EP 613 - Achieving Your Aggressive Retirement Goals Early Via Passive Income With Rachel Richards

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host CEO of We Close Notes, Scott Carson.

Hey everybody. I'm Rachael Richards, best selling author of Money Honey and Passive Income Aggressive Retirement. And on this show of the Note Closers podcast, I'll be sharing how I retired at age 27 and how I'm helping Americans learn about financial literacy.

Good morning, good afternoon, good evening, everybody. Welcome to this episode of the Note Closure Show. As always, Scott Carson. Excited to be here with you today. I'm really jacked up today for our special guest and I think you're going to get a lot of great nuggets that you can apply to your life and your business today. And you are going to walk away feeling pretty damn excited, I think after this episode. And our guest is a former financial advisor who made a name for herself in the personal finance realm. Last year, 2019, she quit her job, retired with over 10,000 per month in passive income. She's the best selling author of Money Honey and Passive Income Aggressive Retirement. She's been featured on the Penny Hoarder and the New York Times and being contracted to speak at colleges all across the country. She's also, as you know, we like to have real estate investors on there. She's also a very active real est investor with over 35 rental units. And her valuable money lessons have helped thousands of millennials and other people work their way out of financial despair. She has successfully done what no one has done before, made the topic of money management fun, entertaining and simple. And so we are honored to have the author Money Honey there, Ms. Rachel Richards, joining us today on the podcast. How's it going this morning, Rachel?

Hey, Scott. I'm good. How are you?

I'm doing wonderful. Glad to have you here. What a crazy time we live in, huh?

Yeah, it's absolutely nuts.

We were talking beforehand how you just moved to Colorado Springs, where was home before Colorado Springs, Rachel?

We were in Louisville, Kentucky. That's where all of our rental properties are.

Louisville, Kentucky, the Bluegrass State. Gotta love that area. Let's talk about this. I mean, you've done a great job really sharing resources and sound. I don't like to say advice, but I say counsel because you've really helped a lot of people up there. What would you Say if you look back now and see what's going on in the crazy world and your experience and kind of had a crystal ball going forward. What are some, a couple things that you would give to our audience as things that they can put in place or try to put in place in this crazy time right now as far as helping them with their finances or looking towards retirement.

Yeah, I think in any recession type environment, cash is always king. So, you know, in some, you know, people ask me, should I be saving up more money? Should I be paying off debt? A lot of the times I'll say, you know, have a little emergency savings account, but make sure you're aggressively paying off that high interest debt. Now coming into this coronavirus and this potential recession, you know, maybe we need to switch our thinking on that maybe it's better to have more in savings and wait now to pay off the debt aggressively. So that's kind of what I'm telling people. Cash is king. If you have a little bit of extra money right now, I would personally rather just put it in my savings account just in case. You know, safe is better than sorry. And then I think something we can ask ourselves are, is, hey, was I happy with the amount of money I had coming into this crisis? You know, I think there's some statistic out there that less than 50% of Americans or more than 50% of Americans had less than $500 set aside for emergencies. So that's not where you want to be coming into something like this. I think it's a great opportunity to just ask ourselves, hey, did I like the way I was coming into this crisis financially and what can I do to better prepare the next time? Because it's not a matter of if, it's a matter of when.

Yeah, we went through this obviously 12 years ago in 2008 with the great Recession. I think this is going to end up dwarfing it based on some of the other things that we look at. I mean, back then it was the real estate that dropped dramatically and a lot of layoffs in banking. But this time around, I mean, it's not the real estate cliff hasn't hit yet. My spidey sense was like, oh my God, it's coming, it's coming.

Yeah, it's so. It's very weird. I mean, in the last recession, I mean, I was young, I was in high school. So I saw it firsthand in terms of I saw what happened to my parents and other people in my life, but I wasn't personally affected the way other people Were so this is kind of the first time I'm like, whoa, this is crazy. And it seems like things could get worse, but I don't have a crystal ball, so I don't really know what's going to come.

Yeah, well, that's the thing we look at. When you look at the number of unemployment filing. 40 million people file for unemployment, 25, 30 million Americans are already in the forbearance agreement, something like that. 50% of small businesses expect not to come back from everything. And obviously there's a lot of distressed stuff out there. People are obviously, you know, obviously with the mortgage companies doing a forbearance, we with our portfolio, it's one of the things we offered up our borrowers that they want, they wanted to was like, okay, if you need to wait 60 days or 90 days, we'll just tack it on the end of the mount, which is great. But it's still. If people ain't working, you know, if people aren't going back to work or those jobs aren't there, they've got to get creative in the way they're doing. And then I was talking with some people here in Austin and then they've required, they've made their money with Airbnb, Uber. Well, those things aren't working too well for them, right Rachel?

Yeah, that's a bummer. I mean, no one's traveling right now and you know, who could have foreseen that? But that's a great point to why it's so important to diversify. You know, don't have all short term rentals, don't have all long term rentals. The more variety you can have in your real estate portfolio, the better off you are.

Now with your portfolio of rentals, what's kind of the makeup of them? Are they all like three twos or duplexes, triplexes or where it's at long term or short term or what's kind of the makeup of your portfolio, Rachel?

Yeah, there's a mix. So I have two single family, a duplex, and then three buildings that have like 10, 11, 12 units each that are bigger. Most of them are like one year leases. And then in the bigger buildings we actually allow a three month lease at a minimum. So it's kind of somewhere between short and long term, but gives people a little bit more flexibility. You know, people like traveling nurses, traveling doctors, we get those a lot because they're on those 12 week assignments and they need, they can't sign up for a year long term. So that's been Kind of interesting to.

Do now with the shorter term leasing. I would say it's like executive leasing a little bit there. The 90 day aspect of things. You obviously get a higher, higher clientele than somebody that's a normal rental, a renter for a year. Would you, would you agree to that or does it vary a little bit?

I think it's. It's really variable. You know, I think it kind of depends on where you are in town too. We are in the business area. It's close to the hospital. So we do get a lot of the people in the medical or just people that are needing to work downtown and maybe don't have access to private transportation. They need to be close and within walking distance of things.

That makes a lot of sense there. Now I always like the small apartments, the 10 units and plus there. How'd you find those? Were those just buying retail? Did you have a broker? What was kind of led to you guys taking those down?

I've been really lucky. I found all of our deals on the mls, which I know is crazy to hear from a real estate investor. So there's some reasons I've been fortunate the way I am, but part of it is I have my real estate license. I got it early on because I wanted to have that time advantage. I don't think you can reasonably compete on the MLS if you are reliant on another Realtor because then you have to wait until they're free to show you the property.

We.

Whereas with. I have my license. So the second a property came up and I saw that it had potential, I would get my butt down there. I mean, there were times that I would be down at a property 30 or 60 minutes after it was listed. So I was almost always the first one. And that gave me a little bit of a competitive edge because the MLS is very saturated.

Yeah, no, that's great. That's a great tool. I totally agree that if you're waiting for a realtor to send you a weekly report or once a month, you're going to be weeks behind a competition of somebody who's really hungry and looking at it. And there's been plenty of that's beauty in some markets. There are a lot of opportunities for that Here in Austin, it's way oversight, it's way oversaturated, way overpriced for the most part. And I think Louisville is probably a much more affordable market compared to this or other parts of the country. Right.

Oh, so affordable anywhere in the Midwest in my opinion. It's a great place to invest. I tell people the first duplex I bought, it was on the mls, but it was an expired listing. So I basically called the listing agent and kind of pestered her for several months. I was like, hey, once this goes back online, let me know. And she did. She called me first before she even listed it. So I was able to put in an offer before anyone else saw it. And that was one of the best deals that I ever did. But I tell people it's funny because that duplex was $100,000. Now, even in Louisville, Kentucky, that's a pretty cheap price. But I can just hear my Bay Area people scoffing at me because that's just not realistic in some cities. So I always encourage people consider long distance landlording. It absolutely can be done. I'm doing it now. So I'm managing our properties from far away. It's going fine. And I know it can be scary, but if you are in one of those high cost of living areas, that could be, maybe that's the only way that you could get invested.

I mean, most of the country is a two hour plane ride from probably about 75% of the United States. And if you've got to jump on Southwest, I don't want to get away for a weekend to go out and take a look at the property or to put your team in place because we, I mean, we all can't do it ourselves. And although most real estate investors are egomaniacs when it comes to things, it's best to delegate. And you end up sleeping a whole lot better versus running around and trying to unclog a toilet and replace light fixtures and rent the property all yourself. If you've got a team and professional that you trust in you being a realtor, you've got access to a lot of people that are locally too, being remote now to make things happen, right?

Yeah, absolutely. That's given me a big advantage. And you bring up a great point. You know, I always talk about rental income being passive. It's hands off, you know, mailbox money, whatever you want to call it. But there's a caveat. If you want it to be passive, you have to build in the expense of having a property manager, of having a cleaning person, maintenance person. You can't be doing it all yourself. So I always tell people, set it up the right way from the get go. And when you're analyzing the numbers, make sure you're building in the expense of a property manager, even if you don't hire someone right away. Because the last thing we want to do, or at least the last thing I wanted to do was quit my job to become a full time landlord.

Yeah, nobody wants to do that. That's replacing one job with another job, right?

Yeah.

Now let's talk about a little about passive income aggressive retirement. Your book on. Great book. What was probably the biggest surprise that you've gotten from writing that one, and then maybe even money, honey, a little bit. What's been the biggest thing that really kind of shocked you after you wrote.

It for Passive income aggressive Retirement? I was shocked by how many different types of passive income there are. So when I first started out on my passive income journey, and the way I define passive income is it's money that is earned with little to no ongoing effort. All right? Now, it's no get rich quick scheme. It does take time or money to create. But I kind of look at it in two stages. Stage one, you're investing the time, you're investing the money. You're getting it into place for rental properties. You're searching, you're closing, inspecting the house, getting tenants into place. Then in stage two, once you've launched it and have it going, that's when it really becomes passive and a lot more hands off. So you have to make sure and be aware that there is this upfront investment that you are going to have to do to put that passive income into place. So the epiphany I had a few years ago was, hey, once your passive income exceeds your living expenses, you're retired, you're financially independent. And that's what I started going for because in my opinion, this whole nest egg theory of trying to save up a ton of money by age 65 to retire. A, I wasn't interested in that because I want to have fun now, and maybe that's a little entitled of me, but B, I think it's really unrealistic, actually, and it's really, really difficult to do. You know, there are studies that show that millennials will need to accumulate at least $2 million by age 65 in order to retire. And I don't know about you, but I just don't know like, that many multimillionaires. So to think of becoming a multimillionaire, it just seems really overwhelming. So this whole idea of passive income, you know, generating passive income of 5, 8, $10,000 a month, to me, that seems a lot more attainable. So my whole journey started out with real estate investing. At first, that was the only type of passive income I was aware of. And to me, it's one of the best tools for building long term wealth. But once I started writing this book and becoming this student of passive income and researching and talking to people, I realized there are so many ways. And in my book I outline 28 different passive income models. So trust me when I say that there is something out there for everybody.

Yeah, I would agree to that. It's a great read. And I love how you break down each of those 28 different models. And taking the time you're learning it as you're going through what you're. I mean, you've done a lot of it, but also, ooh, hey, here's another way, here's another way, another way. Great way. There's no excuse for anybody that out there not to find something that could be passive, right?

Oh, absolutely. Yeah. And you know, when people ask me a lot, they say, well, where do I start? How do I get started making passive income? I basically tell people, well, the first question to ask yourself is, do you have more time or do you have more money? And if you're anything like I was a few years ago, I would have said, I have neither. So the second question to ask is, okay, well, which one can you create more of? Is it going to be easier for you to free up more more time or easier for you to create more money? And then you can really, based on your answer to that, you can narrow down which type of passive income makes the most sense for you to pursue.

You got to start with some goals in mind too, I imagine, huh?

Yeah, for sure. You know, I always say you have to have a really solid understanding of your expenses. How much are you spending each month? What are you spending on necessary expenses versus, you know, expenses where you maybe have a little bit more flexibility. And for me, I didn't want, if I was, if my living expenses are $5,000 a month, I didn't want to just make five grand a month in passive income because that leaves me zero wiggle room in case something unexpected happens. So that's why I aimed for 10 grand. My husband and I are closer to 15 grand a month now. But even at 10 grand, we are more than covering our expenses and we have such a big buffer that we're still saving several thousand dollars a month.

Well, and that's a very valuable point, Blade, to bring that up. We always talk about various things. Hey, what do you need to be, what do you need to have coming in to be able to walk out of your job if you wanted to? What do you need to have coming in to cover your expenses, but comfortably. Not barely getting by living on ramen noodles every night and walking for entertainment versus sitting down watching a movie or go. You gotta be able to live life right, not just get by. There's no fun if every cent you're putting away, you're not able to really have any type of enjoyment. We can agree to that, right, Rachel?

Oh, 100%. I'm so glad you said that. There's a piece of advice that I feel like entrepreneurs or business owners are given when they're starting out. And a lot of people will say, oh, you know, just take a leap of faith and the net will appear. And I'm like, no, don't do that. You know, make sure you're making a solid enough income to walk away from your job comfortably. Because the last thing you want to be doing in your business or as a real estate investor or whatever you're doing is you don't want to be operating out of a place of panic and out of a place of desperation. That's not going to be good for your business or for your mental health. So make sure that you get to a point. You know, I started all of my businesses on the side. I started investing in real estate on the side. I started writing my books while my husband and I were both employed full time. And it wasn't until I was making ten grand a month from my side hustles, I guess you could call them, that I quit my job and I'm so happy I waited to do that because I'm very comfortable now and I'm at peace. And I'm not trying to figure out, oh my gosh, how am I going to make my bills this month?

Yeah, no, that makes a lot of sense. What would be as a financial advisor and a real estate investor, what's one of the other side hustles that you were doing that maybe most people. People don't know about?

So I have four sources of passive income now. I have my rental income, the royalty income from my books. I have a print on demand business. So that's where you can take advantage of platforms online that have things like mugs and tote bags and T shirts, and you make designs to go on those things. And when they sell, you're paid a royalty. So it's really cool because there's no inventory risk, there's no financial risk. You're only paid when something sells. And then I have. I just launched my first online course, so that's my fourth source of income. And just to kind of Give you an idea. I've always been very transparent on the income stuff. So in a normal month, the rental income makes anywhere from seven to $12,000 a month. And I mean profit. By that and then book royalties. In February, I just actually had my first $7,000 month in book profit. Thank you. And the print on demand, it's just a few hundred bucks a month, but it's super passive. And then the course, I'm expecting to make one or two grand a month. So things have been pretty solid except for the rental income. So do you want me to talk about rental income and coronavirus?

Yeah, sure, let's go down there. You're all excited about it, so yeah, I love it. We'll come back to a couple of other things, but let's talk about that.

Yeah, yeah. You know, in like I said, in a normal month, anywhere from seven to 12 grand a month in profit from the rentals. In April though, our rental profit was $1,000. Okay. So I. A lot of landlords. There are many people that are worse off than me. There are many landlor that are doing a lot better than us right now. The way I see it though is if my worst case scenario is that I break even for a few months, I'm totally happy. I mean, nothing's coming out of pocket, nothing's costing me. So that's totally fine. And there are several reasons for that. Obviously, some of our tenants haven't been able to pay rent. Some of our tenants have just moved out because they knew they couldn't pay rent. And the third thing is I haven't been filling the vacancies because I haven't wanted to put anyone at risk yet. Now we're slowly starting to do virtual appointments, virtual showings. I think we'll be back on track by August. Things are definitely already picking up, but that's part of the reason it's been so low. And I would say to any real estate investor out there, when you're looking at buying a property, make sure that you have the ability to pay the mortgage for several months if you had to. You don't want to be house broke. As a real estate investor, you want to be able to cover all of your expenses for at least several months because these things happen on a cyclical basis. So again, it's not a matter of if, it's a matter of when.

Yeah. Now, do you have students, as in your tenants as well too? With the universities and stuff like that kind of being ghost towns these days or not?

Not really. We've We've had a couple students in the past, but for the most part, we haven't really had many students apply because we're not that close to college campuses.

You know, I think that will be an opportunity for a lot of people. And also negativity. I mean, a lot of towns out there that are really based on the colleges and universities and a lot of landlords, you know, the rental properties, and now they're, you know, tumble. It may not quite tumble. Leads flowing through the cities, but there are some, a lot of vacancies and a lot of people have to get creative on what they're doing. Especially when you look at the short term rentals, people renting houses for weekends, and if we don't have a college football season or other things happening or even professional sports taking place, there's a big impact to the bottom line for a lot of investors out there. Right?

Yeah, it's crazy. I mean, and think about college dorms, I mean, they're just empty. And for the colleges that aren't going back in person this semester, it's like I would be figuring out a way to do Airbnb with those dorms or short term rentals or something because that's scary too. That's probably a big source of revenue.

Oh, yeah, yeah, definitely. Now, let's talk about your class. You got your first class, your launch, and let's talk a little about that and kind of your goals and ambitions for that and break it down a little bit for our audience out there.

Yeah. I was so excited. I wanted to launch a course for so long because the thing about most topics is that it's one thing to have the knowledge, it's another thing to implement it. And that's where we all struggle. We all know we should be eating healthy and exercising and saving our money instead of spending it on stuff we don't need. So why don't we do it? It's because. Instant gratification. It's because we're not thinking about the future. And it's because self discipline is one of the hardest things. So I struggle with. I eat chocolate every single day, even though I'm trying not to. So I struggle with it too. So I just figured, man, if I could, you know, anyone can read the book Money, Honey, but people struggle to maybe implement some things sometimes. So I was like, okay, well what if I can create this environment, create some accountability, really be more hands on and help my readers in a more hands on way? So that's why I wanted to create the course. I Ended up doing it in April, kind of right in the middle of coronavirus. And at first I kind of had this moral dilemma, you know, is it okay to be charging for this? Is it okay to have this product right now? I didn't want to rub people the wrong way. So I basically just went to my platform and I asked people, hey, what do you think? Do you guys want me to do this? What do you think? Is this a bad idea? They were like, please make this course. This would be so helpful right now. So I was like, oh, okay, cool. So I did. Very reasonable price. I got a great response. I'm just finishing up the beta round where I kind of had people test it out for a much lower price and they absolutely loved it. I'm so excited. And I'm going to launch my final version of the course at the end of July.

Nice, nice. And what's it called?

It is called. So my first book, Money Honey, is called Money A Simple seven Step guide for getting your Financial BLEEP Together. So the course is called get yout Financial BLEEP Together.

I love it.

It goes along with the book. Yeah, it's a lot of fun.

Now this can be online, like a virtual summit or videos. How's it gonna work? How are you gonna deliver it?

It's all online. It's all pre recorded videos. There's, you know, homework assignments, all these Excel templates and downloads, bonus content. So lots of different things.

Good, good point. And the price point for our listeners out there who are sitting there salivating.

Listening to this, I haven't nailed it down 100%, but I'm pretty sure it'll be about. It'll either be like 247 or 297.

There you go. Yeah, that's awesome. That's a great price point. And your time is valuable, your knowledge is valuable. They want free. They can go listen to you go read your time and the lessons you put in place. That's one of the things I always tell entrepreneurs because we've been teaching online workshops for years and charging. But I think when people have an investment, they show up. They take a lot more ownership into what they're learning versus if it's free or, you know, very, very cheap. They don't take as much serious because the investment's not there.

Right. You have to have some skin in the game to take it seriously. So if I was offering this course for free, I mean, people just wouldn't take it seriously. You have to have some type of investment or commitment.

Yeah, no I agree. That's on everything, you know, you got to invest in Now, I just saw the other day somewhere about that you just dropped a little bit of money in the stock market as well, too, to buy some stuff. You dropped, what, 10k or a month of. Technically a month of passive income for you into the stock market. You want to dive into that and share your little insight on what you're doing there?

Yeah, I sure did. I did it right in March. I was lucky on the timing. I just saw that it was down really far. I was like, okay, I got to get in. Wish I had invested more, to be honest, but I did. I put $10,000. I think I put it all in VTI. I'm a really big believer in index funds and ET and passive investing. There's been a lot of research that showed that passive investors perform just as well as active investors. And if that's the case, then why are you paying a 1% or 2% fee to a mutual fund manager? I always tell people, DO index funds ETFs, aim for an expense ratio that's 0.2% or lower, and just by doing that, you're going to get a 1% higher return because you're not throwing your money away on the fee. So that's the way I invest. Invest for the long term. Buy low, sell high. Don't try to time the market. All those. All those golden rules.

Yeah, that's great. I mean, that's great stuff. You put money where your mouth is. Exactly. You know, hey, here's the things to do and get rock and rollin'. Now, are you planning on getting your license there in Colorado and looking at property there in Colorado Springs?

Not immediately. The last time we acquired Property was in 2018. We were still working full time when we got to this point where we did not have the capacity to acquire any more rentals. So we kind of took our foot off the brakes. And we haven't needed to for real estate investing. For us, it's more of a means to an end. We got to this point financially where it's making enough to more than cover our expenses. So we don't exactly have the drive to kind of keep building this massive empire. But we have thought about potentially selling some of our properties in Kentucky and then maybe doing the 1031 exchange and buying just a massive complex out here for some reason. I think maybe you can speak to this. I think it'd be easier to just have one big property. Things would be more streamlined rather than having all these different Random things, Kentucky. So I don't know. We'll see.

It all depends on the deal. It depends on your time and energy. I mean, the exact same things out there. Yeah. Obviously, if you've got one property great with 30 doors versus 30 properties, it's a little bit different aspect of things, but it all depends on the price, your comfort level, and honestly, how much time you have to go into moving the other properties and then finding the other properties. Multifamily is one of the most overpriced assets right now. The market still with the things, but I also think there's gonna be a lot of opportunity here as the market starts to come down, because you had a lot of people buying multifamily at way overpriced, counting on appreciation, and the fact that they go and regentrify and get refinanced out in three years. Well, by looking back at what happened 12 years ago, when the market dropped and the banks kind of dropped, the values dropped, the banks had capital calls, all these investors to bring 20, 25% cash to refinance out. And most people didn't have that. So we saw a wave of specifically 200 or minus units really hitting the market in default. So I think you've got some opportunity to wait around for six or 12 months here.

Yeah, that's true. Maybe I'll just wait, take my time. I'm in no rush.

Well, and that's the beauty of it. That is a very smart thing. Especially we tell investors, don't get OTSC Symbros. Oh, that's so cute. I gotta have that house right now. Be smart and work on the numbers and get the habit of saying no to skinny deals and going to next, next, next. And when you rush in, you make a lot of mistakes versus being patient and smart, right?

Oh, my gosh, yes. And I always tell people, the best advice I can give to new real estate investors is to be patient. Do not settle. We looked for that first duplex for nine months, and that was after making offers, having accepted contracts that fell through, having to back out from inspections. And let me tell you, all those previous properties we made offers on, they weren't nearly as good as the one that actually went through that duplex. So, you know, be patient. The right deal will come up. And, Scott, you made another important point, too, which is that we. You really can never count on appreciation. So the way I see rental properties is that there's three benefits, and I refer to this as, like the holy grail rental properties. You get the passive cash Flow, that's number one. Number two is you get the equity buildup because your tenants are paying your mortgage. And then number three, you get tax benefits. A lot of people would say appreciation should also be in there, but I always view it as a bonus. It's like, yes, if I get appreciation, great. But I'm not going to count on it to make the numbers work. I'm just only going to view that as an extra, as a bonus.

Yeah, that's the cherry on top of the sundae. Because a lot of times when you look at different markets, appreciation doesn't kick in. And what's sad is a lot of. If you look at the west coast, predominantly, they've counted on appreciation, hence their overpay. I know people that would slice their grandmother's throat for a forecast, you know, and that just doesn't make sense if you're really thinking about what you're investing in and then you also look at the value. Well, I could buy one property out in California or I could buy a block in Columbus, Ohio or something like that. You know what I mean?

Yeah, it's crazy. I'm not super familiar with California, but after moving to Colorado, everyone here is like, man, everyone from California is moving to Colorado right now. So I'm kind of wondering if it's just become so oversaturated, so overpriced in California. Maybe that bubble is popping a little bit now.

I think the air, if we listen closely, we can hear the air escaping from that balloon there because it's Colorado or it's Texas where they're moving to. We get so many people here that are doubling down. As I say, they sell our house, they're their little, you know, two bedroom, two bath, 900 square foot house. Buy a four bedroom, four bath for a third of the value and then put half a million in the bank to do some stuff with. Let's take it back a little bit though. With you working with people and being a financial. What's the one or two things that just drives you ape shit, you know, when it comes to your pet peeves when you're talking with people? I know, it's for me, it's like if you give them good counsel and they go the opposite direction. But what's a couple things that really drive you bonkers when you're working with people?

That's such a funny question. I don't think I've ever been asked that. But one thing definitely comes to mind and I get a lot of questions about should I do a balance Transfer on my credit card. And I just have mixed feelings about this because on one hand, yeah, like transferring tens of thousands of dollars into a no interest, you know, no balance transfer fee, credit card. Yeah, that can save you a lot of money and interest. But at the same time, I hesitate to tell people to do that because I'm like, okay, well, are we fixing the problem or the symptom? You know what I mean? Because the only way to get out of credit card debt or any debt is to pay it off. You know, moving it from one type of debt to another type of debt account, that's not going to really do anything. Yeah, maybe it can make it easier. But I always tell people, unless you're ready to aggressively pay off that debt and you have a plan to pay it off completely within that introductory period, don't do it. Because you're just going to end up hurting yourself more in the long run because you're going to give yourself a sense of relief and a sense of feeling like, oh, I can take my foot off the gas pedal now because I moved it to this account. It's 0%. You kind of feel like you're buying more time, but that's not what's happening. So I always tell people that. And then another thing that comes to mind is with student loan debt, so a lot of people say, hey, should I be consolidating this? What's the best way to go about this? And I definitely think student loan consolidation can be a great thing, especially if you're getting a lower interest rate. But a lot of people will look at consolidating their debt. They'll see, oh, this bank is offering me a lower monthly payment, so this is great. And they actually don't look at the interest rate. And so what's actually happening is the term lengths of the loan increasing, and it's going to take you a lot longer to pay it off, and that's what's making those monthly payments go down. So people think, oh, I'm saving money, but in reality, that's going to cost you a lot more in the long run. So I always say, if you're going to consolidate your student loans, stick to the original term length of the loan and get a lower interest rate. That way you're really helping yourself out.

And then throwing that extra. One extra monthly payment in there to reduce a lot of extra interest over time. Reducing that and speeding up the payoff of that aspect is also probably something you're a big advocate of as well, too, right?

Yes, I think Be as aggressive as possible. Dave Ramsey talks about the debt snowball method and money Honey. I talk about the avalanche method, which is where you pay the highest interest rate first. That's really going to save you the most money over the long run. But the secret that I tell people is it doesn't matter which method you use. Use the one that's going to motivate you more. Use the one that's going to help you pay off your debt the quickest. And either one is going to work.

Now, I like to throw something back at you here. If you're thinking what you guys are working on right now, who knows? A crystal ball. But if you and your husband, obviously very goal oriented, put plans in place. What's your ultimate goal? What's your five year or 10 year goal that you guys are really working towards? I'm sure you guys have probably had those conversations. What's endgame for you, Rachel? What's that honey pot of goalness that you're wanting to get to?

You know, it's funny you asked that because really the end goal for so long was to get to this $10,000 a month mark and to be completely financially independent. And we are, we are totally financially independent. Yes. We could, I guess, become more financially independent and continue to grow our income and make more money and just save more. And that's fine. But we kind of feel like we have this sense of we hit our goal and we're going to relax a little bit and sort of enjoy life. So it becomes a lot more now about, hey, what brings us fulfillment? What can we do for fun? What do we love to do? You know, we love to travel. We're not doing that right now, but we're hiking, we're enjoying our time together. We sacrificed two or three solid years where we were working 80 hours a week and not spending enough time with one another. And now it's been really refreshing to kind of get that quality time back and just relax a little bit and sort of reset. But in terms of just one of the more fun goals that I have, I've always wanted to write a fiction book and become a fiction novelist. So I think I'm just going to start dabbling in that this year just for fun. But you know, most of the things now that are goals are just for fun goals, which is cool.

Well, that's the big thing, is if you're gonna work so hard, you gotta play hard.

Yeah.

And that's one of the biggest things I think entrepreneurs struggle with, is that we're so driven to get things done. We don't enjoy the victories along the way. We don't celebrate the little wins. And entrepreneurs get so burned out burning the candle at both ends that we're not stopping to smell the roses, not stopping to really kind of take the time, say, hey, yeah, 10 grand is my goal. I got to 2,500. Let's celebrate us being, you know, a quarter of the way there. Or we shoot these big goals, and at the end of the year, we don't hit them, but we've still exceeded anything we've ever done. So it's good that you're enjoying yourself. It's good that you're having fun. It's good.

Thank you.

Smelling the roses and what you've worked so hard to get to, that's a very valuable thing.

Yeah, I appreciate that, and I'm glad you said that, because having that burnout, that's been absolutely my biggest struggle in the past five years of my life. It's something I think everybody struggles with. But it really got to a dark place for me personally. I was really overcome with anxiety. I remember even when I quit my job, I had anxiety because I thought, oh, I'm not going to have this accountability anymore. What if I become this lazy person and sleep all day and I don't do anything? And I guess I didn't know myself very well because the opposite of that happened. And I went from working 40 hours full time to working 80 hours as an entrepreneur. It's a lot harder now because there's no clear start and stop to my day. You know, I'm not going into an office and leaving an office to come home. Plus, I am doing things that I truly love. I teach young people about financial literacy, and that's so much fun. So it doesn't even feel like a job anymore. But that can make it really hard to protect my time and make sure that I'm relaxing. It's something I still struggle with. So I'm glad you bring that up because I think a lot of people can relate, and it's easier said than done is what I'll say.

Well, it is. And you have to. You have to kind of block that time out. You've got to kind of set those, okay, I'm going to go do this for myself. And sometimes I think we feel guilty about taking that me time because we get so used to that grind. I mean, entrepreneurs, I don't know of a successful entrepreneur that actually just puts in 40 hours a week for the most part. You know, You've got tools of titans over your shoulder there from Rich Ferris, who preaches the four hour work week. And that's great in theory, but we all know that's in theory a lot of cases if you really want to get. If you're not at where you want to be right now. Right, Rachel?

Yeah, exactly. And I always have this innate drive to kind of keep growing and keep impacting. So I'm never like, I didn't become financially independent to sit on the beach or to golf. And a lot of people do that and that's great. I just, I get bored really easily. That's just me personally. So I was like, I'm just going to keep working on this book business because this is what I love to do. But yeah, I mean, there's a few things that I feel like I've done in the past year that have really helped me to protect my time better. One of those is that I only do calls or appointments or meetings three days of the week. And then the other two days I block off either so I can do the work that I want to do or just have those days off completely. And then the other thing, I've just had to be more comfortable with understanding that my to do list is never going to be done because there was a time right when we were in high school or college where we had a manageable to do list and a lot of us could feel like, oh, we're on top of things or ahead of things. And as you become an adult or an entrepreneur, that's just not true anymore. And so if you're always struggling to try to finish your to do list, that's a lot of what's going to create that anxiety and burnout. So I've just had to be okay with realizing not everything's going to get done. It's okay. I will get to it eventually.

Yeah, that's the big thing. As we get older, we get big rocks as a list versus to do list. You know, we've got the bigger things that we've got to get done and then a little small things will fit into the cracks of the week or the day to get things done. Definitely. I want to kind of take it back there. You mentioned something that you're working with youth on financial literacy. Talk a little about that. What are you doing with that? Because I think there's a lot of listeners that we've got here, Note nation. They have kids at home or they've been at home with them for 60 days with visual or online Learning. And they want to try to keep their kids entertained and keep that mind working versus just sitting in front of Netflix or Amazon for 12 hours a day. Tell us about what you're doing with the kids.

Well, so when I say young people, I really mean students. Not like children or anything. But my first book, Money Honey, was geared towards female millennials. But as that came out and that had a lot of success, I started getting solicited by different college campuses. So, you know, one thing I did a little bit in the past six months is I've spoken on different college campuses. The speaking thing is obviously winding down a little bit right now because people aren't doing those types of events. But I've been doing a lot of virtual workshops and. But, yeah, I mean, I would say overall, my target audience is students. High school students, college students, female millennials, just young people that are starting out in life and don't know how to manage their money. Because the thing is, we are in a financial education crisis. At no point in our lives are we taught how to manage our money. And then we're left as young adults to try to figure it out all on our own. Which is a little bit unfortunate because, you know, a lot of us feel these feelings of guilt and shame and embarrassment that we don't know what the heck we're doing with our money. So that's why I'm so passionate about it, and that's why I've made it my goal to really teach those younger generations about financial literacy.

Oh, my gosh, I'm getting chills here, because I scream the same thing. That while we are really the best country out there, we are such financially illiterate for such a mass majority of the United States. I mean, it's such a bad, bad thing. And you're right, they don't even teach how to balance a checkbook in high school anymore. They don't talk about trading. It's all about barely passing a test to get buying it passed on. And you have to. You may end up making a lot of mistakes. I remember being in college, and I graduated in 2001 from college. I'm a little bit older than you, but it used to be a big thing of, oh, get the college T shirts. We'll give you a buck to fill out the credit card application for Discover or something like that. Now, the beautiful thing is they outlawed that on campuses, but there are so many traps that we make student loans, not paying bills on time as college kids because we don't have the education. And it's definitely not passed down a lot of times from families. And our parents or our parents are not there. They're not able to help out because they're financially literally as well. Right?

Yeah. And the problem is, is that not teaching this publicly reinforces systemic poverty because kids that are growing from poverty, they're not learning from their parents. So that just reinforces that cycle. It's really sad. It's really an enormous problem. But yeah, I mean, there's so many memes about them. But one of the ones I referenced early on in my book is that you've probably seen this meme, but it's like, oh, I'm so glad I learned about parallelograms. That's really come in handy this parallelogram season. It's like, yeah, what the heck?

Isn't that a sideways square parallelogram? Right? Yeah.

Yeah, that's come in handy, right? So glad I learned about that.

You got to know that the angles add up to 360, though. Mrs. Snyder would be proud of that. Algebra like that or Mrs. Crawford. But that's the truth. And you know, when you were starting off, where did you get your education from before you got it? I know you were a financial advisor, but where before that, what kind of helped you build that foundation? What really helped you gauge such an interest in personal finance?

So, funny story. One of my earliest memories of learning about money was in sixth grade and I was at this water summer camp or whatever. All my friends were going down the water slides, playing. I was sitting by the pool reading this book I had found, Motley Fool's guide for teens, how to have more money than your parents ever dreamed of. And I was like, oh my gosh, totally nerding out. I've been a nerd my whole life. And I was like, this is so cool. I'm going to be able to, like, know this stuff at a young age. And I really understood the advantage of time, even at a young age. So I was like, okay, I'm going to get really far ahead. The other thing too, that kind of motivated me is I grew up in this really wealthy white county surrounded by uber rich people. And my family was always on a budget. You know, we weren't going out on these luxurious vacations. We didn't go out to eat at restaurants. And I went to high school where when people turned 16, they were getting brand new BMWs. So at that age, I remember just feeling like I didn't fit in. And that's the last thing you want to feel in middle School and high school, remember thinking, man, I don't want to end up like everyone else who's struggling with money. I don't want to have to operate on a strict budget for the rest of my life. I don't want to have to borrow money from family and friends to make it to my next paycheck. I want it to be different. And so I realized then that what I did then was either going to set me up for wealth or for poverty. So I kind of had these motivations, this feeling of wanting to stick in, wanting to become financially independent at a young age. And those, I guess you call them fears is what has driven me to become what I have become.

I guess I think fear drives is a huge motivating factor that we want to overcome things. I know. I feel that same way, too. I saw my parents struggle when I was young, and I did not want to replace, you know, end up back in that situation. So fear has driven me to keep going and keep going, even though I look at my parents as heroes because they were motivation and I built my work ethic from. But I agree to that. You look back your surround and realize you don't want to be in that same situation when you're older and you want more for your kids or your family as you grow older. Right?

For sure.

Now, where is your favorite place to travel to? I had to ask this question because I love traveling as well, Steph and.

I. I love traveling. That's a hard question.

It's a hard question. But if you could go anywhere right now, they open up the borders anywhere in the world or anywhere in the United States. Top two, top three places that you would go to right now if you had the opportunity.

Well, my husband's family's from Italy. I've always obsessed with Italy, and I've always wanted to become fluent in Italian. So we go there probably once every two or three years. And it feels like my second home. So if I ever had to pick, I would just keep going back to Italy.

What part of Italy?

His family's from kt, but I've been lots of different places. Last year, we actually kind of did northern Italy. So we were in Venice and Lake Como. Oh, my gosh. Absolutely beautiful. So there's so much to see there. But, you know, I've been Greece, like Santorini, Greece. Probably the most picturesque place I've ever been in my life. So that's another good one.

Yeah, Italy is one of our favorites, too. We've been a couple times the last couple years taking A couple cruising by, hitting five or six spots. But we've talked about going back and spending more time, especially wine country. The food, the wine, the people.

What's not to love?

Exactly. The bread, the cheese, the pizza, and then the artwork. And the architecture. So beautiful. But as with any good architecture, any type of building, it wasn't built overnight. And with retirement and savings, it's not built overnight. You gotta build it one brick at a time, one deposit at a time. And so, you know, are you. Obviously we talk about this, the budgeting aspect of starting to put away money towards saving. And, you know, how important do you want to scream at people to start putting something away? I mean, we talked about this at the very beginning. 85% of Americans were one missed paycheck away from being in default before all this happened. 10% of Americans are already 30 days behind of their mortgage. It's so important to be putting something aside and doing it on a regular basis. Remember, it's a dollar or $100 a month, right?

Yeah, I agree. It's so hard. You know, there are. People are scraping by. Systemic poverty is real. And, you know, it's hard to get out of that cycle because people, some people are already doing everything they possibly can to make more money. When you're thinking about saving money, it really boils down to this. In workshops and when I'm teaching people, you know, I'll ask people, hey, if you're trying to save money quickly, what kinds of things do you do? And a lot of people will say, oh, I'll eat out less or I won't shop as much or I'm going to make my coffee at home, stuff like that. And that's all great. There's a common theme there, and most people are focused on decreasing their expenses, which, again, is great because you absolutely have to get your spending in line and make sure that you're not living above your means. So definitely important. But there is only so much you can do to decrease your expenses, right? You can't. In normal times, you can't negotiate your rent or your mortgage payment. You can't stop paying car insurance. You can't stop buying food. So there's a little bit of a limit. So I always tell people the bottom line when it comes to saving more money is doing one of two things, either decreasing your expenses or increasing your income. And for whatever reason, a lot of us, we just don't automatically go to that, increasing your income. But the great thing about that is that there's no cap on how much Money you can make in a year, there's nothing stopping you from going out and making more money. So I always tell people, if you're looking to save more or really make an impact with your budget, don't just do one or the other. Focus on both decreasing your expenses and increasing your income.

I love it. I love it. I love it. This has been so much fun. Rachel, what is the best way for people to connect with you or to. Do you have a way for people to sign up for your course you were talking about earlier? What's the best way for people to reach out to connect with you?

Yes. So all the information can be found on moneyhoneyrachel.com both of my books, Money Honey and Passive Income Aggressive Retirement are in ebook, paperback, and audible, so you can find them on Amazon. And I will give listeners my free passive income bonus gift. So this gives you some resources, you know, deadly mistakes to avoid free resources and tools. If you want to start building passive income, you can go to moneyhoneyrachel.com bonus to download that.

That's awesome. Thank you so much. I guarantee you'll be seeing some downloads from our listener database because they are action takers.

Awesome. I love that.

Yeah, definitely. Love it, love it, love it. Rachel, this has been so awesome. We got to have you back on at a later episode. Does that sound all right for you?

Oh, absolutely. Thanks, Scott. You're great. So this has been a lot of fun.

Oh, yeah, definitely. All right, guys and gals, that's going to wrap it up for this episode of the Notebook. Close the show. So many great nuggets of advice and counsel from Rachel today. Take heed. Go and get her bonus. We'll have the links on the website and in the show notes as well for you guys. But do something powerful. Do something for your future self. You know, if you really want to accomplish big things, start today. And as Rachel said, a little bit here, a little bit there, not just on cutting debt, but going forward, making more money. There are so many different ways you have to look at what's going on right now as a way to pivot, to really capitalize on the different opportunities available out there for you so that you can bring in multiple streams of passive income to help you get your goals a whole lot faster. So go out, take some action, buddy, and we'll see you all at the top.

Sam.