BiggerPockets Money

You’ve heard the old statistic “nine out of ten businesses fail”, but why is that? If there are so many people willing to risk their livelihood to pursue a great idea, why do so many end up broke and back at a job? Gabe Nelson, certified financial planner and business advisor, has an idea.

Gabe advises many business owners and solopreneurs through building their businesses with maximum cash flow and minimum time commitment.

A couple of decades ago, Gabe was in the position many entrepreneurs are in today. He was working seven days a week, almost living at the office, doing anything he could to build his business. Once his daughter was born, he knew he had to take a step back from the seven-day workweek. Then, his second and third daughter were born, forcing him to automate, delegate, and eliminate every unnecessary task on his plate. 

Now, with a thriving firm, Gabe knows what does (and doesn’t) work for solopreneurs, and the systems they need to implement now to secure a happy life tomorrow. 

In This Episode We Cover

The #1 thing you should do before you start a business or side hustle 

Keeping your relationships healthy while working long hours at your business

Outsourcing when you’re ready and growing a self-operating team 

Laying the groundwork of communication between you and your partner 

Managing cash flow in your business and keeping a healthy safety reserve

Trusting the “whispers” that your gut tells you about your business

And So Much More!

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Your late 20s through early 30s can be a financially troubling part of life. You aren’t making the most money you ever will, but you’re tackling big expenses. A wedding, a down payment, and trying to max out retirement accounts can put you in a financial tizzy. But, it doesn’t have to be so complicated, especially if you stick to a scalable investment strategy.

Today’s guest Louise is in this position. She recently changed employers and found herself with a big uptick in monthly income. She has plans on the horizon to marry her girlfriend but knows this will come at the cost of many thousands of dollars (rings, dresses, etc.) She’s also looking at buying a primary residence, but is already familiar with the home buying experience (she has two rentals!) Louise has a plan to hit FI (or at least coast FI) by age 40 and wants to know the best way to optimize her finances to do so. 

Scott and Mindy have a healthy debate over 401ks, Roth IRAs, refinancing rental properties, and combining finances as partners, in order to get Louise in the best position possible to tackle her financial goals. 

In This Episode We Cover

Why switching jobs may be the ultimate hack to getting a better salary 

Whether you should max out your Roth, 401k, Roth 401k, or HSA

Getting a cash-out-refinance instead of stockpiling cash 

Whether or not paying off a rental property mortgage is a good idea

Renting vs. buying when living in an expensive market 

Combining finances as a couple and having the ever-important “money date”

And So Much More!

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There are few people on this earth that can make Mindy laugh as much as Alex Felice. He’s been around the block with BiggerPockets a few times, appearing on episode 301 of the BiggerPockets Real Estate Podcast. Alex has a growing rental property portfolio, a flipping business, and is a professional photographer/videographer. But, beneath his success, was thirty-one years of financial struggle.

Alex was taught financial skills growing up. The only problem: he didn’t listen to any of the advice he was given. He joined the Army without any skills, and as soon as he got out, he immediately bought a new car with a high monthly payment. He then was hit with a DUI, forcing him to really think what his life would turn out like unless he made a change.

He needed cash flow but didn’t want to go out and get another job, so he settled on investing in real estate. It was important for Alex to have a “get rich slowly” type asset, one with stability that could take care of him well into retirement. Now, he’s amassed an impressive portfolio, with some large commercial deals and flips on the side. Alex spends his days investing, working on his skills, traveling, and really doing whatever he wants!

In This Episode We Cover

Why self-sustainability is more important than a big paycheck 

Using “radical responsibility” to mold your perfect life and never falling into the “it will be okay” trap

Buying foreclosures and BRRRRing properties to minimize cash needed for investing

Having control over your money so you have ultimate financial freedom

Why you MUST surround yourself with like-minded, successful individuals 

Focusing on your passions (regardless of whether they pay well or not)

And So Much More!

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“Should I cash out my 401k?” That’s a question you never want to ask in an online financial independence forum. It’s been a well-known rule to never cash out retirement accounts due to withdrawal penalties, tax implications, and the possibility of throwing away your retirement plans. But, what if you had a substantially larger amount in real estate and other assets, what would you think then?

Kate is in this exact predicament and has done a phenomenal job at growing her wealth over the past decade. Kate and her husband have acquired $1.8 million in rental properties, bringing in gross rents of over $10,000 per month! She’s currently sitting on half a million dollars in rental property debt and is wondering whether cashing out her 401k to pay off the debt would make sense.

Because Kate is in such a high cash flow position, she may be asking a question that’s not so obvious. Mindy and Scott spend time walking through calculations that allow Kate to visualize what her life would look like with paid-off rentals as opposed to a fully-funded 401k account. 

In This Episode We Cover

Why a mentor can help spur you onto to make better, more aggressive investing decisions 

Moving to a different part of the country to take advantage of higher salaries

How to calculate whether or not you should withdraw your 401k funds 

Switching your job to a more flexible schedule without giving up your salary

Travel hacking and using credit card points to pay for your vacations

The benefit of using financing to buy your primary residence or rental properties

And So Much More!

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Brad Finn was raised with a strong work ethic that follows him to this day. He always knew he should be working hard, and that’s exactly what he did. Brad worked throughout high school, college, and started multiple businesses in adulthood. While his work ethic was strong, his financial skills were lacking. When Brad went to college, he remembers using almost a third of his student loans on partying alone.

Fast forward to his mid-thirties, Brad is waking up in a beautiful house, with two nice cars in the driveway, a great income, a new business, and a negative net worth. It wasn’t until Brad allowed himself to look at the true number behind his net worth that he realized something needed to change. Fortunately, his wife had been slowly, but surely, trying to tell Brad that they had to make that change.

The day Brad’s first child was born, he and his wife were debt-free. This didn’t come easy, especially since they were facing close to $190,000 in debt. They tracked their spending and realized they spent close to $20,000 in two months, solely on eating out. They dialed it in, worked side jobs to boost their savings rates, and rewarded themselves when they hit milestones. Now their net worth is growing fast, and they’re locked in on investing.

In This Episode We Cover

Calculating how much you need in student loans and taking out that exact amount

How to continue your debt payoff journey without getting discouraged

Rewarding yourself for big milestones, even if it will set you back a small amount

Talking to your partner about money and asking their opinion on strategies 

Raising your budget on things that matter while lowering it on things that don’t

Retirement plans for government workers, like 403b and 457 plans 

Understanding that the long journey to financial freedom is worth it

And So Much More!

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Retirement planning can be complicated when you have so many options to choose from. Do you stick with the Roth IRA, the 401k, the Roth 401k, your employee pension plan, or solely invest in stocks and real estate? With all these different types of accounts and their numerous benefits and drawbacks, it’s easy to get stuck financially stalling. 

One person who has been able to optimize his retirement plans, is Matt, pilot and soon-to-be captain, delivering cargo around the United States. Matt bought a home in high-appreciation St. Petersburg Florida, where his home has already gained a fair amount of equity. Although he loves the ability to rent out his home and create cash flow, Matt doesn’t like staying on dry land for too long. He’s going to captain his own home; living in a houseboat and renting out his primary residence to lower his living costs even more.

Matt talks through questions he has about his 401k, Roth 401k, Roth IRA, and other retirement accounts. Even though Matt feels he could be optimizing his finances for faster retirement, both Mindy and Scott agree: if he keeps doing what he’s doing, he’ll reach his fifty-year-old retirement goal, without any change to his current lifestyle.

In This Episode We Cover

Deciding between the 401k, Roth IRA, Roth 401k, and other retirement accounts 

House hacking and taking advantage of low-interest, owner-occupied loans 

Whether or not an employee pension should be thought of as a guaranteed retirement 

Living on a boat to save money on housing costs and maximize cash flow

How to plan for retirement when you have an age limit for your job

Employee stock purchase plans (ESPPs) and when to invest in one

And So Much More!

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If you’re part of the FI community, you’re probably a saver. Heck, if you’re listening to this podcast you’re probably a saver. While we all are busy optimizing our budget, reinvesting dividends, and contributing to our retirement accounts, do we ever take a step back and ask, “why are we saving so much?” Maybe you have a simplistic answer for this: your kids, your spouse, your “future”. When it comes time to finally reap the rewards of all that saving and investing, we struggle, and often fail to do so.

Ramit Sethi, the author of I Will Teach You To Be Rich, has struggled with this in his personal life as well. When he got married, he and his wife spoke about what money meant to them, and they were shocked to have completely different answers. While Ramit loves setting up models and spreadsheets, he also encourages couples to speak about their finances through a shared vision. It isn’t “I’m saving this money so we can be happy”, it’s “WE are saving this money so we can take that camping trip we always dreamed of.”

We touch on other topics like joint bank accounts, creating a “worry-free number”, and building a rich life together, as partners. Ramit also gives personal advice to Mindy to help her realize that she has already won the “money game”, even if it doesn’t feel like it at times. 

In This Episode We Cover

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A few weeks ago, Mindy was asked by a listener of BiggerPockets Money, “when are you going to do a Finance Friday follow-up?” Well, listener, your wish has come true! Today we talk to three past guests of the BiggerPockets Money Show, Sarah from episodes 6 and 178, Brian from episode 180, and Erik from episode 170.

In Sarah’s most recent episode, she spoke about having large safety reserves and sinking funds for her new property. Since being on the show, she’s taken time to evaluate how safe she really needs to feel. She’s taken a risk and has started to invest in her first short-term rental, as well as being on the house hunt for her next house-hack property!

Brian had the question we all want to have, “what do I do with all this money?” Since coming on the show, he’s expanded his rental property portfolio, purchasing an off-market five-unit in upstate New York, and a short-term rental in North Carolina. He’s currently looking into syndications to see if that would be another great avenue for his wealth accumulation. 

Lastly, Erik has returned to the show with more rental units and more cash flow! He’s been able to pay off his HELOC with a very lucrative refinance, allowing him to buy a new condo that is paying him $400/month after all expenses! He was even able to increase his salary thanks to his employer’s free education program! Make sure you stick around for his bonus tip towards the end of the episode! 

In This Episode We Cover

Why being too conservative with your savings can become a financial detriment 

Making offers on properties that work for your numbers, even if it means rejection

Why short-term rentals are very cash flow heavy investment 

Telling everyone you know that you’re investing in real estate (to get more deals!)

Using a cash-out refinance to pay off old loans like equity lines and HELOCs

Taking advantage of employee benefits like free college tuition 

And So Much More!

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Amber Porter has one of the most optimized retirement plans we’ve ever seen. Seriously, she could give Mindy and Scott a run for their money! Amber grew up in a neighborhood that was anything but rich. Surprisingly, the wealthier people in her neighborhood were more interested in purchasing nice cars instead of investing, which they told her was essentially gambling. Amber quickly saw past this idea and realized that smart, consistent investing could lead her to many millions of dollars.

She worked throughout high school and was able to graduate in only three years. Then, she applied for every scholarship possible and did the same in college, graduating in three years and completely debt-free. Suddenly, the idea of law school came into her head. She studied, passed the entrance exam, and got into a top school. The same school even gave her a twenty-five thousand dollar scholarship every year she attended.

After graduating, she started investing heavily, working as much as she could to fund retirement accounts. She started working for the Army on the side, which allowed her to get an even better retirement plan, an army retirement check, and the ability to buy homes with a zero percent down VA loan. If all goes to plan, Amber will be retiring with close to ten million dollars at age fifty! 

In This Episode We Cover

How to graduate from college debt-free by taking advantage of scholarships 

Graduating early so you can save a year's worth of tuition 

Working a government job with the benefit of a pension upon retirement 

Military benefits for homeownership, retirement investing, and more

Getting rid of the “investing is gambling” fear many people have

Reaching Fat FIRE upon retirement so you can live exactly how you dreamed

And So Much More!

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Marching along Bourbon Street last week was a parade with some of the best real estate investors in the world, celebrating another successful BPCon, ready to take on the world. Throughout the past week, attendees of the conference heard from world-class business leaders, investors, and authors, learning about everything from running a business to short-term rental markets, to self-storage, and more.

On this live episode, your BiggerPockets Money host, Scott Trench, is joined by Brandon Turner and David Greene, hosts of the BiggerPockets Podcast, Ashley Kehr and Tony Robinson, hosts of the Real Estate Rookie Podcast, and Liz Faircloth and Andresa Guidelli, hosts of The Real Estate InvestHER Podcast, plus special guest Esther, who has a widely impressive portfolio herself.

You’ll hear the hosts talk about topics like how to connect with fellow investors, future trends influencing the real estate market, what’s working today (and what isn’t), plus a live version of the Famous Four and Fire Round. 

If you weren’t able to make it to this year's BPCon, plug into this episode and get on the waiting list for next year!

In This Episode We Cover

What’s ‘firing up’ the hosts of the BiggerPockets Podcast Network?

What investors can do in today’s market to ensure wealth tomorrow

Future trends that allow investors to profitably pivot 

How BPCon helps connect investors, reshape ideas, and build wealth

How do you vet partners before you go in on a deal with them?

The top characteristics that contribute to your success as an investor 

Why you should definitely be at BPCon 2022 

And So Much More!

Links from the Show:

NPR (National Public Radio)

Kevin Leahy's BiggerPockets Profile

Mark Ferguson's InvestFourMore

Wendy Papasan's LinkedIn Profile

Noah Evans's LinkedIn Profile

Rickey Rodriguez's BiggerPockets Profile

Your First Real Estate Investment Podcast: How to Recover from the Great Recession and Leverage Creative Financing to Fund Your First Deal

Joe Asamoah's BiggerPockets Author Profile

AJ Osborne's Personal Website

Steve Rozenberg's BiggerPockets Profile

InvestHer's Partnership Question Guide

Meetup

Hal Elrod's Personal Website

Dave Ramsey's Personal Website

Cashflow The Board Game

Matt Faircloth's BiggerPockets Author Profile

BiggerPockets Calculators

The Real Estate InvestHER Community

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