Mindy: Welcome to the BiggerPockets Money podcast, show number 345, live from FinCon 2022, where we interview Monica Scudieri from grabyourslice.com and talk about going from six figure debt as a single parent to financial independence in just 10 short years.
Mindy: Hello, hello, hello. My name is Mindy Jensen and joining me today is the military guide, Doug Nordman from militaryfinancialindependence.com. Doug, thanks for joining me today.
Scott: Hi Mindy. This is always fun to be at FinCon.
Mindy: This is always fun. It’s always lovely to see you, Doug. Doug and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.
Scott: Whether you want to retire early and travel the world, or go on to make big time investments in assets like real estate, or start your own business, we’ll help you reach your financial goals and get money out of the way so you can launch yourself toward your dreams and freedom.
Mindy: And freedom. Oh, I love that little addition, Doug. Doug is joining me today because Scott is not at FinCon. He’s off um, gallivanting? Should we call him lazy? He’s just…
Scott: He’s the unlaziest person I know.
Mindy: I know, right? Scott is wonderful. I am the president of his fan club. I am just talking smack. Doug is stepping into Doug’s to Scott’s shoes because Doug knows Monica, and Monica has recently written a book called Grab Your Slice of Financial Independence where she tells her story of being in six-figure debt as a single parent, all the way to financial independence in 10 short years. And I have to tell you, if a single parent in six-figure debt can become financially independent in 10 years, you can too. I don’t care what your situation is, you can become financially independent too. So, Monica Scudieri, welcome to the BiggerPockets Money podcast.
Guest: Thank you very much. It’s a pleasure to be here. Thank you.
Mindy: Let’s jump right in because FinCon has a very tight time schedule for recording. Where does your journey with money begin?
Guest: So, my journey, uh, actually began when I went through my divorce. And, um, we went through the divorce. Um, I I we had the kids were really young. Uh, I took on the debt of the marriage, the $257,000 of debt.
Scott: My gosh.
Guest: And, yes. And I, um, went through and the first five years that it was actually really hard because I had a temp job that ended, um, I was on unemployment actually for 22 months because I lost three, three temp jobs in the first five years.
Scott: Not not due to your own misconduct?
Guest: No. No, it’s just, you know, the economy. I was it was temp work and when you’re a single parent, you’re limited to, you can’t drive very far to a job. You have to be 9 to 5 because you have before and after school care. Um, you can’t do overtime. And so, all of those limitations really kind of put me in a wedge of these are the certain jobs I can take. So if they wanted weekend work, night work, these are things that I could not accommodate when you have small children. Um, so but, you know, so the first five years were really hard, but I kept my why with my kids, um, to reach that financial independence. I never wanted to rely on a paycheck or child support or anything. Um, and so I just kept that in my fo- forefront of my mind and then there was an opportunity after those five years to sell the house and downsize and then I was able to pay off the debt and put money down on my house. I was able to, I’m probably jumping ahead here, but I was able to use a HELOC off of my personal home to be able to put money down to buy my first rental property and then from there, I was able to buy two more and then the next year I bought two more. And between that and putting money in 401K and some Roth and HSA and a bunch of other things, um, I realized at the 10 years that I became financially independent and that I could quit my job. And that in in of itself was, it was a lot to take in. So I didn’t quit my job right away because it, first of all, it was disbelief that I could do that. And so I took some time to kind of figure out what I wanted to do and the direction. COVID came along and I thought, well, I’ll just stay at work for a while longer. And then I just actually recently quit my job in March and um, focused on the book and go from there.
Mindy: Yay. Okay. So let’s rewind. Yes. What year did this all start?
Guest: So, in North Carolina, you are required to be separated for 12 months. So it started in 2008. Yes.
Mindy: I know. That was an audible sigh that I hope my editors keep in because that is super annoying.
Guest: Yes. Yes. Yeah. So, you know, we had to wait the 12 months and then file. And once we filed, then it then it went very quickly. Um, so it was 2008, 2009. Okay. to go through that process.
Scott: I can’t think of a better time to have a divorce case going on.
Guest: Absolutely. Yeah. And it was kind of crazy because, you know, the house is valued at one thing and then everything caves in and then it’s not valued at that. But you’re filing the divorce at that. And so, you know, that’s how the math worked out, but it’s fine. It worked out in the end anyway.
Mindy: Well, yes, it worked out in the end, but let’s go back to the beginning. What was your financial position before the divorce?
Guest: So, um, when when we were, I guess dating, um, we both worked and so we never thought about, you know, like who thinks about saving money for retirement? You know, I mean we had a 401k, we put very little in it. We were more going out to dinner and, um, we both had family in Europe, so we would travel to Europe. Um, we would, you know, just live life and, you know, for me it was, you know, I made my paycheck and then so I would spend like 90% of it and I paid all my bills. And then for, you know, their dad it was more of a, I made my paycheck and I can spend more because I have this credit card and you just pay the minimum because isn’t that what everybody does? And so there was, we never really had the money conversation. We never really talked about mindsets and even after we got married, we still didn’t have those conversations even though there were clearly many opportunities where we should have, but we never we never did that. And and so that was just, you know, one more thing that we didn’t didn’t agree on.
Scott: It was a real problem with the budgeting word too, right? You had to figure out what your budget was going to be, but you weren’t even ready to talk about it. For example, what was your debt? What was that made up of?
Guest: So, when I managed the bills, I paid everything off at the end of the month. When we got married, I said, you know what, I think you need to step up and take over. and he didn’t really want to do that, but you know, he did. And then about three months into it, um, you know, we got the credit card in the mail because that’s what we used to get, right? Um, and I opened it up and it was thousands of dollars of debt on there not paid. And I’m like, why, what what is going on? And he’s like, oh, my pay the minimum. So, I mean, it’s it’s it’s credit card debt. Everybody has credit card debt. And I was like, I I need to take this back because this is not working for me. I do not want to live, I mean it’s bad enough we don’t have a lot of savings, but I don’t want to have debt. And so I took it back and then I was really excited because it took me like three, four months to pay it all off. And it was like, you know, maybe $6,000, you know, in a short period of time, that’s a lot of money that wrecked up. So ended up paying it all off. I was super excited and I went to him and I’m like, guess what? We have paid off all of our debt. And he was kind of like, okay. Like it really didn’t, it didn’t really matter to him one way or the other. So we really just had very different money mindset. You know, but see that would have been the perfect opportunity to have that conversation of what are we going to do moving forward? But I never said that. He never said that. We never had that conversation. So I just continued to manage the money and you know…
Scott: Was was some of that at least mortgage debt or was it all consumer debt?
Guest: So when we divorced, it was, um, some mortgage debt was half mortgage. Okay. and then the rest of it was consumer, um, and we bought a, um, a, uh, what do you call it? A, uh, townhouse because, you know, we live in North Carolina, so we’re like, oh, everybody’s going to want to come and visit and they can stay at the townhouse, which is ridiculous because…
Scott: A townhouse in addition to your primary residence.
Guest: 3,000 square foot house that had a guest room and plenty of space. It was completely ridiculous. Um, and so, uh, yeah, and and right, which he got that and, you know, I ended up paying for it. So…
Mindy: Okay, so, uh, what did you do with the money instead of paying off the credit card bill?
Guest: Yes, that’s a really wonderful question. Um, it that’s a really good question. It’s it’s hard to know where I mean, he just kind of uh, went out to lunch with friends and bought stuff. Um, you know, it’s it’s one of those things where, oh, look, this is this is really cool. I really, really want it. I need that. It’ll make me happy. And then, you know, you buy it thinking it’s going to make you happy and then two weeks later, it’s sitting there collecting dust because you’re onto the next thing that’s going to make you happy. And yeah, and that’s, you know, that’s where the money went.
Mindy: So I think it’s safe to say you did not have the money conversation before you got married.
Guest: Correct. Big mistake. Yeah.
Mindy: That’s a big mistake. I think a lot of people make that mistake. We’re not here to berate you for past mistakes. You can’t go back and change it, but if you have a time machine, please call me, email me, mindy@biggerpockets.com. I’m not going to give my phone number out. But email me, biggerpockets.com, let me know because I have some stocks I’d like to invest in back in 1982 probably in ’99.
Scott: I I’d like I’d like to reconsider some of my life decisions. Yes. For sure.
Mindy: Yes. Oh my goodness, some life decisions I’d like to reconsider. But, you know, having the money conversation is so important. I didn’t have the money conversation with my husband, but I also used context clues. Like he used a coupon on our first date, which is so him because he’s here too because he’s uh, in this space. Um, but did you and Marge have a conversation about money before you got married?
Scott: Oh, we did. But the conversation was was Marge showing me how I needed to have a budget, how we needed to be a little more frugal because I was that legendary college student that had money graduating from high school and managed to get rid of all of it by the end of my first year of college. So…
Mindy: Wait, I thought you walked on water when it came to money, Doug. I thought you were perfect.
Scott: Me too. Well, when you walk on water, you got to hit rock bottom. Tell more. When you’re when you’re in the Bahamas finishing your summer training as a midshipman in the Navy and they have an exit tax at the airport of $5 to get on a plane to go back home where you have to be. And and you have to borrow that $5 from your best friend, that’s when you know you hit rock bottom. But I had a wonderful time and I know this because I can hardly remember any of it.
Mindy: We need to have Marge on the show. Does she do podcast interviews?
Scott: Oh, no.
Mindy: Okay, I now have a new goal, but this isn’t the Doug show. This is the Monica show. So let’s get back to Monica’s story. Um, did you combine finances during your marriage or did you keep them separate?
Guest: We combined our finances. Yes.
Mindy: Do you think if you would kept them separate that may have changed the outcome or were was it never going to happen?
Guest: No, I don’t think it would have worked.
Mindy: And do you think the financial, like did the financial issues contribute to the divorce?
Guest: The financial issues contributed. It wasn’t the main thing, but it contributed.
Mindy: Okay. Okay. Um, so how did you tackle this debt? You had the $257,000 of random debt including the mortgage on the unnecessary townhouse.
Guest: Right. Well, that was all, it’s all the townhouse, the the mortgage and just random other credit card and other stuff. um, that never mattered. um, so I…
Scott: never matters.
Guest: yeah. I mean, so when I when I when I had a job, um, I was trying to pay it down. And after about a few months of doing that and realizing that this is not going to work because it was like trying to pay down. It’s like trying to shoot a little with a water gun and, you know, it’s it’s just you’re you’re trying to paint a whole, a whole wall with like a like a little tiny paint brushes. it’s not going to work. And so I took the debt, took the mortgage and I, right or wrong, but I rolled it all together to make one big mortgage and did away with the home equity line of credit and took all the debt, just rolled it all together. My thought was, first of all, I needed to get the house in my name only. Um, and so when I refinanced, um, that gave me the opportunity to take his name off the title. Okay, good move. and so it was worth it to me to do that and it gave me a big, you know, a bigger mortgage payment, but I had no equity, um, no credit to be able to do anything. So…
Scott: But that that does stretch the payments out over 30 years and your home is at risk. You’re using your home equity, but you now have a lower payment and a much longer time. Yes. And if you wanted to accelerate, you can pay a balance, you could pay the mortgage or you can just celebrate and pay it off sooner. Right?
Guest: Yeah. And it did give me that flexibility. So it really was good when I was unemployed for 5, 6, 7, 8 months. Um, to make ends meet, I was, um, you know, I dog sit, um, I cook for people. I sold since we had 3,000 square foot house, I sold furniture out of the house. Um, I had to borrow money from my mom, which is a very, very humbling experience when you’re in your 40s. Um, but, uh, yeah, I mean you you get very, very creative. Um, and then so when after those first five years, I finally had an opportunity to to sell the house and downsize, um, I had somebody finally make an offer on the house and that was a whole crazy situation because, um, my real, realtor was telling me that you should have men’s clothes in the closet. And I said…
Scott: Oh, boy.
Guest: Why do I need to have men’s? She goes because if they see, they’re going obviously they’re going to see children live here, they’re going to see that there’s only women’s clothes in here. They’re going to rake you over the coals and try to take advantage because they know you’re in a vulnerable position. And I said, I mean like who am I going to ask to say, can I borrow some of your clothes to put in my closet? I mean, so I I did not take her advice and sure enough, the one couple that came in to put an offer did rake me over the coals and nickeled and dimed me for every little thing and I told my realtor, I’m like, I I don’t have the money to fix this laundry list of stuff. And she’s like, you know what, let’s fix this one thing that was like a some dry rot on a window frame. I said, okay. and she goes the rest of the stuff, it’s honestly it’s just filler. They’re just looking to squeeze you for every…
Scott: Exactly. Yeah.
Guest: And then they had they asked for a four week closing because they had to sell a house that was um out of state. and so they thought four weeks they could get all their paperwork and everything. and I’m like, fine. So I did that. But then the four weeks came and my…
Scott: You you’ve seen this before, huh Mindy?
Mindy: I, yes.
Guest: So, yes. So, well then you’ll love the you’ll love the finale. So at the end of the four weeks when we were supposed to go supposed to go sign to sell the house, they they had the nerve to call my realtor and say, we’re missing one piece of paper, we need another week. You just move out of the house and we’re going to move in and um, and then we’ll get you the money later. And I said, well, I said a couple of things I’m not gonna say here but… Thank you we’re family friendly. Yes, we’re family friendly. We can stil let that out. But yes, you can still let it that out. But um, but yeah, so I said absolutely not. My realtor was like, absolutely not. So I left my, my whole worldly possessions in a truck at the top of the driveway and slept in a in a sleeping bag and it turned out my kids were going to see their dad because it was the first week of summer. So they were gonna be at their dad’s house anyway. And then I just kind of stayed there with my two little cats and waited until paperwork cleared and I mean, I couldn’t move to my house because I couldn’t get the keys ’cause I didn’t have the money to close on that house. Right. So I was like, no, we’re not we’re not doing that. Good. Yeah. Oh but then in the middle of all that, this is this is another thing. This is in the book actually, um is that during those four weeks while we were waiting and I was trying to sell stuff, my car broke down. And so I went to…
Scott: Yes. Because of course.
Guest: Of course, right? Murphy’s law. And so I went to my mechanic who’s, you know, really it’s family run and he sat me down and he said it’s a money pit. You have to get rid of it and buy another car. And I’m like, I I literally have no money to buy a car. And he goes, if you put money into this car, you’re you’re just throwing good money away. You you really should get another car. So I got a um, a used Honda Civic which my daughter still drives today. Oh yeah. Yes. And um, what was crazy about it was so I was selling furniture out of the house and I had big pieces of furniture. So I had like saved up $5,000 from selling all this crap out of the house. In the garage was like a gold mine but anyway. um, so I sold $5,000 with that. Turned out the car that I had even though it wasn’t very good, they could sell it for parts because it was discontinued. So I got $5,000 for that. And then I was able to pull a couple thousand out of my emergency money and I got to buy a car for cash. So it’s still my favorite car even though it’s, you know, a 2003 Honda Civic, you know, but still my favorite car.
Scott: These cars last a very long time.
Guest: They do. They do.
Mindy: I currently drive a 2003 Honda element.
Guest: Oh, see?
Mindy: So it’s going, yeah.
Scott: So you understand. it goes forever.
Mindy: So this is your primary residence. What happened with the townhouse?
Guest: Oh, um, um, he got that in the divorce.
Mindy: Okay, so he took that and the mortgage and all of the things associated with the townhouse?
Guest: Yes. Okay.
Mindy: Well, there was no mortgage because I I had that was part of the uh, death.
Mindy: Oh, you got the mortgage on the townhouse and he got the townhouse?
Guest: Yes. And and it was still a bargain in the long run. Absolutely because I am I am so much further ahead.
Scott: Right. Yes.
Guest: Yes. Absolutely. And I got the kids, which to me is worth everything. Yes. Yes. Oh my god. I’m very blessed. I’ve got wonderful babies. But I mean they’re not babies anymore, but you know.
Mindy: So you refi the house, you kind of roll everything into one great big 30-year mortgage. Yes. And you start your unemployment journey. Yes. I start this. Sorry. I’m not laughing. I sound like such a horrible person. This like, what else could be thrown at you? Your car breaks down. You get the mortgage on a house that you don’t get to live in and all the debt and but you get the kids.
Guest: I got the kids.
Mindy: And then you lose your job and then after five years, yeah, so how long did it take to pay off the debt?
Guest: So, well, once I uh sold the house, I was able to pay off all of the debt through selling the house. Okay. and put down 50% on my new little house. Oh. So I was able to open up a brand new home equity line of credit. Okay. and that home equity line of credit I used to buy my first rental property. So what I did was I used it, you know, I’m jumping ahead a little, but I used that to um buy buy my rental property for cash and then I would turn around and um go to the bank and I had a preapproved loan, which is very, very important. I want to say have make sure all your paperwork is lined up, but I had a preapproved loan and so once I bought the house for cash, I turned around, went to the bank and then um financed 80% of it, paid off the 20% and then got my taxes ready and waited until the next year to buy two more.
Mindy: How much was this house?
Guest: The the five houses that I ended up ultimately buying were anywhere from $56,000 to uh $78,000 each.
Scott: We we don’t see that in Hawaii. I don’t think you see that in Colorado.
Guest: That doesn’t happen on longer in Hawaii, right? Yeah.
Mindy: Yeah, same. We buy those all day long in FinCon. Yeah. Are these local to you?
Guest: Yes. Okay.
Guest: Yeah. These are all these are all local to me.
Mindy: Oh my goodness. I I’m so jealous that you have local to you properties. I mean, that’s not the price they are now. Right?
Guest: This was 2015. No no.
Guest: Yeah it was a 13, 14 and 15 so these three years. So it was very very different market for sure.
Mindy: So the the first property, what did it need? You bought the house for cash for 50?
Guest: So the first one I bought for 70… say $79,000… And it needed nothing.
Mindy: And it needed nothing. And it was going to rent for like $12,000 a month, right?
Guest: And I I was renting it at 850 a month, yeah, yeah.
Mindy: Okay, so that is the 1% rule.
Guest: That’s the 1% rule. Yes. Yes. And nice to see that happen for a rookie.
Mindy: Yeah. I love it.
Guest: Yeah, thank you. Yeah. I love it.
Mindy: You still own that property?
Guest: I do.
Mindy: And is it under a mortgage or paid off?
Guest: So I have today I have three properties paid off and I own um one consolidated mortgage on two.
Mindy: Okay. It’s it’s it’s a crazy story, right? I mean you cannot make this stuff up. That’s why I wrote the book. You can’t make it up, but it’s not as good as the truth.
Guest: Uh uh, you can make it up, but it’s not as good as the truth.
Mindy: You can’t make it up, but it’s not as good as the real truth.
Guest: Yes.
Mindy: Okay, so property two, you bought property number one, how long did it take to buy property number two?
Guest: It was the next year.
Mindy: The next year and that was how much was that?
Guest: That one was probably like 72.
Mindy: Okay and what did it rent for?
Guest: Uh, they’re they’re all around um 8 850.
Mindy: Okay in the beginning, that’s how they went.
Guest: And how much did that, how much work did that one need?
Guest: So then they started needing roof and HVAC, but not right away. And so, you know, we just do some like minimal stuff to get it ready to rent out. so like painting the inside and maybe if it needed carpet, we would do stuff like that. And then as the roof started to leak, then we would put, you know, like 5, $6,000 to replace the roof. And I had somebody manage the properties for me that, you know, helped walk me through the process of, you know, what it what it takes to. And then, you know, like so in those three years, they all at some point needed a new roof and a new um HVAC. The property that I bought for like, I think it was like 56, 52, almost $52,000, but that needed the most work and it came with a renter that was renting it for $800. So I’m a softie. I left her there, never really raised her rent because she’s, you know, on her own and there were health issues. I don’t know. So it was definitely renting below market value, but eventually, after three years, I had to evict her because she was a hoarding situation. It was and there’s a long story, but when she when she left, it needed windows, inside paint, new carpeting, new kitchen, new new bathroom, new outside, there was a lot of glass and I, you know, we rent to families. And so I had to make sure that all of that was, you know, cleaned up. Um, so that one, I mean, honestly, for the money I put into it, I almost feel like we could have torn it down and built a brand new house. It was practically there. Yeah.
Scott: I bought that house.
Mindy: Yes. Yeah. Uh, how much did you put into that house?
Guest: That house I put in about $45,000.
Mindy: Oh. Yeah.
Guest: That was…
Scott: You still own it?
Guest: Oh, yeah. And what is it worth now?
Guest: Oh, now all of them are in like the 200,000, 220. Okay. Yeah.
Mindy: So 100 in, 95 in and you’re at 200 value. That’s a spare deal. Yes.
Guest: Yeah.
Scott: You’re you’re replacing things like roofs and air conditioning and heating. That’s that has a return on an investment. We’re not talking granite counters or koi ponds. Yes. Well, it’s it’s got a bit of a return on investment. It it’s it’s like, you need a roof. you need the air conditioner.
Guest: But you need it. Yeah.
Scott: You need air condition. Well, depending on where you’re at. Yeah. You need air conditioning. You need HVAC, uh, or H heating in most places. You don’t need a heater. Well, do you have a furnace in your house?
Mindy: Okay.
Scott: No. Okay. This is one of the advantages of living in Hawaii is we do not have a furnace and we do not have air conditioner.
Mindy: So he doesn’t have to pay $12,000 every 30 years.
Scott: You don’t want to know what my electric bill is.
Mindy: I know what your electric bill is. Okay, so you bought your first house, you bought your second house and then uh at year three.
Guest: So yeah, so the first year, um, I established the LLC to when I when I bought the properties, everything went under an LLC. So I only did the first house because that was all I was, you know, approved to buy with the bank. And so when I got my tax returns, um, I was lined up and ready to buy. So I bought two the second year. And yeah, yes, absolutely. And you know, it’s funny because they’re all like in the, they’re all like close to each other. and but they’re all kind of the same three bedroom, one bathroom, little hardwood floors, little carpet in the bedroom, you know, I mean like they’re 1,000 square feet, more or less. Um, and they’re perfect for for families, they’re great for couples. I mean it just and it’s close to downtown area. you know, um, and then the third year, I actually bought the next two number four, number five, I bought them within two weeks of each other, which was really crazy. One of them was a Section 8, was my first time experiencing a Section 8, which we ended up converting it, wonderful people there. Wow. Yeah. Um, and yeah, and so it’s, um, you know, and then it’s it’s definitely we could we could do a whole show just on rental property adventures. Uh, you know, the good, the bad, you know, like some people are like, oh, you know, landlords can be so hard. But you know, it’s I think it’s it’s um, you know, everybody decides to run their business differently. I mean, you know, um, I think there’s good landlords, there’s bad landlords, there’s good renters, there’s bad renters. You know, I mean like it’s just it’s just, um, but I like knowing that, um, I got families in there and then, you know, helping to provide a roof over their head and, you know.
Scott: And they’re taking care of the place?
Guest: And they do. They do take care of the place. Yeah.
Scott: With all this experience, did you invest in anything else? Was it strictly real estate? Did you put money in your retirement account? Yes. What other what other wealth building was there?
Guest: So I, um, so it was 2008, you know, with everything, you know like to everybody got a 50% discount on their retirement funds. Um, I didn’t take the money out, even though a lot of my friends were like, no, no, take the money out. We don’t know what’s going to happen. But I left it there because it wasn’t a lot there to begin with. So half of not a lot is, you know, may as well leave it. But when I had temp jobs, I always signed up for the 401k and I put, you know, it wasn’t a lot, but I put a little money in there even though there was no match, there was no, there wasn’t anything to it, but it’s so important is it was a lot of it was about building that muscle to discipline myself and invest that. Yeah. and then the other thing was just learning how to budget. and I I think, you know, when I tried budgeting in the past, my biggest takeaway and I write about this in the book too was not to go look at it backwards, reverse engineered. Don’t just start putting numbers in and saying, okay, you have $400 to spend on groceries. Instead and when I when I coach people, I tell them, let’s look at what you’re spending today. Don’t change your spending habits. The next four weeks just record what you spend and it’s such an eye opening experience. and then from that, you can make your budget, what you’re spending and then think about, is this, you know does is it worth it spending $500 going out to eat every month? Is that $500 if is it bring do you remember where you ate? Did it bring you joy? And a lot of times people are like, I don’t even remember why I remember spending that money. Like did I really spend $500, $600 going out? Where did it all go? And so it’s it’s having those conversations, you know, look at your spending. That’s the conversation I always had. is my spending matching what’s important to me. Is am I putting the money where I say, you know, like the words come out of my mouth, the kids are important, family is important, friends, am I spending my money that way? Is that, you know, and so it’s it’s having those conversations and taking that time.
Scott: But everybody got to decide for themselves where the money was being wasted or where they wanted to do something that was more valuable to them.
Guest: Yeah. Yeah, and it’s just really interesting conversations, you know, I mean, even some people I had one guy had three gym memberships we were talking and you know, and and yeah, it’s a lot of money for three gym memberships. I was like, well, it’s why, why do you have and I’m not saying it’s right or wrong, but really think about is that…
Mindy: I am.
Guest: Yeah. It’s hard to get a pickleball court with one. I mean it was there were some interesting reasons for it. But you know, in the end he decided to to cancel two and take that money. And it’s just, you know, I mean it’s just just really just thinking about it, thinking about where your money’s going and does it make sense for your life?
Scott: It’s the first time too that it’s not that you’re being judged. It’s just that it’s the first time in a long time that you’ve had to reflect on that expense that you probably started on impulse a long time ago and never really spent much attention to whether you use it or not. But now that you’re looking at it as part of the big picture of the B word, the budget. Yeah. it becomes clear that you really prefer to spend that on other places.
Guest: Yeah. Absolutely. Absolutely. And it’s it’s very interesting conversations because, you know, what’s important for one person, not necessarily the same for another, you know. Like, you know, Mindy maybe you’re not a three gym membership person, you know. How could you tell? But, you know, I mean, so it’s like everybody’s got their got their thing that’s, you know, they want to keep.
Mindy: Yes, everybody does have their thing they want to keep. And what does Paula Pant say? You can afford anything, you can’t afford everything. Yes. I am a huge proponent of just tracking your spending when you first start out because yeah, you’re absolutely right. If you put, oh, I’m going to spend $150 on groceries. If you have no idea how much you’re spending on groceries, $150 isn’t get it cut it. And if, unless you’re Justin from saving Sherpa.
Scott: Unless you’re growing most of your food and using coupons on pizza. Yes.
Mindy: Justin from Saving Sherpa has some like crazy, it’s like $125 a month. but he shops the sales and he’s like perfect and uh, he’s a very interesting grocery shopper, but everybody else on the planet doesn’t spend $125. Yes. So you do have to see where your money is going and that alone is so eye opening. It is. I’ve told the story multiple times on the show, but I started tracking, we we were like, why are we spending so much money? We don’t do anything. We have small children. Like why is all this money leaving our wallet? Let’s track our spending. So I started like pen on paper, writing it out and I was going to the grocery store literally every day. Go for one thing, but coming home with five or one thing and coming home with 15 and one thing and coming home with 27 and it’s no big deal if you go for one thing and you come home with five once a week or once a month. But when you do it every day, it adds up and I didn’t need those other things. Wow. And once I, I mean, it was two weeks, I was going to track it for a whole month, but it was two weeks. I was like, I see the problem. I see the hole in our spending.
Scott: I’m going to the grocery store twice a month.
Guest: Yes.
Mindy: And that’s the thing. I love grocery shopping because I love cooking. I love eating. I love eating. I do. Yes. And when I’m at the grocery store, oh, I don’t just go with the list. I mean, at the time I did it, I can just wander up and down, when you have two small kids, you got to eat up a day. Right, right. Going up and down the grocery aisles. Oh, look at this interesting thing. I’ll try it. Yes. With no regard for what I’m going to do with it or the 37 other ingredients I need to make pickled figs with or whatever. And yeah, I’m not making that. But all the things you need to use this one, you know, bottle of giraffe snot or you know, whatever and what are you going to do with this stuff? I had no plan but I would just randomly put something in my cart. So once we started tracking, it was very easy to cut down our expenses because I didn’t want to be spending $11-teen billion on groceries. That one thing, track your expenses. No, inside not track your expenses, track your spending. Yes. In real time. Yes. There are a lot of people and I don’t want to say that they’re wrong. If Doug were to track his expenses at the end of the month retroactively, that’s fine because he’s got it dialed in. He’s been doing this for a minute. But if you’re just getting started, you don’t track them at the end of the month, correct, backwards. You track them in real time because you can’t remember, I mean do you remember what you spent at Target last week, what did you buy? You don’t remember all the little things. But when you’re there, you’re like, oh, it was $17 in this category and $14 in this category. And when you track it so hard, it’s so helpful and eye opening and you can make changes in the same month. Yes. Now, I have to make my confession. I have been publicly tracking my spending for all of 2022. You can follow along at biggerpockets.com/mindy’sbudget until July. And we went all the way through June and did it great and then in July, kind of fell off the bandwagon and then August was also off the bandwagon. So now we have two months of expenses to go back and enter manually.
Scott: I am not setting her up.
Mindy: However, I’ve just shown you my spending tracker because it is really, really detailed because I want to know, I don’t just track groceries, I track groceries and restaurants. I I’m sorry, I don’t track food. I track groceries. I track restaurants. I track parties. Right. I have a pool in my backyard. I host a lot of parties. But if I lost my job and the stock market went to zero, I would have zero parties. Yes. That’s an expense I can easily get rid of. So I track it. I’m trying to open it up, but boy, my computer is not, it’s just like a bunch of people. With everybody with a computer, and yeah, they’re just opening it up and um, everybody’s opening up everything all at once. For real, like, okay, my guys edit this out. It’s supposed to just come right up. Come on, but this is populated by an app on my phone, a Google form that is on my phone and I have it with me whenever I spend, I open it up, I type in the date, how much I spent, what I spent it on into the category and where I spent it. And that is enough for me. I have prepopulated categories and that’s enough for me to know where I’m going. I really like the trace of alcohol. I go to tap rooms a lot. There’s a lot of tap rooms in my city. But I also will like, I have parties at my house so I might go to the liquor store and buy some alcohol too. Those are in different categories because liquor at like in bulk at the liquor store is a different, like it’s not retail prices. I mean it is, but it isn’t. And then uh do you see this, the red categories are where I go, um, where I went over in my spending. um, but every month I learned, well I don’t learn because I still, you know…
Scott: You learn you don’t like to look at red.
Mindy: I don’t like to look at red. Not that you can tell as I miss in every single month in my grocery budget. But it’s a learning experience and I know, hey, I’d love to spend $400 a month on groceries, not going to happen. Yeah. So if it’s not going to happen, I need to adjust my budget. And if if that has to go up, something else has to come down. Where can I cut? Oh, alcohol is real easy to cut. Tap rooms, super easy to cut. I can have people over at my house. It’s like $7 a beer to go to the tap room. It’s like $14 a six pack to go to the grocery store and buy it and bring it over to my house. That’s cheaper. Let’s everybody come over to my house and have a big party. Correct.
Guest: And see that’s what I am because I’m a big foodie too. I mean unfortunately not all food loves me, but I love all food. you know, but I mean that’s that’s where I spend my money and to your point about, you know, going to the grocery store and like, ooh, I don’t know what this is, but this looks really cool. I’m going to try it with what this is. And sadly my daughter is the same way. She loves trying trying food. And so what I what I learned though is that if I find myself getting a little, you know, out of out of hand with the the food budget, we have this thing where I’m like, I’m not going to the grocery store for another week or two weeks. We have to shop inside, whatever’s in the pantry, in the fridge, we have to get creative now. And that forces us to like really whittle it down, the freezer and just kind of so it gets a little creative toward the the end of those two weeks, but um, but it’s it’s a good way to kind of remember like, well, since we bought this, let’s before it expires, let’s eat that. Let’s not, you know.
Scott: But that’s valuable to you. You’re willing to spend that life energy for that money to buy that thing that brings you so much pleasure. So you’re going to find a way to afford that whether whether you have to cut the spending in a bunch of other categories or whether you’re going to go out and work extra hours or find a way to get promotions and salary boosts.
Guest: True. True. but I’m not a clothes person, you know. I I don’t, I don’t look at me. Yeah. I don’t I don’t I’m not I I’m not big on my hair. I mean like I’m just, you know, a lot of things that, but food to me is like, food’s like, you know, it’s like you say, you know, it’s like that’s your time that people come together. you, you know, and it’s it’s very social and it’s the experience that goes with it. And to me that is that’s everything. That is everything. Okay, so that was a little detour. So let’s get back on track. Um, after you had five properties, what was it, when when did it click that you were financially independent?
Guest: So, I it’s it’s quite actually it was after, I mean I was buying the properties after that that I started to learn about the FIRE movement. It was, you know, toward the tail end of that journey. And it started to click when I started to read about it and I understood that, you know, you don’t have to wait until you’re in your 60s or 70s to retire. You could you could do it sooner. And so then it became kind of a game to see, well, you know, where am I with this? And what does that look like? And how do I, you know, have income stream to know that I can be financially independent? And so, uh, I when I looked at the property, so they were all fixer uppers. And so I decided that when the big things were done, like the last one I did was that, you know, $45 some odd thousand to to get that one fixer upper done. That was the last one I did. Um, so I knew that when I had all of those done, I thought, okay, I’m, I can I can be ready to quit. And then I finished them and I thought, I’m I’m not ready. And so I kind of fell into that trap of, um, you know, it’s like, like Doug would say and Jay Money would both say, you know, like don’t, don’t be that, you know, don’t wait three, four, five, six years saying, oh, next year, next year I’m gonna…
Scott: Just just just one more year.
Guest: Just one more year. And I was starting to do that that just one more year. Um, but I mean, you know, COVID came along and I think that for me it it wasn’t the money, but it was the realization that that journey that 10 years, that was just step one. And that I I I spent so much time trying to figure out, um, how was I going to replace that paycheck that I never, you know, thought about what was I going to do after? And so that took a little bit of time, you know, um, my mom was was got sick and she ended up passing and that took a little bit of a toll and so for me it was just a little bit of uh taking take a breath and take a step back and figure out where do I go from here? And um…
Scott: At this point though, you had plenty of cash flow from the rental property and it’s probably going up with market rents and keeping up and you’re not feeling like you’re losing out with tenants or expenses.
Guest: Correct. Correct.
Scott: And you also had been investing in your 401K and your other retirement accounts. So you had put together a plan for financial independence knowing that you might earn another dollar or two in your life after reaching financial independence.
Guest: Yes. Absolutely. But I mean I knew that, you know, I could whether I earned a dollar or two or not, that, you know, my expenses are covered every month. It only take a vacation or two and, you know, and everything was going to be fine. It all fixed. Yeah. It all fixed. you know. but that didn’t still didn’t get me to.
Scott: And that just one more year is the most powerful influence in personal finance and it keeps you from making a leap. But on the other hand, now that you’ve made the leap, you’re not laying awake at night wondering if you’ve overlooked some horrible mistake or some incredible expense that you didn’t think of coming.
Guest: Yes. I did yes. Brazilians. Yes. Absolutely. And it’s funny because, you know like so when I quit, I think it was the first four weeks that I thought what did I do? I need to go find a job because it was a bit surreal, but now I’m like best decision ever. Best decision ever. Um, I I love not having my 9 to 5. I mean I loved my teams and what I did, but I I love this more. a job.
Scott: I I should point out that once she was no longer going to work, she was trying to replicate that pace and the deadline pressure.
Guest: Yes.
Scott: And everything else about her old life in her new life. And somebody had to step in and suggest that maybe she should slow down a little bit, space it out and it’s okay to take a break. Yes.
Mindy: How did you convince her? Because I’m married to her.
Guest: So no, I believe the words were you don’t have to uh do everything in the first three months of of quitting your day job. And but it’s, you know, you’re so ingrained in like the long hours and the working and the drive that it doesn’t turn off because you quit your job on a Friday and Monday comes around and you’re kind of like, I when I still, I I literally Monday went downstairs same time I always do. Get up at 6:00. I was on my, you know, laptop by 7:00 a.m. I had my coffee, you know, and I’m like looking at emails and thinking about, okay, so what am I going to do today? And, you know, I worked on the book. That was a big thing. That’s what writes the book. The daily habit. The daily habit. Yeah. And you know, so you, you know, I’m still in that. So that’s like that’s a work in progress. That’s definitely because it’s only been, you know, it’s only been what six months. So.
Scott: Only, only.
Mindy: It is a work in progress. Um, it’s only been five years for my husband and he still bangs it out every day because it’s his time. So he can’t afford to waste it. I’m like, you know, it’s okay to enjoy doing nothing. It’s okay to not be productive. It’s okay to sit there and read a book that you enjoy and that doesn’t teach you something. It’s totally okay. And then he’s like, okay, I’ll meet Stephen King’s It in bed. I’m like, really the one book that I had to put down and never ever, ever pick up again. That’s the book you choose to read.
Scott: I I share your concern.
Guest: Yes.
Mindy: Face down too. I never put that book face up in the bedroom. Okay, so in terms of your rental property income, how does that compare to what your W2 was bringing in?
Guest: So, the rental property income, it’s it covers not everything, um, but it but it covers like just over half of my monthly expenses. Okay. Um, and then I I have some, you know, my, uh, just, you know, in a savings account, I had cash there. And your drawing down your assets perhaps maybe not at a rate that’s going to bankrupt you in five years, but you’re using a 4% safe withdrawal rate or something else that makes you comfortable.
Scott: Yeah, and you got cash flow, you got annuity income from rental property. So you can afford to have a much more sustainable withdrawal. Right?
Guest: Yeah, I think right now it’s a little less because the rental is doing well. And so I don’t need to yeah.
Mindy: Would you buy some more rental properties?
Guest: You know, I I do and I don’t. I don’t know, not really. I mean, there’s a couple of things I was looking at like syndication that looks really interesting. um, so I’ve been having some of those conversations, but nothing, nothing concrete. I think right now I’m, I’m really excited about, you know, just the book and um, sharing my story and helping other single parents out there. Um, know that it’s it’s hard when you’ve got little kids and you’re on your own, but I I really, you know, I, I wish I had a book, I wish I had, you know, people to lean on and that’s, that’s really my focus right now is is uh, serving and giving back.
Scott: She’s been to two financial conferences since she stopped showing up for work. And despite the idea that she’s surrounded by real estate investors, she has held firm. She is not budging on. This is my third one. Yes. Because New Money was the first one. Yes, that’s what.
Mindy: What is next for you besides a whole year’s full of uh campfires and financial conferences?
Guest: Yeah, I recommend CampFi. It’s wonderful. But I mean these are…
Mindy: I love it.
Guest: Yeah, no, it is it is a lot of fun. Um, so what’s next? So I I started blogging on the piece of the pie, but I put that on hold to write the book because now that the book is out, um, I’m going to spend the rest of the year, I hired somebody to help me uh rebrand because I have learned that uh WordPress is not my forte. Uh, and I’m better at creating the content and not good at making it look pretty. So, um, I’ll be rebranding that. Um, I’m looking to build a community with the blog, so it’ll be blog, um directions on how you can build your slice of, you know, how you can grab your slice and make your own five pie. And then the third section I want it to be uh for community where other uh financial coaches can come and showcase some of their case studies and people that they’ve worked with. And yeah, and so that, so that when when people come to the site, they can go, oh, I relate to this story. and oh, look, um, you know, Tina, uh who is the financial coach, that’s her, she gets me. And so I can call Tina and I want to build that community on the site. And so that’s something that the rebrand there’s that will be part of this year. The site will be ready. I think January is a fair timeline. Um, and then I also I’m going to turn my my book into an audio book, which will be ready probably February time. And then after that, I think people learn differently. And so I want to do a workbook and online classes, um, so that, you know, if you can read the book and follow the directions there and hear my story or you can have your own workbook and make your own uh five pie and or have online classes. So, yeah, that’s the near future.
Mindy: I like the workbook. I don’t think there’s enough workbooks out there. I think there’s books and then they don’t really give you like some people, you’re right, they they’ve learned differently and as you go in and you like actually write it out and see it and you see the steps, oh, that makes sense in a way that reading it maybe didn’t. I I really love the workbook that we did for uh First to a Million where we teach kids about money uh by Dan Sheeks ’cause he did a workbook. I actually, I like the workbook almost more than the book itself. It’s just so helpful to kids who are already filling out stuff at school all the time. It’s just such an easy progression. I love that.
Guest: Exactly.
Mindy: Okay, well, tell people, Monica, where they can find out more about you.
Guest: So, I have a site called grabyourslice.com and you can hear more about, you know, about me, the author, um, you can see where you can buy the book which is anywhere books are sold. And yeah, and then just follow along because there’s a link back to the blog of the piece of the pie and you’ll see the progression and the rebranding and where we go. It’ll be an exciting, 2023 is going to be very exciting. So, yeah, I’m looking forward to it. I’ve got a few other projects that I’ve got once I get past this that are very exciting.
Mindy: Whoa, whoa, whoa, you’re retired.
Guest: Yeah, I know, I know.
Scott: She has projects that just don’t have deadlines yet. I have to meet your husband because I’m like, oh, it’s like my brother.
Mindy: Okay, well, he’s just down the road, so we’ll go as soon as we wrap this up, I’ll go introduce you to. Okay. Well, huge thanks to the National endowment for Financial education for sponsoring the podcasting group at FinCon 22 in um kind of stormy Orlando, Florida.
Scott: I’m not surprised we haven’t been interrupted by thunder and lightning yet, right?
Mindy: Well, there was some thunder earlier too. Yeah, and I’m glad the power stayed on the whole time we were recording. Uh, from episode 345 of the BiggerPockets Money podcast. He is the military guide, Doug Nordman from militaryfinancialindependence.com. Doug, tell us what’s going on over there.
Scott: Well, I’m updating the original version of the military guide, which is now 11 years old. Uh, the book is largely evergreen. There’s a few things that the military has changed in personal finances over the last decade that I’ll update. Once that’s done, I’ll start working on my third book and this will be about living your financial independence and I’ve been beta testing some of the concepts on some of the people that I’ve come in contact with.
Mindy: I love it. I love it. Okay, Doug, thank you so much for stepping into Scott’s shoes today while he gallivants around and does…
Scott: I’m not gonna make a joke about tough shoes to fill, but I will say that I’m happy to show up whenever you need help.
Mindy: Like the military always does.
Scott: There you go. We we like that that stepping in and taking care of things.
Mindy: Okay, so he is Doug Nordman and I am Mindy Jensen saying, chop chop lollipop.”
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Jensen saying chop chop lollipop.
