For those who have money… or want more of it!
Join Mindy Jensen and Scott Trench (from BiggerPockets.com) weekly for the BiggerPockets Money Podcast. Each week, financial experts Mindy and Scott interview unique and powerful thought leaders about how to earn more, keep more, spend smarter, and grow wealth.
How to Grow Retirement Accounts Before Having Kids | Finance Friday with Steve
Most listeners of the show will know that a cash cushion is always great to have and should be mandatory for almost everyone. Having a cash reserve of 6-12 months can help you cover unexpected expenses or life events like a sudden medical bill or losing your job. That being said, sometimes you can have a cash cushion that’s too big for your lifestyle.
Today we talk to Steve, who has been paying off his mortgage quickly with the help of his wife. They both have respectable salaries, retirement accounts, and a large cash cushion. Steve wants to know whether or not he should move some of his cash out of his reserve and into retirement accounts or real estate.
Since Steve has such a large cash cushion to rely on, he could take out a fraction of it to use as a down payment on a rental property and still have tens of thousands left over! Scott and Mindy walk Steve through the different options he has, such as paying off his primary mortgage then buying real estate, pausing his mortgage prepayments and going all in on real estate, and other strategies.
Steve is in such a secure position that it makes it hard to criticize his current standing. That being said, he could be using leverage to springboard his investment property portfolio and be on the path to financial freedom sooner!
In This Episode We CoverHow much of a cash cushion you should have available Eliminating big loans like mortgages and student debt Buying rental properties before you pay off your primary homeLeveraging debt in order to grow your wealth quicker Getting a real estate agent to start browsing the market for rentalsAnd So Much More!Check the full show notes here: https://www.biggerpockets.com/moneyshow176
Staying Flexible in Early Retirement with A Purple Life
Last time we talked to Purple from A Purple Life, she told us about her plan to retire at the end of 2020. If you haven’t listened to that interview, you can listen to it here to get the full scoop on Purple’s journey from a $5,000 net worth to hundreds of thousands within only a few years.
Like many financially savvy early retirees, Purple put a lot of time into planning, saving, and investing her capital in order to retire in her early 30s. Well, she did it! As of October 2020, Purple is financially independent and retired! So, how’s it going so far with financial independence in Purple’s world?
Purple talks about her hobbies, interests, and most importantly, how the final month of her employment went with her former employer. She also gives some great insight on taking advantage of her employer’s health insurance for the last month of work, making sure that she was able to keep her quarterly bonus, and how she ended up breaking the news to her boss.
It’s all worked well for Purple, but she did have some big plans to cancel. Purple had lined up 4 months worth of travel that all had to be canceled when COVID-19 hit and shutdowns began. She would have been snorkeling in Australia and scootering in Thailand right now! Thankfully, Purple has been able to adapt and take advantage of this off time to assess her financial situation and what she wants out of early retirement.
In This Episode We CoverThe importance of planning for early retirement even if you love your jobHaving a lean FI number and low monthly expense so you can live comfortably in retirement How long a cash cushion should last you when you decide to retire Taxable vs. Non-taxable retirement accounts (and which to leverage)Ending your employment in a respectful and polite way Being flexible with your retirement plans And So Much More!
Finance Friday: Reaching Semper FI (Financial Independence) Before Retirement with Fabio
Real estate investors are known to have their hands in 20 different pots, this is doubly true for Marine and real estate investor Fabio. Fabio is a Captain in the Marine Corps and has been in service for the past 21 years. He has at least five years left before he wants to retire, but is poised to hit his “freedom number” (or what others call their financial independence number) soon.
Fabio has rental properties throughout the country: a duplex in San Diego, a house in Arizona, a BRRRR currently in the rehab stage in St. Louis, and his residence in Illinois. The problem? Some of these properties aren’t cash flowing as much as Fabio would like. He also has a high interest hard money loan on the BRRRR property he is rehabbing, plus a loan taken out against his retirement account.
This presents a handful of different options: should he sell some of the houses that aren’t cash flowing in order to pay back some of the high interest loans or wait to refinance? Which debt should be taken care of first? How can he leverage his current assets to help him build a bigger real estate portfolio.
If you’re a long-term real estate investor, you’ve probably been in a dilemma like this before. Stick around for all the lucrative options Fabio can use!
In This Episode We CoverKeeping monthly expenses low (especially if you’re about to retire)Taking advantage of the equity you have in different properties Coming up with a “Freedom Number” then shooting for that goalWhat to do with houses that aren’t cash-flowing Taking out loans from a 401(k) or TSP account Which loans to pay off first (depending on time and interest rate)And So Much More!
Bringing in The ‘Dough’ with Brent TheFoodTruckCEO (Part 2)
Welcome to episode 173.5! Yesterday you heard from Brent, a former registered nurse who paid off over $100,000 in debt and started a mobile pizza truck! Brent’s original interview was recorded back in January or 2020 and was scheduled to be released right around the time that the pandemic hit and shutdowns began. Since it was released yesterday we thought it’d be a great idea to have him back to talk about all his progress since then!
Since we last spoke to Brent, he’s added a whole other food truck to his business and has hired on more staff. Now he’s cooking up (and selling out) pizzas wherever he goes. He even has a new social media handle, he’s TheFoodTruckCEO!
Brent talks through the challenges he’s faced this year, the wins he wasn’t expecting, and advice he’s given to young entrepreneurs just starting their business. As you heard in the last episode, Brent paid for his first pizza truck with savings he had, allowing him to finance the business debt-free. A year later, Brent still agrees this was a good idea, as has less stress and far more creative freedom being able to make decisions without having to worry about paying off a large amount of debt.
What are the profit margins of pizza and food trucks? Brent shares his margins, his pricing, and success stories, showing that regardless of how profitable your product is, you’re always going to have to put in the work to get it to where customers are willing to buy. Brent manages a very tight ship and is still learning the best ways to hire, manage, and make delicious pizza (without burning it)!
In This Episode We CoverHow Farm Fired Pizzas has grown since we last talked to brentWhy starting your business can be much harder, but much more fulfilling than a regular jobWhy staffing is such a big hurdle when scaling and expanding a businessUsing debt vs. using cash to start your business venture Becoming competent in a trade before you start a business focusing on itBeing flexible with your business venture and embracing failuresRaising prices in a way that works for your bottom line and your customersAnd So Much More!Check the full show notes here: https://www.biggerpockets.com/moneyshow173-5
Leaving "Soul Crushing" Corporate to Chase Food Truck Dreams with Brent TheFoodTruckCEO (Part 1)
What does the average person do in their 20s? For most people, it means going into student debt, getting a car loan, getting a mortgage, and treating yourself. These are the “average financial decisions” that put many Americans into debt and stuck at jobs they only dream of leaving. That’s how Brent aka TheFoodTruckCEO felt when he and his wife realized they had over $100,000 in consumer debt.
Brent and his wife didn’t make any crazy decisions, he merely did what society said is the right thing to do. He and his wife had student loans to cover nursing school, both had car loans, and racked up around $13,000 in credit card debt alone. This doesn’t even include a tractor Brent decided to buy for a future business purpose!
Both Brent and his wife were bringing in solid money every month from their nursing jobs, but as soon as the money came in, it somehow flooded right back out. This annoyed Brent, he felt like he wasn’t in control of his money and his life. He went to work on debt, adding up everything they had spent over the past few months and realized he and his wife were eating out far more than needed, wasting groceries they were paying good money for, and jeopardizing their future with random purchases.
They cut up the credit cards, started snowballing their debt, reduced their eating out, and stopped shopping at the big box stores. They attacked their debt! Within 5 years, they paid off $109,000 in debt, and started to save up for investments every month.
As time went on and Brent got promoted to a more corporate role, he realized that he put himself in a terrific financial position to leave and start his own business. He had accumulated $100,000 in cash, started investing in his business, and now runs a mobile pizza truck, serving delicious woodfired pizza and doing what he loves.
In This Episode We CoverWhy “average financial decisions” can often trap young people in debtGoing over finances with your partner before (and after) getting marriedHow to expense track to see exactly where your money is goingUsing the “debt snowball” method to get out of debt quicklyCreating the “financial runway” you need to invest in your business and futureHow to have a job exit plan so you can leave on your termsAnd So Much More!
Finance Friday: Why You Don’t Need to Sacrifice Everything to Hit Financial Freedom with Jeff
Jeff, like many listeners, feels as if there is enough money coming in every month, but somehow it’s slipping out, not allowing him and his wife to hit financial independence. A big reason this could be happening is simple: not enough income and expense tracking. This is why Mindy and Scott are always so adamant about having a budget (and sticking to it).
Jeff owns his home, and it has appreciated a favorable amount since he bought it; he also owns a duplex in his home state of California, and a rental property in Memphis. But that’s not all, Jeff owns another type of property...one he isn’t too proud of. A timeshare! Jeff wants to get rid of his timeshare so he can put more money into growing wealth.
He also has HELOCs taken out against homes which are burning holes in his pockets on top of the bills he and his partner already have to pay. While Jeff is happy with his line of work, his wife wants to be able to leave her job. With so many factors at play, it can seem difficult to reach financial independence and grow wealth, while also being happy at work, but with some financial intuition, it’s possible!
In This Episode We CoverWhy you shouldn’t go to a timeshare meeting (ever!)How having a high income doesn’t mean you’re moving closer to FIWeighing the pros and cons of in-state and out-of-state investing How much to keep in cash reserves for your personal accounts and business accountsThe importance of zeroing in on your goals so you can shoot for successHow to stop income from leaking out (amazon shopping, eating out, etc.)How to have a successful money date with your partnerAnd So Much More!Links from the ShowBiggerPockets Money Facebook GroupBiggerPockets ForumsFinance Review Guest OnboardingMintCheck the full show notes here: https://www.biggerpockets.com/moneyshow172
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Inspiring stories of people on the path to FI. Relatable stories that make FIRE seem attainable. Thank you for the great content and keep it up!!
Awesome stories and interviews