe deferred them. Do you remember if he deferred them?

Scott: I think he was being the minimums.

Mindy: Yes. Paid the minimum and then bought a house. Then continued to pay the minimum and bought another house. Now the cash flow from these because he still has a job, he works here at BiggerPockets, but because he still has a job he doesn’t count on that cash flow to sustain his lifestyle. He’s throwing all of that at his student loan so he could pay those off. Then he can pretty much be financially free. He’s got all of his expenses paid for. Just on two properties. He’s not going to stop once he hits the one year owner occupancy requirements for his mortgage. He’s going to start looking for another property.

Scott: Yes, I think that’s a fantastic episode an example of how much progress, how quickly you could just how much progress you can make really quickly if you are extremely, you know you go all out on it. I love his story. It’s exactly what I would be doing if I were in his position. Right.

Mindy: Yes.

Scott: Going through it and I think that is just a very. I think he’s put a lot of thought into his situation and is really understanding the risks. Hey this deal could work out and you know could not work out and maybe I’m even more in the hole, but the odds are enough on my side and I’m willing to live in such a way to make them as high probability as possible that I can go ahead and buy two properties before I start paying down my student loans.

Mindy: If you look at his lifestyle he has completely cut out his transportation costs. He has completely cut out his housing costs. He lives for free. He hacks his housing and lives for free because somebody when I say cash flow all of his mortgage is paid, all of his taxes, and then additionally he makes $1,700 a month her $1,500 a month.

Scott: Yes.

Mindy: He gives exact numbers in episode 35, but it’s just it’s so doable. In a hot market where you can’t make money nothing cash flows. Nothing it is a good deal and he’s said, “I don’t care what you think. I’m going to go and make my own luck.”

Scott: Love it. Well I think we’ve covered now the seven major points, the seven kind of key critical points that we’ve seen kind of come up over a couple of number of episodes right.

Mindy: Yes.

Scott: This year. The 50 episodes this year. 50 guests.

Mindy: Number one tracking your spending is key.

Scott: Number two, self-education. Every episode somebody has got a book or another piece of educational content that they consumed that changed their life and put them on the path toward financial freedom.

Mindy: What is your favorite finance book Scott?

Scott: Well I don’t plug my own. I would say the millionaire next door is probably my favorite right so.

Mindy: Have you read the new millionaire next door or the next millionaire next door?

Scott: I have not. I’ll have to go check it out though.

Mindy: Yes, I’m going to get that book too. I haven’t read that one yet. What is the name of your book Scott?

Scott: Set for Life.

Mindy: Set for Life by Scott Trench. Number three, get your spouse on board. Have a money date. Ask your spouse especially if they’re not quite on board. Ask them what their ideal life looks like.

What would you do if money was no object? Use that question to start the discussion and you know give them time to think about it. Maybe even set a date where there’s no kids, there’s no TV, there’s no dishes to do. There’s no nothing. You’re just sitting the two of you and talking. Grab a glass of wine.

Grab a soda. You know a cup of water if you’re healthy and just sit down and talk about your ideal life. If money was no object what do you want to do? I love flipping houses. If money was no object I would still buy really ugly houses. I just might not live in them. I would still buy really ugly houses and flip them. I love real estate. I love to travel. I love to spend time with my kids. What does your ideal life look like?

Scott: Love it. Number four, there is no secret sauce. If you want to move toward financial freedom you’re going to have to spend less. You’re going to have to earn more. You’re going to have to achieve high investment returns or you’re going to have to be a you know build a new income stream or asset. Entrepreneurial style. Right there’s no way around it. You have to do one of those capacities or all of the above. Right. You have to improve somehow.

If you’re looking for the secret, you’re never going to get there. It’s just an application of hard work and intelligent risk taking, understanding the odds, and increasing them as much as possible in your favor through self-education. Stop looking for that secret sauce and understand the levers and apply pressure to those key points in your financial position as methodically as you can.

Mindy: Also there is no secret sauce means that you can do this.

Scott: Yes.

Mindy: This is repeatable. This is doable. Listen to these stories and pick out the parts that you think apply to you. Oh I love real estate or I don’t like real estate. I like investing in stocks.

Great. We’ve got different people who have different investment strategies. There is no secret sauce and it is repeatable. Number five, past money mistakes do not dictate your future money life. You bought too much car, you bought too much house. You spent way too much on credit cards right after college. You have a 400 credit score. Take the steps necessary to fix those past money mistakes so that you can have the best future money life.

Scott: Yes, and then one episode we didn’t mention that I want to kind of call attention to is episode number 22 with Travis Hornsby. He talks about pursuing financial independence with large student loan debt. Like six-figure plus student loan debt so there are ways to do this even if you have a lot of student loan debt relative to your income.

Mindy: Yes, that was a really excellent episode. I didn’t graduate college with student loan debt and I wasn’t aware of some of the repayment programs that are available, but it’s definitely worth checking out. That episode especially if you have a lot of student loan debt. Also an episode listen to if you have kids that are going into college. You know one of the things that he said that really stuck with me was you know when you’re helping your child choose a college private schools are going to be way more expensive than public schools, but ask them is this the only thing in your life that will make you happy.

Is there something else you could do that would make you almost as happy, but doesn’t come with the huge crippling debt?1 Especially like veterinarians, I didn’t realize this, they come out of school with three, four, or five- $600,000 in student loan debt. They’re making, that’s med school debt, but they’re not making med school salaries.

Scott: Yes, absolutely. I mean that’s1 very tough uncomfortable question that we have to ask because the problem is that people are making that decision before they’re 18 years old in a lot of cases.

Mindy: Oh before they’re mature. My choice I mean don’t, I’m not trying to dog on veterinarians, my choice was fashion design. It was a really not right for me major. I wish I would have studied business or finance. What did you study Scott? I wish I was you.

Scott: Economics and finance.

Mindy: I don’t want to study that.

Scott: I never use it anymore.

Mindy: Yes, you never use it every day in your life.

Scott: The sixth kind of big take away though is that the intelligent application of hard work in a performance based career can really be the driver that propels you toward financial freedom. Right.

Mindy: Yes, that is.

Scott: Exemplified by David Greene.

Mindy: Exemplified by David Greene in episode 12 work hard and work very smart.

Scott: In a career that has the opportunity to provide performance-based rewards that are infinitely scalable.

Mindy: Finally number seven, real estate is an excellent way to financial independence.

Scott: Awesome. Well let’s transition here real quick and so we have a couple of minutes left. Let’s really quickly go through some tips, some practical tips that we can kind of walk away with him. Let’s focus these around saving money because I think that this is the component that is most difficult for most people to kind of transition to if they’re looking to move toward financial freedom is how to actually and dramatically cut back on expenses across really four major categories of spending that have come up in the past episodes. Those areas of spending seem to be housing, transportation, childcare, and healthcare. Food is a huge component of people spending, but typically no one really has difficult time understanding how to optimize their food budget right.

Mindy: Yes.

Scott: I haven’t heard that come up as a challenge for folks.

Mindy: Not really and if they do, they can go and listen to Aaron Chase’s episode number three. She really breaks it down on how to reduce your food spending and she doesn’t talk about couponing. She doesn’t talk about you know all of these shopping the sales. Actually she does talk about shopping the sales. Go into the sales flyer, look for the meat that your family will eat and make your whole meal plan around that. Plan your meals. I mean that it’s so easy to spend a lot of money on food, but it’s so easy to not spend a lot of money on food.

Scott: Yes.

Mindy: Yes so for housing.

Scott: Yes let’s start off with housing right. The first major expense is housing right and we have talked a lot about housing on over the course of the show right. There’s a whole variety of different ways. You can house hack and try to cut that expense out entirely like I did or like Craig Kurlop is.

You can buy a house that’s well within your means. You can rent a place that’s pretty reasonable and close to work. There’s a lot of options here that work depending on which market you live in, what the real estate prices are, what have you. What we don’t hear a lot of is we don’t hear a lot of people moving towards financial freedom who live in a the largest house that they could qualify for and make mortgage payments on that on a regular basis right. There’s got to be some happy medium between buying all of the house that you can possibly qualify for and living in a content way that can help you move toward financial freedom in a reasonable manner.

Mindy: Yes. You know I think that if you really want to be financially independent and your house is your biggest expense and house hacking isn’t an option. At some point you’re just going to have to get over the fact that other people may look down on you. Well this goes to my other favorite quote, Coco Chanel. I don’t care what you think about me. I don’t think about you at all.

I have a small house. It’s 1800 square feet and people come over to my house and the outside has this really big porch on it so it could look like it’s bigger on the inside than in actually is. I have had some people come in and be like, “Oh this is kind of small.” I don’t care if you think I have a small house. You know what I have? I have an $1,100 mortgage payment. That’s what I have. That makes my heart sing. I am happy to write my $1,100 every month because it’s not $4,000 that I was paying at the last house. If you don’t like me because I have a small house A, you’re not a true friend and B, I don’t care. I’m going to be laughing while I’m sipping margaritas on the beach and you’re still at work when you’re 65 because you have to have this big house so everybody thinks you’re rich. I don’t care if people think I’m rich. I actually when I was looking for this house, I had given my real estate agent my price limit of like $250 I think and there was another house that had come up that was $500,000 and I asked her if he could see that and she said, “Can you afford that?” I was like, “Yes, mission accomplished.” Then once we finally moved in to this dumpy little house my neighbor across the street was congratulating me on my purchase as though it was my first house. She’s like, “Oh good for you. I’m so proud of you or something like that.” I’m like, “Thanks this is the cheapest house I ever bought.”

Scott: Yes. Yes, I think that like I live in 700 square feet with my girlfriend and if it gets too crowded in there that’s too small because I got too much stuff.

Mindy: Oh.

Scott: Right and that’s a huge barrier to freedom. Like there’s you know the point of accumulating items in today’s world, you know today’s age other than like the things you kind of need to be happy it seems so irrelevant to me. It just seems like it’s such a constraint on your life. It locks new to one place. It forces you to purchase more and more square footage. You know it’s expensive to maintain and it’s difficult to part with and I think that that’s one of the big things is like take a look at all the stuff you have. Right I mean we’ve had guests on the show who have commented you know I didn’t even go into a room in my house in the last year.

Mindy: Yes.

Scott: It was time to make a change so I think that there’s understand what it is that you need when it comes to your housing and understand that that can be the biggest thing that’s holding you back.

Mindy: Anthony Angaro from episode 48 talks about minimalism and what you just said is so like it’s like your reading my mind. I have too much stuff. I have way too much stuff. I need to get rid of it. I am ending the first month of a minimalism challenge where day one you get rid of one thing.

Day two you get rid of two things, etcetera. I have gotten rid of 496 items in my house. Which sounds like a lot. I bet you couldn’t even notice. In February, I’ll be doing it again and probably in April. I think every other month I’m just going to do it and continue to get rid of all these things in my house that I don’t need, I don’t use and I won’t miss.

Scott: Yes and think about how liberating it is to have to get rid of all that stuff and then have a house that’s ready to go for example for Air BNB. You can take off for a month and pay for that whole trip for free. Right you could rent out a space commercially. Like Anthony did right? You know there are so many different applications to your residence that are being taken up by your items that are limiting your ability to move toward financial freedom not just because you can’t downsize, but because you can’t repurpose any part of your house to be used. You know if all your assets are in one house in equity, in one house you’re in a really bad position. To really to enjoy any of the freedoms that you’ve heard the guests on the show talk about.

Mindy: Yes.

Scott: Let’s move on to transportation.

Mindy: Oh. Craig Kurlop in episode 35 has such a great story. He also bought a car that he didn’t really need. I think did he buy it new? I think he bought it new and he rented it out on a site called Turo where you can rent your car to regular old people and they would use you instead of using a rental car company. He was making so much money on this car every month and then when the car got totaled by one of the people who was driving it, renting it, Turo paid him more than he bought the car for when they totaled it out.

Scott: Yes, I mean that’s like I would say that Craig takes this to its, takes the you know transportation question, the expense. The transportation expense question to its logical extreme right. You buy a car instead of rather than having it cost you nothing or cost as little as possible you actually turn it into an asset that can produce income by renting it out. Right and then you know he would he obviously rents his car out and he’d bike to work so it’s a you know as low a cost or a negative cost as you can possibly get in terms of your transportation. Now that’s not repeatable for everyone, but it’s an example of the farthest the best way possible. The worst way possible, the hardest way, you may want to make this a really big challenge for yourself to move toward financial freedom as buy a new F350, jacked up, red, shiny red 2019 pickup truck right.

Drive that both ways to work in your flat city that most of the time doesn’t have any snow or ice on it right. Between those two extremes there’s a reasonable middle ground I think for how you can kind of move, get yourself to and from work so my approach and I could have been more efficient is I own a Toyota Corolla. I bought it brand-new in 2013 and 2014 so I bought it December 2013 is when the new models come up so I bought a 2014 Toyota Corolla and I actually just paid it off in November 2018. Right and if I could go back again, if I was buying a new car right now I’d probably buy something like a Toyota Corolla that’s from 2014, five to seven years old because I think to me it seems like it has a good trade-off between economics and longevity for the car so.

Mindy: Yes, I have a Honda element that I bought brand-new in 2003 and will drive until it’s dead. A Mazda five that I bought in 2010 brand-new that I will also drive until it’s dead, but those are the only two cars I have ever bought brand-new. I will probably never by another brand-new car.

Scott: Yes. All right so let’s move on to childcare and healthcare. Let’s talk about childcare first. What are some of the big takeaways you’ve seen from guests who are tackling the childcare problem?

Mindy: Some of the big takeaways I have seen is that there is no easy solution. There is no magic button. There is no oh I want to have a baby and go back to work and pay a dollar an hour for child care. It doesn’t happen.

What I have seen is couples splitting shifts so one of them works in the morning. One of them works in the afternoon and they take care of the kids when they are not working. I’ve seen relatives, a solution with Jamila Souffrant, her aunt moved in to help her take care of her kids. Alyssa Parros from episode 29 her mother-in-law takes the baby one day a week. Her mother takes the baby one day a week and then the other three days a week the baby goes to or two days a week the baby goes to an inexpensive daycare and then one day a week she works from home. There is no easy solution.

There’s no oh go to Bob’s daycare and it’s only you know it’s free. It’s going to take some work. My husband and I when we had our children I wanted to be a stay at home mom. That’s another viable solution, but you know you’re losing the one salary. Now are we really losing a salary? I wasn’t making very much money.

It was going to actually cost more money for me to put my child into daycare than it would for me to stay home. I would be paying, I would be working and also using some of his salary to pay for child care. That just doesn’t make any sense to me. I had always wanted to be as stay at home mom and we me made those financial choices ahead of time. We didn’t take the vacation every year. We didn’t buy the new house every year and the brand new car and you know all this stuff. We lived very frugally so that we could take time away from my work.

Scott: Yes, I mean it seems like I think that’s a pretty accurate summary of the problems that people are facing with it you know. If one spouse earns significantly more then the other and the other spouse like in your case it’s just not economical you know. It can be effectively significantly less than minimum wage to if you look at the trade-offs to work and then pay for child care versus stay you know stay at home. If childcare is $20,000 a year right which it can be in some of these markets and you’re working for $35 you know $24,000 a year, $2,000 a month right. You’re making $40,000 right you know after tax you know that’s 35.

It’s $11,000 a year. That comes out to $550 an hour. A rational person can say that is not a worthwhile trade-off one spouse has got to stay home. Right the other part of this is it’s expensive to move away from family right. We’re noticing a lot of folks. Oh we had someone in one of the early episodes that lives in Pennsylvania. What’s their names?

Mindy: Alyssa Parros, episode number 29.

Scott: Yes so it’s like a lesson here is it expensive to move away from your family so if you live in a major city that’s far away from where maybe your parents or your spouse’s parents live or any other relatives then there’s no ability to leverage that family thing to take care of situations when there’s an emergency right. Every time something comes up you have to hire a babysitter or figure something out. You know you don’t have that option of maybe one day a week or even two days a week of your parents or your spouse’s parents coming in and watching the kids. That’s a trade-off you have to understand and kind of come to terms with hey the income or the career potential of wherever you are had better be pretty significantly you know significantly in your favor if you’re going to walk away from some of the advantages of being around your family.

Mindy: Right and my income potential was that was a dead-end job that I was in. There was no significant improvement. There were several years I didn’t get a raise because the company was doing poorly. It was very easy for me to walk away, but also and I do want to point out because there are some women who really do want to have a career, I didn’t have a career. I had a job.

It was very easy to walk away from my job. It wasn’t anything that made my heart sing. I did want to spend time with my kids. I wanted to raise them. I didn’t want to put them in daycare and we could afford it so that’s what we did. It was not I mean we weren’t even doing anything with my salary anyway. We we’re just funding the 401Ks that’s how much money I was making.

Scott: Yes and then the last takeaway I have is you know from my perspective selfishly like what am I learning from all this? Well it’s built in passive income and create a retirement level of wealth as early in life as possible.

Mindy: Yes.

Scott: Because I will not have to deal with these problems. That’s my privilege from having house hacked early in my 20s and built some things up is if I decided to have kids then I can potentially make that choice and either decide hey I’ll use some passive income to pay for child care or stay home or create a situation where my spouse could stay home.

Mindy: Yes and I don’t think that privilege is the right word. You made sacrifices in your 20s so you that you can have the life that you’re living and you’re still in your 20s so. You made sacrifices in your early 20s and how long did it take you to sacrifice? You had a year of house hacking with your friend.

Scott: Yes.

Mindy: Then you had another year of house hacking with is he your best friend?

Scott: I sacrificed everything, but the fun.

Mindy: Yes.

Scott: That’s the point. The point is that if you can take care of these, if you can really apply the pressure intelligently early in life then a lot of these problems aren’t problems later and that’s what I’m you know I’m hoping to share with some of the younger listeners as well is hey if you can do that you know this it gives you a big advantage when you are making these tough choices, raising a family.

Mindy: Right and how much of a sacrifice was it to buy a property slightly outside of the hot area of town and live with your friend.

Scott: I mean like I definitely agree with you. I wouldn’t be recording a podcast telling people how to handle their money if I didn’t believe in what I was talking about and think it works so, but yes I mean I think it absolutely is worth the trade-off. It’s not that big of a deal and it provides immense opportunity down the road getting into this first few assets for sure. Let’s move on to healthcare.

Healthcare has actually been the pleasant surprise for me from this year of podcast recordings right. It seems like this insurmountable hurdle, but we really what I think my big take away from healthcare perspective is that healthcare is extremely expensive if you have a very high income. If you are for example going to retire and live off of passive income, less than $30- $40,000 a year there’s a lot of options out there through various government programs that are currently allowing you to get pretty good reasonable healthcare at a low rate. Veterans have a big advantage. Like that’s you know if you’re looking to achieve financial freedom you have a military background, you have a huge leg up on the rest of the competition because you have that, the VA. If you’re looking to travel around the world healthcare is a nonexistent issue.

Mindy: Yes.

Scott: Right.

Mindy: Yes so we do record our episodes in advance and in two weeks we’re releasing an episode number 55 with Christie and Bryce the millennial revolution and they go into detail about how they fund their healthcare in its nothing. What is it like? $25 a month or something like that. It’s so low cost if you’re outside of America. When you’re inside America that’s when health care kind of shifts and changes.

Scott: If you do want to travel the world it’s actually quite cost effective to do so. It seems like perhaps one of the best things you could do to move toward financial freedom is build up your asset base, buy a house or house hack and then put it on AirBNB and traveled the world because you could do it for way less than you expect every single time is what we’ve kind of heard time and again from the folks who are doing that. Then there’s a couple of other programs as well with for healthcare where we heard one from PT Money. He joined a co-op is that right?

Mindy: The health share co-op.

Scott: Health share.

Mindy: Yes.

Scott: Yes.

Mindy: PT money was episode number 38. He shares his health cost with a lot of other people. The way that this health share works his has a religious component to it. I think you need a letter from your pastor, your church pastor to that says that you’re a Christian, you’re a member of a Christian Church, but everybody kind of pools their. You pay your premium and it just goes into a pool and then most of the time you’re not sick, but when you have a bill you submit it to them and they pay it for you. I mean that’s an oversimplification of it, but there’s no. They cover pre-existing conditions don’t they? I think the first year they.

Scott: I can’t recall all the details on the specifics of it, but I think the bigger point is to know that it’s an option.

Mindy: Yes, it’s an option and it’s a much lower cost option.

Scott: Yes so I think a lot of people struggle with this problem. This is not just early retirees. This is a problem that the self employed face. You know entrepreneurs face right this is an issue that comes up time and again and there are plenty of solutions out there. The most expensive one seems to be to earn a high income and live in the United States. If you’re attempting to do that then know you’re going to pay a lot for healthcare, but hopefully you can supplement your you know still work toward building wealth and maintaining a strong financial position because you’re earning a high income and spending less in other areas.

Mindy: One other episode I want to mention simply because it was just a fabulous episode is the episode with the Mad Fientist. That was episode number 18 that he talks about the HSA as the ultimate retirement account. The HSA is the Health Savings Account. It is only available with a high deductible insurance plan and a high deductible plan basically doesn’t cover any expense until what like $15,000 so you basically have $15,000 deductible and then it kicks in. It’s more of a catastrophic plan. When I say it doesn’t cover any expense I’m lying. It is it covers well child visits. It covers your annual exam for a woman and I believe an annual physical for a man. It doesn’t cover anything with prescriptions or anything like that. However, if you are a otherwise healthy person it’s a great option.

Scott: Love it. Yes and I mean one of the things you should do if you are interested in this is listen to our podcast and other all the other ones on financial independence. Retire early and then teach people how to exercise and eat right and save this country a trillion a year or whatever it is in what we’re spending to treat all of these completely preventable, avoidable diseases centered around over eating, obesity, lack of exercise right. Poor dietary intake, lack of sleep. Right like go solve that problem for us and bring all of our healthcare problems challenges down. To summarize like our learnings on healthcare you know again very expensive to have a high income and purchase your own health insurance in America and we don’t really see very many ways around that right.

After you retire if you reduce your taxable income through for passive investments or with a low lifestyle expense there are options that can reduce that cost dramatically. If you are a veteran there’s free healthcare. Take advantage of that HSA plan and if you want to travel outside of the United States you know healthcare problems kind of cease to be material and healthcare costs kind of cease to be material relative to your financial position if you’re supporting an early retirement. Then lastly you know why are these costs going up in the United States so much. Well there’s a variety of answers, but one thing that one action that you could potentially take is you know listen to this podcast. Retire early, build up a personal financial position and then go educate the country here on how to prevent some of these diseases. You know how to live, how to eat reasonably, how to exercise.

wHow to you know get vaccinated and prevent the spread of easily treatable or easily preventable illnesses that are a result of people not vaccinating. That kind of thing might be a really big help, might be a really worthwhile exercise to pursue even though you’re supposed to be technically retired right. That retirement police will come after you. Yes I mean that the yes the answer is there are no easy answers for a lot of these, but there are answers and people are solving them and they’re not insurmountable and they are repeatable these solutions that people are bringing to the table.

Mindy: Yes, there’s definitely a solution for every problem that you have.

Scott: All right.

Mindy: Okay before we leave here I just want to say to everybody who’s listening to this episode as you start the new year whether you’re just discovering this podcast or you’ve listened to every single episode start tracking your spending. Make it a game that you and your spouse play how little can I spend today? How little can I spend this week? You know give yourself a reward. Your normal spending as $3,000 a month and you can get it down to $2,800 and you can when you know go out for ice cream or go for a big walk or go see a movie or you know do something that you don’t normally do to reward yourself for you know making a gain in every month try to get a little bit better.

Scott: Yes, absolutely. That is the number one tip. Right you’re already self educating if you’ve made it this far through the podcast so go track your spending and look at what you’re spending. See if you can make a change and I guarantee you there will be, there will be opportunity for improvement that you can go after right away.

Mindy: Absolutely okay. Scott? Shall we get out of here?

Scott: All right before we leave we’re going to walk out of here with a couple of Christmas puns. We didn’t get to do them last week because we didn’t plan ahead. We’re doing them now congratulations. All right my girlfriend, she’s an English teacher so she’ll like this one. What do you call Santa’s little helpers?

Mindy: What do you call Santa’s little helpers?

Scott: Subordinate clauses. All right happy holidays. Merry Christmas, happy Hanukkah, whatever it is you celebrate we wish you a happy holidays and a happy new year.

Mindy: From episode 53 of the BiggerPockets Money podcast this is Scott Trench and Mindy Jensen saying happy new year and we’ll see you next year.

Watch the Podcast Here

Help Us Out!

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

In This Episode We Cover:

  • What Scott and Mindy’s goal is
  • The most important thing that their guests have done for their success in achieving their financial goals
  • A discussion on tracking your spending
  • Why relentless self-education is so vital
  • How to get your spouse on board with money dates 
  • Why there’s no secret sauce for making more money
  • How past money mistakes do not dictate your future money life
  • How to apply intelligence and work ethic to earn more income
  • How real estate helps people to pursue financial independence
  • The four major categories people spend on:
    • Housing
    • Transportation
    • Childcare expense
    • Healthcare
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “You will probably lose something out of your lifestyle, but it’s not something that’s gonna matter to you now or in the long run.” (Tweet This!)
  • “People learn so much more from your mistakes than they do from your successes.” (Tweet This!)
  • “Being open and honest with your spouse is so important.” (Tweet This!)
  • “Numbers don’t lie.” (Tweet This!)
  • “What’s the worst that can happen? I have to go back and get a job. My worst case scenario is everybody else’s everyday life.” (Tweet This!)
  • “Your past money mistakes do not dictate your future money life.” (Tweet This!)
  • “I don’t care what you think about me, I don’t think about you at all.” (Tweet This!)
  • “Understand what it is that you need when it comes to your housing, and understand that that can be the biggest thing that’s holding you back.” (Tweet This!)

Connect with Scott & Mindy

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