From Broke in Their 30s to Millionaires in Their 50s

[00:02] think you had over a hundred thousand in student loans. I had over a hundred thousand in student loans. I had a car loan, credit cards. We probably had of negative net worth. >> From negative 250 in your early 30s to

[00:17] now 4.2 million dollars at 54. That's insane. I think there's a lot of people until their 30s. They're not taking getting out of the starting gates. And here you guys are a success story of

[00:29] here you guys are a success story of folks who were actually able to do it. chatting today? >> I think we want to retire within, you

[00:43] know, before we're 90. Okay. Maybe within the next 5, 6, 10 years, something like that. And so, just how can we get there? What position are we in that to get there as quickly as possible within 5 years? I mean, we've

[00:57] been toying with real estate probably since we first got married, you know, 21 lucky. Um, you know, you start out and you don't know what you're doing and property and you buy a second property and learn a little, you know, a couple

[01:09] of things and watch some YouTube people or some podcasts. And you learn some stuff and I'm very thankful that we've learned a lot of stuff from just watching TV and, you know, doing some research on our own.

[01:22] So, we've learned a lot and we've gotten really, not just lucky, but I think we purposely put some things into place that made us be smarter investors. And we got lucky. Well, we've been lucky. It's just there's no two ways about it.

[01:35] estate in Detroit and you got lucky at the time you bought? Like what do you the right properties? We found the right property. So, we, um, when we, we lived and uh, the the townhouse that we lived in,

[01:49] our neighbors, they're they're some college kids and their son, their father bought them the townhouse. And then they graduate and of course he keeps it and smart. >> to think about that. We should do

[02:02] Georgia soon after that. >> Which part of Georgia? Um, Atlanta. Okay. Northeast Atlanta. And

[02:23] was going to a lot of conferences in Savannah a lot. So, we go to Savannah. We're like, oh, this is lovely. We should try to buy something. going to try to buy something. Had no idea that it was a popular tourist place

[02:37] good stuff. We find a property, we buy it. Um, the owners at the time, they certificate. Am I am I correct about that? into the deal like if you will get the certificate, you know, so we kind of

[02:52] worked that into the deal. Long story short, that was that was luck cuz we had no idea that it was the market that it was. And it's been a really, really good introduction to So, Savannah was your first first property you bought?

[03:06] got the short-term rental? Yeah. We had done a couple of like live-in, fix-up and then sell and make money. So, we we had done that the first, you know, on the first couple of homes. Um, and then I would say Savannah was probably the

[03:20] first real like legitimate investment. >> y'all to get the the short-term certificate? Was that your I got a really good real estate agent or did >> We knew. Yeah, it's kind of what we knew at the time, but our real estate agent

[03:32] was like, well, you know, cuz cuz it's in the historic district. It's very probably want to We're like, you're right. in the right direction with where to buy and that was fantastic.

[03:45] >> easier to get the existing person who's got the legacy connections versus you And we slid in right as they started to put short-term rental restrictions in place and it would have made it much more difficult or maybe impossible

[04:00] because they were limited to a certain number per, you know, block or whatever. professionally? Are you in real estate professionally? What are your vocations? pathologist. And that's what you want to retire from. Yeah, you know what? Now,

[04:14] this is weird. I'm one of the few people I really like my job. I work virtually. So, if I can do this until I'm a hundred years old, I promise to goodness I'd do >> Okay. Now, I want to probably go down part-time when we cuz we want to travel

[04:29] part-time when we cuz we want to travel and I'm itching to get to Vietnam and Paris. So, you know, we want to travel, but I'm 100% fine with working till I retirement for you looks like a pseudo retirement, backing down hours or

[04:41] have confirmation that you're working because you want to work. because you want to work. >> That's it. a real estate firm, but for them I oversee their senior living portfolio.

[04:57] Um, so, we do anything from, you know, acquisitions, developments, um, and then release, lease up and then ongoing operations. And so, I oversee everything And so, that's what I've done for the last 20 plus years.

[05:13] timeline to retirement, are you also going to back down or you like, no, no, I want to stop working and not do that anymore? Yeah, no, I don't think I'm just going to switch, um, completely. Yeah. Un- unlike, you know, I I think I

[05:26] Everyone says that it'll be impossible for me to do. I'm like, let me give it a So, >> nothing doesn't work out, what would you do? >> I love real estate and I

[05:39] >> we want to keep a small portfolio. So, right now we've got a portfolio of real estate and I think we want to pare that down and just keep a few select, um, properties. That'll be easy to manage, close in proximity to one another, um,

[05:55] provide some cash flow in retirement, etc. So, that's and I just look to >> Awesome. Well, you guys were so kind. You shared a net worth statement with me and with us and it looks fantastic. Like as you guys sit here right now, total

[06:07] dollars. >> Whose sheet is that? >> Right. Which is wild. Y'all saw cuz y'all in the notes I had read zero. I mean, y'all might have even had some debt that was

[06:19] below zero, right? Where was the starting point? Oh. Oh, the starting point was quite negative. Quite negative. Oh, definitely. When we met, our first date, I was I that was my birthday. I was 31. I remember that.

[06:34] That's a good marker. 31 years old, we started dating and I think you had over a hundred thousand in student loans. I had over a hundred thousand in student loans. And this is in your early 30s, not like early 20s.

[06:52] probably had about two hundred fifty thousand dollars of negative net worth old are you guys now? 54. 54. So, obviously not I wasn't going to ask you. Of course I wasn't going TO ASK YOU.

[07:15] From negative 250 in your early 30s to now 4.2 million dollars at 54. That's there's a lot of people out there that are going to hear that cuz a lot of home until their 30s. They're not taking finances seriously. They're not even

[07:30] here you guys are a success story of folks who were actually able to do it. >> We spent our entire 30s getting out of that 250,000 dollars worth of debt and then 40s building, you know, what we've what we've built thus far. So, yeah.

[07:46] But I have to give him all the credit because he, I'm a planner. Um, you know, I'm doing in life. Financial stuff, I you know, I'll do it because I have to. He thinks IT'S FUN.

[08:03] interest in that, but thankfully he finds it fun and was able to kind of put a plan for us together to kind of get out of debt cuz I I don't think I would >> Well, as you sit here right now, you guys have cash and equivalents of about

[08:16] 338,000. Your liquid investments are just a touch under a million bucks at about 970,000. But then you do have a big chunk of real residence and then the real estate that you've invested in, almost five and a

[08:30] it certainly seems like real estate has been the main avenue through which you Definitely. >> Yeah, I think that that's accurate. I think our our growing incomes helped us to eliminate the debt, get out of debt

[08:44] and then save up for down payments, which started our real estate journey. So, you know, our W-2 incomes helped us to kind of get started in that. And when estate, I just think it'd be helpful for the audience to hear, were you guys

[08:58] putting 20% down, 25? Like how do you guys approach cuz you have a again, you portfolio. different places, too. Uh, and then your mortgages, your total debt is about two

[09:11] and a half million dollars. So, a lot of equity in the real estate. So, how'd you guys go about like what was your strategy for acquiring real estate? And you guys thought through that. Our initial primary residence was 5% down

[09:24] and I think our very first home was even FHA financed. So, started just with what we could do. And then that property we fixed up and when we moved, we sold it and made some money. Then we put 20% down on the second home. That was in

[09:38] Atlanta. And ever since then I've done that just because I don't want to pay PMI and, you know, I like to have an equity position and especially in the rental space. So, you know, I I think I've been pretty conservative in making

[09:52] where we don't get into a tight situation where we've got to feed these things every month. So, that was kind of the strategy. So, put enough down and I did some fix and flips along the way as well and use some of that money to buy

[10:05] other properties and did a couple of cash out refi's to buy buy more >> some had some equity in the homes but you would go take cash out and then use >> a couple of times um just to be able to acquire more um properties but still

[10:20] there and make sure it cash flows after that cash out refi. One of the things we noticed on the net worth statement that you have this thing called self-directed addition to your IRA's you have these self-directed IRA's which is a little

[10:34] on the net worth statement? >> We had some you know rollover 401k's we >> We had some you know rollover 401k's we moved into IRA's and then we'd I decided to self-direct those because real estate is what I really know. And you know at

[10:48] financial advisors or anything. So, it was just me and my comfortability is with real estate, right? So, I'm not picking stocks and bonds and mutual um what I know is real estate and so I I

[11:01] moved that money over into self-directed IRA's um you know checkbook control IRA and I invested in real estate with that money. And so that's where some of that through an IRA is different than investing on it investing in it with

[11:15] just after-tax dollars. How did you guys educate yourselves cuz there's some like you have to know so that you don't run a foul. I told you guys this Jason and I we don't come from wealthy

[11:28] Jason and I we don't come from wealthy families. We didn't have a whole lot of our parents are great don't get me wrong but you know that just wasn't our story. but you know that just wasn't our story. And so, when I say we watched tele-

[11:42] television and looked at you know podcast listen to YouTube that really really served us well. So, for your audience members that are like I you know I'm not rich look at me neither am I.

[11:55] But it can be done and it really can be. Yeah. And then we went to a couple of conferences based on you know podcasts that I'd found and online search just in you know research I I love to learn and learn and learn you know all I can about

[12:08] this and so we went to a couple of conferences as well and spoke to some people that had done it gave us a little bit of comfort level enough knowledge I felt like we could kind of venture into and we started with one. Mhm. You know,

[12:20] we just started with one property. It was a short-term vacation rental in Gatlinburg, Tennessee. Um so we bought that was our first purchase with through that. How did you think about that? Like when you did the

[12:33] thought process when you bought that first one? I think that'd be helpful for a lot of folks who It would be. Yeah, first was location. I think both of us so my my family is from Alabama and Virginia and when we were my dad was in

[12:46] Virginia to visit my grandparents we would always stop in Gatlinburg. So, you know it was near and dear to our hearts. His parents left they eloped

[12:58] essentially and left Michigan got married in was it Gatlin- in North Gatlinburg and came back. So, it was kind of near and dear to his heart. >> and then we would we would go down as kids. So, my parents and my brother and

[13:11] I we would drive down from Michigan and visit Gatlinburg. It's and we didn't know that we had that in common when we were dating until we were well >> Right. And we were living in Atlanta and we decided to go up to the mountains.

[13:25] >> You know, and come to find out she's gone there several times as a as a child and I had gone there several times as a child. So, we were curious on how it had changed and what it was like and so we went up there to vacation.

[13:38] >> Right. And so we we find this property. I think you'd watched a YouTube video something about the directed IRA and we were like well maybe we should try this with this property. So, we we buy the property. It it did fairly well in terms

[13:53] revenue. How much was the how much was the property? Like what was the cost of >> Oh, this is a sore subject. >> this is the This is yeah this is this is I don't want to think about what don't ask what it was worth today.

[14:06] >> sold it. Okay. And we didn't make a lot on it and I'm I'm you know the the the the missed opportunities hurt more so than the the wins are exciting but the missed opportunities will stay with you you know. So, when you Okay, so you have

[14:20] this this this property 187,000. Mhm. You had this these IRA rollovers 401k's. So, what did you do? You opened up a a separate self-directed IRA. How a down payment. You went and got financing. How How did that whole

[14:35] financing. How How did that whole process work? 50% so on the 187 plus closing costs we needed to we could get a non-recourse loan for 50% of the value and so we moved money from a rollover 401k into the IRA open up a

[14:48] 401k into the IRA open up a self-directed IRA had enough to do that um in in that account at the time. And so it was approximately 50% plus closing costs that we had to put forth and then 50% non-recourse debt. You end up

[15:02] coming in from it pay down the mortgage and then you sell the property. Yes. Okay. When did you sell the property? Two years later? Yeah. Yes, about two years later. And and we bought another place which was great and we What we

[15:16] learned was that in at least in the Gatlinburg market at that time if you make better money. We sold that property bought something um had a little bit higher elevation station which is you know nice for for

[15:31] Um and it was a little bit bigger. Um not not like a 12 person place up probably slept six or Six yeah exactly. six or eight. Um so we so we gradually were able to you know learn from our mistakes and be able to apply what we

[15:45] learned to the next property that we bought in in Gatlinburg. Yeah. I think we made just a little bit of money on that first one. It went up in value right? They had these wildfires unfortunately in Gatlinburg it's really

[15:58] sad. After that of course there were you know about 500 less cabins or something and in which so prices went up and we thought oh well let's let's exercise money because you know home values were going up in that market because of low

[16:14] We should have just held on obviously hindsight but we sold it and then we took that money and we went and bought a nicer place a little bit bigger place nicer view yeah. No, I I think that was the right move. You feel differently. I

[16:27] >> We're we're sitting on a pretty large net worth. We're all we're all going to have woulda shoulda coulda's. And there's there's those things just haunt all of us. I mean but I think you focus on what you have had success with.

[16:39] focus on what you have had success with. I was curious cuz seeing a $5 million know there's a little over 2 million of still mortgages. How much is self-directed IRA's versus how much do you guys just own? Do we I think we have

[16:52] a list of the real estate. Any of these I mean which of these are self-directed or are these all outside of that? Um short-term number three is >> Okay. And that's it. Oh, all of that? At this point that's it. Okay, got it.

[17:07] Awesome. Now that I know this We had we had a couple but Cuz well self-directed IRA real estate investing is kind of like pigs get fat hogs get slaughtered in the fact that you can use it but it is it is not for the faint of

[17:20] heart. It is not. It is not right. >> And you you I was really impressed. You can tell you you you did your research. Cuz you were payment you had to do cuz you non-recourse financing. There's also you

[17:33] know you're you're not even allowed like if the plumbing goes bad you can't show up and fix it because that's considered like a a contribution that you're not allowed to make. So, you have to run everything through and then you also

[17:46] know the thing with IRA's is the government gives you this money and this deferred growth and so forth. But in the 70 and once you get in your 70's they're the money. It's hard to do that with real estate cuz it's not liquid but but

[18:01] you're kind of in business with your bank because whoever your custodian is has to be good at this and make it accessible and keep everything compliant or it could go sideways really quick. Oh, there's a lot of details to it. It's

[18:16] heard this when I saw the portfolio I was like oh my gosh I wonder how much of this $5 million is in these IRA's. So, you actually made me feel this just I feel like a weight just came off my shoulder from because I was trying to

[18:30] figure out how we were going to navigate this. December of of this last year. There is a lot to of heart. There's a lot of details to it

[18:45] and you can get tripped up very easily. Um and then the tax implications I'm always show up in the brochure. They don't tell you that stuff. It's in the fine print. Figure it yes definitely in the fine print and they're like oh okay

[18:58] For your audience let's say this. I sold I so we bought a property it was 280,000 and we sold that with a self-directed IRA we sold that in December for 549,000. So, that we did well on that. However,

[19:13] there's trust rate taxes on that 50% on that bill sitting out there about 40 grand. Yep. Now I set aside the money. I mean it's it's fine and we did still did well on the investment but that's one of

[19:29] up. I was going to ask having invested also invested outside where you can can take advantage of depreciation and you and those sorts of things. Which one do you like better? Have you

[19:42] decided like oh when it comes to real estate investing I would do it this way. >> Oh, no hands down. I mean just with outside of the IRA. self-directed investing. Well, I I think a lot of people

[19:55] >> option. Like we've learned a lot from it and so I would recommend from that point. Yeah. Definitely. Yeah. But you know, the problem with real we love real sometimes cuz people say they just don't like real estate. We love real estate,

[20:07] but we like real estate when you truly can do real estate. Is because and IRA feels like it's a bridge. Very much it's some ways is that sometimes debt is used as a bridge to do things

[20:22] self-directed IRA investing in a real estate got a big pot of money left over from a former employer. Let us help you get into this. You just don't know what you're getting into too early. I think

[20:36] >> But it's timing. In the way I think about it is timing. Like at our at that point of our lives, real estate was a smart move for us to do. Gatlinburg was different right now. >> Yeah. But Gatlinburg was booming at the

[20:50] time. We had the money. We went for it. But that's where luck does come into I made I think about my like I was one of those people back during the collapse of housing in Georgia. I was on an interest-only loan for my primary

[21:03] residence. I mean but it worked out great for me in the long term because I have I didn't treat it like an interest-only. I I've made if you read the the book, I talk about all the the negative equity.

[21:17] I prepaid Yeah. cuz the house got crushed. You know, and I didn't walk it was one of those things where I look back though and it was this was a tool that was probably too aggressive in the market, but it did I was able to use it

[21:31] and just like you or have been able to use this and now leverage it. >> Yeah. And you can educate people to to know don't don't get too greedy with some of these products. That's right. I think it was a little bit aggressive.

[21:44] Looking back on where we're at today, when we used the self-directed IRA funds to buy that second it was probably a little aggressive at that time for us You ever heard the saying the Lord takes care of fools and babies?

[22:02] about okay, in the next 5 years we want to look at some sort of transition. We want to transition to a part-time or less time traveling. Walk us through what things changed. Like when that happens cuz one of the

[22:14] rental properties, are they cash flowing, are they breaking even, are to I think the word you used was simplify a little bit. Walk us through years from now looks like. What's that look like sort of in the perfect

[22:29] >> For me it's simplification cuz I think you always say that the you know, it becomes complex, right? And it's it's complex right now. Okay. So and I feel that. I feel that weight.

[22:43] So as I feel as though when I transition to retirement, I I don't want to feel that. I I want things to be simple. Um I still love real estate and I still want to have the ability to do a deal here or there that pops up and keep that very

[22:57] small portfolio perhaps, but I need to simplify everything out. So a dollar size? Is that like a number of property size in your mind? I In my mind it's a number of properties. Like we already kind of have them earmarked sort

[23:10] of what we'd like to keep. So we own some townhouses in northeast Gainesville, Georgia. Yeah. Okay. So in Gainesville, Georgia. So right now we have four. We've got one under contract. So we'll have five there and I'd like to

[23:23] keep those. Um cuz they're all in one Now, think about diversification maybe not the greatest strategy, but I but simplification it's a good strategy and I feel like in that they're all within the same area and they they're easily

[23:36] managed and they're townhouses with low HOA that do allow rentals and we've had they do well. They cash flow really well. They're small. They're easy to maintain. Do you know off the top of your head which one which ones they are

[23:51] on the list? Long-term one, two, three, and four that have the 220 225,000 value. And those rates are not super crazy. Five looks like it's from 3.375

[24:03] up to 5.125. Not horrible rates. And you said all of those cash flow and you're acquiring one more. One more and I'm paying cash for that fifth one. >> When you look at all five of those, how

[24:17] much will they generate net cash flow to you guys? Right now I'd have to do the math with the debt. So my other thought is that we maybe pay them off and for retirement. So cuz then they'll cash flow about a thousand a month and I feel

[24:31] like 5,000 a month of free cash flow would be really nice in retirement. Right. Right because you know, I would like to retire before I'm eligible for social security. So I think that would that would be nice.

[24:43] a month if there were no debt on them. >> Correct. here. You've got long-term, you know, and for those who who aren't real estate investors, that means that you're typically signing year leases beyond 9

[24:57] months or so. Whereas short-term is like that's your VRBOs, your your Airbnbs. Yes. How have those been? Because those cuz I'm also when I see the interest rates Well, yeah, BECAUSE THEY THEY DO.

[25:15] use cost segregation. They do depreciation. They do all these things. There are a lot of cool things in the brochure for why this is awesome, but I now y'all have got a mix of both long-term, short-term is no different

[25:29] than like a rental car. People, you know, they're going to slam on the accelerator. They're going to you know, skid on the brakes.

[25:43] I tried to put nice mattress pads on the houses. I had nice pillows. That was so You know, cuz you're trying to create the best experience. The next time you happened to my mattress pads? What happened to the pillows?

[25:57] >> a we had a place in Memphis. Loved it. But I tell you people would pee in the bed. Just awful. YEAH, YOU HAVE TO replace mattresses every two we had a beach rental and we had to replace couches it

[26:10] seemed like every 2 years, mattresses every 2 years. You couldn't do nice stuff because people just >> had to learn.

[26:22] replacement of everything. So when you talk about simplification, I'm like, are y'all enjoying the short-terms? Well, we do use property management companies for the short-term. There's no way that we could do that with our W-2s, you know.

[26:36] also going back to the self-directed IRA, you have to have property management, right? Cuz to your point, you can't do it yourself. So what's your take on short-term rentals moving forward? This is this is my take.

[26:48] Um of course time is everything. You know, when we first got into the Gatlinburg market, it was great. Right now, you know, everything is just so overbuilt that you know, that they're not renting like they they used to.

[27:01] Um having a great management company is key. Particularly when you're long distance. And and you have to get used to you know, you can't have nice stuff in in these places. I'm the kind that like like I said my parents were in the

[27:15] military and they took pride in we had people come over that had their they made their favorite meal. They had you know, all that good stuff and that's how I handle our short-term rentals. You can't do that.

[27:27] I have a I have a great example cuz this is another lesson learned. I've got a mistakes. Do you remember when I did those soap So I bought these amber glass shampoo bottles and I I branded one of the

[27:43] sold. So it was called Hello Sunshine. So I got custom soaps and labels for the shampoo all this you know, like really I had a Hello Sunshine throw pillows.

[27:55] Yeah. That didn't last and all the stuff. You know what I did? I didn't save all of it. I knew IT WOULDN'T GO WORK. I KNEW IT I knew IT WOULDN'T GO WORK. I KNEW IT WOULDN'T GO WORK.

[28:11] for the next one. So okay, so when you think about simplifying, right? You want to get down to these five townhouses in Gainesville. Are there others you want really? Everything else you're looking to probably liquidate.

[28:23] >> Just that. I think we're Oh, yes. Yeah, sorry. There's one long-term rental in keep as well. Which one is that? >> It's a number eight. Number eight. >> Number eight. Yeah. That one cash flows

[28:36] It's got a big interest rate on it. It does, but I'll I'll I'll refi it. It's got a 5-year note on it anyway. As you as you started selling some of these other ones, you could probably you know, come up with some proceeds

[28:50] also to pay down that that debt. Absolutely. That or or just just flat it's a mixed-use building. So there's floor and then there's three long-term rental units. And it's a really great

[29:04] cool building and we like owning it. We love the tenants. >> worth 425,000? I know. Northern Michigan. Northern Michigan value. Don't tell everybody.

[29:21] there. What else? Like when we think about like have you guys figured out cuz you mentioned I want to travel. I want to I want to live and doing the things you want to do. How much does it cost to do

[29:33] are going to have when you're doing those things? Yeah, so in in my mind, I have what I call quarterly living. Okay. And I like to go somewhere I I I. I

[29:45] would like for my husband to go with me. I'm coming along. I You going to come, Every 3 months I want to go someplace different if we can. Okay. Like live someplace different or like visit? >> Live. I want to live in Vietnam for 3

[29:58] months. I want to live in Paris for 3 months. I want to live in Mexico for 3 >> No, I'm ready. Oh, that's awesome. That sounds great. I >> Yes. What that's going to cost? Well, hopefully that you'll tell us.

[30:12] UM YOU KNOW, THE WE THOUGHT I mind, yeah. I think we would like to have spend that. >> Let's firm this up a little bit. >> All right. So, if you're living somewhere 3 months, you're not going

[30:25] Are we saying out of 12 months 3 months away or 6 months away? How Give us Give something around this. >> In my mind, if if I want to go to at >> For at least 3 months.

[30:39] months a year Mhm. Yeah. >> living somewhere else. Mhm. Okay. And then 6 months a year here, of course. So. Now, I know Now, look, you you're giving out too broad. We're We're all

[30:51] over the place. We're all over the place. Because you can go to Asia and Vietnam, the cost of living in those areas is is very affordable. So, you might actually, as long as you cash flow, you might actually have a cash

[31:03] >> Right. Right. Right. We might stay there 6 months instead of 3. Right. But Paris completely different. So, we probably need to balance some type of assumptions >> That's the idea. That's But that's exactly what I was thinking is balancing

[31:17] going to go to Paris, then we need to go somewhere else that's, you know, a lot less expensive. So, we've got some Exactly. It's two different in the same year.

[31:30] >> Paris and then come home. I think the budget's going to kind of dictate, you and that sort of thing. So, is the question not, okay, do we have enough to live X lifestyle and it's more, okay, based

[31:45] that support? Which one of those questions are we trying to answer? Gosh, questions are we trying to answer? Gosh, I think the question is, as I visualize this, I I don't see us living in the most expensive place. I see us living in

[32:00] the cheapest place, but being able to have experiences in the places that we're in. Like the countryside outside of Paris is what you're saying. >> what I what I was trying to figure I

[32:13] figured out it's going to cost us $15,000 a month to live to be able to do life we want to live. But what I'm hearing you say now is, the actually the language is hey, the budget is going to dictate. So, is what

[32:26] based on what you've accumulated and based on where you'll be 5 years from now, we think that that amount of money, that portfolio can sustain $11,000 a >> Part B. And then you're going to figure out how to fit your retirement into

[32:39] >> That's exactly it. Well, that helps us with the planning assumptions cuz we want to be able to give you parameters and and essentially guardrails. And then >> and have fun with it. >> So, we want to simplify. We're going to

[32:51] figure out this sort of living thing. You said your work can be done quarterly living, you can do it anywhere, anyhow, right? so we have to make some sort of assumption around like

[33:05] income from working and real estate and that sort of thing. Or do we want to for all of your living expenses and we pretend like there's no other income coming in or can we use some number for working income and like what do we want

[33:19] will be coming in for you guys in that stage? >> Mhm. Well, you're looking at going part-time, right? So, it'd be your part-time wages, maybe the 5K cash flow from the townhouses and that would

[33:33] probably be it, you know, the bridge and well, and whatever So, whatever the investments earn, we could use some of that to supplement and then probably, you know, the thought was 62 she would do social security. I would

[33:48] postpone mine till later for spousal benefit purposes. So, yeah, so there might be a little bridge there between whatever it is, 59 and 1/2, let's say, and 62. And I think we want to be mindful of Irma, too. Yeah, how about

[34:01] thinking about for retirement on health insurance? >> To her. So, right now we're on my health plan from my W-2. So, we would switch over to hers. And getting some benefits out of you keeping this thing rolling.

[34:18] marriage?" I was like, "Here's a AAA membership, baby." 21 years. We're going to potentially sell some of the properties. We're going

[34:31] to take the proceeds, satisfy the debt, right? But there's likely, even once we big chunk of assets. So, we've got to figure out something to do with. And he I'm not I haven't done stocks and bonds

[34:44] you're going to just be sitting on a bunch of cash to look for additional going to take that money and we're going to deploy it to a diversified portfolio The latter. >> shaking his head, but I know him better

[34:59] than he knows himself. He's going to want to buy something. Okay, so there I need a little bit of play money, though. I need a little bit of play money, but yes, the remainder of it we want to invest. We just want to invest in in the

[35:12] market, whatever makes sense. Just so I'm more hands-off and kind of have the right now we set a little bit of cash aside where it says real estate fund and it's 160 right now.

[35:25] have right now? If y'all don't know off the top of your head. This We We sold a few recently. What's future primary? What's that? Oh, that is We >> Okay, got it. So, it looks like there's

[35:39] >> 12, yeah. I mean, we Yeah. And we we've sold four >> Okay. So, you've already begun this wind-down process. Yes. Not acquired any you want to have some play money, you're not trying to get back to 12 properties

[35:54] again. No. Okay. No, but I like to have So, you know, it's kind of the Warren Buffett thing, invest in what you know, right? And I know I feel like I've got a good grasp of real estate and in particular markets, right? And so, I I'd

[36:09] like a little bit, like that 160 that's for real estate fund, that's what we're going to buy that other that fifth townhouse with. I want to ask on the management company on that, though, are you? No.

[36:21] little bit cuz you guys are going to be living over in Vietnam or Paris, living your best life and then all of a sudden the toilet breaks. >> Yeah, they go they go start telling you, hey, we got water. We need somebody out.

[36:34] time zone difference is We just need to probably build some realistic I'm okay with you dabbling in the real estate. But let's let's be honest with ourselves is that if we want true passive living in retirement,

[36:48] you're not going to be wanting to be the Roto-Rooter and the the water heater and everything else. But I we do have my mom that lives in one of those townhouses

[37:01] and and she's fantastic. She's a real estate broker and she oversees those management company. It's just the mom management company is what he's got. management company is what he's got. He's got the mom management.

[37:16] consideration instead of paying a property management It's love. It's consideration. She's going to see this and she's going to be know way too much." But now I know way too much. Maybe we ought to have had a

[37:29] little feed of this. She's she's awesome. We've we've, you know, worked together for a number of years. And aside from her being my mom, you know, you know, we've done some fix and flips together, things like that.

[37:42] She's fantastic. So, she does oversee those uh for us right now. So, you know, know, I'm still the decision-maker and, you know, we collaborate with her on That long-term rental. So, it's usually a one-off thing like

[37:57] that point, she won't be able She won't be able to do that forever, so either. And I don't want to burden her with that, you know, for however many years. into the weeds on this. You are okay if some of this isn't like index funds and

[38:12] can >> Absolutely. simplify this thing as much >> I I want the bulk of it to be there. So, right now you have I'm doing some mental math here, about $3 million of equity in your in your real estate

[38:25] you know what it feels like to have $3 million invested in real estate. You've only got about a little under a million dollars invested in the liquid markets. >> Right. Have you thought through this is

[38:38] going to be sort of a a significant shift to where now the vast majority of markets. And you're going to see the values go up every up and down every single day. Any reservations, hesitations with that

[38:51] We're comfortable with that. >> I think um having the short-term rentals probably helped us with that a little bit like the toilet is out, okay. The Oh, you got a new AC. Like it it's

[39:04] type of up and down when you're investing differently. And I'd rather be a little bit nervous about the market than knowing that, okay, their shower isn't working. To me, that's worse. Like I want I would not and and I stand by

[39:17] this, I do not put people in places that I wouldn't live in. If someone's thinking about that. I love that. Yeah, we fix it. That makes you a great awesome. But it does work against you as a real estate cuz that's the problem I

[39:30] have with two far on real Bo knows. Well, also there's a reason when Bo and I bought real estate, he knows he has to kind of be the super on some of this stuff cuz I will I'm worried every pipe's freezing. I'm worried. I'm I'm a

[39:44] why we're a good balance with each other stuff. Sometimes he even says, "There's something that happened. Do you want to check?" I was like, "I'll just write the check. Don't tell me."

[39:57] We kind of play good cop, bad cop with the same guiding principle that if we wouldn't live in it, we wouldn't have someone else live in it. And so but she's really really great with tenant relations and I handle the money

[40:10] and the bills and the you know, this and that and the leases and stuff. So I'm good team. >> do we do well in that aspect. So to me it's just trading off a different risk like up and down up and down. So I'm I'm

[40:23] okay. Yeah, I I and I think we expect market fluctuations. You just can't look it daily, you know? Well, and what we always for retirees, I mean what we try to structure I know with our own clients, we we try to set up the the

[40:37] it like a direct deposit. So it's like you're getting a pension payment in retirement. We just have an automatic amount of money that shows up in overseas, the money just is automatically replenishing and then

[40:51] behind the scenes the rebalancing and the restructuring of the portfolio you're doing this right. >> That sounds great to me. >> All right. So our timeline, is it 5 years? Is is it 60 months? Cuz I want to

[41:05] kind of said >> Yeah, we said a few different things. >> We did. What's the actual timeline? Hey, I want to know that by this date we can move in this direction and begin living this life. So It's a great question and

[41:20] I like the peace of mind knowing that it could be tomorrow, but realistically we've got a lot of moves to make, you know, with the divestiture of these and all and that's going to take time cuz it's real estate, right? 3 years? I

[41:36] takes as long as it's going to take. I like the peace of mind knowing are we >> Yeah. If we're good right now, I like my job, you know, and I I love the people I work with and everything's going well. So I don't need to But what I do think

[41:49] Yeah, let's let's say 5 years. Just just to make So no, but I think we could say What could it look like 2 years in the future? What could it look like 5 years >> going to continue working, all three of those scenarios look different, right?

[42:03] three of those out. And I think it'll probably take us realistically, you know, knowing our properties and markets, it'll probably take us through next year to be able to divest. >> Consolidated. Correct. I think you're

[42:16] sold my tax practice, of the taxes and then Bo knows the rest of the story. I didn't miss doing taxes. Cuz you're still going to have a little your foot still in the the the shallow

[42:30] I don't think you I think you're going to enjoy going more traditional in the long term on this because then it it'll really free you up from some of the headaches that you probably just are ingrained in you right now. Oh, yeah.

[42:42] Oh, well, I think about my situation a couple years ago. I was stressed out. I mean we had a lot going on, you know, we were at construction projects going on and buying and selling and my job and her job and

[42:54] everything else. It was a lot and I think that's when I mentally started to about what's the what's the end goal here and maybe start working toward that started to become a little too much. I was juggling a lot of things.

[43:07] >> something to think about particularly with maybe some of your viewers may be younger and kind of, you know, building their career and it's great to be able, was there. But think about your stress level. You know, when I

[43:21] one thing that I feel like millennials and what's the next generation after Gen Z I really I'm proud of them for taking their mental health seriously cuz my generation will work until we can't

[43:35] >> Very deep down inside. That's it. You barely keep rolling. And so so thinking about him during that time and he was very stressed. It's it's important to keep that in mind as you're building your career.

[43:49] your mental health and your physical health. >> I talked to Bo about this all the time because I think achievers Mhm. we all just go go and trying to always check the box. And and there's nothing wrong

[44:01] where you are trying to conquer the world essentially, but y'all know cuz we're we're all kind of in the same Bo, I'm sorry, you can sit this one out. But I mean there is something about when you get older, you don't want to have to

[44:15] carry so much because it's the stress manifests itself in weird sleep issues. It shows up in what you can do in your 20s, 30s and even early 40s with no struggle all of a sudden will show up if you don't take care of yourself. And

[44:30] then and then you're going to find out as you get in your 50s and 60s, health make sure that you know, and if you don't think your mental, you know, happiness is is not impacting all the physical sides of it, it does. It's a

[44:44] weird dynamics coming to play. So I I had this conversation with somebody I was on the phone with yesterday who was talking about that cuz he's in that that conquer the world phase and I was like, "I promise you, take it from the older

[44:56] guy, you have to start building margin >> Yes. so that you have so that you can actually enjoy this because you know, maximizing and optimizing every transaction of your life works great in

[45:11] your 30s and 40s, but but it's okay when you're 40s and and late 40s and early 50s and even 60s, you don't have to maximize every dollar. Now it's okay to let some of your army of dollars just be there for you for

[45:25] simplicity, for happiness, so you live your best life. And and that's something we we balance and and talk to people about all the time. We got to clink about all the time. We got to clink glasses on that. That was great.

[45:38] young guys Bo Bo's still conquering the world. I to me and he's like, "Hey, what do you think about this?" I'm like, "Bo, come on, man. I need I still need processing time FOR THAT ANSWER."

[45:52] BO, CONQUER THE WORLD. BUT PULL IT BACK. YOU GOT KIDS, BO? I have three, yeah. think about think about that. you guys. You ready? Cuz I feel like we've got some good marching orders and

[46:04] Obviously you've already begun the process of selling the properties that I would then encourage you to continue doing that. think one of the things you're going to be able to do is consolidate the

[46:16] have a bunch of different accounts. You may not need all the self-directed IRA pieces. You might be able to consolidate those into IRAs and when you retire pretty simplified account structure. Cuz then you'll start doing stuff like maybe

[46:30] we should be looking at Roth conversions or those sorts of things. Um so that'll I do think it'd be helpful for you guys to really dial in your timeline. Like it all talk about what you really really want because from a logistical

[46:45] standpoint, retiring at 55 for you has different implications than retiring at 59 and a half or post 60 or post 62. Um and then the people who have said they want to do like really fun travel, like really

[46:58] but it's sort of like out there in the ether. I want to do this. I tell them, "Hey, go and figure out the first places you're going to go." Whatever whenever year, 2 years from now, 5 years, is Paris going to be the first one you

[47:11] try to tackle? Or are we going to go spend 3 months in Mexico? Or in you And the more clear you can have that defined, the easier the transition's say, "Oh, I want to travel I want to travel I want to travel." They put in

[47:24] they're like, "Oh, what do I what do I do now?" what you're retiring from, but know pretty clearly what you're retiring to, at least in that first 24 to 36 months, I think that's going to help.

[47:36] >> Candy's got that covered. Yeah, maybe I got you. She knows that Vietnam's on the list. That's early on. That's early on. is going to be fun. I'm excited to to put some put some numbers down and see

[47:49] what we come up with. Brian, what an awesome conversation we got to have with Jason and Candy. I absolutely love Jason and Candy because look, I think a lot of people are going to get lost in how big their numbers are, but let's let's level

[48:01] set and bring this back into context is that they didn't start when they were in their early 20s, even mid 20s or even right at 30. I mean this is a couple that started thinking about finances in their early 30s and they started at

[48:14] debt built in the background, but yet they still built their great big >> Yeah, and it's really interesting. They used real estate to do that. That was but now as they're sort of entering into this next phase as they're going into

[48:28] really want to simplify." They kind of acknowledged to us, you know, uh real estate is not a passive endeavor and it's not something that's super simple and they want to simplify their lives as they think about what this next season

[48:41] of people are going to watch their story and say, "Ooh, I I want what they have. >> And another thing that I like about Jason and Candy is that when we do a lot of making millionaires, we have to project out where where we think things

[48:55] them cuz look, I resemble them in a lot of ways cuz we're in that same age group. We're actually going to look at their actual assets. We're not having to saying, "Hey, how do we land the plane with the success that they've already

[49:08] >> So as a reminder, when we look at their real estate holdings, they had about $5 million in current real estate and about $2.3 million of debt. But they let us properties that we're not really planning on holding. We're actually be

[49:23] okay selling and unwinding these." So I said, "Okay, let's put together a plan to get these down to just the holdings that we want to continue to have and ones that we sell off, we're actually going to satisfy the debt. Now we want

[49:37] to be pretty conservative, so we just kind of took the values that they gave us, we added a 6% real estate commission, we assumed 1 and 1/2% for closing costs, and we came up with sort of a net number. So, selling down all of

[49:52] the properties they no longer want to keep was going to net them about 1.7 million dollars, which is awesome. So, they're going to sell, simplify, net down 1.7. And then we said, "Okay, for all of the remaining debt, for the

[50:04] properties that we do want to keep, let's take a chunk of that 1.7, and let's have you guys be completely debt free." So, wiping the slate clean on the liability side, and that still left it with about 1.1 million dollars to invest

[50:20] and grow for the future. Yeah, I mean, this is fascinating to me cuz not only they're also going to have a little mini pension plan if you think about it cuz that are completely paid for. They're going to probably yield somewhere around

[50:35] >> Yep, thousand each property. >> That's going to be a a quite nice >> And then on top of that, they had sort of this mixed-use building, which pay off the debt on that, but for our analysis, we said, "Hey, yeah, just if

[50:50] you pay that off, that's going to generate free and clear about $3,000 per month in free cash flow." So, you're talking about $8,000 a month coming from these real estate holdings that they plan on holding anyways. When we reframe

[51:03] back through this, you can see that they're going to have about $180,000 in cash, emergency fund liquid investments, a portfolio liquid portfolio of just under about 2.1 million dollars, and they're going to

[51:17] have a real estate portfolio with about 1.7 million. So, their total net worth 1.7 million. So, their total net worth is right there at 4 million dollars as they ease into this next stage of life. >> I don't think it's we we can't minimize

[51:29] the value that just 1.1 of that is going to come from these real estate proceeds. That's really going to firm up the liquidity of this portfolio. So, now they really will have 2.1 million dollars kind of working for them in the

[51:41] liquid assets, whereas if we didn't do the simplification, it would have been a lot less of liquid assets and counting on a lot more from the illiquid real >> So, as they think about retirement, the question becomes, "Okay, well, what can

[51:53] 2 million dollars do for us?" And we said, "Okay, if we just said that okay, properties and retire at the end of this year." So, you got that 2.1 million, year." So, you got that 2.1 million, that 2.1 million plus the $8,000 a month

[52:06] coming in from the real estate portfolio could generate about $180,000 a year in today's dollars right now. So, that's like $15,000 a month if they wanted to retire right now, but they were unclear on exactly the timeline of when they

[52:20] want to leave the workforce. So, we said, "Okay, what happens if we wait 1 year longer?" So, now the portfolio grows, and we just assumed a 6 and 1/2% rate of return. Well, now instead of almost 2.1 million, they could have a

[52:33] kind of letting the real estate stuff settle. And then we said, "Okay, well, the future? What if we got all the way out to age 59? What could the portfolio grow to if you decided you didn't want

[52:46] to fully leave the workforce?" And the portfolio could grow to almost 2.9 million dollars 5 years from now. And again, if we just think about $8,000 didn't even like grow with inflation or adjust it, 8,000 from there plus 4% on a

[53:03] 2.9 million dollar portfolio is almost $200,000 >> What what I love about this plan is that we really have Goldilocks'd it. Cuz if present format, Jason and Candy were going to deal with a very complicated

[53:19] real estate portfolio, and it was just cuz they might not know it now. They do the people who just think they're going to do real estate only is that it's going to be illiquid in a lot of ways. You're also it's very active. It's not

[53:32] going to be simplified. So, that that that doesn't fit in my Goldilocks formula. If they just apple cart sold it all, I don't know that that's a great I think they would miss it a little bit. Plus, they got some great equity and

[53:45] some good holdings that really could be not fully mailbox money, but it's definitely more of the passive side of real estate with these townhomes and the is the perfect mix of they're going to have investments that are going to be

[53:59] real estate income that's going to be flowing in, so they have multiple streams. This is going to be the best of all things and give them their best retirement. And here's what the crazy thing is. If you want to say, well, may

[54:12] this is a pretty rosy situation. No, we left this still somewhat conservative. Doesn't even include social security. >> We we didn't increase the rental income, we didn't factor in social security, we gave them a conservative rate of return.

[54:26] dream plan, the down-to-earth plan, or the do-do plan? I'd argue it's somewhere between do-do and down-to-earth. This seems very, very reasonable. I think like. >> somewhat passive cuz if you remember,

[54:40] traveling." I think it was it as crazy of a goal as they 6 months out of the it definitely needs to be mailbox money, but I got to tell Jason, now that we've actually run the numbers, I think you've got to be prepared that we got Candy

[54:55] Candy. >> So, this is going to be awesome. Thank you so much for getting to hang out. We love that you were willing to even open up your financial life and let us be part of it.

[55:08] >> Yeah, they were phenomenal people, crazy goals that they're going to actually be able to accomplish, and it was just fun being kind of part of the story and who want to go on Making a Millionaire, if they want to share their story, what

[55:21] guest on Making a Millionaire, go to moneyguy.com/apply. tools or resources, you can go to moneyguy.com/resources. Jason and Candy, we really did have a blast. Y'all were so fun to hang out

[55:35] y'all were next door neighbors. I think we would have a lot of fun hanging out, and I love that you were so transparent to share your journey. There going to be some financial mutants that actually learn something from this, but also

[55:49] thank you for coming on and joining us. I'm your host Brian, joined by Mr. Bo. Money Guy team, out.