BiggerPockets Money Podcast

BiggerPockets Money Podcast 65: Getting Your Family on Board with Financial Freedom with Jacqueline Burch

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Jacqueline Burch got married and did what all newlyweds do, spent time with her husband. They continued down the road of “things you’re supposed to do”—had dinners out with friends, purchased a home, and had a baby!

After her first son was born, she returned to work and he went to daycare. She knew she needed to invest for her future, but wasn’t quite sure how to do it.

Aimlessly investing didn’t yield the results she wanted (shocker!) and upon realizing she was pregnant again, Jacqueline decided to get her finances in order. She and her husband cut all extraneous spending, paid off their outstanding debt, and even found a way to reduce childcare from $77/day for one child to $65/day for two.

Jacqueline became an expert is optimizing her family’s finances —and a master at turning “we can’t afford that” into creative ways to accomplish anything. Her ingenuity includes teaching ski lessons as a way to afford skiing for her family of six, rehabbing a short sale house to live in, and continuing to live in a 932-square-foot house even after her fourth child was born.

Jacqueline absolutely embodies the mantra “when you have the desire, you find a way, and when you don’t, you find an excuse.” This woman makes no excuses and always finds a way.

If you are looking for a repeatable path to financial freedom, this is a can’t-miss episode.

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Welcome to the BiggerPockets Money podcast show number 65.

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I mean nobody wants to have to tell their kids face-to-face you know this has to wait, but I think it’s so important that they do see the sacrifice that work is work and this is what we do and this is what mom gets to do to be with you. This is also what we have to do because we have a larger family and we’re trying to make these steps toward financial independence and retiring early.

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

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

Mindy: I am doing fantastic today Scott. I’m really excited for today’s guest. Jacqueline reached out to me a hundred years ago and to talk about kids and she is on the path to financial independence. She has four boys.

They go to private school because that’s something that means a lot to her and so clearly he’s lying. She can’t do financial independence right because she has four kids they’re in private school so there’s no way. You would be wrong if that’s how you thought because today Jacqueline is going to share exactly how she manages this. She’s going to share all sorts of things about her life and I think managing is a really great theme for this show don’t you think? Because she has managed her life and her circumstances and her choices and managed to direct them into the life that she wants to live. She’s loving her life.

Scott: Yes, I mean she’s overcome a lot of obstacles by tackling every area of personal finance in life with kind of a zeal and enthusiasm and really just like kind of I’ll use this word in a loving way ruthless efficiency right. She runs the household very efficiently. They made a great decision at every step of the way, housing, transportation, food, their investment approach. Their careers have gone really well.

They’ve taken big strides there. Just a really impressive story and a lot of that and also maybe you guys listening may not realize this, but a lot of the guests that we have on the show often are you know have a story that they’ve told on other areas in here on the Internet or have their own blog or otherwise have kind of told their story a lot. Jacqueline doesn’t have that. Jacqueline is I think is telling her story for the first time here today and her poise and delivery is really really excellent as a result of that so really got to commend her on a lot of these doing everything right.

Mindy: Yes and you said she made every decision. That is such a key point. Financial independence doesn’t just happen. It is the results of a variety of choices that you made to optimize your spending, your saving, your investing so that you can arrive at this goal. She is not there yet, but she is on the path towards it and she’s her goal is not to quit her job which I really like about her story.

A lot of people come on the show or send me a note I want to be on the show oh I can’t wait to quit my job it’s so awful. It’s not necessarily about that. It’s about getting to a point where you can do what you want. It isn’t just I want to lay on a beach and do nothing all day. It’s may be for a week or what was yours? Playing video games for six solid months?

Scott: In fairness to Jacqueline she did quit her job. We will go over that in the show. She started.

Mindy: She quit a job.

Scott: Yes, she quit a job and that was not giving her the flexibility that she needed in order to pursue her goals and she made another job for herself.

Mindy: Yes, which is a decision. It is a choice. It is an action that she took in order to further herself down the path towards financial independence. You know we should not sit here and tell her story. She has a great story and like you said she has a great delivery so we are going to stop and let her tell her story.

Scott: Yes and just as a heads up at the very end of the show we do the Famous Four, we do some jokes. Her joke is very inappropriate so be warned ahead of time for children listening all of that kind of stuff. Very inappropriate.

Mindy: Still funny though. I actually laughed at this joke so you know. Teaser, spoiler alert. No not spoiler alert. Teaser, I think it’s just teaser. Okay before.

Scott: It was a crappy joke.

Mindy: It’s a crappy joke. Before we bring Jacqueline in let’s hear a note from today’s show sponsor.

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Mindy: Okay huge thanks to today’s show sponsor, Jacqueline Burch welcome to the BiggerPockets Money Podcast.

Jacqueline: Thank you so much for having me. It’s an honor and pleasure to be here.

Mindy: I’m super excited to talk to you. Let’s start off with where your money story begins.

Jacqueline: Sure. I’m going to start where our money story begin for Jeff and I as a couple. When we first got married we came in to our marriage with about $38,000 in debt. $17,000 of that was an auto loan. Jeff had an auto loan and then the other was credit card debt just from me shopping, going out to eat, very frivolous debt so when we got married we committed let’s get out of debt.

As we were doing that I decided to go back to school so normally that would be a very responsible decision to go for an MBA or something like that, but for me I had a degree. I was working in the field of my degree, accounting and I decided to go to cosmetology school. That’s another story for another day, but and during this time we also thought it would be a good idea to start a family so we were young. We were making some money and we thought this is what married people do. They start families.

They go back to school so during this time we had our first son who is now 10 so I was working full-time, going to school at night from 5 to 10 and then we had our first son. During this time, we also we made our first big money mistake. This was when the market was down so we bought a piece of vacant property at a great steal thinking that we would build a house later, but in the meantime we’re paying HOA fees, taxes, insurance on something that we were seeing no benefit from. Working, school, baby, childcare, buying a piece of vacant property.

You can see that we were not making any progress on our debt at all. Fast-forward, we started to search for a house. Because we were married, I had a baby and thought this will be the time that we buy our first house. We identified this cute, downtown, quaint area.

Tons of cute houses, normally they would be priced way outside of our budget, but because the market had fallen so much we could now afford to buy a house. What we didn’t anticipate was all of the investors were also on the trail for these cute, small, quaint houses that are now priced a $100,000 below market value. It was a real struggle to even find houses to bid on so we lost a few houses and then we put in an offer on a short sale in January. We didn’t hear back on that house for months so we had a conversation and thought okay we have to give up on this area. It’s just not going to happen for us.

We need to get out of this apartment at that time we were living in a one bedroom apartment with a baby so I’m sure you can imagine how fun that was and we thought we really need to brainstorm on where we’re going to start looking next. Went to sleep that night. The next day our realtor called us and said, “You got the house.” An investor bought it for cash, decided to flip it quickly.

Didn’t even look at other offers. Just took the first one behind his and basically just luck we got the house so we were super super excited we bought our house for $132,000 and it was a complete dump. As in at our inspection I saw what I thought was dust bunny scurrying across the floor. It was a mouse. Every single square inch of our house we have strip down to the studs and brought it back. Jeff is super super handy. He has his builder’s license. He framed houses in high school, in college, has a degree in construction management so he has those skills that he put to work on our first house.

Scott: Where was this house again? I’m sorry I’m not sure if we covered that already.

Jacqueline: Sure it’s Southeast Michigan.

Scott: Southeast Michigan okay great.

Jacqueline: Yes so during the time we were probably living in our house for a month or two and we surprise were pregnant again with our second child so we were remodeling a house. By this point I was done with school. I went down to working three days a week, but we were at a crossroads with childcare. With our first son we, my sister-in-law watched him one day a week and then our moms helped out. They live about two hours away so they would come over once a month to help out.

With two children it really priced us out of the daycare that we were using and so I remember this was a crossroads when we really took a look at our budget and saw that it was not working at all and especially adding a second child we really needed to fix some things that were going on with how we were spending money. What we did was we stripped away anything that wasn’t necessary. We stripped away cable. We stripped away going out to eat.

We transitioned our son to a licensed in-home daycare that had a sibling discount. We went from paying roughly $77 a day down to $65 for two children and that was really when our FI journey began. I remember sitting in my office before I even knew what FI was I would just sit with an Excel spreadsheet on my lunch hour and calculate how much we would have to cut to either make our budget work better or to make it so I didn’t have to work outside of the home to make childcare work and I just remember I would sit for hours and hours with spreadsheets and kind of rework them, present it to Jeff. Him having an idea, coming back to me so yes that’s where our FI journey started in a big mess.

Scott: To kind of get a little bit where the chronology here I’m a very like linear thinking.

Jacqueline: Sure.

Scott: It was for this stuff.

Jacqueline: Yes.

Scott: Your first son you had while working full-time was it how long out of school was that?

Jacqueline: Maybe a year and a half.

Scott: Then how much longer after that was the second child born?

Jacqueline: 17 months, a year and a half.

Scott: 17 months. Okay okay so you had both these children in the span of less than two years.

Jacqueline: Right.

Scott: This is right after you had bought the house from the middle of all of this construction the whirlwind and that is what prompted this extreme budgeting basically.

Jacqueline: Sure.

Scott: You prompted to sit down with the spreadsheet and cut out everything right. How did that look? Like what was it what was the difference between your spending before and after with that exercise?

Jacqueline: Before we were saving maybe 11% of our income and when I say saving we were putting it into a ROTH RIA. I’m not remembering dollars and cents so much right now, but I remember that number being 11% and then afterward we were saving 35% and then day to day what it looked like was really watching our grocery budget. Again childcare was a big expense. Housing, our housing for us at the time was a bit of a stretch even $132,000. That’s not that much, but again.

Scott: Yes.

Jacqueline: We were on starting salaries.

Scott: Yes and the way you obviously kind of helped the housing salary, the housing situation was by doing a lot of the work yourself.

Jacqueline: Yes.

Scott: Putting together.

Jacqueline: Yes.

Scott: It looks like a beautiful home on your own.

Jacqueline: Right so now 10 years later the home we’ve had two separate appraisals done. It appraises at approximately $324,000.

Scott: Wow. That’s awesome.

Jacqueline: Nice.

Scott: Okay. Okay so walk us through like what was the moment where the how did you discover the concept of FIRE. You got to the savings position, but when did it begin okay this is about early retirement or passive income.

Jacqueline: Sure so I would say that started not that long ago. I would say it was discovering this podcast when you guys started this podcast I listened to the first podcast and thought oh this is what we have been working toward. I understood the financial independence component of it, but I didn’t necessarily put with it the retire early. I took a look at our budget again, what we’ve been doing and calculated how as far are we truly out from not only being financially independent, but being able to retire early. What does that look like? Not that long ago.

Scott: Let’s walk through that exercise right so.

Jacqueline: Sure.

Scott: What does retirement mean to you? What does that finish line look like in your mind?

Jacqueline: For us I think it’s a little bit different because I think it’s important to mention before we go too much further. We have two more children so we have four sons, which was also interesting to me because listening to the podcast a lot of people there may have been one or two guests that have had more than three children, but I think for me looking at fire I was like can we feasibly do this with four children. Who we want to help through college, who we have in private school, what does that look like? Coming back to your question I guess I discovered this back when we had those first two children, but put a name to it probably when you guys started the podcast.

What does it look to us like for us now? It looks like we still live in the same house. It’s 932 square feet with four kids and a big dog and two grown-ups. It’s tight, but we love it. It looks like looking at the budget and each month we pick one or two areas where we really hone in and focus on how are we doing in this budget? For example, January with groceries. We were averaging $1,200 a month on groceries, which for six people, four of whom are growing boys seems reasonable.

Can we tweak that? We got it down to $815 last month and we’re on track to do that again in February. It also looks like I remember the first weekend we set out with our new budget in place. We had two kids under three. It was January.

It was cold, right a 932 square foot bungalow. It’s raining outside. There’s nothing to do. Let me tell you if you are stuck inside you’re going to do two things.

You’re going to go insane or you’re going to go out and spend money. That’s what we did. We went to target after we just had this big budget meeting and we spent $70 bucks on puzzles and something else. I can’t remember.

That was important to us. When we did our budget review the next week what do we do with time now because we’re not going out to eat. We’re not spending money on entertainment. What do we do with this time? We really took a look at the entertainment component, the lifestyle component of FIRE. Jeff loves to downhill ski. I love to do yoga. I love photography. How can we do these things either for free or as close to free as possible. We really came up with some ideas for that.

Mindy: You just said skiing.

Jacqueline: Yes.

Mindy: I didn’t know that that is a very expensive endeavor because I am a snowboarders so it’s kind of the same thing.

Jacqueline: Yes.

Mindy: How do you cut down on an expense that is for all intents and purposes frivolous.

Jacqueline: Sure.

Mindy: You don’t need to go skiing and expensive so how do you find a cheaper way to do that?

Jacqueline: For us, what we were able to do is there are seven grandsons on my husband’s side so we share equipment costs. We’ll go in, we’ll buy used equipment and then we share the cost amongst, he has two other brothers. Then everybody uses everybody’s equipment. That’s one way. The biggest way and we were anticipating putting it into practice this season, but there’s only so much time.

Jeff chose should coach basketball, but next season we’re for sure going to put in to place. The local ski area well you can be a ski instructor there. It is a huge time commitment. It’s at least 10 hours a week, but you and your whole family can ski for free. It’s 50% off meals. It’s 60% or 70% off equipment and not only that, but if we chose to go out to Colorado, to Vail, and some of the other resorts out there it’s free skiing out there as well. That would essentially get rid of 90% of the cost other than fuel and if we choose to have a meal out there.

Mindy: Okay that’s interesting that you said being a ski instructor you said 10 hours a week.

Jacqueline: Right.

Mindy: That’s actually not that much. I mean that’s what? Two maybe three days. Does your husband okay so I guess we haven’t talked about this. What does your husband do for his job?

Jacqueline: He’s a project manager at a commercial construction company.

Mindy: Okay so he has an actual 9 to 5.

Jacqueline: Yes so for him it would look like probably two evenings a week and then all day Saturday. Possibly all day Sunday.

Mindy: Okay so that is a time commitment, but I mean to ski for free I guess if that’s really important and you know there are people I live in the Colorado area where like Scott can attest. There are people who are up there every single weekend and they ski.

Jacqueline: Right.

Mindy: All the time.

Jacqueline: Well for us with four sons okay bring all the kids out. They you know two of them are independent. Two could ski with me. It’s just kind of a thing we do as a family in the season and it’s getting us out of the house and then if it’s free they get us out of the house, fresh air, movement. It’s just a win-win.

Mindy: Yes so.

Scott: Yes.

Mindy: We’ve jumped in and covered a lot of things so let’s go back to now and kind of dive into some of those so we just talked about skiing that is a cheap endeavor as anybody who has ever been skiing ever knows that. I just went a couple of weeks ago. It was $134 for a one day lift ticket. I believe that’s just insane to me so in the beginning of your story you said that you started off with $38,000 in debt.

Jacqueline: Right.

Mindy: Obviously if you’re going skiing that’s now more or did you actually pay that off? How did you I’m assuming you paid it off I know I actually know you paid this off. How did you pay that off?

Jacqueline: We paid it off little by little, month by month. The first thing that we did though was we looked that vacant piece of property and we priced out what would it actually cost to build a house and is that reasonable for us? It was so far-fetched that it wasn’t even like it was a very easy decision so we put the vacant lot on the market and it then sat for two years and it makes me sick to think about how much you we flushed down the drain and HOA fees and taxes and insurance. We put the property on the market right away.

We also looked at what we were spending with entertainment and groceries and that we stopped going grocery shopping. We live in an area where there are five really good grocery stores within five minutes. We went once a week, made a budget. Stuck to it. We also revamped what we were going to be able to buy when we bought our first house. We cut the budget in half, which made it more challenging, but it also made us feel more comfortable. Housing cost was big.

Mindy: What year was this? Was this.

Jacqueline: This was 2008.

Mindy: 2008 okay.

Scott: I mean if you look at the average American household budget right, a third of it goes to housing, 17% goes to transportation and then another 13%-15% goes to food. It sounds like you know hey we have this debt we’re going to make extremely responsible decisions in two critical areas. Right one is.

Mindy: Right.

Scott: Like housing and the other is the food. What about for transportation what were you driving around that time?

Mindy: Gosh back then Jeff was driving a two-year-old pickup truck and I was driving a Honda Civic, two door Honda Civic so that wasn’t a frivolous area where we had these extravagant cars and that was a challenge for us because when we looked at our budget it wasn’t necessarily a matter of an expense problem. It was also an income problem because we’re starting off on starting salaries and we just weren’t making very much.

Scott: Yes, absolutely so you got this down. Were you able to begin making progress in the debt over the next year or two.

Jacqueline: We were. We went from saving maybe $250 a month to saving $2,000 a month and to look at that and to say, “Oh my gosh how much were you spending on groceries?” It was big. Groceries, Starbucks, eating out when you don’t have a child yet you’re eating out all of the time. Because to sit in a one bedroom apartment we ended up okay let’s go out. Let’s go out. Let’s do something.

Mindy: So over and over I hear this. The first thing that people cut out is they cut out they’re going out to eat. Did that change your life? Did you miss it? Did you just feel depressed all of the time because you weren’t going out to dinner anymore or was it pretty easy to get rid of?

Jacqueline: You know I’ll say the first month was really hard because we had to say no to ourselves over and over and again at that point we were in an area where you drive home from work, you’re driving by 50 restaurants. Our friends all were going out to eat and going out to the movies and going out to the bar and doing all these things so to miss out on that was hard. What we started to do was we would bake dinners in. That’s when we learned how to cook. We didn’t join a gym, but we did start working out more regularly and we would just get outside and go for a run, do something like that.

We also traveled back to our hometown often and just spent time with family, which was nice because then mom was cooking dinner, which was an added savings and then again I went back to school pretty quickly so this period of time was maybe six months and then I went back to school and my life was going to work from 7:30 in the morning until 4:30 at night and then going to school from 5 to 10. During this time period, Jeff helped his brother remodel his whole house. His brother bought a fixer upper and he for free helped his brother remodel it, but it was nice because he could use his skills and spend time with his brother doing something that he likes. He loves to build, but he didn’t have to spend any money.

Scott: Was Jeff earning income during that project as well so that was on top of his job?

Jacqueline: No, he did it all for free.

Scott: Oh wow so during this period you were at school, he was working for his brother for free and you were able to still save money and accumulate?

Jacqueline: Yes.

Scott: That’s impressive. Wow.

Jacqueline: Once well and Jeff was just so supportive of me going back to school. He would make my lunches so there was no incurred costs of going back to school as far as like oh I didn’t get to pack my dinner so I’m going to buy dinner. We were very intentional about making sure we had our meals passed for the week ahead of time.

Scott: Over what period of time did it take you to go from $250 a month in savings to $2,000 a month in savings? Was that almost immediate?

Jacqueline: Instantly. Immediate.

Scott: Really wow.

Jacqueline: Immediately.

Mindy: Wait wait what are you? How often were you going out to eat? This sounds like the waffles on Wednesday couple when they were.

Jacqueline: Yes.

Mindy: What did they say? They spent $30,000 one year at a bar?

Jacqueline: Oh yes. It was.

Mindy: Bar and grill. Not just bar.

Jacqueline: It was at least four nights a week and then when we would go out on the weekend it was probably a hundred or $200 and dinner and drinks.

Scott: Wow.

Jacqueline: Friday and Saturday.

Mindy: Wow, okay so this one.

Jacqueline: $200 a weekend, $800 in a month.

Mindy: This one fairly big, but also small change. It’s not like you’re not eating at all.

Jacqueline: Right.

Mindy: You’re just not eating out.

Jacqueline: Right.

Mindy: This one change helped you save so much so how long did it take you to pay off your $38,000 in debt.

Jacqueline: Gosh that’s a good question. I can’t remember exactly, but I remember because then we bought a house so I felt like even though it was a mortgage and typically people don’t include that in their total debt figure I did so I felt like we never got fully out of debt until we paid our house off.

Mindy: How long did it take you to pay your house off?

Jacqueline: We paid that off two years ago.

Mindy: Okay.

Jacqueline: So a long time.

Mindy: Well.

Jacqueline: We added two kids and.

Mindy: It’s not 30 years.

Jacqueline: Right.

Scott: Your money management approach overall right so you’re starting at saving this. You have $38,000 in debt you’re saving $250 a month. What do apply the increased savings to? Do you build up an emergency fund? For you to pay down the debt use it all to pay down the debt or do you invest and pay down the debt with a hybrid approach?

Mindy: We started to invest in a ROTH IRA so we put $800 a month toward our IRAs and then the rest we put to our debt.

Scott: Got it. Okay and okay and then that took you about what eight years or so then to pay off everything.

Jacqueline: Right.

Scott: Including the mortgage?

Jacqueline: Including the house, yes.

Scott: Okay and what do you do now with excess savings? What’s your money management strategy?

Jacqueline: Sure.

Scott: Now that everything is paid off.

Jacqueline: Sure so anything above $10,000 we feel like $10,000 is an adequate amount in cash to make us feel comfortable and then we also have a home equity line of credit that just sits there for you know let’s say there’s a catastrophic emergency. We have that money sitting there if we need to access it, but anything above $10,000 we lend out to real estate investors. Typically in the form of a short-term note so less than 24 months and typically 10% to 15% return. Averaging probably 12.

Scott: Mindy have you ever heard of this type of strategy?

Mindy: Wow that sounds like the private lending that some people do. That’s interesting so you are making 10% to 15% definitely around 12% on this money that’s just extra that you don’t need. That’s so disingenuous, just extra money that you don’t need. Everybody needs all of the money that they have.

Scott: Okay and now diving into this almost tangent here, but I have heard that a lot of folks prefer to do this type of lending inside of a 401K or other tax deferred retirement vehicle because that 12% to 15% interest can be taxed as at a very high interest rate.

Mindy: Sure.

Scott: Or very high tax rate so do you do that with pre or post tax money or both?

Mindy: We do it with both so we a hundred percent self-direct our IRAs so doing the same thing we did one fix and flip, but those are a little bit harder to come by now that the market has turned a bit, but we also do it with private money because it was sitting there and I thought you know what this money is just sitting there and I don’t necessarily want to put it in a long-term investment like a rental home. We do own two rental homes, but I want this money to be fairly accessible or at least coming back to us within 24 months.

Scott: Got it okay so we’ve talked about how you kind cut back on your savings and it sounds like you continue to have a consistent approach with reviewing various aspects of that over time to kind of make progress. I do want to drive in to at some point the what you like specifically did to reduce the grocery budget there. Before I get to that let’s talk about the on the income front. Over a course of your career I imagined you guys you know because of your disciplined approach in all the other areas of life have probably had some success in the career front as well. What are you guys doing today and how has that changed in the income front over the years?

Jacqueline: Sure so I’ll start with Jeff just because he’s a little bit more simple to explain so Jeff started out starting salary maybe $45- $50,000 10 years ago and since that time he’s doubled that just on base salary and now he does get performance bonuses, auto allowance so he loves where he works. He’s a hard worker.

Scott: And what does he do?

Jacqueline: He’s a project manager for a commercial construction company.

Scott: Got it.

Jacqueline: Yes so then me I started out in a CPA firm. Worked two tax seasons, figured out pretty quickly not for me. I went to work as at a property management firm, which was awesome because I could work in accounting, my specialty, but then it was also this real estate which just I just loved working there. Adding two children, childcare, I went down to three days a week, which I felt like gave me a great balance of being a mom, but still having my foot in the corporate working world. After I had my second child though it became very difficult to manage even working three days and having some home balance I never felt and I just thought if I could work from home life would be awesome and everything would be perfect right? What I did was I approached my employer about working from home and they said no.

I have to say I approached them from the standpoint of what how it would benefit them and they still said no. That’s when I took my search outside of the company that I was working for and I found an entrepreneur who owned several businesses, needed a bookkeeper, and actually needed a bookkeeper plus a personal assistant and I started working for him, but I kept my job for about three months. I worked my tail off and finally working for the client from home grew so much and I had other people approaching me that I needed to make a decision, which was super scary because I had the security and the comfort of the paycheck from the other job, but I had this ability to work from home and grow a business if I chose the other. I remember the day I quit my job and I remember walking out super super slow because I wanted to remember what it felt like to take a big risk and since then so I’ve been working from home since 2012, September of 2012 and I started out making maybe $40,000 a year and now I’ve grown with net I make about $60,000 a year.

Scott: Oh that’s great so you basically tested this concept by just working double, working double.

Jacqueline: Right.

Scott: Two jobs for three months. Once you were confident with work that’s when you took your you made the transition. How did you or I guess what was life like before and after? Was it the change that you were hoping for from all of this.

Mindy: Not at all. Not at all.

Scott: Yes.

Mindy: Working from home I describe as the best of both worlds because you’re still working and producing and you know my kids see me working and I think that’s so important. It also is the worst of both worlds because clients still need their financial statements and they need their cash consulting that I do each month. They need those things and the baby’s homesick or and there’s no daycare too and there’s no family support to really call on. It’s all on me.

What I say is you know what? It’s hard, but it’s worth it. You know childcare isn’t free. Working isn’t easy. Raising kids isn’t easy, but it’s so worth it. I love what I do and I love raising my family and it’s worth it.

Scott: How many days a week do you pay for daycare and those types of things while working from home? Does that still come up?

Jacqueline: Sure so during the school year all of my children are in school except for the youngest goes three days a week. He was going to an outside daycare two days a week, two full days so I would hammer it out those two days. Since November that has closed so right now I’m in the process of let’s see if I can do this on my own and it actually hasn’t been too bad. I wake up super early and work. He still naps. I work during nap time and I work in the evening and then sometimes I work Saturdays just to really get some good projects done.

Scott: What I’m trying to get at is if you had worked five days a week how much would you have had to pay for child care during the last two years.

Jacqueline: Oh gosh. A lot. A lot. Especially with for four kids, for three kids we thought we were done having children after two because it was so expensive. We did the math and we just couldn’t add a third child. Working from home I allows that flexibility to grow our family.

Scott: Okay, but what I’m trying to get at is this is maybe a hundred to a $120,000 decision for your family for a year right.

Jacqueline: Oh yes and if you compound that.

Scott: Yes.

Jacqueline: Huge.

Scott: Yes so I mean not even counting the long-term investment aspect of how much that you wouldn’t have been able to save and invest. I mean this was a huge decision that seems like very critical to your overall plan here was being able to do this and it sounds like it’s worked out in a lot of ways for you.

Jacqueline: It has and you know if I were listening I’d be wondering how did you find this person? How I have people asking all the time how do you find clients? I found that first client on Craigslist. I just.

Scott: Wow.

Jacqueline: Typed in the keyword that I searched for on Craigslist was telecommute and work from home. I did that for probably four months before I found that client. Then from there when I’m out in the world I just asked people what do you do? I mean it is a bit of selling because you’re convincing people who have had in-house bookkeepers to now have an outside.

I’m somewhere in between like a bookkeeper and a CPA. I like to think of myself as like a mini controller. You’re getting a bookkeeper, but also someone to manage your accounts receivable, Accounts Payable, all that stuff. You have to talk to people. You have to sell it a little bit I guess.

Scott: I mean it sounds like something that people would really want. That sounds great.

Mindy: Well you know what? That’s a good point Scott. I hear people say this all the time. Oh I would love to be able to work from home.

I want to stay home with my kids. I want to do this. I want to do that. Okay what steps have you taken?

Well I asked my employer once and they said no. Sure. Period and that’s the end of their story. They didn’t go out and they didn’t. I’ve heard people. I can’t remember who we interviewed.

They asked the employer their employer said no. They came back and asked their employer again and the employer said yes. Because they framed it in a different way or they said they were going to quit or whatever. Asking once and then taking no for an answer you’re going to have not the life that you want.

You’re going to have the life that is given to you. You didn’t take no for an answer. Boss can I work from home? Here’s all the reasons why this would be great for you. No.

Okay thank you very much and I’m going to go and now I’m searching and it took you four months. I think that’s important to point out. If you go on Craigslist and you find a work from home job the first day that you look, you should also buy a lottery ticket too because that is luckiest day of your life. It takes work to get the life that you want.

That doesn’t mean that it’s not worth pursuing, but it took you four months to find a job and now you get to work from home you get to see your kids all of the time. That’s so powerful. I mean I’m trying to be really careful not to tread on anybody’s toes. If you are a working mother that’s great. If you work outside the home I’m not casting any judgment upon you, but when I had kids I wanted to stay home with them.

I did, but I planned in advance so that I would be able to. That’s you know that’s how my journey looked, but your journey is a little bit different. You still at the end you got home with your kids and now you’re leading the life that you want. I’m assuming. Right.

Jacqueline: Yes.

Mindy: I mean nobody comes on the show, “Oh my life sucks. Let me tell you all about it.”

Jacqueline: Right. Right. I mean it’s not easy. You know when my son comes he’ll sit next to me and he’ll tell me about his day and I’m in the middle of a project and I kind of have to say this has to be finished first. That sucks right? I mean nobody wants to have to tell their kid face-to-face to wait you know this has to wait, but I think it’s so important that they do see the sacrifice that work is work. This is what we do and this is what mom gets to do to be with you, but this is also what we have to do because we have a larger family and we’re trying to make these steps toward financial independence and retiring early.

Mindy: I’m glad you brought up the larger family because that’s another question that I get frequently. How can I do this with kids? Again.

Jacqueline: Yes.

Mindy: You have to make the choice. Did you say you have four kids in private school?

Jacqueline: I do. I do. That’s also a choice we make that has prolonged our FI journey significantly. We pay $1,500 now. It will be $1,700 next year when the littlest is in full-time school. That’s a huge expense.

Scott: Per student.

Jacqueline: No, for all four of them.

Scott: Okay.

Jacqueline: So I’ve done the math. Compounded, it’s just everybody has deal breakers right? Everybody has something and this is our thing. We’re willing to live in a smaller home. We’re willing to take less vacations. We’re willing to work longer and harder to do this for them.

Scott: What were some of the things that prompted this private school choice?

Jacqueline: I went to public school growing up. My husband went to private school. I would our say our faith in wanting that to be a part of their everyday was super important. Also, when we went on that initial tour for preschool 10 years ago we just felt so comfortable and felt like it was where our kids belonged.

Mindy: I’m going to point this out because I’m sure that there will be people who make comments, “Oh well they’re going to private school. They could have it so much faster or whatever.” They’re making this choice. You are making this choice. You’re saying.

Jacqueline: Right.

Mindy: You’re making this choice, but personal finance is personal.

Jacqueline: Right.

Mindy: You get to make the decisions that affect you personally because it’s your choice. If you want to send your kids to private school then send them to private school.

Scott: Yes.

Jacqueline: Right for some people. You know date nights or going on vacation or you know making cross-country trips to visit family is super important. This is just our one deal breaking thing.

Scott: Let me point out something else also that most people’s housing expense it’s probably going to average greater than $1,700 a month maybe $2,000 a month for a family of six. Right.

Jacqueline: Right.

Scott: R1egardless of where you are in the country.

Jacqueline: Sure.

Scott: Right if you want to live in you know a nice place. This you know you have completely eliminated that probably only paid taxes, insurance, utilities for your place.

Jacqueline: Right.

Scott: Without mortgage payment so you simply are diverting that expense into your children’s education as one way of looking at it.

Jacqueline: Right.

Scott: Right because you’ve made those choices elsewhere so.

Jacqueline: We have done the exercise of what does retiring early look like for us. Doesn’t mean that I completely walk away from my business. Doesn’t mean Jeff walks away from a job he loves and the answer is no. If we aren’t in an uncomfortable situation we don’t feel necessarily this race to get there so if the journey is prolonged a little bit to send our kids to the school that we love, it’s worth it.

Scott: Got it.

Mindy: That is fabulous. Yes because financial independence shouldn’t be oh God I can’t wait to quit my job. It should be about the journey. It should be about what you’re going to do after you get there and continuing your job if you love your job is a valid choice says the girl who’s continuing her job because she loves her job.

Scott: Okay so let’s transition into some tactics that you’re going about because it sounds like you are so strong on all of the different types all of the different day to day details. You have a great approach, a great strategy, a vision of what you want your life to be like and you’ve made a bunch of things, but I mean going back to the beginning, how did you cut your grocery bill from $1,200 to $800?

Jacqueline: Sure so we averaged $1,200 a month on groceries. Some months it was $1,400 because like I said we live by five amazing grocery stores and stopping by on the way home from work Jeff picking up you know oh box of cereal because we’re out. I think she’s been a guest on your show, Aaron Chase.

Scott: Absolutely.

Mindy: Oh yes.

Jacqueline: I heard that her program pays for itself and by and large it sure did. She had my ear. She has four sons. Her sons are a little bit older than mine so she had my ear from the get-go.

Okay if she can do it I can do it. What that looked like was her kids, snacks that are in the house will be eaten so I only bought snacks for the coming week and when they were gone they were gone. It also looked like cooking everything at home. We buy a lot of fresh produce.

Typically, we are very routine eaters. We eat the same thing for breakfast, mostly the same things for lunches and then dinners. We cook a huge tray of chicken on Sunday and make it into about four different things throughout the week. Just really having a routine of cooking and I’ll tell you what it doesn’t get boring because roasted veggies, you can put different things together to make it taste different. Also my kids are not picky eaters and they will eat anything under the sun so I know that’s a huge point in our corner, but that’s how we did it. I would go to like a big box store for my chicken and for things like fishy crackers once a month and when it’s gone it’s gone and then go to the grocery store once a week and completely eliminated any extra trips. If we are out a Rice Krispies we are out until the following week.

Mindy: That is a brilliant tactic because I have told the story before. I’m sorry if I’m boring everybody, but I used to go to the grocery store every single day because I needed one thing. When you’re in there you don’t just buy the one thing. You buy one thing plus two or three others and if that’s your only trip it’s not a big deal.

Every single day every trip three or four extra things and all of the sudden you’re a food hoarder or you’ve got oh this looks interesting I’ll try that and then you never try it and it just sits your cabinet and limiting yourself to what’s on your list and only going once a week and this if you don’t have it you don’t have it and you’ll just do without is that was key to changing my grocery habit and changing my grocery budget was just leaving it alone. I don’t need that one thing.

Jacqueline: It sounds almost overly simplistic, but for example we were out of little sandwich bags and Jeff said well we need the sandwich bags to pack the lunches. I said, “Well we do have aluminum foil. Can’t we just wrap the sandwiches in that?” Problem solved so it’s just it’s not even really thinking outside the box.

It’s just using what you have and our grandmothers and our mothers did it and I think because we have all these stores around us we’ve never had to do it, but I’m just choosing to do it now.

Scott: For context because I’m a nerd here, but $800 a month over six people, over 30 days times three meals a day is less than a dollar 50 per meal per day. Which is pretty amazing for six people right? That’s a pretty, that’s a ridiculously tight budget and operation that you’re running there. It sounds like you’re doing a fantastic job with that so.

Jacqueline: Can I add one thing too because some will say the argument well we have food allergies. We have food allergies. Jeff is allergic to dairy. I don’t eat gluten. My kids have some citrus and tomato allergies or whatever so we do have some food allergies and we’re still able to make it work.

Scott: Awesome.

Mindy: Yes and that’s okay the citrus, you can kind of leave that out, but the gluten and the dairy that’s a big issue that you have to deal with.

Jacqueline: Right.

Mindy: It’s not just oh I don’t eat limes. Okay I don’t eat olives because I don’t like them. I don’t eat mushrooms, it doesn’t affect my budget at all.

Jacqueline: Right.

Scott: One more question. We know about the house. It’s paid off. We know about your food budget. Anything you’re doing special for your transportation. Are you still driving those same cars?

Jacqueline: Because we have four kids I was in a Ford Explorer for a while and we have a huge dog. She’s 80 pounds and we travel to visit family over the summer quite a bit so I drive a 2017 Expedition. Typically, I just drive the kids to school and back. I work from home. There’s very little fuel costs there. We paid half cash and then used our line of credit to finance the rest and then paid it off over six months just diverted savings to that. Jeff drives a 2008 Honda Civic with a 190,000 miles.

Mindy: Was that your two-door Honda Civic?

Jacqueline: No, but it was my parents.

Scott: Awesome. Well let’s go on to the investing side. How did you get into let’s start with the note investing. How did you get into that.

Jacqueline: Sure.

Scott: For the first time?

Jacqueline: The first time so my dad is a dentist by trade, but he lost I think over half of his retirement when things crashed and that’s when he started to invest in real estate and that’s a lot of work to invest in real estate. Your signing documents, you’re doing this or that on top of a full-time job so he got into note investing. Our first investment was a partnership with him for a real estate investor on the west side of Michigan.

Scott: Okay.

Mindy: Did you know him?

Jacqueline: My dad had vetted and I trust my dad’s process as far as looking into the background, talking to investors, talking to past investors.

Mindy: Okay.

Scott: Okay and presumably that went well and you continued doing it from there. Have you started to originate those deals yourself?

Jacqueline: I have and how I find investors is one is one of my clients so what better investor than I see the cash inflows and outflows day in and day out so I feel very comfortable in what he has going on and then others I found on the BiggerPockets community. I found that local real estate investors and we just asked for financials, looked through the financials, and we also talked to current investors and then past investors to see how the deals went.

Mindy: Okay are there any deal breakers for you when it comes to lending to somebody? Well I’m sure there are. What are that’s a terrible question.

Jacqueline: Sure.

Mindy: What are the deal breakers?

Jacqueline: First the term of the note we want 24 months or less just because we want it to be a little more solvent than let’s say a 10 year project, something like that. Also they have to be local because we just don’t feel comfortable outside of the state of Michigan. That could change, but for right now that’s where our comfort level rests.

Mindy: Okay.

Scott: Okay let’s go let’s move on to the investment properties that you have.

Mindy: Sure.

Scott: You have two properties. How did you get into those?

Mindy: The market was still a little bit low. This was 2015 so I always knew I wanted to buy rental houses and Jeff didn’t feel super comfortable with it and we had just gone through a period of having kid after kid after kid after kid and I remember the day after we had our fourth son, I found this property and I really wanted to buy it and Jeff just said you are absolutely out of your line. You have three children, a business, and a brand-new baby this is just biting off more than we can chew. My heart just sunk because I knew it was such a good deal so fast forward my youngest son was probably six months old and I found this property on the MLS and there was a footnote and it said seller wants to continue to rent the house.

I knew the property was a good deal. It was listed $20,000 under market value and okay they’re going continue to rent the house. The house was in great condition. We went over, viewed the property and what happened was it was a family that was going to be foreclosing so they were trying to salvage by doing a short sale and so this is a little bit unique in the sense that from the get go we purchased the property knowing that the family wants to buy it back when they’re able to get a mortgage and kind of re-collect their finances so again it was such a great situation in the sense that the home was so well taken care of and they continue to take great care of it because in their hearts it’s their home. We purchased the house for $65,000. At the time that we bought it it appraised for $90. Now it appraises at $110 and they’re going to buy it $100,000.

Scott: That’s awesome. That’s a great deal. How about the second one?

Mindy: The second one I found on Craigslist. Again the search term I used was this particular area and then tenant and it was just a couple who wanted to liquidate their funds. They had a tenant who had been in the house for seven years. She’s still our tenant today and the home cost $46,000. It’s a small two bedroom house about 2 miles away from our first rental property and they’re are about 20 minutes from our primary residence so super convenient. If we have to run over there do a repair.

Scott: Is this one a long-term hold? It sounds like the first one you do intend for the occupants to buy that place back and you think they’re just likely. Is this one also.

Jacqueline: The tenant has expressed interest in buying it and we would sell it just you know of the goodness of our hearts. She’s been there forever and wants to own it so it could go either way. We’re happy to hold it or we’re happy to sell.

Scott: What I think is really interesting about your overall investment approach and what it sounds like your philosophy is that you’re really focused on these short to medium term investments and really kind of have a lot of exits in all of these things whereas I think a lot of the investors like a lot of the investment philosophy we see on the show in the past it has really been more focused on very long-term and the you know stackable, reliable passive income generation. Would you say that’s an accurate commentary on your philosophy?

Jacqueline: Yes, I absolutely would and I think the key reason is again having a larger family and not knowing what’s coming, healthcare wise or I work from home what if I lose all of my clients in one fell swoop. Just kind of having a little I don’t want to call it a safety net because that’s not what it is, but having a little bit shorter term investment strategy allows that cash to be coming back to us sooner than it would otherwise.

Scott: Okay.

Mindy: Well and she’s not looking to quit her job. You like your job. Your husband likes to his job so that’s a different mindset going into it in the first place is I’m not looking for this to replace my income.

Jacqueline: Right.

Mindy: Are you looking for more rental properties? Is it just if something good pops up or are you kind of done with that?

Jacqueline: I think we would take on one or two more. We are looking at possibly completely renovating our house, adding on a second story and possibly even an attic space. That would be usable, like a kid’s playroom or something. Because of that I think we want to keep our finances as liquid as possible to be able to either pay for it with savings or pay for it with a combination of savings and using our existing line of credit or we don’t want to do anything to invest in more rental properties would be again more of a longer term hold and we want that money coming back if we choose to remodel our house in the next 2 to 3 years.

Scott: When you talk about the concept of financial independence what does that mean to you in the context of long-term planning?

Jacqueline: Sure so for me financial independence I think there is a shift in mindset that happens so yes we love our jobs, but at the same time I think a further mindset would take place if we didn’t have to have these jobs or I love my job now will I feel this way in 10 years? Is there another talent that I have that I want to explore more fully in the area of the marketplace? I love photography, always have, always will. I ran a small photography business in 2011. I basically made enough money to pay for the equipment and that’s all it was what if I had the opportunity to pursue that again, but without needing the money?

Scott: What does not needing the money mean to you then? Is that a passive income amount?

Jacqueline: Yes.

Scott: Is that a?

Jacqueline: Yes.

Scott: Okay so do you have an approach to doing that or is there a plan to continue to just have a system of lending out money in these real estate notes.

Jacqueline: Eventually we’d like to have a combination of long-term rental holds so our goal would be if we choose to remodel our house it will be in 2 to 3 years. We put this strategy into place. Our comfort zone would be around 10. Again within 20 minutes of our primary residence we feel comfortable. Jeff’s handy.

He can run over, make those repairs, and then having our IRAs in a position where they’re either generating rental income or we have something that’s a little bit more stable than notes. Notes are a lot of work. You have to go out and hustle for those notes so possibly converting our IRAs into strictly long-term rental holds.

Scott: Okay so your ultimate plan is to produce a rental portfolio with that will generate passive income to.

Jacqueline: Yes.

Scott: Complement wage income.

Jacqueline: Yes.

Scott: Okay and then you know on the same kind of token here what you have four children. I think we’ve briefly mentioned the word college earlier how are you kind of thinking about planning around that?

Jacqueline: Sure.

Scott: We’ve always had this dream in our minds that we would get them into the business of flipping houses just because Jeff is so handy. Now with the turning of the market and deals are harder to find and there’s a lot of competition it’s kind of changing our approach to that a little bit. Initially our thought was we do save in an MESP right now, which is a Michigan education savings plan so, but that’s not going to take us the full way there so they will have to have a job. They will have to provide for some you know maybe they’ll pay for books and board and will pay for tuition, something to that effect. They’re going to have to pay something, but other than that over the summer we have this idea of the older boys and then when the younger boys come up in the world to flip a house or two on top of you know working at Dairy Queen or wherever they choose to work.

Mindy: They’re going to see how much they make flipping houses and they’re going to say no thank you to Dairy Queen.

Scott: Yes.

Jacqueline: Right.

Mindy: That was my first job. It does not pay well.

Scott: I think that was Brandon Turner’s first job as well.

Mindy: Oh really.

Scott: No, it was Coldstone Creamery.

Mindy: Oh yes.

Scott: Similar yes. Sorry anyways.

Mindy: More skill over there. I think it’s very interesting that you are not planning on paying for college for them. I think that that’s a good tactic. I think that if your student has skid in the game then they’re going to work harder. They’re going to you know this is my money too and I’m going to get more out of it. I don’t know. That’s how I felt. My parents paid for my college and let’s just go with I’m not the best student.

Jacqueline: Well and even now with them at I mean there are four of them so they have to do things that somebody who has a family of two children, their kids may not have to do that. For example, when I’m working the older boys, they get paid babysitting money to play a game with their younger brother, do a puzzle with her younger brother. Of course, they have chores that have to do just for the good of the family, keeping their rooms tidy and whatnot, but they also have tasks around the house like babysitting and I present it to them in a way that you have this opportunity that other kids don’t have because you have younger brothers. You have this opportunity to make five bucks today that other kids don’t have.

That five bucks and then I go into you can choose to spend this five bucks on Legos, but if you choose to put this five bucks in the bank or better yet make an investment at 8% return, five bucks in 40 years I mean I should know the math off the top of my head. I’ve done the calculations so many times, but a lot of times they choose to save it.

Mindy: That is fantastic. I’m going to give you supermom points because you are paying your kids to watch the other kids. I did not like that 17 kids in counting or whatever show that was where every like the older kids were assigned a new kid. They didn’t have that kid. They didn’t choose to have another brother. I don’t think it’s fair to make them watch the kid that you had, but if you frame it like that and I mean that’s not at you, that’s at the 17 kids people.

Jacqueline: Sure, sure.

Mindy: For you, like you’re giving them money to help you out. That’s you know that teaches them so much more than just well you have to do this because I said so.

Jacqueline: Right.

Mindy: Then giving them.

Jacqueline: They do have a choice. They do have the choice to say no and sometimes they say no and I have to rework things, but that’s what I love about our family is it’s not we do have a routine, but I’ll tell you what, the routine breaks down a lot. We have to rework it it’s like a puzzle. How’s the puzzle fitting together this week? Okay so and so’s sick. Okay so and so has to go to basketball okay what does that look like? It’s constantly changing month to month, but I think that’s what is going to make those kids a little bit more resilient maybe. It’s going to you know in the workplace they’re going to be able to adapt is my hope. A little bit better because we have these moving parts.

Mindy: They certainly have a leg up on the competition.

Scott: Love it. We’ve covered how are you kind of managed this household really incredibly efficiently with a lot of in a lot of areas and on the budget side how your careers have progressed and how you’ve managed to take a couple of risks that have paid off there and your investment philosophy. Are there any areas we haven’t covered that you think are central to on how you got to where you are or where you’re going?

Jacqueline: Gosh we’ve covered so much I think and we’ve touched on this is just using whatever talents you have to create opportunities for yourself to save money. I mentioned how Jeff is super handy. It would be super you know the temptation would be well my husband isn’t handy or I’m not handy so I can’t do that. Well what do you have that you can bring to the table?

I mentioned I love photography. I ran a business for a while. It was a lot of work, but it paid for some really expensive equipment and you know what my sister-in-law and I now are able to swap family photos. Family photos are crazy expensive. It’s at least $500 to a thousand dollars to get a family of six photo taken so the fact that we’re able to barter with each other and swap family photos is a huge savings so I would just ask what talents do you have that you can use to further your FI journey.

Scott: Yes, I think it’s great and I think if you’re struggling to find one of those talents you know I think that another thing would be start reading, start learning, and picking up a couple of these because if you’re sitting there saying I’m not handy. I can’t do this. I can’t do that. I can’t do that. All I could do is just one specialty for my job. You know it’s that sounds like an excuse and it’s going to hold you back if you don’t. I mean.

Jacqueline: Right.

Scott: When you have the desire you find a way. When it’s not that important you find the excuse. Everything I learned from photography I learned on YouTube and I read the manual of my camera from front to back, which was so boring and it took a lot of time, but it was free.

Scott: Yes, I mean it’s pretty straightforward, but that one.

Mindy: Wow, okay I can’t think of a more perfect place to end than that. That was great when you have the desire you find a way. When you don’t you find an excuse. Yes you can make an excuse for anything. Find the way. Okay now it’s time for our Famous Four. These are the same four questions and one command that we ask of all of our guests. Are you ready?

Jacqueline: I’m ready.

Mindy: What is your favorite finance book?

Jacqueline: I’m going to mention two, but only because I would be doing a discredit not to mention Rich Dad, Poor Dad because that was a book my dad gave me and it changed my whole outlook on money and finances, but one that I’ve read more recently also given to me by my parents was The Compound Effect and there’s just a little blurb in there where it talks about when you spend money to think about The Compound Effect. What does that $20 look like in 20 years that your spending on Legos or ice cream or whatever today? The concept of the book is small changes over time make a huge difference so choosing to have an ice cream or broccoli every single day over the course of 20 years is going to make a big difference.

Scott: I’m a big fan of The Compound Effect I read that probably once a year, Daren Hardy. Just a great it’s such a simple concept it’s just so and it’s so effectively demonstrated in that book I mean just get do the same thing over and over and over again. Make it’s your habits that define you and lead you to success and it’s that really that philosophy is just getting half a percent better each day and what builds up to these huge positive outcomes just like you’ve demonstrated over the last 10 years with your journey. All right what was your biggest money mistake?

Jacqueline: This was huge. Absolutely huge so this was two or three years ago I thought I was savvy enough to invest in stock, but you know we’re investing in real estate, doing all of these things so I invested oh I can’t remember. It was at least $50 or $60,000 into one stock. It was called Sima Bay and I got impatient, got nervous so I bought it for about $250 a share and I sold at a dollar 50 a share, taking a $20,000 loss so the kicker and I cannot bear to do the math Sima Bay, six-months later ended up skyrocketing to about $12 and 89 cents a share so if I just would have held that six more months I would have made a killing.

Scott: Why did you invest in it?

Jacqueline: I had read that they were coming out with some new awesome drug, which they did and just I’m not a seasoned stock investor just took, I rolled the dice and I lost.

Scott: Got it.

Jacqueline: I shouldn’t call it an investment. I should call it a gamble.

Mindy: A gamble and you know what the stock market has been compared to gambling a lot. Do you invest at all in the stock market?

Jacqueline: No.

Mindy: Okay.

Jacqueline: Not. Just you know here and there, maybe like a few thousand dollars here and there just for fun.

Mindy: On episode 20, we interviewed Jay O’Collins where he talks about his book The Simple Path to Wealth and which covers stock market investing specifically index funds. He is.

Jacqueline: Okay.

Mindy: The biggest proponent of index funds ever. Probably more than John Bogle and the index fund is you know you invest in the whole market so a rising tide lifts all ships. When the market is up, you’re up and when the market is down, you’re down and past performance it’s not indicative of future gains and please consult your investment professional and yadi yada, but it goes up into the right almost always and it will go down and then it comes back up again so if you’re not comfortable investing in the stock market then don’t invest in the stock market, but if you’re also thinking hey maybe this is a thing an index fund could be right for you. Again discuss with your investment professional.

Scott: What I think also is some of those can probably play out is that it’s very difficult to make these kinds of bets like you made on this biotech stock it sounds like or Bio Pharma because there are so many different things going into play. There are so many different you know market forces happening over the short term, which really is your philosophy is this 12-18 months keep my money liquid. Be able to get it out when I want it all that kind of stuff that really makes it hard to I think to really outperform in those types of bets. Now there are some people who would argue otherwise, but this is my show and Mindy’s show so.

Jacqueline: Right.

Scott: My point of view on this one and I think that it’s really an impractical way to invest and build your wealth long-term is to make these is to over the course of a lifetime make lots of little bets like this in the stock market and try to come out ahead. A few people can do it, really just not a strategy that can be applied consistently amongst anybody really anybody, but the very best without luck being a major driver and it.

Jacqueline: Exactly.

Mindy: The key factor in your success is luck.

Scott: When you invest long-term in like an index fund those types of things now you can be on the side of hey the market does tend to progress over time in an upward direction with all its tides and going up and down, but that’s where the index fund long-term approach were kind of how I look at why finances hey I’m going to invest forever. I’m never going to touch it. I never need the liquidity I’m going to let it compound forever and then I’ll live off of a very small percentage of that total portfolio value. That’s where the stock market investing can maybe be a good part of your portfolio if you’re listening and.

Mindy: Yes, and if you’re listening and you’ve made a billion dollars picking stocks, send a note to Scott, [email protected]

Scott: Yes, people do all the time so.

Mindy: You were wrong. You said this. This is our.

Scott: Yes that’s going to be happy done. I’m just saying that I think it’s impractical for the average listener to really go after that.

Mindy: It’s not repeatable. I can’t teach you. I have done very well with a couple of key stock picks. Did I know they were going to go crazy? No, I guessed and I say I it’s actually my husband that’s choosing these stocks. He guessed. He thought it was a good thing. You know did you know Google was going to go crazy? No, not 27 years ago or whenever they went public. Okay we’re getting off track.

Scott: Yes.

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

Jacqueline: I would say as I said before you have to find your why so that that is pushing you to really do the hard work because if you don’t have your why a solid why then you’re going to find an excuse every time. Well it’s just five dollars. Well it’s just $10. Well it’s just $20. Find your why and put it up in your house somewhere where you’re looking at it every day and then you will find when there’s a will there is a way. That will be my best advice.

Scott: All right what is your favorite joke to tell at parties?

Jacqueline: Well not that I go to many parties unless they’re birthday parties for youngsters so I asked all the boys and none of the jokes that they gave me were appropriate except for this one so.

Mindy: I want to hear these inappropriate jokes.

Scott: Yes.

Jacqueline: Oh my gosh. Of course, they all have to do with bathroom humor because they’re boys.

Mindy: Yes.

Jacqueline: An appropriate joke. What did the paper plate say to the other paper plate? Lunch is on me.

Scott: Next.

Jacqueline: So bad.

Mindy: That is very cute. Whichever boy said that, that’s my favorite joke ever heard on the show so far.

Scott: Can we hear one of the inappropriate ones?

Jacqueline: Oh my goodness. Have you seen the movie Constipation?

Scott: No.

Mindy: No.

Jacqueline: Has it come out yet?

Scott: That’s not that inappropriate.

Jacqueline: Oh they’re so bad.

Mindy: I thought it was going to have poop or butt in it because that’s how. It’s not just little boys that love toilet humor. It’s also little girls.

Scott: Alright we’re going to build up in the intro how inappropriate these jokes are so that people are very wary and listen all the way to the end. Then they’ll get that one so.

Mindy: Again you can complain to Scott at [email protected] Okay Jacqueline, where can people find out more about you?

Jacqueline: My husband and I were not social media, but we do have a BiggerPockets profile and it’s under my name Jacqueline Burch.

Mindy: Okay, I will link to that in the show notes. These show notes for this episode can be found at Jacqueline this was great. I get a lot of emails from a lot of people about oh how can you pursue financial independence when you have kids. I can’t do it because I have kids. I have two kids. I have three kids. Well guess what.

Jacqueline has four and she’s doing it so it can be done. You just have to make some sacrifices. You have to choose not to go out to dinner four nights a week plus every night on the weekends and you have to choose to stay home with your kids if that’s what you want to do. You know, but everything is a choice in your choices seem to be leading you down a pretty awesome life.

Jacqueline: Thank you very much.

Scott: Yes.

Mindy: Thank you so much for sharing your story with us.

Jacqueline: Thank you for having me.

Scott: All right, that was Jacqueline Burch. Mindy what did you think?

Mindy: I love her story. I love you know what I love about her story is A it’s repeatable. It is super super repeatable and B she chose the life that she has right now. All the decisions that she has made have been to get to the life that she wants. She is not letting life dragged her along, which I think is what happens with a lot people. What was her quote? “When you have the desire, you find a way. When you don’t you find an excuse.” That’s so perfect. That is absolutely spot on like in two sentences an overview of the psychology of the world.

Scott: She mentioned a book in there that I think it’s really telling. It’s called The Compound Effect, Darren Hardy. She mentioned it in the famous four segment right.

Mindy: Yes.

Scott: I’m a big fan of that book. I read that probably once a year. Right and it’s remarkably simple, but it’s exactly this. If you want something and you pursue it with that end in mind and just do a little small action towards it everyday, a habit that you can form that moves you in pursuit of that goal. You can literally get almost anything you want in life over a three-five year period.

Right it does not happen overnight. It is life and progression toward financial independence is not one Herculean feat after another. It is several years of just making one correct decision after another and grinding it out that way in improving consistently. A magical transformation, unrecognizable transformation and in some cases un-relatable transformations occur when people just pursue that. Right.

Mindy: I like what you said it’s small changes. It is not this Herculean. It isn’t just oh if I could just lift this car over my head then everything. No it’s if I can lift this rock. If I can lift this rock.

If I can move this down the road a pinch. It’s just small changes that really don’t change your life in the here and now. What did she say? They used to go out to dinner like four nights a week?

Then that first month was a big change. Well yes you are changing a fundamental part of your life, but now does she miss it? No, it doesn’t change her life in the future. Well it does change her life in the future. Actually it changes her life quite a bit in the future financially, but it doesn’t change her enjoyment of life. I guess that’s the question that I’m trying to get at is you know does this change your enjoyment of life? No.

Scott: Absolutely if you make sacrifices in pursuit of what you really want you’re going to be way happier, but you’re going to have to make short-term sacrifices.

Mindy: Right.

Scott: In the meantime and make some uncomfortable changes.

Mindy: Right, but the short term sacrifices aren’t going from you know eating steak and having servants to eating rice and beans and living in a three square-foot house. It’s that’s not the kind of change we’re talking about. We’re talking about these small changes. She was going out to dinner all of the time. She’s still eating.

It’s not like she’s not eating anymore at all. She’s just not eating out at restaurants. She learned how to cook so now she can make great meals at home for her kids. I got to tell you going out to dinner with four kids, not my favorite dinner out.

Scott: Yes, I can imagine that’s not fun.

Mindy: Another part of her story I loved was that she asked if she could work from home and her boss said, “No.” She’s like okay I’m not going to take that as my answer. I’m going to go out and find something else and she went out and found something. She started looking on Craigslist and it took her four months.

For four months she had this I want to work from home, but I can’t mentality and she continued to look for another job. She found it. She’s like you know what I just want to test this out first. I’m not going to jump in with both feet and then not have it work out so she did the Herculean task of working two jobs. Figure out if it worked. It worked and so then she quit the stable job. You know like Joel from FI 180 said, “What’s the worst that can happen? I’ll just go back and get another job.” She had a job that worked out and now she’s got the life that she wants. She had an uncomfortable life for a little while until she figured out that this other job would work.

Scott: Yes, I mean just hustle.

Mindy: It’s hustle. There you go. That’s the title for the show. How to hustle your way to the life you love. Okay, Scott is there anything else you want to add?

Scott: Yes, actually I have one other thing. Sorry I’m still out in The Compound Effect because again I’m reading that right now and she mentions it.

Mindy: I’m going to pick that up because I’ve been reading Rich Dad, Poor Dad again.

Scott: Well anyways so in that and this is I think this epitomizes a lot of the things we’re hearing from a lot of guests right, but there’s like this parable of these three friends who are all about the same right. One decides hey I’m going to get an in-house bar and have one drink per night and eat one or two chicken wings because that’s what I like. Right another is that it keeps doing what he’s doing. The third says, “Okay I’m going to on the way to work I’m going to listen to a little bit of audio. I’m going to walk an extra 3,000 steps for day and then I’m going to do one or two other things that are healthy.”

Right and a couple of months go by. No change. A couple of years, a year goes by, no change. Everything is still about the same amongst these three friends, but fast forward 3 to 5 years that’s where there’s the a 60 pound difference between the friend who has eaten the chicken wings and the extra beer and the friend who isn’t. Right that’s where this guy has consumed, the guy who listens to the audiobook on the way to work or the podcast or whatever has consumed the equivalent of three more degrees worth of educational content that has pursued his job.

He’s got several promotions, all that kind of stuff. Great relationship with the wife all of that, all of these good things our happening there. It’s like that’s the power of The Compound Effect. Right you will not see any perceptible difference in your finances nothing will change about your life for a year, two years, three years, but rounding out that 3 to 5 year period that’s when oh my gosh these monumental life changes really kind of occur. That’s what sticks with me and that’s why I think that’s such a great read and you can see that embodied in what she’s how Jacqueline’s approached her life. That’s my last little bit and tad.

Jacqueline: No that’s great. Life is a choice. Choose wisely.

Scott: Yes.

Jacqueline: Okay Scott before we get out of here somebody sent me a note a couple of times saying that saying over and out is improper radio etiquette for the military and I have spent zero days in the military so I didn’t know that. I just see it online and or see it on like movies and whatever. I’ve been changing it up. I got an email from Quinten who said, I miss you saying over and out. I’ve heard it on other shows so you know whatever. From episode 65 of the BiggerPockets Money podcast with permission from Quinten he’s Scott Trench. I’m Mindy Jensen and we’re saying over and out.

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In This Episode We Cover:

  • Jacqueline’s journey with money
  • On doing childcare, working full-time, and going to school
  • Her mistake when she bought their first house
  • How they started their FI journey
  • How she discovered the concept of FIRE
  • On budgeting the household expenses
  • On increasing their savings from 11% to 35% after cutting off some of their expenses
  • The benefits of being a ski instructor
  • How she paid off her debts
  • How she increased her savings rate
  • Her money management saving strategy
  • On doing private money lending
  • Her life before and after working from home and leaving her job
  • On childcare expenses
  • On sending her four kids to a private school
  • What retiring early looks like for them
  • How she cuts her grocery bills
  • On note investing
  • The deal breakers for her when it comes to lending
  • On the investment property she has
  • On focusing on short- to medium-term investments as her investment philosophy
  • How she plans the college education for her 4 sons
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “It takes work to get a life that you want.” (Tweet This!)
  • “When you have the desire, you find a way. When it is not that important, you find an excuse.” (Tweet This!)
  • “If you don’t have your why, a solid why, then you will find an excuse every time.” (Tweet This!)
  • “If there’s a will, there’s a way.” (Tweet This!)
  • “Everything is a choice.” (Tweet This!)

Connect with Jacqueline

The BiggerPockets Money Podcast is for anyone who has money… or want to have more! Join BiggerPockets Community Manager and Podcast Director Mindy Jensen and CEO Scott Trench weekly for the BiggerP...
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    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied over 1 year ago
    Great interview Jacqueline!
    Don Spafford Investor from Idaho Falls, ID
    Replied over 1 year ago
    Yes, you can work toward FI with kids. I also have 4 kids and started with large debt and saw no way out, until I discovered the power of Real Estate thanks to Bigger Pockets.