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Hacking Your Military Benefits to Become Financially Free With J Grayson

The BiggerPockets Money Podcast
62 min read
Hacking Your Military Benefits to Become Financially Free With J Grayson

J Grayson grew up poor. But with food on the table every night, he didn’t realize it.

Then his sister tragically passed away from brain cancer, financially ruining the family.

J fell into a pattern: skipping school, drinking, and doing drugs. A few years of this and he realized he needed to make a change. J joined the military when he turned 18 and went to boot camp before his high school graduation ceremony.

The military is where his poor money habits really took shape. Living on base means housing and food is covered, so he spent his income on anything he wanted—at one point having FIVE CARS despite only being able to drive one at a time.

He stayed in the military for five years and knew enough to go to college when he got out. What the military didn’t cover, the Yellow Ribbon Program did, so he left college debt-free (at least in terms of student loans). However, J did manage to rack up $30,000 in random debt by the end of college.

J eventually settled into a government job. By year two, he had discovered the concept of financial freedom.

This week’s episode focuses on hacking—house hacking, GI bill hacking, per diem hacking—taking these benefits and using them in ways that are advantageous.

If you’re a member of the military, a government employee, or even just an employee who travels regularly, this episode is for you! And if you know someone who fits that bill, share this episode with them.

Click here to listen on iTunes.

Listen to the Podcast Here

Read the Transcript Here

Welcome to the BiggerPockets Money podcast show number 68 with Jay Grayson from FedonFire.com.

J: In total, I am getting paid over $25,000 plus my pay check, plus free lodging for the whole year. She and I are just living off of that TDY money, that $25,000, keeping our expenses under that, which is what we try to maintain anyway.’

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

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

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

Scott: Oh, life is good. I am very excited for Jay today.

Mindy: I am so excited for Jay. We have had a couple of military guests on this show and on the BiggerPockets Real Estate podcast but this show today is for anybody who is currently in the military, who is recently out of the military, anybody who is considering going into the military, anybody who wants to learn about house hacking, geo arbitrage, per diem hacking. If you have a job where you travel, even if you are not in the government or in the military, oh, it is also for government employees. I mean this show is for anybody who has ears.

Scott: Yes. Or eyes who want to read. Let us see, who else is this? For anybody who wants money, who has money or wants to have more, this is such an amazing show. Jay blew my mind with all of these little tips that he has and it is not going to… Not every situation is going apply to every person listening, but I think anybody listening can get something out of this show today.

Scott: Yes, he did not have the greatest start and then he applies advantages that he accumulated and a sharp mind set shift to the pursuit of FI and really makes a lot of progress in it and it kind of stunningly quick fashion and we will get into that just a few minutes here.

Mindy: Yes, I am so excited. Before we bring in Jay though, let us hear a note from today’s show sponsor.

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Mindy:  I am not the greatest at getting places early, especially when traveling and getting to the airport early enough to avoid I might miss my flight anxiety. That is why I am so excited about our newest ones are Clear. Clear helps you get through security with the tap of your fingers so you can get to your gate faster and reduce pre-flight stress. Clear replaces the need for physical ID cards, using your eyes and fingertips to get you through security because you are your best id. It is so easy to sign up.

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Clear is the absolute best way to get through airport security. It works great with pre-tech too. Right now, listeners of my show can get their first two months of clear for free. Go to clearme.com/bpmoney and use the code BPMoney. That is clearme.com/bpmoney and use the code BPMoney for your free two months of clear. Okay, huge thanks to the sponsor of today’s show. Jay Grayson, and welcome to the BiggerPockets Money podcast. How are you today?

J: I am excellent. The Spring is finally here on the East Coast. The weather is warming up so I am very very grateful for that. How are you guys today?

Mindy: I am doing great. It is getting warmer here too. It is supposed to be in the 50s today which is quite delightful.

J: Excellent, excellent.

Mindy: Jay, why do not you start walking us through where your journey with money begins?

J: I grew up in a small farm town in the rural south and my dad is a small town farmer. We grew up in a low income family, fairly poor. My Dad went bankrupt in the ’80s due to the farming crisis. A glut of supply, crop prices were falling rapidly. File for bankruptcy, we did not have a whole lot of money. Then into the ’90s. I never knew we were low income because my parents always made sure there was food on the table. Lots of spaghetti and cheese toast and things like that but we always felt like we were okay. We never felt like we were poor or low income. My parents did a good job taking care of this. Then in the ’90s, I have two siblings and my oldest sister was diagnosed with terminal brain cancer in the ’90s. That was obviously very emotional heart hit to the family, but also financially. Did not come from a great upbringing of money.

My parents and my grandparents were very much kind of that post-depression, put your money under the mattress, did not know anything about really investing. If you know anything about farming, a farmer’s livelihood is his land. Investing in stocks, bonds, anything like that was really nonexistent. We did not get that education growing up. After my sister passed in the late nineties, I fell on hard times. My sister and I both went through a lot of hardship, kind of fragmented family. I got into drinking and drugs and was just really going down a really dark path in my high school years. I decided to make a drastic change so I joined the military when I turned 18 and left just before my high school graduation, I did graduate. Did that for an enlistment. I was in for five years.

I got out of the military and made a lot of poor financial choices in the military because again, I did not have a lot of money growing up, just working on the farm for a little bit of money here and there. By the time I left the military and went to college, I graduated with college. I had over $30,000 worth of debt. A little bit of student loan debt. Most of it was paid for by the GI bill which is for veterans to help with education costs. But yes, I had over $30,000 in debt. I decided to get back into government work. I took a job making load and mid $30,000. Not a lot of money but I was living kind of pay check to pay check at that point. It was in way to an expensive apartment. I had some money again so I was feeling good about it. About that time, this was 2014, and that is when I discovered financial independence.

Scott: Well, let us take a quick step back into your time in the military. What were some of those, you mentioned that you would made some poor financial decisions in that time period. What were some of those decisions that kind of come to mind?

J: Absolutely. Probably one of the biggest one while I was in the military was I was really into cars, sports cars at that. I am sure you are well aware you do not make a ton of money being an enlisted member in the military, especially those first few years when you are very low ranking but still I was using that money to purchase vehicles. At one point, I think I had five vehicles. I had an El Camino. I actually had two Honda S 2000 because it is necessary to have one for your everyday car and a second or your weekend driver that you keep pristine and that seemed like a good financial decision at the time.

That was probably my biggest money mistakes financially and not contributing enough to my government sponsored 401k, it is called the TSP at the time when I was enlisted. They put everything in what is called the G fund automatically when you enter the military which is just government funds. All those years before the financial crisis where that portfolio had I made known about investing or known anything about stocks, I could have adjusted that and probably made a lot more money. Yes, just not investing my money properly, buying depreciating assets such as cars. Yes, that was probably my biggest mistake there.

Mindy: Were you living in government housing or where you living off base?

J: For the first three years, I was in government housing even though I was not making a lot of money. When you have your housing paid for and your meals paid for, you have a little bit left. But I was blowing all that on meals out and cars and things of that nature.

Mindy: Meals out? The government gives you a tip, beef on toast, and what do they call that?

J: But when you are a 19 year old marine and you want double cheeseburgers from McDonald’s, you go in and buy that or go buy steak or whatever else because the chow hall is just not good enough.

Mindy: Yes, I think that is a good point. When you are 19 years old, you are being expected to make all these adult decisions and you are not in that place. That sounds rude, you are not special in that regard. You are not the only person who has ever decided, I am not going to eat this free food, I am going to go and spend money because I want this. I mean that is just really interesting that that is where your mind set was at the time.

J: I think that also goes back to not coming from a stable financial upbringing and having that … say, ‘Hey, look, these meals are free.’ Because once I joined the military and had my own, a substantial to me, pay check, I said well this is my money. Coming from a poor background, it is like, well, it is my money. I will do what I want with it. I will spend it on all these things. Not having that foundation, I definitely think put me on that trajectory that make bad, poor financial decisions.

Mindy: Yes. You are not necessarily the only person that has ever done that.

Scott: What year did you graduate high school?

J: In 2004.

Scott: 2004. This period from 2004 to 2014, is it all just kind of accumulating cars, kind of figuring things out, all kind of thing? Or did you kind of gradually become a little bit more adept with managing these types of things prior to that kind of FI revelation in 2014.

J: Right. When I exit the military, they had just come up with the post 9-11 GI bill, which essentially instead of just having a standard stipend, you could actually… Colleges participate and they will give you what is called the yellow ribbon program. If colleges participate in that, then they will give you a scholarship to cover the rest of the expenses. For me, and at the time, this was in 2009, the financial crisis is hitting rock bottom but I decided to leave my stable military job and go back to school. I got my Undergrad in economics. I think that is understanding, it is not financed necessarily related, but economics has some changes.

I think that is where I started putting two to two together and I started a business at that time while I was going to school. Which was moderately successful for the first three years. Unfortunately, because of the financial crisis, no one was lending and we were growing a little too quickly and could not keep up with the pace and that business ended up falling apart and that is when I decided. That was from 2009 until 2012 and 2012 is when I decided, hey, this business just is not cutting it anymore. I graduated school and decided, hey, I am ready for this stable pay check again so I joined government service on the civilian side at that point.

Mindy: What type of business was it and have you ever considered restarting it?

J: It was a beer and wine delivery business. I was in Florida at the time, it is where I went to school. We did a lot of corporate events, a lot of kind of catering to Disney travellers, that sort of thing. I have thought about starting it again. Unfortunately, now there are a lot of companies that do that sort of thing. At the time no one was doing it, but now that the competition is… It is not the type of business I would like to get back into. It was a lot of driving, a lot of hard work, not that I am opposed to hard work, but brick and mortar. I want to be a little more, if I do start another business, to be a little more location independent.

Mindy: Did you leave the military with any debt?

J: I did. I had some credit card debt at that time. I had vehicle loans. I sold off all my vehicles, paid most of them off but I did have some debt there. That is when I made the wonderful bright decision to withdraw from my 401k, cash it out, and use that money to pay off my debts which was somewhat okay of a decision. Then I use some of that money also to help fund the business which was a great learning experience. I have no regrets there but hindsight 20-20, not a good idea to withdraw money from your 401k. Pretty much ever.

Mindy: I would agree. Although I have taken out loans from my 401k to do other things with because I am paying myself the interest instead of a bank and people will be on both sides of that and that is fine. But did you cash the entire thing out?

J: Oh, the entire thing. I took a huge haircut. It had already shrunk by 40 something percent because of the financial crisis. Had I left it in there when the market return, it would have been great. However, that is not what I did.

Mindy: Yes.

J: But right. If you financially savvy enough, Mindy, like you were saying, and you can leverage, take a cheap loan to yourself and leverage that to make an investment or just get a lower interest rate. If you are doing a home improvement or I know you are really into flipping houses, you have done live and flips quite a bit. If you are using those funds to gain money, great. But I was not necessarily, I paid off some debts which is good and starting a business. It was not super terrible but had I known then what I know now, I never would have pulled that money out.

Scott: As result of that, I heard $30,000 or so in debt earlier in the show here, right? Did this 401k wipe almost all of that out and allow you to kind of effectively start from zero after college? Is that…

J: No. I had gotten close to zero after separating from the military but then with my three years in college and with the business, I took out, I had a personal one, I finally shut the business down. I had a personal loan, I had a small student loan debt as well and I had credit card debt. Things I was using to finance the business or finance my lifestyle. I was living pretty frugally at the time but I had just a small income from the business. I was putting everything back into the business.

Then, I also had that when you are using the GI bill, you get what is called a basic allowance for housing, which is just a stipend to help your living expenses while you are going to school. I was basically living off of that. But in the meanwhile, accumulating credit card debt and student loan debt and everything else. I would go from probably $10,000 in debt post-military to close to zero and then by the time I graduated my Undergrad, I was at roughly around $35,000 or so thousand dollars in debt when I joined the civilian government.

Scott: One more thing right before we get to that kind of post college starting point here. I just want to point out that the $30,000 in debt you accumulated here, it does not seem so bad to me. It seems like it is actually quite reasonable in the sense that you used it to it was a largely in pursuing a degree and in starting a business at the same time and yes, there is ways to avoid having to take personal liability for businesses in some cases. But it seems like those were calculated risks rather than the second fancy car of the same type that we had previously, right?

J: A part of that debt was a car, but it was a car that I use… A very modest car that I use for the business.

Scott: No, absolutely.

J: Yes, right, right. All in all, not terrible, but still when your school is being paid for and you still graduate with debt, some people look at it and say, how? How did you end up with debt when your college was paid for?

Scott: Well, you were hustling. You are trying to start a business.

J: I try. Trying hard man, trying hard.

Mindy: Okay. Well, let us move to after college. You have $30,000 to $35,000 in debt and you are now getting a job. How long did it take? What year did you graduate and how long did it take you to get a job after you graduated?

J: I graduated in May of 2012 and I started, I was still running the business up until probably the fall of 2012 when I landed a job within the federal government which I started in December of 2012. There were a few months there where I had no income and again, living off credit cards just to get by until starting that new job. I had decided at that point like, okay, I want to pay down this debt. I had more financial savvy at that time because I went to college. It was just generally better educated but personal finance still was not something I was very strong in but I knew I wanted to pay off this debt and that I wanted to be more financially stable. I wanted to make the best of having… I almost took a pay cut from military time, when I was making the military to when I joined the federal service.

I was making less than I was in the military. I was feeling a little defeated. I am in my late twenties at this point and I am going back into the workforce making $33,000 or $35,000 a year. But that was okay, I was determined to make it work. Yes, I started that in 2012. About a year and a half later, I am going to say early 2014, is when I stumbled across Mr. Money Mustache and learned about financial independence and shortly after found Brandon from Mad Fientist and just totally mind blown. Wow, this is really possible and that started my journey into financial independence.

Mindy: Okay. How did your financial position looked during your first year of employment?

J: I moved into what I thought was an affordable studio apartment in downtown at this small city I was living in, low cost of living area. I am moving from the city in Orlando to this city in North Carolina. It seemed reasonable. It was lower than what I was paying in Orlando. However, had I done a little more research, my rent could have been much lower. I was still doing a little bit better than pay check to pay check at the time I was getting the, in terms of the thrift savings plan, the government 401k, I was financially wise enough at that point to at least get the matching and diversifying the stocks.

I was doing a little bit better on that front but I was mostly pay check to pay check outside but still investing in that, but still pay check to pay check outside of that. Not in a great financial position, but doing better than I was. I had also consolidated some of my debt and was paying that off. That is when I started my debt reduction phase. Once I found out about financial independence, I threw a match on it and it accelerated it. I started cutting down expenses and looking for ways to, okay, how can I make more money, progress my career, get a promotion. That really started in 2014. I had an opportunity to move up to New England and where the locality pay, which is for government workers is basically a percentage, it is basically a cost of living. Not a stipend but a percentage that they tack on to your base pay to kind of offset some of those higher cost of living areas.

In finding financial independence, Mr. Money Mustache, learning about Geo arbitrage, I was like, hey, I can take this job. It is a promotion in New England. I will be getting… Living in New Hampshire, actually Southern New Hampshire, but getting the Boston locality pay. That was a great way. The cost of living in New Hampshire for New England is very low. Meanwhile, the locality pay for Boston is very high. I moved into a small 300 square foot studio apartments, not that great of a place and started accelerating paying that debt down.

Mindy: How long did you work in, did you say North Carolina?

J: I was in North Carolina for about a year and a half.

Mindy: Okay. Then you moved up? How did your expenses change? You got more money but then it sounds like you have reduced your expenses while making more money?

J: Right. In North Carolina, was paying $800 a month plus utilities which was high for the area I was living in. But when I moved to New Hampshire, I was making quite a bit more money. Now, I was making in the $40,000, high forties, and also I was living in a studio apartment. It was also $800 but utilities included. My pay had gone up, locality pay had gone up, yet my living expenses had shrink just a little bit and that is when I decided to, I was looking at the housing market there and I decided, hey, the rent to housing is much cheaper to buy than it is to rent in that area at the time.

I decided, this was at the end of 2014, I decided to buy a house and get some roommates. I did not know what the term house hacking at the time meant, but I was house hacking which was covering, at that point I moved out of the apartment into the house, had roommates that were covering basically half the mortgage and expenses. Now, I had reduced my housing costs even lower while also building some equity and that the housing prices in the area were shooting up over the three and a half years I lived in that house. I was able, by the time, have roommates pay half my mortgage and utilities and then by the time I sold it I was able to profit quite a bit just based on the appreciation.

Scott: Can we walk through the numbers on that purchase? It sounds like this was a one central component of the, the journey here.

J: Yes, really, during this time it is twofold. The housing was one at that point, had put enough aside to pay off my car. My car, I was not paying for a car anymore, paid off that debt. Still had some other debt. I was paying down, still had probably $20,00 to $25,000 worth of debt at that time. The housing purchase, I bought it for 177 in December of 2014. My mortgage was around $1,200, you add in utilities it was about $1,500. At any given time, I had one or two roommates that were paying $500 a piece.

Some months my portion was only $500, they are helping build equity in this home and I was able to sell it, put very little work into it at all. Just a few things when I got ready to sell, just to spruce it up a bit, but I may be put, I do not know, $2,000 or $3,000 into the property total. Just some cosmetic work that helped with the curb appeal and the interior just a little bit and was able to sell it for $215,000 three years later. A pretty good profit there.

Scott: Awesome. Going back to the car, I mean these are two of the essential expenses for most people, right? It is housing and transportation, right? You are making money off of your housing at this point because of the way your low cash outlays and then the appreciation and you recapture it with a sell and then you have a paid off car. What kind of car was this?

J: This was a Scion XB, the little toaster on wheels. Which I will say, another, I will backtrack just a little bit. In between when I shut down the business and took the job with the federal government, I had taken out a student loan for, we were supposed to go on my senior class, we were supposed to go on a trip to Europe. That ended up getting cancelled so I decided I was going to take my own trip. I took that student loan money and a friend of mine, we packed up in that toaster on wheels and drove, spent a month driving across the country. That is where that student loan went to. That was another, I do not want to call that a financial mistake necessarily because it was one of the best experiences of my life and I think we need to have those along the way, but that did not help my financial situation.

Scott: No, absolutely. But I mean those two things, like having them at zero or very low, it seems like was that essential to help to being able to start making progress towards accumulating cash or paying down debt or the next step?

J: Absolutely, absolutely. That is something that is obviously very repeatable, something that is maybe not as repeatable. The second thing that really helped me obliterate my debt, the rest of my debt, as well as build a nest egg and start investing. While I was working in New Hampshire, I decided, you know what? I still have some GI bill left, I am going to go to Grad school and get an MBA. The stipend for veterans going to school in that area, because you are close to Boston, I went to UMass, my stipend was I want to say $2,200 or $2,400 a month that fluctuated a little bit, increased over the couple of years I was in school. I was working full time, I had got another promotion while there just by grinding it out and working hard at work and proving myself. I have got another promotion.

At this point, I was making in the mid-sixties, maybe high sixties. I was going to school on nights and weekends. Here is a benefit if any of your veteran listeners can learn from this, I call GI bill hacking, where you are working full time, go to school. You only have to take one resident course to get your full housing stipend from the GI bill. I was doing kind of 50-50, 50% online, 50% on campus, and collecting going to school for free, getting a master’s for free. Also collecting an extra $2,400 a month that I use to obliterate my debt and start my nest egg for investing. Meanwhile, I have almost no living expenses in terms of the big overhead items such as housing and transportation. Those two things, between cutting down on housing and transportation, and then using the tools that I had available to me as a veteran and taking advantage of that to do some geoarbitrage there from a GI bill perspective, it really accelerated things.

Mindy: Okay. I have got to look on my face of pure like wow and I do not think Scott is as excited about this as I am. Maybe I am misunderstanding this. You went back to school and all you were required to do was take one in person class, meaning not online but you have to actually attend class, and the government gave you $2,200 for you to do with whatever? Like they did not pay your mortgage, they did not like pay in student housing. They just, here is $2,200 every month.

J: Right. You have to take a full course load, which for a masters is nine credit hours, three courses. I took one on campus, sometimes I took two on campus, one online, just depending on what the course load was. Sometimes I took one on campus, two online, but just by going to school “full time”, I would go maybe two week nights and one weekend evening, usually two or three days a week for four hours at a time. Not a huge time commitment. I do not want to say that. It was rough working full time and going to school, but I was dedicated to paying down that debt and increasing my net worth. I think a lot of folks misunderstand that GI bill can be a little tricky.

For folks who may be in that situation who do not know, absolutely do it. That also enhances your earning potential whether you are a in federal service or you are in the private sector. Now, you are getting a free education and they are paying you money directly to your bank account. Like you are saying, Mindy, it did not go to my housing and it did not go towards additional school expenses. It was directly deposited into my account every month.

Mindy: Okay. We are just going to reiterate this for all of our military listeners, when you go for your GI Bill, pays your college. When you go for this, have a house hack and get roommates and then they will pay your stipend so everything is paid for. I mean this, not everything is paid for, I am sorry I have never done this before. I should not say that everything is paid for but holy cow, you have a job which covers all of your living expenses. Plus here is $2,200 which easily covers your mortgage. Did you still have the mortgage? Were you still living in the house at the time or did you move?

J: No, I was still living at the house in the house at the time.

Mindy: Okay, okay. Scott, are you now sufficiently excited about this?

Scott: Yes, very excited about this. This is the power of a military background were you are attempting to pursue financial independence or becoming an entrepreneur or any of those types of things. There is a number of huge advantages, right? One, the stipend, and three, higher education, right? Two, VA loans, right? Three the healthcare, right? VA Health Insurance, right? Those three, and I am sure there is more, but those three seem like absolute pillars of several stories that we have heard around moving toward financial independence at a rapid rate for veterans, right? Rightly so. Can I ask you, Jay, did you use the VA loan for that house? Was that a VA loan?

J: I did. I paid zero down. I had zero upfront costs to purchase that house. No money out of my pocket. Also I am glad you mentioned the healthcare, I am a disabled veteran so I do not pay for healthcare. I get all my healthcare through the VA which I also get a small disability stipend from the military or from the VA because of my disability. Between those things, you add in the stipend, not having pay for healthcare costs and I know these things are not repeatable for everyone, but I think the moral of the story is, hey, look at your employer, look at the opportunities. A lot of employers do, even if you are not a veteran, they do tuition assistance, things like that. Take full advantage of the benefits, your 401k matching all of those things. Any healthcare benefits, HSAs, whatever you can to really reduce your expenses while also building your net worth.

Mindy: Yes.

Scott: What I love about this is that you recognize all these advantages, you see the concept of FI and then you go all out basically over the next couple of years here. You moved to New England, you physically relocate, you buy a house hack, right? You leverage all of your benefits, the absolute max, right? Because you are using the VA loan, you are getting a massive stipend here. You have got a cost of living adjustment for a high cost living area while you live in a low cost living area. You are working full time and obviously kicking butt because you are getting promoted … period and you are getting your part time, right? What did you do for fun? Fun during this period?

J: Well, as you know, craft breweries, lots of craft breweries in New England. On the weekends, I would, after all that stress, go and partake in a couple of New England IPAs here and there. That and hiking, a lot of free activities. The white mountains and that part of the country. Lots of hiking, camping, those sorts of things, kayaking, just being in the outdoors. Skiing, I did not grow up skiing, did that a little bit which was terrifying. Even as a marine, you get on top of those mountains, it can be a little bit scary so I do not know how you guys do it out there in Colorado. I will probably do it again at some point but I am looking for smaller mountains these days.

Scott: Your first lift right up one of these mountains out here is pretty terrifying.

J: I am sure.

Mindy: Come visit and I will take you skiing. I will take you on the little hills and then we will go to the bigger hills and then we will go to the great big hills. Okay, this may not be repeatable for everyone but it is definitely repeatable for all of our military listeners and we are definitely going to reach out to our military blogger friends like Doug Nordmann. Oh my goodness, I am blanking on his blog because it is all for military and I am not military. I do not read it that frequently but I know he is huge. David Pear from military to millionaire, I believe it is the name of his blog. We are going to reach out to all of them and make sure that they know that this episode is available because this is huge. This is amazing and I have never heard this.

Again, I am not military, so the GI bill does not apply to me. But this is really, I mean, I am speechless. This is amazing. This is still, you can take lessons from this. House hacking is available to every single person. House hacking is an excellent way to reduce or completely eliminate your housing expenses and there is a really awesome article on BiggerPockets about how is hacking and the whole concept and that we will link to that in the show notes which can be found at biggerpockets.com/moneyshow68. But this, this is just fantastic. I love how you said, your employer could have ways to pay for college. We had Zach Gautier on episode 64 where he talked about how to pay for college, all these different ways to fund your college. Mainly for kids but there is definitely opportunities to pay for post like regular college age. I do not know how to say this. Scott, save me please because I am just fumbling over here.

Scott: Well, I think it is just being creative about how you are going to approach your journey, right? Like maybe if you did not have the stipend, maybe that changes the equation on going and getting that MBA in the first place, I do not know, but I think that it is kind of just all about assessing all of those things in and your benefits and how it will impact things, right? Because I mean these degrees are very expensive and are they going to have that trade off in pursuit of FI? I do not know. In this case, you could make money while getting an opportunity to earn even more with the degree. That is a no brainer, right? Like that is kind of clearly be a winner to a certain extent.

J: Right. Even for, so on the federal civilian government side, even with that I know the agency that I worked for, they offer tuition assistance which will cover most, if not all, or a local like state college will cover a lot of those expenses. A lot of government agencies offer that type of things and private employers too. Anytime, there is free education benefits and you can build your resume and increase your knowledge and your education. Absolutely, go forth and do that. If it is free, it is free. Take advantage of it. There also a lots for federal civilian employees, there are so many opportunities. Other things I have done to help increase my net worth. I mean everyone has to get… if you are in the federal service, you are in some jobs series where you have to get certifications, you are traveling for training or you are going to conferences or you are going to give briefs.

In the federal government, when you travel, you get paid your lodging as well as what is called MAIE and a, which is meals and incidental expenses. That ranges anywhere from $50 to $100 a day, you are on travel. That just goes directly into your pocket. I forget who mentioned it, it was on your podcast at some point. Someone was mentioning, I believe it was on, on BiggerPockets Money. Maybe it was the frugal words. We are talking about going down for breakfast and making lunch sandwiches while at breakfast. I do that all the time. Every time I travel I pocket all that mill and incidental expenses because I just go to the hotel and if you stay at somewhere like a Homewood Suites or Embassy Suites where they also have a dinner and cocktail hour and you can essentially go get breakfast for free and make yourself a sandwich for lunch, grab a couple eggs, you have lunch and then you come back, get a free drink and dinner and you did not spend a dime.

I have done that quite a bit and I am currently on the biggest travel hack of my federal career, which has really really expedited things. I am actually in Washington DC right now on a long term TDY, Temporary Duty Assignment. I am here for a year and currently my girlfriend and I are living in this gorgeous apartment right across a river here in Arlington and we are saving 100% of our incomes right now. We have zero cost because the government is paying for our lodging and living expenses. If you are a federal government employee, seek out those opportunities and travel as much as possible.

Mindy: Okay. No, you cannot just drop that.

Scott: Before we get to that, let us build the rest of your story into this point and then they will hover this. Sorry, I know Mindy’s antsy to hear exactly how this happened.

Mindy: Yes.

Scott: I do too but let us keep going linearly across this. In 2014 you buy the house and you stay there for three years until 2017, right? At the same time, you are getting your MBA, you are getting the stipend, you are living frugally. I imagine you exhibit frugal tendencies towards other major expenditure categories like food for example. Kind of as you just mentioned where you would craft that all extra breakfast stuff and all that kind of stuff. But you are not interestingly foregoing a lot of the fun stuff like the outdoors activities and the craft beer and all that kind of stuff, right?

J: Yes. I sold the house at the beginning of 2018 and the reason I started, my girlfriend and I, she had taken a promotion in Baltimore and I had, because of it, I do not want to downplay this because I think this is really important too and you guys discuss this all the time, you can cut expenses drastically but at some point if you really want to accelerate things, you have got to increase your earnings. Again, if you are in the federal government, if you are willing to move and you are a hard worker and you show that you have got that tenacity, the promotions are out there.

I took a promotion to move to southern Virginia and my girlfriend took a promotion to move to Baltimore because we both knew that I was going to be on this rotation in DC, in the Baltimore DC area, for a year. That was definitely part of the plan. At this point now, during that time I am steadily getting promotions and so I would gone from when I first got into federal service making mid-thirties, by the time I sell the house, take the promotion down in Southern Virginia, I finally hit six figures. Work your way up along the way and I know some people, it is tough. You have kids, I do not have kids personally, I have two fur babies, two cats, but they are pretty easy to travel. Relocation is not something everyone can accomplish easily but how bad do you want it and how willing are you to make a couple of sacrifices and relocating in order to really boost your income?

Scott: What happens at your net worth over that over that three year period in New England?

J: I hit net worth is zero at the end of 2015. I spent about a year, a year and a half getting my debt to zero and I would build a little bit of a nest egg. I started investing. I went from I will just say zero to hundreds of thousands of dollars in the matter of three years, 2016, 2017, 2018, and now like I said at the beginning, I am pretty much, some people say the term lean FI, whatever you want to call it. Between my small disability stipend and the assets that I have stored up. I do not have to work, I choose to. I want to build that nest egg to a more comfortable level. It would be a very, very lean, lean life which I live currently a lot of Costco, Aldi. Do you guys have Aldi out in Colorado?

Scott: No, no Aldi.

J: That is… But Scott, you love it. I can actually out my window, I can see Costco from here.

Scott: I actually go yesterday, it was great.

Mindy: The only problem is you cannot walk to Costco because I cannot bring all your stuff home. Every once in a while I will go to Costco and I see somebody on a motorcycle. I am like, what are you getting here? There is literally nothing you could like put in your pocket. It is all like 40 gallons of mayonnaise.

Scott: I am just there for the free samples, the ultimate food hack.

J: Here is the deal. You can go on Amazon or Walmart, wherever, you can get these cheap roll-out carts that fold up. My girlfriend got one and it is the best thing ever. Just folds up, we literally walks to Costco, it pops open, we throw everything in it, check out and it is like a little red rider wagon and we pull it home.

Mindy: Oh my goodness, he even walks to Costco. I love this.

J: I walk everywhere. I have zero transportation costs now. There is great public transit here so I have zero transportation costs.

Mindy: Okay. You said there is great transportation here, that is in Washington DC?

J: In DC? Yes.

Mindy: Okay. Can we please talk about that now, Scott?

Scott: Yes.

Mindy: Really. To talk about this zero living expenses hack that you have. Your girlfriend took a promotion to Baltimore and did you know that there was this temporary duty assignment coming up or did you just apply for it or hope for it? All these cities are really close together. I am not from the East Coast. I know Scott is from Baltimore.

Scott: When I grew up, my mother worked in Baltimore and my dad worked in a town called Alexandria, Virginia which is a little bit south of DC.

Mindy: How far away are these cities?

Scott: We lived in between. Yes, they are not very far. It is probably 50 minutes between the two, maybe an hour, yes.

J: Yes, between depending on traffic as always, you are about an hour between DC and Baltimore. Alexandria is just right up the road. Yes, they are all very close.

Mindy: Okay. Your girlfriend took a job in Baltimore, how long was she in Baltimore before you came down to or did you go down the same time?

J: She moved to Baltimore in March of 2008 and then I moved to Southern Virginia, Richmond area, central southern, just south of Richmond. I moved there in May of 2018. We spent a few months apart and then we kind of travelled back and forth to see each other on the weekends for a bit knowing that I had already applied for and been accepted to that rotational assignment here in DC. We already knew that going into us living separately that eventually instead of being three hours away and more southern Virginia from Baltimore, that I would be right there in DC.

We were both renting at the time and then I came to DC on the rotation and she is like, why are we living in two separate places? Why do not I get out of my lease, I will come live with you in DC for free and I will just take the train to Baltimore because the government will pay for her transportation costs. I was like, yes, that is a great idea. Let us do that. At this point she is getting on the FI path. She is trying to pay down her student loan, that is all. She has got a whole story in of herself if you guys ever want to be hired.

Mindy: Does she work for the government too?

J: She does. We both worked for the same agency.

Mindy: Okay. I was like why does the government pay for her train ticket? But because she works at… Okay. The government has you assigned to wherever you used to live and now you are just temporarily in Washington DC?

J: Yes.

Mindy: How long are you temporarily in Washington DC?

J: I arrived here September of last year and I will be there until September of this year. All the while, we are basically that MNIE portion of that meals and incidental expenses. They pay the current rate, it just boosted up from 2018 to 2019. It is now I want to say $76 a day. In total, I am getting paid over $25,000 plus my pay check plus free lodging for the whole year. She and I are just living off of that TDY money, that $25,000, keeping our expenses under that which is what we try to maintain anyway. It is really easy when you do not have any lodging cost.

Scott: It is not like you mentioned the name of it earlier but it was like a long term or short term deployment or something like that. What was the name of this? Yes, it is long term TDYs. It is long term temporary duty.

Scott: Long term temporary duty, yes. Sorry, that is just…

Mindy: Wow. What are you doing with your money? It is buying more S2000’s?

J: Yes, I have six… No. I am investing all of it. I did the math. I am actually saving 109% of my taxable income.

Mindy: Well, of course, a 109% because that does not exist. How do you save 109% of your taxable income? Because, oh, so you are making X plus you have no housing expenses, plus they give you in addition to paying your housing expenses, they give you an additional $76 a day so you can eat. I do not know how you can survive on such a small amount of food in a few months or in a few weeks. We are going to interview the savings Sherpa who claims he has $25 a week in grocery costs. We are going to get some recipes from him, we are going to talk about how he does that. But $25 a week versus $76 a day, how do you do it?

J: Costco and Aldi.

Mindy: I mean that just seems ridiculous that people could spend $76 a day on food. That is what you are using to live off of well saving 109% of your income. What are you investing in?

J: I invest in a variety of things. I maxed out my TSP which is the government version of 401K. I maxed that out and plus they give 5% matching. They do 3% on your first 3% they match and then a half percent for the next two. That gives you 4% and then they have an automatic 1% that they contribute. It is a total of 5%. I maxed that out. I also maxed out a Roth IRA and then I have some money in a peer to peer lending and some money in crowd funded real estate. Then I am currently putting a lot of cash aside and I am sure you guys have been watching the interest rates that banks are supplying now.

If you have not heard a CIT Bank, they offer over 2% on the money market accounts. That is where I am putting all my savings for my next real estate purchase. That will be I am searching hard for a duplex or triplex or quad in the Southern Virginia area because she and I will be moving back there. I have a decent amount, about 10% of my net net worth just in a savings account now strictly for real estate purchase.

Scott: Do you own any other real estate or besides, I guess you sold your first place, do you own any real estate that you privately hold?

J: I do not, just the crowd sourced a real estate which is more commercial real estate focused.

Scott: I imagine that you are accumulating quite a bit of after tax liquidity after you maxed out your Roth and after this TSP based in your savings rate with all this stuff. Is that why you are kind of shifting to real estate now and kind of am putting all this money aside in these money market accounts and coming up with that strategies because there is not enough places to store it pre-tax? J: Yes. Well that is part of it. Also, we have become accustomed to not paying for lodging. When we moved, we want to continue that. The biggest goal there is to do a house hack and when we moved back to Virginia, Southern Virginia, to have something that is going to put our lodging cost at zero, we want to maintain that so that we can continue. I want to build a small real estate portfolio, less than 10 properties probably.

I am not big on landlording but it is such an incredible tool towards financial independence that you cannot ignore it, at least in my opinion. I like the diversity too. The market’s been so crazy up and down lately. I want to diversify. I am very very heavily weighted in stocks. Overall, I am probably between stocks and bonds between my taxable accounts and my 401K. I am probably at about a 90-10 split, 90% stocks, 10% bonds. Because we are looking to hit our FI goal collectively between myself and my girlfriend within the next three to five years, we want to have some more stable outside income. Some more cash flow coming in. Real estate is definitely that avenue that we are approaching.

Scott: With your plans going into the future into the moving into Virginia and getting a house hack, would you consider using a VA loan for that or are you going to use a large down payment with the cash you set aside?

J: Probably, ideally we would use a VA loan but as you probably know with the VA loan, there are lots of restrictions. It is tougher to buy like a property you are going to rehab. If we are looking to do like use the BRRRR method or something to that effect, it is tough to do that with a VA loan versus a conventional loan or a rehab loan. Ideally if we could find a property that qualifies for a VA loan and put zero or just a little money down, but even if that is the case I want to have some liquid cash sitting there to do any types of upgrades or things that will really bring the property to bring the most money in.

Scott: Great, I love it. I have a lot of cash to give me more options and then yes, we will use the advantage of the VA loan if the property that meets the qualifications comes up but I think it is great, not using it gives you more options.

J: Absolutely. Or maybe I will just throw it all in bitcoin, you know?

Scott: There you go.

J: No, I am kidding, kidding.

Mindy: I do not recommend that.

J: No, definitely not.

Mindy: It is your money. Where is your girlfriend on her path to zero net worth? You said she still has some student loans.

J: When she started her path, she originally, when she went to a private school, she had over a $100,000 in student loan debt.

Scott: Oh man.

J: She started her path about a year ago. I finally convinced her, which was not hard when you start with we could travel full time and work from the road. She is like, okay, yes, let us do that. She really got on the ball and she has paid off about $70,000 in student loan debt. She had around $120,000 and now she is around $45,000. While she is also maxing out her 401k, she is maxing out a Roth IRA. She is building her net worth while also paying down that debt.

Mindy: We interviewed Travis Hornsby from student loan planner on episode 22. He did not use the government job with the long term temporary duty assignment as I meant as a way to pay down loans. But let us look at your girlfriend for a second, she had $120,000 in student loan debt with whatever interest rate. Even if it is at zero, that is still a lot of money to pay off. What we talked about on episode 22 with Travis is that there are doctors and veterinarians and dentists who have all of these super high, like multiple six figure loans, not just a hundred. They have $300,000 or $400,000 or $600,000 in student loans and they are unable to make any sort of dent in it.

Your minimum payment does not cut it and it is just it is soul crushing and there is a huge rate of suicide frankly for a lot of these professions that are just so mired in this debt and your girlfriend has taken this, it is not a geoarbitrage, job arbitrage with this government job. I mean granted I do not know how many government veterinarians there are but there is a lot of jobs in the government that can help you pay down your debt just by having this travel. What did you call the travel hacking and GI bill hacking and per diem hacking and all of these hacks that, I mean, how is your life? Does it suck? It sounds like it is pretty awesome.

J: Yes, yes. Absolutely, absolutely.

Mindy: I mean it sounds like you are living your best life while also having zero expenses and living in an amazing city and going out and I mean living on $25,000 a year without having any expenses at all besides what food, right? Is that literally your only expense?

J: Pretty much. Food and, oh I do have a storage unit right now because we had to put our stuff somewhere which I cannot stand having a storage unit. But it is like a $100 a month. I mean that is my only real overhead expense and a Netflix account, shame on me.

Mindy: Oh my goodness, look at this Mr. Spendy Pants over here, a Netflix account and a storage unit. By the way, storage units are a really awesome way to make a lot of money in real estate because lots of people are just like you. ‘Oh, I do not have enough room so I need to put my stuff in storage and then oh it is only a hundred dollars a month.’ Then you just pay it and pay it and pay it. Yes, my parents have had a storage unit. They had two storage units, the biggest storage units they have. They moved it down to one but they have had it for 12 years or 11 years because they live in an RV and they travel around the country building churches. I am like, get rid of all this stuff in the storage you need. You do not need it anymore, but whatever.

Twelve years, they had been paying the same bill and there is just like two $250 a month. That is a lot of money. You can make a lot of money in storage units because people will put stuff in there and then it is only a hundred bucks, what is $100?

J: Absolutely, absolutely.

Mindy: Look into that too. If you cannot find yourself a duplex. Find yourself a storage unit.

J: Definitely, will do.

Scott: Also, what is next after you moved to Virginia?

J: Moved to Virginia. We hopefully can find a place that we can house hack. Then even if we did have small living costs in terms of housing, we are both be able to save and put back roughly 75% of our income if we continue our lifestyles. We do not want for anything, we actually, and I know this is going to sound terrible, we actually go out to eat two or three times a week and have fancy expensive beers two or three times a week and we still are able to live. When you do not have the housing cost or if you have low housing costs and you do not have transportation costs, you can still live on $25,000 a year or less and still have a really fulfilling life. Continue the lifestyle, continue investing, depending on the market of three to five years, if we have to work a little bit longer to really hit our are comfortable number then we will and that is where we are totally okay with that. But then that is when we plan on cutting the cord from traditional, employments and going onto more bigger and better things. Things that excite us more, traveling, helping.

We discussed, I have a niece who is extremely disabled and there are not a lot of organizations available to help a lot of those folks with her specific condition. She actually has a cousin that has the same condition so we have discussed starting a non-profit to help fund some of those healthcare expenses. My sister and my brother in law are both teachers, but even on low teacher salaries, they make too much money. They have actually had to cut down and take demotions in order to meet certain healthcare requirements, to get the stipends from the government or the health care coverage to help cover her expenses. We are looking into potentially starting a non-profit to help with that. Joining the Peace Corps, who knows, the sky is the limit.

Scott: No, that is awesome. That is what kind of gets me going at what I do here, with what we do with this BiggerPockets Money podcast. Because the carrot on the stick, the carrot that we dangle for everybody is, hey, go sitting margaritas on the beach and hang out. But no one does that. If you have the ambition and the drive, the hustle, the discipline to build a massive net worth and do all the things that you are doing, optimizing every front on the wealth generation equation and you end up achieving this FI within the next couple of years, you are going to go out and impact the world positively in some unique way. That is kind of this unique blend of the things that are you are passionate about where you are and what you are going to be good at it. I love it. Like those, all of those things you just mentioned are going to make a huge positive contribution to society. I just, I love it. I think it is fantastic and a great goal.

J: Scott, you got your undergrad degree in economics, right? In finance?

Scott: I did, yes. Yes.

J: How much did you learn about personal finance in college?

Scott: Ah, I did not learn anything about personal finance in college. I did not learn about personal finance until I discovered Mr. Money Mustache, read it from Mad Fientist in 2014.

J: Absolutely, that is my point exactly. I would love to… I know the guys from choose FI, this is something they are really into. I would love to network with folks and say, hey, how do we give younger folks or even young adults or regardless like some kind of free access to personal finance education? It is not part of our curriculum as we are growing up in school, you know this. I think that is also something that I am very passionate about is teaching personal finance. I mean if you learn this at an early age, we would not have such a looming retirement crisis and student loan crisis and all that good stuff.

Scott: Yes, and then even with a niche and there, the military in particular, right? I mean there is so many, it seems like there is a lot of folks that go into the military and come out with a bad financial situation when a little bit of education in the right direction can produce a very strong foundation from which to go after this stuff.

J: Absolutely. I always think the military is particularly interesting branch of that because of the benefits that you guys have and it just seems so perfectly suited towards a life of FI because you just have two of the biggest problems completely eliminated in the VA loan and then the health insurance.

J: Well, in military as well is one of the last places where you can actually still get a pension, right? Federal civilian service is the same way. We actually, we have enough time in the service and my girlfriend is also a reservists, she is going to get a reservist  pension at is 60 and we will both get federal civilian pensions. We are going to do a deferred retirement. We only need to stretch our dollars for maximum of 20 years before we will receive pensions and then shortly after social security if it still exists, who knows? But we want to make sure even with those pensions and potentially social security coming, we want to make sure we have enough that if those things fall apart and do not happen, some massive government change happens, it is not funded, that we still have enough and we do not have to worry.

Scott: Love it.

Mindy: Yes, I love that. I love the forward thinking of that because I have people in my life who have a pension, but it is not guaranteed and counting on that as your only source of income during your final years is really not the smartest manoeuvre. I really hope the government does not go out of business but I love that you are thinking past that and the whole non-profit thing. Wow, that is really cool because the whole financial independence thing is not about quitting your job. It is about having enough money to do whatever you want. If that is travel, if that is stay home with your kids and raise them. Working at your passion with no consideration for money.

My husband wanted to be a park ranger and never wanted to make, what do they make? Like $4 an hour or something. He did not want to have that job because it is not sustainable. I mean you cannot, I do not know how park rangers live off that, but now we live by rocky mountain national park so he can go and be a park ranger if you once because it does not matter what they pay, they pay nothing. Yes, that was kind of an abrupt stop. But yes, that is what this is all about. It is living your best life without considering, oh, how much am I going to make?

J: Right. It is fine in that, what would I do if money were not an option? What would I do that paid zero but I would still get up every morning and go do it. That is a park ranger, absolutely. Spend time in nature, that is great.

Mindy: Rocky Mountain National Park is amazing. We will take you there. When we go skiing, we will plan another day to go up to a Rocky Mountain.

J: Perfect.

Mindy: Okay. Is there anything else you want to share with our listeners before we move onto the Famous Four?

J: Ah, no, I think I am all set.

Mindy: Yes, this was fabulous. I am so excited to share this with like everybody I know. Okay, now it is time for the Famous Four questions. It is the same four questions or five questions, four questions and one command that we ask of all of our guests. What is your favourite finance book?

J: Okay, I have two. The first being for if you are a beginner and you are just getting into this or you know you are midway through, Scott Trench’s Separate Life is absolutely in sync.

Scott: Alright.

J: It was a game-changer for me. I was like man I am already house hacking. I need to do this some more. Really building that financial runway, it is just an incredible resource. Kind of nuts to spoon look at at financial independence. It is very accessible for anyone and steps you can take to really enhance your financial independence path. The second book is called Plenitude and it is by Juliet Shore. If you are already well on to your FI path and you are thinking about the future and I think it is a really good book. The subtitle was the new economics of true wealth and it is very along the lines of Vicky Robbins.

Her ideas, we have this our current economy in our current culture and stayed the way we are doing things is not sustainable. What does the new economy look like? You are starting to see it pop up in certain urban neighbourhood. People are growing more of their own food and doing these sorts of things, becoming more green if you will. I think it is kind of when you are thinking about, okay, how can I live a more sustainable, less impactful on the earth and on society. But I think it is very FI related if you read it in the right context.

Scott: That is great. I never heard of that book and I look forward to checking that out. Alright, what was your biggest money mistake?

J: I think we covered those, all the vehicles for one and then cashing out my TSP, my 401k when leaving military service, just terrible.

Scott: But if that business had worked out, would you still consider it a mistake?

J: True. I guess not, I guess not. You take a risk, right? You take a risk and you have to.

Mindy: Did you know that the market was going to crash like it did?

J: No, of course not.

Mindy: Did you know that the market was going to shoot up like it did?

J: Absolutely not, you never know.

Mindy: You cannot really beat yourself up over these. I mean now, sitting over here in 2019, you are like wow, that was not such a smart move. But when you were doing it, you still paid off a lot of debt. You did not take it to the boats and gamble. It was still a fairly smart move.

Scott: I, a couple of months ago or maybe almost a year ago, interviewed Annie Duke who is a poker player. She wrote a book called Thinking in Bets on the BiggerPockets real estate podcast. I love the way she kind of thinks about things. It is about like was it a bad decision or was it a bad result on that? That is where I am kind of want to get at with the liquidating the 401k there. Yes, there is a lot of things no one is recommending liquidate the 401K but I think that you made a bet on that one versus a necessarily a bad decision and the bet did not work out. The result did not end up the way you wanted but I guess you could make the argument that that was not, if things are, if you would still thought it was a reasonable probability of success and you did that, it was not the worst mistake in the world compared to a lot of other mistakes that we have heard in the show.

J: Right. I want to be clear, it was not like I had a ton of money in that 401K. I was not making a ton the military so I did not like wait a hundreds of thousands of dollars to throw into a business. It was a relatively insignificant amount in the big scheme of things. The risk reward ratio there, I felt, was worth it. Hindsight, obviously.

Mindy: 20-20.

Scott: Absolutely. I just always try to think about things like, hey, did I get a bad result or did I make a bad decision on that? That is kind of it is sometimes difficult to separate the two and the thinking in and all that.

J: The lessons you learn in running your own business are invaluable. I mean, you cannot replace those. It is something that I will always look back fondly on.

Mindy: That is awesome. Okay, what is your best piece of advice for people who are just starting out?

J: People say it all the time. It is a marathon, not a sprint. Something that I have been coming to grip with or have over the past year or so now that I am kind of I am at the point where, hey, I really could not leave my job today if I want it to. Just recently, within the past six months to a year, that has become the reality. It is like, oh, well I am running from a job but what am I running to?

I think you really need to think about, as you are in this process and you are building your net worth, focus on what you value and do some soul searching. Because like Scott said and Mindy you say it all the time, it is not all my tide is on the beach. That gets boring. What are you going to contribute to society? We are in a country and in a economic situation where we are able to do these things and build this type of wealth and that is very fortunate. What do we do to give back and better each other and better society?

Scott: Yes. You know there is a event that I go to every year and it is a meet up for a lot of folks that are interested in financial independence and that kind of stuff. There is always a good number of folks who are a couple of years into the journey and pretty close, like in your position. Like yes, I could probably do this. Somewhere in this spectrum, I am kind of lean right now. I really got a couple more years work to do. It sounds like that is where you are at and is in your mind for this kind of stuff. Then some people are like, well, I am way past whatever the conservative expectations are for this.

I am clearly FI. Like what do I do though? Like my identity is my job and all that kind of stuff. I think that that is a unintended consequences a lot of people do not think about, when they are starting on this journey, it is like what is going to come after this and how am I going to plan around that because it is kind of hard I think at that time that at the moment, once you get there, and you realize you are fine to actually make that leap and go do whatever it is that you are going to do after your job if you do not have that planned out ahead of time.

J: Alright. Scott, one of the things you see a lot on forums or blogs, like if you are on reddit or whatever, people go, ‘I am going to, once I hit my number, I am going to travel the world.’ Maybe they have never even been out of the country. Take some steps now to kind of dabble in some of your passions and dabble a little bit of travel to places you think you may want to see or live in potentially, more geoarbitrage, because you may get there and say, ‘Oh, this is kind of sucks.

Actually, I do not like it here. I want to be somewhere else.’ Do not just make a plan, but also test that plan a little bit and make sure it is what you want versus diving into it. Do not up and move to Peru when you have never even stepped foot in Peru before.

Scott: Absolutely.

Mindy: That is a really good point.

Scott: I think a lot of people love traveling.

J: I do not like traveling that much, at least not right now. I am not a big traveler.

Mindy: Thank you.

Scott: I just I do not want to go somewhere and hang out and from places. Like I lived in Denver because I like living in Denver. I do not want to go to Peru for four weeks and have an experience. Sorry, I am making fun of someone that it is not even here… But that is just not me. I think that some people are like, hey, that is what you do when you hit FI. Well, no, you do what you want to do. If you do not know what you want to do, you are in trouble because all that work is not going to pay off for you the way that you want it to.

Scott: Absolutely. What, what do you value? It comes down. What do you value? What brings you joy?

Mindy: Exactly.

Scott: Alright. Well, one thing we all value is party. What is your favourite joke to tell at those parties? That was a horrible transition, but we will go with that.

Mindy: That is awful.

J: This is a terrible one but Scott, you may appreciate it since you got a degree in economics.

Mindy: If it is terrible, he will love it.

J: Three economists go hunting and they are in the woods and they see this giant buck walk up. The first economist grabs his rifle and he shoots and he six inches too wide to the left. The second economist pulls up his rifle and he shoots and he is six inches wide to the right. The third economist drops is rifle and jumps from joy and says, ‘Oh we got it, we got it.’

Mindy: That is actually a good one.

Scott: I am laughing but I do not get it.

Mindy: The average.

Scott: Oh.

Mindy: Because it is six inches to the right and six inches to the left.

Scott: I see.

J: Because economist make all this projection, right? They are always one economist is a little off, the other is a little off, but if you took their collective knowledge, they hit it right on.

Scott: Okay, fair enough.

Mindy: Okay, Jay Grayson, where can people find out more about you? Oh, I am sorry. This is the command, tell me where people can find out more about you.

J: Yes, ma’am. My girlfriend and I, we recently, it is now live, we started a website and it is geared towards veterans and federal employees. It is called FedonFire.com. There is virtually no content on there right now because we just started it but we have contents in the work and hopefully by the time this airs there will be plenty of content on there. We have lots to upload, I just need to get around to doing it. Yes, that or [email protected], that is our email address. Shoot us a line anytime.

Scott: Alright, we will link to both of those in the show notes there.

Mindy: Are you on Twitter and Facebook, others social, Instagram, what else is there?

J: I was going to but I have never been big on social and I think I am just going to leave it that way. It is just we get so many distractions from digital media constantly. I have a Facebook but I rarely get on itself. I do not think I am going to start a bunch of additional accounts.

Mindy: Well, I will recommend you starting them even if you do not do anything with them just so nobody else starts them. Like Scott Trench could not start Fed on Fire on Twitter and then be like, oh yes, here is the picture of it an S2000, you should buy one. You went to keep Scott from hijacking your name online so get everything that you can on social media.

Scott: I have like a hundred Twitter handles.

J: Excellent advice. Thank you so much. I will do that.

Mindy: Yes, do that. Okay, Jay, this was awesome. I learned a thousand things. I hope that our military listeners are also learning how they can, finagle is not the right word, finesse their military… Because when you think of military, you do not think of like lucrative salaries. You think of, wow, they do not make anything. You might not make a lot but you are also not paying for housing. You are not paying for food. You all get uniforms, right? You are not buying clothes, right? The seven pieces of clothing that you walk in with can last you forever because you are always in military clothes, right?

J: Absolutely, that is one thing I miss. just not having to decide what to wear in the morning. You

just get up, put on your uniform, and go.

Mindy: You could still wear uniform, go to the thrift store. You could find or if you kept yours.

J: Well, I do not quite fit in mine anymore, but…

Mindy: Yes, if you are in the military, what can you do? How can you use your situation? Take advantage of all these opportunities that you are getting to either pay down any debt you have or not generate any debt. Stuart Glazier was here, remember Scott? His first thing, like as soon as he got his, what was it, like a bonus or something? First like a sign on bonus or something. As soon as he got that, he went out and bought like a $30,000 truck. Not the best choice, not the worst choice. I mean it could have been a $50,000 truck but you do not do those things. Or if you did those things, sell the truck and pay off the debt. While you are in the military with basically no expenses, use that to start generating investments and buy a house and whatever works for you and your investment.

But this was unbelievable and thank you so much for coming on and sharing this. Now, I am thinking of all the things. My husband used to work for the VA and he would periodically travel with them and he would go to the grocery store to get his per diem because he just did not want to go out to dinner all the time. After you are done working, let us go back to the hotel and just relax. Yes, he took advantage of this, but he did not take advantage of it like you did. He did not have this a 100% no expenses thing either. Wow, that is just… You blew my mind, Jay. Thank you so much for coming on the show to blow my mind.

J: Thank you guys so much for having me. It has been an absolute blast. I really appreciate it.

Mindy: Okay, have a great day, Gray.

J: You as well. Thank you so much.

Scott: Alright, that was Jay Grayson from FedonFire.com. Mindy, what did you think?

Mindy: Oh my God, that was fantastic. All of those things that he shared with his like geoarbitrage, the per diem hacking is blowing my mind. The what is it, short term, long term, temporary duty, whatever he has got, that is fantastic. The government is paying 100% of his living expenses. They pay for his property or his place to live. Now, you know what we did not ask him? It is the government giving him money for the per diem and also her money for the per diem because they are both government contractor or government employees.

I mean either way they are living on $25,000 a year and all they have to pay for his food. I mean the government pays for their transportation, the government pays for their housing, the government gives them money for food and then they can spend that however they want. He is saving 109% of his salary. How do you save 109% of your salary? That is ridiculous. He could also be spending 109% of his salary. This is just an amazing story. He went, what is this? In three years, he went from net worth of zero to net worth of I could technically retire now.

Scott: Yes. It is not easy to do that in the DC metro area either.

Mindy: No, it is impossible. That is a high cost of living area.

Scott: That is right. Yes, there is a lot of impressive things here. I just love… There is four ways to increase your wealth, right? You spend less, you earn more, you invest aggressively or you create an asset through entrepreneurship, right? He took three of those buckets and just optimized them relentlessly, right? I mean, look at his income production skyrocket over the last four or five years. Look at how he is effectively cut out all of his expenses and he has planning out his next move in advance to keep those expenses extremely low and he has got a very aggressive asset allocation plan and plans to continue that even though he is going to expand into real estate with his house hack. I mean it is just fantastic and it is in all of those areas, all combining to drive his financial position forward and really showing a really incredible progress very quickly.

Mindy: I think he hits all four buckets because at one point he had started the company absolute. He is definitely knocking it out of the park with three of the buckets and then the fourth bucket, it did not worked out.

Scott: Yes, absolutely.

Mindy: But that is not… I think that was more like a product of what was happening in the country at the time and he did not really have a lot of control over that. But yes, absolutely love every single thing and he did not start out with some fabulous background.

Scott: Yes, By the way, with that fourth bucket for entrepreneurship, as a veteran, he is in perfect position to go and pursue that full time whenever he so chooses with a great advantage, right? He has got the passive income and the asset base here. He has got the healthcare covered, he has got all these advantages that are going to come into play if he ever does decide to go into the full time entrepreneurship side of things as well, which is listed as one of many potential possibilities going forward and the future.

Mindy: Yes and I brought up that whole self-storage thing. I do not know if that is technically real estate or owning your own business or both, but I would really like to own a self-storage unit simply because it prints money. When we first moved to our city, we had to put all of our stuff in storage because our house was not ready and yada yada and it was like $250 a month and we started talking to the guy. He is like, ‘Oh yes, I own four,’ within like this tiny little, I do not know, three or four block radius and they generate something like $300,000 a year and he has no employees and he just… If somebody calls up and they say, ‘Hey, do you have a storage unit?’ I do not have one at that place. But around the corner is another one and nobody cares where their storage unit is located because they will drive an extra half minute to get to the other place. They are just looking for a unit and he very rarely has vacancies and it just prints money.

Scott: The great thing about storage is that most people are not like… Most of your customers are not like Jay, right? Jay is actually using short term storage to actually store his stuff while he lives for free for a year. Then he is going to go collect his things and move down to Virginia, right? But most of your customers really in storage just put their stuff there and then stay there for years. I got to imagine, right? I am not going to make a promise but that that would be my guess. There was a guest on one of the BiggerPockets Real Estate podcast episodes who talked about this and he had a really creative approach to that.

If anyone’s interested, we will have to go in and find that show number and put it in the show notes. But basically the premise is he has one storage unit that is in a really good location that is very expensive and it is a loss leader. He has got like six or seven more that are in the outskirts and much cheaper locations. People go to the really prominent one and they are like, ‘Oh, we are all full here.’ But if you drive five minutes away or 10 minutes away, we have got six or seven more where you can go and store them there. It is kind of like that is how he generates business into his other storage rental places.

Mindy: That is awesome. I have not listened to that episode. Do you know who the guest was?

Scott: No, I will have to go and look it up. It was this couple of years ago.

Mindy: Okay. Well, you can find that information in the show notes at BiggerPockets.com/moneyshow68. We will make sure to look up that episode and include that in there. Scott, is there anything else you want to add today?

Scott: No. I think I was just very inspired by Jay and his journey and I think he is going to be off to some… He has already done and accomplished some really big things. I assume he is going to have a lot of even bigger and better things coming up in his future.

Mindy: Yes, I am so blown away that he wants to start a non-profit for his niece. That is so touching. I hope that she and her parents really appreciate that because he could just do nothing and he is going to go and make the world a better place. I also have a cousin with some weird disorder and she has blown through her health insurance maximums and it is just what do you do? You still have to pay for health insurance. Okay, If you are listening to this show and you know somebody who would really benefit from this information, they are in the military, they are going into the military, they are just leaving the military, they are thinking about going to college, they are young, they are old, they are like pretty much anybody with a heartbeat. Please recommend that they listen to this show.

We are available everywhere podcasts are found and I just think the information in this episode was really, really mind blowing. You do not know what you do not know. When somebody presents an option to you and you are like I have never heard of that before, your first thought might be to be like, oh, whatever, that is garbage. But this guy is showing you you can do this. You do not have to have some fancy background. He did not, he had a less than ideal childhood. His parents filed for bankruptcy, they were farmers who had no money. His sister passed away at a very early age. All of these things really do not make you think like warm and fuzzy thoughts and he did not just sit there and let that define him. He kind of stood about it in high school for a while but then he righted his ship and he went to the military. He fixed himself. He is going to be financially independent.

I do not think we ever asked him how old he is. I think he is in his early thirties. Who retires in their early thirties? Nobody. That does not happen. Except it does happen and he is an amazing example of what can be done when you put your mind to it. Please share this episode with anybody that you have in your life that you think could benefit from it. Okay, now from episode 68 of the BiggerPockets Money podcast, this is a Scott Trench and Mindy Jensen and we are out of here.

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In This Episode We Cover:

  • His background and money journey
  • The reason he joined the military at 18
  • His experiences in the military and his poor financial decisions during that time
  • What he did after he exited the military
  • On using his 401(k) funds to pay off debt
  • Starting a business while going to school
  • What GI Bill hacking is
  • Stumbled across Mr. Money Mustache and learned financial independence
  • What his financial position looked like during his first year of employment
  • How he learned about geoarbitrage
  • Making money through house hacking
  • How investing helped him
  • On using a VA loan for his house
  • On saving 100% of his income
  • Going from zero to $100,000 in just three years
  • How he and his girlfriend managed to live with zero expenses
  • And SO much more!

Links from the Show

Books Mentioned in this Show

Tweetable Topics:

  • “What do you value? What brings you joy?” (Tweet This!)
  • “If you learn personal finance at an early age, we wouldn’t have such a looming retirement crisis and a student loan crisis.” (Tweet This!)
  • “The whole financial independence thing is not about quitting your job, it is about having enough money to do whatever you want.” (Tweet This!)
  • “It is a marathon not a sprint.” (Tweet This!)

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