FI by 34 After Making “Calculated” Bets that 99% of Us Would NOT Take
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Have you ever wondered what your life would looked like a debt didn't hold you back or if you could actually live mortgage free? Today's gust has a financial background that began with the familiar middle class money chAllenges. Many of us know all too well.

Growing up in a single income household, he saw early on how debt and limited financial flexibility shaped live choices. After racking up nearly one hundred thousand dollars in debt in student loans and car debt right after college, he quickly realized that earning more didn't always mean having more. Now he's saving almost all of his income, living off rental cash flow and on track to hit five by age thirty four.

Andrews journey highlights the power of keeping your expenses low, investing wisely, taking advantage of opportunities that are presented, and allowing yourself to be OK with a bit of risk. All the things we keep talking about here at bigger pockets money. Hello, hello, hello. And welcome to the bigger pocket money podcast. My name is janson and with me, as always, is my also five before thirty four cohoes scotch.

Great to be here as always, the intro is a great kindling for an awesome money. Discussion is coming up here. Bigger pot is a go, creating one million million airs.

You're in the right place if you want to get your financial house in order because we truly believe financial freedom is able for everyone, no matter win or where you're starting, will give you the Spark. This episode is brought to you by connecting, invest, real state investing, simplified and within your reach. Now let's get into the show. Thanks much for joining yesterday. Angel.

Yeah, thanks for having meat. S been a long time follow of this podcast in both your journeys in the public space and and bigger pocket. So thanks for all, all the help but .

you guys do uh, I just want to say, Scott, I saw what you did there right to beginning and now to Andrew, where does your journey with money begin?

So thanks mainly. So I want to say my money journey leads back to start in middle school, my dad encouraged me to get long mowing jobs. When I graduated college, i'd probably about seventy grand and student loan debt and a reliably unreliable car.

And so that thing finally broke down on me like a month two post graduation. And I decided, screw IT, i'm going to buy a brand new truck, you know, I deserve IT. I A have a good job.

So got up like hundred thousand dollars in debt, probably there. And that's when I was kind of scratch in my head, comparing myself to some of my peers. And like while i've got a boat anchor behind me to to catch up to them, some of them just had parents pay for school, school stuff like that.

And so I started researching investing, started aggressively paying off that google, how to pay off that, how to save money, how to reduce that stumbled in the dave rams these program is many listeners have probably went through that and uh, thankfully follow that. And it's you know it's relatively straightforward and and IT works. And so I was able to pay off most of my dead there.

How long did you to so you graduate college in one twenty thirteen twenty twelve .

yeah thirteen .

okay I was the same years me um great year um and and you accumulate hundred thousand dollars in debt in the first year in twenty thirty nine and two thousand forty .

was right yeah my my student loans throughout college plus my truck added up about one hundred grand in death that I was at .

twenty fourteen year old and when did .

you discover day I couldn't tell you the exact year.

but he was within the first year .

of college, was probably like six years total, because I got, I would say, eighty percent of the way there before I started house hacking. I wanted kind of do things one step at a time until was I gonna pay off my loans before started saving up for a house. And then once I got my truck dead, and student loans down to five to ten thousand dollars each, probably.

Then I started saving up for a house and thought a duplex to start house hacking. And what year was this? So I bought a duplexes in two thousand and eighteen after somewhat learning about the the fire movement and and rental. Al realist.

and how did you discover the financial dependent?

I used to work at a larger refinery and news, ta and I, A coworker there who bought one duplex, moved in to IT, waited for the neighbor to move out, move next or remodel IT bothering duplex, no other duplex. And he started in his early twenty years, and I think by his early thirties, he had half a dozen duplexes. And we'd work these large shut down at the refinery.

There were one to two months long. You'd work seven days a week, thirteen hours a day. And I remember one of those. The bosses will come around like, k bob, you're gna do this, jim, you're going to do that. So you're going to do this and this gentleman was like, oh, actually i'm going to sit this one out and they're like, oh, it's not really up IT wasn't a question as the state and that you're going to do this and he was like, well, if you want, I can put the higher contractors and put on the company credit card. Sure, you and I going to go for that, but that is an option to you.

The other option is today's is my last day because I don't need this job y more or just to buy me more rentals um and I can live off my rental income just fine or third option is I can work forty hours a week and i'm just not shown up on the weekend so I can do this remodel. And his boss was made fifty six years years old, and this guy, thirty two years old. And IT IT was just like, you know, draw dropping for me to sit back in the panic gallery watches. So I was like, there's something going out of these duplexes. I got a dig, end of this.

That's also some. And what year was that conversation?

When did that happen that would a likely bend twenty, fifteen, sixteen.

okay. So that that was what kick the fire and fire to go after, you know pain of rental. Did did that change the aggression or th Epace o f t he w ay t hat y ou a ccumulate c apital u m o r c onduct? And so IT made me lean .

into IT more and I definitely wanted to pour some gas on the fire there. And I was relatively frugal. Some my friends or family members could could definitely speak to enter being frugal and his Young is but some of my peers, you know, didn't care if they paid after student loans by forty or fifty.

I wanted those things gone as soon as possible. I I personally don't enjoy being in debt at all. Then I was like, OK, I start early, like polar pants. Afford anything, you can afford anything, but not everything. And so is like, i'm gona try these little one month things of no restaurants this month or no new hunting here, camping here this month, and try to figure out, can I like suffer through one month of a many deprivation in in one category to save another fifty box or hundred box.

Because what I found is I can nickle and die myself to being poor in a month, or to given away all my money so I could also nicklin die myself to paying off to alone that or nichol, and die myself to saving up A A housing down payment. I don't I don't always save a thousand box at the time. Sometimes I save fifty box, 2 box， one hundred fifty box and over time and out so .

and then did you how was your income situation like during this time period? Um and and I presume that with thirteen weeks of A D R weeks and your full time on this job that there's overtime pay or something like that.

no kind of what is relatively disappointing. So they sold Diana was good experience for resume with our salary. We get zero dollars and hour over time. And then assuming zero of the two thousand contractors on site had safety incidents, you'd get a thousand dollars per week pretax bonus. So after the seven week shut down, I did the math in front of my boss. I get like just under a thirty five hundred dollar bonus and I work just over three hundred fifty hours of over time and I was like, i'm pretty sure i'm making less than minimum wage. So with all your respect, I I have my experience full on my resume and i'm good on this.

Wow, this is good resume experience working for free. I'm like a thousand dollars pretext.

thanks. Your first question I was making about seventy five to eighty five thousand at this time.

We need to take a quick ad break. And while we're away, we went here for you. Unlike Andrew, were you well capitalized when you buy your first real property answer in the spotify or youtube? APP, in the meantime, will be right back.

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Well.

come back to the show. I want to go back to that game of, fine, your savings and trying, okay, how can I deprive, for lack of a Better word? How can I deprive myself in this one category to see if I can save an extra fifty one hundred box? Did you take that extra fifty five hundred bugs and put IT into your dead or into your savings?

So really many answer both. At first, I I follow the debt snowball method on my student loans. You know, I had multiple student loans, as many of the listeners probably do, that I didn't refinance all mind into consolidation.

So I was I was just trying to you know, pay off the smallest lump, some student loan there. So I was just trying to cross those off one at the time. And that was a definitely a big win for me every time I paid off one of those.

And then once there were sub ten thousand dollars, I was really interested in getting a duplex. So I started to not put all my extra savings towards student loans, and I started just putting into a house down payment fund afterwards. After I bought that duplex to remodel IT, I had no more money, and I was smoked and hadn't been update in fifty years, pretty rough shape.

So I got a zero percent credit card for eight months and put five grand on IT. So there was risky, incited the math. I was like, well, if I take my ordering payment, my old student loan payment, my old truck payment and a max tra frugal and another hundred to two hundred dollars for eighteen months, I can save fifteen hundred dollars a month or whatever to pay off twenty five grand in eighteen months so and I I got IT done with like one .

month to spare so i'm hearing a story of intentionality. You weren't intentional necessarily with your um collecting your student loans and then you decided to make IT an even hundred k by throw on another car on top or a truck on top of that. But then after that I heard I am hearing you say I don't like debt.

I went to get this done as soon as possible. I'm playing games like mental games with myself to save this extra money to throw up my debt. I am then taking those same mental games and the extra savings that i'm not paying towards my student and my truck anymore and i'm paying I putting that into fixing up my duplex, which is now a cash flowing asset, is that wasn't a cash flowing asset.

I guess what I mean by the rent is really fifty dollars more than the mortgage. So yeah, I would say it's following. And if I were to move out.

would I would cause for pretty well, wait, the rent from the half of IT is fifty dollars more than your mortgage yeah and you're living for free that correct yeah yeah okay. I say that's .

cash ful yeah say so so that's been pretty nice. And even the game, I fight a little more and add more risk to the fire. Um so I took out that eighteen month credit card. I started saving up in a broken account. I I can hand a little bit of risk so I put I didn't actually pay off any of the credit card.

I put IT all in the S M P five hundred uh which I would also probably not recommend on a eighteen months time eline with a twenty percent interest risk if I lose up the back end. So I started saving up a year later. My real ter um called me one day is like, hey, I found the six plus for sale.

I think it's really poorly marketed and it's probably listed for two thirds of what IT should be listed for. Do you want IT? D A fifty grand? I was like, yeah, fifty grand. Um and I was like, yeah, let's go look at that.

I was like shape after credit rental property so I looked at IT in the after get go one thousand something so like, okay yes sure let's do that. Um so I went toward IT and made not for that day got and then I was like, great. So I and I had probably two thousand dollars less than what I needed for a dawn payment. So I go go, i'll be super frugal for the next month. You know dave, ramps is business and rice um but I can save up two gram by closing date so yeah will be good.

I would react a couple days here because when I like like this like what's the right way of my realistic how should you be capitalized well, you know we've got back and forth on this the right answer, I think, looks something like this. You have the dawn payment. You have, uh, all of the projected repairs that, you know, we gonna come up immediately.

They are big into that. You have a emergency reserve of, let's called, ten to fifteen thousand dollars for the property, or maybe three to months expenses. You know, whatever is is grater among those two things um for IT and that's what you do.

You're for IT and your D T I or work and you're going to go on that. And yet very few people seem to meet all the requirements when they buy their first property. Uh for this really I I certainly didn't meet that require bit when I bought my first property, my first due black house act, you you didn't come a close by one shot. When I had you, did you did you meet the requirements when like your first property?

No, I borrow ed, my doubt favorite from my parents.

Yeah so what's the right answer to like how much did you have to buy a new property that I gave you? The the reality is not many people meet that actual set a criteria. Ia and when you're getting started, you know it's and all in back um in your case was too all in that uh you put all of IT on into middle the table and get going and that's why real states so hard to break into you is because for so many people it's either at all in bed or it's you wait your delaying that purchased by years to get into that well capitalize state um I think for what for the record of all of us the wrong way so kind of canon m about what's responsible or not so does that room true with the other people? You know in real state national .

yeah i'm fairly involved in the montana real state investor made up groups. And I would say that that's more Normal that that's the rule is not the the exception is a well capital ized investor and even some large land developers that I know they seem to they're not bedding with five percent of their network by animals.

I am having hard palpitations listening to your story because that is I mean IT IT turned out great in the end. Spoiler er IT turned out great for you in the end. But like where you having A A hard time sleeping, I mean you stuff contribute your uh area.

You took the money that you had set aside for your credit card payment and you put IT in the stock market and then you bought a six plex instead of paying off that credit card, incurring more debt, and you had a wapping five hundred dollar net worth. But that's not how you do IT. yeah.

I mean, what was I probably anxious or nervous? I'm not a doctor, so I can't diagnose myself. But do I have significantly less stress with an emergency fund and no credit card debt? Absolutely by a lot.

And h IT hard to articulate that until leaves, but on both sides of the coin there. But yeah I was an intimidating um in very committing I I I was well aware of that. I wasn't like naive of that was IT was a calculated risk, but I I knew the risk and I and I thought the math would work out.

And here are we going to take one final break and then will be back with Andrew.

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A. Let's jump back in. I don't wanna a say lucky, but yeah kind of you did so, uh, you said a couple seconds ago, you don't want to be foolish, but sometimes you just have to try.

I look at the statements that you made surrounding you, the circumstances with you buying the six plex. How was that? Just trying and not being foolish was IT because I was so no, you said I was like a two third surprise that should be, was IT all rented out?

Yeah, I was all rented out and I was cash flowing like a thousand dollars in. The rents were relatively low. So I was able to increase the rents immediately, get IT to cash flowing fifteen hundred dollars a month. So I I thought long term, i'd be. Really grateful for buying IT, and I thought short term, I could handle the the risk of my credit card.

I still calculated out that I could pay off the credit card before I paid in the interest, and I knew that worst case, I would have to take ten thousand dollars out of my four on k, which had fifty to one hundred grand at the time. So like, I can take out ti grand out of my foo N, K, that's not optimal, but it's not catastrophic. And if I were to even need another tony grand to pull out of my forearm to use as a downpayment to buy the six plex, I thought I would be worth IT set out that uh, appreciation and the cash floor from that six plus would be well worth the the tony grand plus taxes and fees.

Do you still own this? X, yeah, I do. And the duplex.

yeah, are they going?

They're going great. I mean, i've had not on ward, no terrible property management stories of high great renters throughout COVID. And i've got every model, I mean, most of the units by now. And so I mean, they're probably tripled in value. I don't know maybe yeah maybe more than that, but probably three hundred percent of .

of what I btm for you probably you and i've probably .

put a hundred grand in the real estate, probably have yeah I don't know, a million in equity or something.

Oh, well, that's a nice trade off.

Was IT risky. yeah. But I was still calculated risk of, I wasn't naive to what I was doing, but I calculated out, like h what happens to the stock market goes down percent. Then I need to take out seven grand for my foo on k was like, okay, I can do that if I need to.

you know, the next couple years not be like that. But that's the beauty of real state investing over a long time. And i've put away more money into the stock market in terms of dollars investing than I have in the real state and the portfolio about the same science equally and like that.

That's a remarkable power of that, right? I put more into real state than you did, but not a time more. And you know and and and and that's again, fifty percent of my portsoy is amazing. How much that appreciation in the last couple of years is power returns in here.

Okay, I wanna jump in here really quickly and say to anybody listening, thinking, oh, i'm gonna buy a six plex with the money that I had saved up for my credit card payment in eighteen months, um Andrew had other places that he could find money to pay off that credit card should something happen to the stock market where he was keeping his credit card money. Don't keep your credit card money in the stock market. But IT worked out for a do I can say it's going to work out for .

you the other thing that really your situation and there was how little you spent there is a huge gap between your income from your salary and they, not you spent on your life. And so that's what like thirty grand y year.

forty grand y year. So I looked this out. I am my budgets back. I could tell you much.

I spent on groceries in April of twenty and seventeen, uh, so my annual spend in eighteen was ten thousand, nine was ten thousand, twenty eight twenty nine. I lived IT up seventeen grand, twenty one eighteen grand. I i've sense increased my expenses a lot back in. But I remember I have old graphs for when i'm gona become financially independent once I make eight hundred and thirty three dollars a month .

in are dividends well you get there with one six plus um even like that's the real that's the real item here, right? Like I I think that if that's your situation you make seventy five eighty grand year and you than eight hundred and months, then you can responsibly take a risk like what you took, like you took that what would be totally inappropriate and probably not impossible for many folks because they wouldn't have these other options is if you spend seventy grand and eighty five there .

because at that time I was saving four, five thousand dollars a months. So twenty five thousand dollars is a lot of money to myself or somebody that make seven, five granted a year. But I also figured out I was like, okay, let's say I I we refuse to take money out of my foo on k, i'll pay this off in four or five months.

I was like, yeah, I i'll do with that. That's fine. So even a twenty percent interest rate when you're pain and off over four months IT IT reduces the severity your interest there. So I think one of the ultimate super powers of house hacking, receiving, getting in the real estate is your expenses get so low or can get so low. And assuming you don't do lifestyle creep with your rental income creep, then you can save so much money.

And I have so many peers who save fifty box a month, one hundred, two fifty, and with most people can obviously afford a rent payment, student loan payment, car payment when the recently graduate in college, but want to pay off those debts in your house hacky no longer a rent payment, then just that simple math that's like two thousand dollars a month that easy to save. And so I think if your house hack, a lot of people can start saving two, three, four thousand dollars a month, even on a medium salary. And then you're saving fifty grand year, seventy five hundred thousand dollars a year and then you're stocks portfolio, which is where I put all those savings. Sounds like somewhere to use scot, and that can start growing very, very fast.

That's the magic of the the if you can keep your expenses low on a medium and upper middle ass hour, like really low where you're saving sixty, seventy, eighty percent of that income and all these options rack up really rapidly because cashes accumulating. You don't need the job at that point. You are able to take risks like what you're talking about.

The next house pack feels like a luxury and a huge lifestyle upgrade when you go from eight hundred dollar a months house act to the slightly the the the nation one there like just an incredible um I think I I like amplifier of this right and a great an allergy here。 If you're saving two hundred forty box a months on the seventy five eight thousand million salary, let's go, let's called ten percent of your income. You seventy five hundred and eighty five hundred years. You're saving one year of expenses every nine years, right? If you do, if you do in that math, you were saving, what four years of expenses every year yeah truly .

eighty percent for four, five years. So when you .

think about IT, it's not ten, it's not twice as or three times as fast IT is forty times as fast, right? Or something thirty to forty times as fast the amount of what relative wealth you are accumulating and options that you are aculab and that just produced um these opportunities probably I I know the more the story, but I bet you the opportunities have continued to explode you since making those two investments and will continue to exploit for the rest your life if you could sustain in this path.

Yeah I think house hacking or side hostel is many ways is in the cap. I think it's such an asean c bet where if your extra frugal or you live live less cool than your peers for three to five years, they'll have thirty to fifty years of of abundance or however you wanted to fine IT. Like I recently went to fin kon and and hang out with mini and some other folks, and that's probably the most expensive vacation i've ever bent on.

But you know, this is not. And I recently started a youtube channel and china start online business. But the ability to buy some camera equipment, lights, mikes, all that could fly to a lana to try to learn something is just, it's crazy.

Or now I can I can make these five ten thousand hour bets of honesty youtube channel, spend ten grand on equipment, see if that works and if not, then i'll try the next thing. Um but I think that's just so powerful IT and I I really like what you say scope all the time about starting a business. If ten percent of success try ten times, you have a hundred percent out just success by the end of IT. And obviously more complex than .

that I actually have to do to the probabilities. Curious some games there is some compounding um a geometric thing that makes IT you're getting very high probability view by the take bet.

But yeah so and i've been I don't have any other like big opportunities and i'm currently working on, but i'm carefully close to financial independent, and i'm trying to figure out what is that next step. So I don't feel called necessarily to just have a corporate nine to five job anymore, but I have a good job I do. I'm good at IT.

IT pays relatively good. And some like all do I just keep saving, very regret. I can more less save my entire salary if I want to um spending money on this youtube equip and trips takes out of that a little. But like do I do that or try business ideas? And because I don't want to just sit on the beats drinking in margins for the rest of my life, for sit on the couch like that live.

So what did your life look like? What did you do for fun when you're spending ten or seventeen thousand dollars a year? And what is a look like?

Now I still live in western montana, so there's ample outdoor activities, hiking, hunting, skin rock climbing, very popular out here as a likely down in colorado. A lot of those activities are are relatively cheap. At those times when I wasn't doing like a remodel project on the weekend, I was rock climbing skin.

So a lot of those thousand and two thousand dollars in equipment to get into them. And then it's more less free, unlimited times ago about skin. I would get a season pass stuff like that, but I was noticeably frugal probably.

And I still have that same truck from twenty thirteen. So just house hacking. A lot of my peers were ranting.

Some of them definitely bought nicer single family home. So I don't live in the cool lest house by any means of any of my pierce. But I you I drive a twenty thirteen truck with two hundred thousand miles on IT. You know, hunting hike is as much as the next guy. montana.

So yeah, and you have the coolest big baLance of all of the people that you know.

Maybe you are probable. Do you rental like about these two ones? Pretty so.

So you have what you have today that sounds like A A lightly lever real state court for you. And I imagine a lot of cash has piled up. Over last couple years. What do you do with all that other cash?

It's just all in the S M. P. Five hundred. I really have. I I just been investing in that since tony nineteen or I about the six plex. I've been wanting to buy a house, but mentally i'm still in two thousand eighteen Prices. Some extent I haven't wanted to buy a six hundred thousand doors house because today starter homes are probably four hundred to five hundred, so I could definitely sell my duplex and get a starter home. But to me, a starter home is not that much cooler than a single family started home.

So a nice house is six, seven, eight hundred and I just don't want to get a four or five thousand dollar mortgage um and I don't or probably sell the duplex just for capable gains taxes, but i'm also just kind of just hanging out and save in cash and figure out what the next step is. I kind of want to trying to debate, do I so do I buy a new family house and then quit my job and then have higher overhead and then try to start a business to dedicate forty hours a week for that? Or do I stay living in my duplex with rock bottom overhead, arguably financially independent, and then keep my job so that I have access to a mortgage easily, get a business off the ground? Wait l IT.

Makes a dollar a month or a thousand dollars a month, then quit my job so I can lay the gas puddle down and give IT forty hours a week. Or, or I just quit my job. I ve ve ve got a cool camper this year to excel like I I anna live IT up a bit.

I'm onna buy a used camper and road trip to west in the summer and worker mode and do some of that. So like, do I rent out the duplex in just road trip the west for a while, hit all the national parks, for example, and just live off fantin income? I could totally do that um or I just quit my job and lose the mortgage access how to do creative financing and then get a business half ground and and maybe just pay cash for a house next.

How much time would you be spending getting the business off the ground? Because I can see if we're talking about the youtube channel, I can see once you figure out what you're going to a talk about if you get all of your editing processes down, I can see that being a pretty low hourly lift. So then you've got all this extra time um I love the w two for the ability to get you a more going to do you like what you do? Or are you so work in those thirty nowadays for an extra dollar fifty?

No, I don't work a lot of over time anymore, but but I don't love my job, but it's fairly CoOperate and I just feel more call to be like an entrepreneur. So that's what I that's what I want to do a long term. And one of my question is, let's to say i'm eighty percent five, is if I save up for another year or five years and i'm a hundred and ten percent five or hundred fifty percent five at that date, i'm still wants to go and start my business.

I'm gonna want to just sit on the couch and be five and twill my Thomas for the rest of my life. So i'm just kind in my mind i'm like the the best data about to start how hacking was five years ago or today and not five years in the future. So it's like the best time to start a business is today, not five years in the future. And when I look back on buying a real estate, it's not like a thankfully, I waited till twenty, twenty. And like a and starting a business.

you will either succeed or fail. Let's succeed quickly or let's fail quickly so you can move on to the next thing. So start your business now.

And that's what i'm trying to do on the side. And I totally agree that once all your systems are in place, I think you can have a youtube channel with five, ten, fifteen, twenty hours a week, probably less than forty. But right now, that that started up phase is a little more learning.

So that takes a little more time. And so I commonly working on saturdays and maybe one or two evenings to get a video out, and I don't want to. So let just say for made up numbers, IT takes a thousand hours to get a business off the ground. Maybe the youtube channel may, maybe it's a digital marketing agency. I've got a couple ideas, but I can either do ten hours a week for a one hundred weeks or work every saturday for two years, or I can do that in six months or three months, working full time at IT and then you know fail quickly and on to the next thing. Or also just like the compounding of the skill development in the learning first is waiting a week to refigure out how to make A A some nail or something.

I would bet on the full time, I, for a word, all day, every time. But the reason, the reason that most people can do that is because they need to spend sixty seventy thousand year to maintain their lifestyle. And the job is a requirement in order that work.

And so the other effort has be done. The side. But I mean, you there there is no, almost no world IT is possible, but is so unlikely that someone in your situation will get richer faster by staying in a job. So unless you intend to buy another rental property like he said, like that's the that that's the the rub here is, is if your expenses are still in that twenty three thousand range and you have the cash showed up for a couple years, like entrepreneur out makes so much more sense than trying to compete. Entrepreneur free time on the side, I think.

what do you think? Do I really like creating a business like this where you can do IT part time, you can do IT a couple nights on the weekends, and then if your friend calls you up is like, k, let's I have this really awesome, uh, experience available. You could be like, i'm just going to do that instead.

I like starting that with the safety nett of a job underneath you. So if IT doesn't paying out and nine and a ten, then you can you're still generating income. The rentals throw a bit of a monkey range into IT. Um are you are you actively looking for new rentals? Or are you just if something comes up that is intriguing.

I would say i'm inactively looking. I'm still open to buying, but and I have a couple hundred grand in my taxable account. So IT, in my mind, i'm like I have likely years in years of living expenses, assuming no rental income, or I could probably live off my rental income just fine um and take nothing out of my savings.

So I hear you saying and clearly IT seems like i'm willing to take on more work than the average bear. But in my mind it's like I would argue all get a business off the ground faster, obviously doing IT full time and I can do IT saturdays and evenings. But I also like i'm i'm not energetic and creative at A P M. On a thursday after working, you know, monday through thursday. Same with even saturday morning.

What's your annual spending now?

It's probably now I donate to my church a lot more. So I forty five hundred dollars a month.

fifty .

saying .

a higher risk collar. You do not have a higher risk. You're so conservative on a spending front that you can these these other plays that are more long term focus on an investment perspective that don't require liquidity in the new year term, don't require income generation are very reasonable.

You have four hundred grand in a taxable broker account, whatever, and you spend fifty ten years, even if the market crashes yet, four years of living action, fifty percent, you get four years living expenses. So I I think that that's the whole trump card. Everything else in your strategy that you've pursuit here is reasonable because that that one that's also conservative, that nobody else or very few people will will replicate. And the option is going to provide you just going to be incredible.

Another option is I have enough in my taxable to pay off my six plex, and i'd have fifty grand left out on my do plus so I could either go frugal for another six months or just take fifty out of my foo on k. I'm not arguing that optimize perfectly, but I could just then pay off my six plex, two plugs and probably cash flow, I don't know, six thousand dollars a month and I need forty, five hundred to live off of.

So that's another option to pay off everything and then start your business and save a thousand dollars a month. Half doing that like not a bad option. I don't know. I like having cash because i've i've been broke so many times before. I'm kind of like over that. So I can know you don't want to pay after six plus s and just keep the cash if I need to pull a thousand or two on here and there than soba.

Andrew, if you did decide to leave your job, there's a couple of things that you're gna have to consider. Let's say you quit your last day is today and then tomorrow your agent calls you up and says i've got this amazing property that's gonna cash flow just like you're it's so fantastic but you got ta jump on IT right now. How would you fund that?

I know creative financing strategies, but I don't have a private money lender. I don't know the the easy button there. Obviously, you can get prequalified, but you have to verify employment commonly are closing. So so really the answers, I don't know how I would do that.

I have enough in my taxi plus my retirement to likely pay cash, firm a nice family house so I could maybe play a game there, but I don't want to liquidate my foo one k by a house and then pay taxes and fees and then refinance. That sounds like i'd lose a lot in taxes. So that kind of why I am still working because I i'm not comfortable with creative financial strategies. Um I know they exist, but I don't know .

how to do them and they do exist. Um but yeah, I have the ability to get a mortgage so I don't uh I haven't dived into creative strategies. I would encourage you to also go to the bigger pockets forms bigger pockets that slashed forums where there is a creative financing forum and lots of uh, discussion about creative financing simply because we find themselves in this kind of uh, unpleasant interest rate environment right now.

Uh, so there's there's definitely opportunities and now is a really great time to start looking for those. So when your agent calls you the day after you quit your job. And says i've got this awesome property. You're not starting your creative financing education then and trying to like criminal in um another thing that pops up frequently is health insurance. So how are you paying for your health insurance if you don't have a job?

Yeah, i'd after bite on the open market, i've shopped around a little bit in my mind. It's not crazy unaffordable. It's like five hundred and seven and fifty foreign individual. So I think I could .

stomach that. In my experience, IT is not unaffordable to buy on the healthy care exchange through the aca. Um I would encourage you and anybody who is listening to reach out to an insurance brooker in your state, who can give you more information.

They did not make the A C, A easy to understand. In fact, I think they made IT difficult to understand on purpose, uh, because it's a government thing and that's what they do. But IT was, IT was very difficult. I consider myself to be rather knowledgeable about health insurance in general. And I went on to the exchange.

I was like, I do not understand any part of this and I had a really great chat with a broker and I was kind of life changing um because I didn't need nearly as much as I thought I would need for my health and shirt. So i'm glad you have already thought of that as well. Scott, his mother, think talk about when they are early retired.

Oh, i'm going to be bored. That's not IT with you. I mean, you're you're there financially IT isn't a question of, oh, can I do IT can I not do IT I think your you're doit really well.

You've got your income or your expenses covered by your rental. Uh, I maybe say a couple more months and get A A fatter emergency reserve just because you won't have another bucket to all from the income bucket to pull from. But I ve been .

that i'd fin kon, I was asked in, you know how much would be an appropriate emergency und in in pursue time meine. And people are tilling me six to twelve months. But so if I have five years, is six years Better than five years now? Six like it's the same. So like and i'm literally transitioning into trying to start a business with the intention of making income or not transitioning into sip and Margaret on the beach. So i'm like I think I will become bored if i'm doing something that so on productive after twelve months, state after two thousand hours of IT all transition and like within a thousand days I can make a dollar or i'll to start my middle school lin long morning business again or you know crazy idea, go back to engineer exactly.

There's there's always a demand for engineers and that's kind of why .

I am leaning toward starting an agency inside of a youtube channel like learn the skills and then do video editing and higher and lead the company doing that or audio editing or making youtube videos for real ears and imposing all the short stuff like that. So then likely a faster, timely to generating income because really, I love working. I enjoy you. I just don't want to work for others anymore and I want a scalable career. So it's like if I want to raise, I don't want to ask my boss for raise, I just want to work harder and then I want to get a raise.

Okay, that right there is the answer. I like working. I just don't want to work for somebody else anymore.

I'll see, yeah, i'll see what next year brings. Like one more rough, a little more savings. Another, Cameron.

let's play ball. okay? And you I am super excited for what next year holds, and I demand that you check back in with us and let us know what you decided and how your uh how you came to that decision. So they'll circle back in uh three to six months and see exactly what's going on with your story. See how many of those ten businesses you have started so far.

So yeah really appreciate uh, all your encouragement medium Scott and h all education you've done to everyone over the years and you've definitely help me and and many others become millionaire to bigger pocket. So it's great. Great tool, great form. And uh yeah huge thanks. So keep up the good work.

thanks. Words graduations on your success before we go. What is the name you to out?

Yeah it's Andrew. Jx.

J, A, X.

C, K.

Yes, J, A, C, K, S, okay. And we will include those links in our show notes. And andy, thank you so much for your time today.

This has been super fied, and i'm not kidding. Three to six months, I want to send. D.

O, yeah, i'll do that. And if I pull my through denver, long ontario, i'll hitch you guys up in and buy a coffee or beer. So thanks.

I've got an awesome place to sleep. If your camper, you want to take a break from the .

campus sounds good.

thanks. okay. And do you thank you so much.

Few time and we will talk to you soon.

Yeah for okay, Scott, that was a fun set of circumstances that and finds himself in. And I I like when we're talking to somebody, they're like which one of these options would work. You know what? You've got a lot of really great choices, but I do think we need to address the elephant in the room.

Andrew bought his rental properties at a different time. He bought them in two thousand and twenty twenty when interest strates were lower. So that part of history, I don't think, is going to be so repeatable right now.

However, we are still able to take a village of keeping your expenses low, investing wisely in other ways, taking advantage of opportunities that are presented. They're still realistic opportunities available right now, just not for a two percent interest stator whatever ridiculous rate he has and allowing yourself to be OK with a little bit of risk. I think those are all points that people need to keep in mind when they are expLoring their own financial journey and trying to take advantage of the opportunities that are presented.

I mean that right there, anybody can be presented with an opportunity, but how many people are gone to say yes to IT you? Scott had a good job at a Operate company, and you left to go take advantage and opportunity that presented itself this little internet start up. How that work out for you .

spot it's been a been a fun right here for that. But I think I think IT comes down to um the the quality of a bet, your execution of IT and separating that from the outcome and Andrew made good bets, execute and well in the outcome was great IT was very possible that if you follow that playbook at random intervals over the last thirty forty years, that you're executing that playbook twenty two thousand and six or two thousand and seven, right, and seeing that portfolio crash and taking a year or a decade to unwind the the the pain or you know a hundred grand more specifically, to unwind the pain of buying those properties at the wrong time.

On average, this set of bets is probably going to win, and it's probably going to result really well the timing of a twenty eighteen purchase and really going all in at that point time was particularly fortunate for him. We want to be respectful of the role that luck plays and acknowledge that that that on average is a good one, especially the way that he put put IT together with in the context of an extremely frugal lifestyle. And and the body became a lot of cash, even if he had bought in a thousand six, two thousand and seven, you know, kind of about that peak or before a crash, uh, timing. I think that he would have been fine because he would be able to cash law and frugal as way through that transition. But IT obviously would have been very painful .

for him as well. Yeah, absolutely. I think that's a good point timing. And I just I want to hammer home the point when you have an opportunity taking action is the what separates people being retired at thirty four and being retired at sixty four are right. It's got to be get out of here. Let's do IT that wraps up this episode of the bigger pockets money podcast. He is this got trench and I am I jenson, saying, off we go, lepardo O.