BiggerPockets Money

If you need pension funds explained, there’s no better person to talk to than the internet’s leading voice on all things pensions and retirement, Grumpus Maximus. After spending twenty or so years in the military, Grumpus began to put his health, happiness, and passions first. Now, retired with plenty of money coming in (thanks to pensions and retirement accounts), Grumpus spends his time blogging and helping others ask the meaningful question, “is my pension worth it?”

Guest co-host Joe Saul-Sehy from the Stacking Benjamins podcast is here to help Mindy tee up some pension-related questions for Grumpus. Whether or not you have a job offering a pension or you’re debating accepting a job with a pension, the research-based questions asked today will help you evaluate whether or not a pension is truly worth it. 

You’ll hear about the safety of pensions, healthcare-impacted pensions, annuities, and Cost-of-Living Adjustments (COLA) so you can make the best possible decision regarding your (early) retirement plans!

In This Episode We Cover

“Cashing out” of a pension and what to do with the money

Understanding the healthcare implications that come with leaving a pension 

Which industries have the riskiest pension plans

Is an annuity ever worth the fees? 

Researching your pension and understanding the benefits 

How to analyze the safety of an organization’s pension plan 

And So Much More!

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A common debate in real estate is cash flow vs. appreciation. While some investors rely on their rental property income to reach FI, others argue that appreciation will provide them the equity gain to truly build wealth. You’ll hear this discussion in-depth on today’s episode as guest Jackeline walks Mindy and Scott through her $20,000 rental property in Northern Illinois. 

Jackeline is already doing well in other aspects of her life. She’s got a high net worth, with fully-funded retirement accounts and a big cash cushion, but she wants to reach FI by 45 so she has the option to retire. One of the best ways to do that? Cash flowing rentals! The only problem is that Jackeline is buying these rentals in a less-than-optimal area.

With rentals in C or D-class neighborhoods, you can count on more tenant problems, repairs, and headaches. But, these downsides come with the big upside of higher cash flow. Scott and Mindy both help Jackeline balance the scales on what is most important to her: buying in an appreciating market but using more of her cash or continuing to purchase low-cost, riskier rental properties. 

In This Episode We Cover

Building multiple financial safety nets between retirement accounts, cash, and cash flow 

Buying rentals in C to D-class neighborhoods and the pros/cons associated with them

Properly screening tenants to minimize turnover and maximize ROI

Experimenting with different rental property classes to find a strategy that works for you

Finding your real estate tribe and networking with others who can help you grow

1031-ing a property to avoid a tax penalty and grow your real estate portfolio

And So Much More!

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We have a lot of impressive guests on the show, and they just seem to get younger with every new episode. You’ve heard the stories of people in their twenties buying rentals, people in their thirties hitting coast FI, and people in their forties and beyond making many, many millions. But, what about a marine recruit, making a low salary, buying more than $800k in real estate within his second decade on earth? Now that sounds like an interesting story.

Jabbar Adesada fits the bill exactly! After moving in with his father, he was given strict instruction to read books like Rich Dad Poor Dad, I Will Teach You To Be Rich, and Automatic Millionaire. Jabbar decided to put down his NBA/med school dreams and open up a brokerage account. Lucky for him, right around the time he started investing was the 2020 stock market crash, giving him all the discount he needed to make his first profits.

After running some “when will I be a millionaire?” scenarios, Jabbar realized that real estate, and not the stock market, was the best path to financial independence. Jabbar shares the story of how he was able to find funding, a down payment, and a property that would allow him to house hack, Craige Curelop style. Not only that, Jabbar just closed on a short-term rental in the Smoky Mountains, which puts his real estate portfolio north of $800k! Let’s mention this again: He’s twenty years old! 

In This Episode We Cover

Why early financial education can make or break your child’s path to success

The best finance books that you (or your child, cousin, niece, or nephew) should read 

Why crashes aren’t a sign to panic, but a sign to buy more

House hacking at a young age, and how to get pre-approved for loans without an extensive job history 

Having an “obsessive mindset to be wealthy” and using it to help not only yourself but others

Practicing delayed gratification and building a brighter future with each investment

And So Much More!

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There are many ways to fund your nest egg. You could outright save, or you could invest in index funds, rental properties, or short-term rentals like today’s guest, Charlotte from Charlotte. Working as a teacher in one of the lowest-paid states in the US, Charlotte was able to fully replace her teacher’s salary by operating a single short-term rental cabin in Western North Carolina.

When she discovered the FIRE Movement only a year ago, she knew that intelligent investments like this could fund the globetrotting adventures she and her husband had plans for. But, with her husband four years away from securing his government pension, Charlotte wants to be absolutely sure that her short-term rentals will be pulling the fiscal weight of word travel when he steps away from his job.

Charlotte may be a rookie in the terms of real estate investing, but she’s far from it when it comes to taking actionable steps to ensure phenomenal returns. She’ll be hitting a 100% cash-on-cash return with her newest rental addition! If you have dreams of early retirement through real estate, follow Charlotte’s lead by planning, executing, and financing to FI!

In This Episode We Cover

The phenomenal returns of short-term rentals and why now may be the best time to invest

How to plan for retirement with a pension or predictable income stream 

Investing in index funds vs. real estate when trying to hit FI

Vacation home, second home, and portfolio loans for your next short-term rental

Why the high price of STR property management may be worth the peace of mind

And So Much More!

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If you’ve been in the FI community for years, you know the ins and outs of retirement planning, index fund investing, house hacking, and every other money-making opportunity around. But, it’s safe to say that this took you years to figure out, sometimes well into adulthood. What if you were given the same knowledge you have now, but when you were a teenager?

Dan Sheeks is trying to do this exactly, by teaching his students about personal finance, saving, investing, and how they can plan for FI. Dan has taken his knowledge of finance, teaching, and working with teens to write First to a Million, a Teenager’s Guide to Achieving Financial Independence. In this book, Dan takes teens on a journey through the four mechanisms of financial independence and teaches them to plan money around what makes them happy.

So many teenagers have seen their parents run off to work only to come home exhausted, constantly checking emails, and rarely present with the family. Dan wants to make this all-too-real future a thing of the past for teens who are willing to work hard, be frugal, and practice financial discipline. 

In This Episode We Cover

Why The American Dream may be off-course for modern teens 

The financial independence “plan of attack” for teens who want to hit FI fast

Why happiness should be at the forefront of your financial decisions 

Whether or not college is still a viable choice for today’s modern working world 

The importance of having a strong community you can count on

And So Much More!

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We’re back with another Finance Friday Follow-Up! This week, we talk to two past guests and review three life updates. Fabio from episode 174, Clayton from episode 168, and Rachael from episode 190 all have life updates for the audience!

When we last talked to Fabio, he was starting to expand his real estate empire. Since the market has been so hot, he has had to pivot his strategy towards what works best for him in the long term. With a few years of military service left, Fabio wants to wind down his more active income and pursue more passive income streams, while still including real estate and stocks/index funds in the mix!

Clayton shared with us on his solo episode how lucrative living on the road can be. Since then, his girlfriend has turned into his fiancé, he’s been offered a very large pay raise, and he has scaled his real estate portfolio with one more house hack. He also gets to take his foot off the literal gas pedal since he’ll be transitioning into a more stay-at-home role.

Rachael wasn’t able to be here for a video interview but sent Mindy an update on her overall financial situation. Since we last talked, Rachael realized that house hacking wouldn’t be exactly the right fit for her family. Thankfully, she’ll be closing on a new home closer to her children. Rachael also found herself in a particularly scary financial and medical situation since we last talked, something that you’ll hear about in-depth on a new episode in the coming months!

In This Episode We Cover

When is the right time to sell a property, especially in a hot seller’s market?

Paying off high-interest debt so you can reach financial independence faster

The importance of budgeting and expense tracking so you don’t impulse buy

ESPPs (employee stock purchase plans), HSA (health savings accounts), and other lucrative investing options 

Sharing the financial knowledge with your significant other in case of an emergency

And So Much More!

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On the last day of a semester in college, Adam Zaleski’s geology professor dropped a bomb on his class: the professor was worth a staggering $10,000,000! The reason for telling the students about his net worth wasn’t to impress but to make the case that exponential growth is more likely than most people think. This taught Adam that he needed to choose a profession he enjoyed so he could continue to work, invest, and grow his wealth exponentially, just like his professor. 

Adam did just that, and now, he’s a millionaire professor, working a casual thirty hours per week, doing what he loves! Adam knew from the beginning it was more important to make long-lasting, intelligent financial decisions, instead of chasing after a bigger salary. He did this right out of college, taking a serious pay cut to live in a state with far cheaper housing, allowing him to house hack, build wealth, and reach financial freedom.

Now, Adam is looking to expand his real estate empire a little further, without having to sacrifice a large amount of time to do so. If you’re interested in partnering up with Adam or looking to chat about long-distance real estate investing, market analysis, or the best surf spots in Kauai, shoot Adam a message on BiggerPockets!

In This Episode We Cover

Why lifestyle choices are important when choosing your job, house, and investments 

Understanding the value that comes with exponential wealth growth 

House hacking and analyzing real estate markets with the most growth opportunity 

Buying rentals in places you love, so you can write off the trip!

Scheduling your rent raises so you keep up with market cash flow 

The most important financial lessons of your 20s, 30s, and 40s

And So Much More!

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It takes a leap of faith to leave a W2 job and wander through the hills and valleys of self-employment. With the right skill set, time management, and perseverance, you can come out more profitable (and happier) than you were originally at your old job. But, once you succeed, it may be hard to slow down the self-employment train, and your side-gig could become a full-on business, with the need for employees.

TJ has put herself in a phenomenal position, both financially and income-wise. She left her job to become a full-time consultant but knows she won’t be able to expand without hiring her first employee. Her business would need an employee to bring in more revenue, BUT she needs more revenue to bring on an employee. What would you do in this situation?

Scott and Mindy have both spent time outsourcing and hiring before. They help TJ develop a roadmap to getting her first hire on board while keeping crucial revenue in the business. This episode also dives into self-employed health insurance, project management, and hiring a junior position that can grow into a senior in little time. 

In This Episode We Cover

Why it’s imperative to keep your costs low while trying to run a business 

What to do once you’ve hit your max capacity for work at your business 

Whether or not now is the time for you to hire your first employee

Fully mapping out the cost of a full-time vs. part-time worker on your team

Putting together a business plan that allows you to forecast your business’s future 

Health insurance while self-employed and why an HSA plan may be your best bet

And So Much More!

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Is college worth it? For the first time in history, we may have a definitive answer to whether or not your specific degree and school choice provides a positive ROI. We know that ROI isn’t the only thing that matters when choosing a degree, but when looking at higher education through a financial independence lens, it’s definitely the highest value.

Looking through census, employment, and Department of Education data is number crunching crusader, Preston Cooper. Preston and his team over at The Foundation for Research on Equal Opportunity put together the most extensive research on college degree ROI ever created. Preston’s findings allow you to parse through over 30,000 degrees and school choices so you (or your child) can make the best decision on where to get a bachelor's degree.

Preston discusses the discrepancies between nonprofit and for-profit university degrees, whether or not high-cost schools equal a higher payday through life, and why even going to Harvard doesn’t secure a high ROI. Want to know the true value of your degree? Tune in and check out Preston’s full study!

In This Episode We Cover

How much you could benefit, in general, from getting an undergraduate degree

The degrees that have the highest lifetime ROI

Degrees that offer little-to-no or negative financial benefit

Whether investing in real estate or a college degree is more worth it 

The biggest criticisms of Preston’s study and how he combats them 

Dave, Mindy, and Scott’s ROI on their respective degrees 

And So Much More!

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Everyone knows that tech salaries tend to be on the higher end. In tech, you could be working as an engineer, programmer, or statistician, like today’s guest Matthew. But, Matthew never planned to go to school for this type of work. Half a decade ago, Matthew was wearing a chef’s apron, working forty to sixty-hour weeks, making slightly above minimum wage. He loved the work (and the food) but realized he couldn’t keep living with the long hours, low wages, and high stress.

Mathew went back to school to study statistics and landed a job in tech, which he’s just recently moved on from, and accepted a far higher salary. This all sounds like good news, so what exactly is Matthew having trouble with?

After maxing out many of his retirement accounts, Matthew is wondering where else he should be putting his money. He’s already saving a significant amount every month, thanks to his frugal lifestyle, but wants to be sure he’s standing on a strong financial foundation. Should he look into rental properties, taxable brokerage accounts, or higher-risk assets like tech stocks and crypto? If you’re lucky enough to have a little extra change left over at the end of every month, you may be in Matthew’s position too!

In This Episode We Cover

Changing careers even after you’ve been working in the industry for years

What to do if you’re young and don’t know which field to study 

Keeping your expenses low, regardless of how well your job pays

Starting side businesses that can help you float expenses 

Investing in after-tax retirement accounts vs. investing in post-tax retirement accounts

Live in flip tips from the master herself (Mindy Jensen) 

Calculating out your estimated retirement nest egg using the ‘Rule of 72’

And So Much More!

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