What It’s REALLY Like to Build Wealth in the Military | Making a Millionaire

Fifteen years ago, they were $35,000 in debt and struggling to make minimum payments. Today, before turning 40, they have a $4 million net worth and a path to financial independence. We uncover the mindset shifts, real estate strategies, and honest money conversations that fueled their journey. ⁠⁠⁠⁠⁠⁠⁠⁠⁠Jump start your journey with our FREE financial resources⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Reach your goals faster with our products⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Take the relationship to the next level: become a client⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Subscribe on YouTube for early access and go beyond the podcast⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Connect with us on social media for more content⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ Bring confidence to your wealth building with simplified strategies from The Money Guy. Learn how to apply financial tactics that go beyond common sense and help you reach your money goals faster. Make your assets do the heavy lifting so you can quit worrying and start living a more fulfilled life. ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠NordVPN.com/MONEYGUY Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Speaker 00

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• 0:27Speaker 01

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• 0:56Speaker 02

  15 years ago, you were $35,000 in debt. Negative net worth.

• 1:01Speaker 03

  Correct. We had no assets. And I looked at all of our bills and I was like, well, we can't even make all the payments on all of these bills.

• 1:07Speaker 02

  Like, we don't have enough money to even cover the minimum requirement to keep us afloat.

• 1:12Speaker 03

  Correct.

• 1:13Speaker 04

  I mean, there was probably a healthy mix of fights and really frank conversations.

• 1:17Speaker 03

  She is more the spender of the two and I'm, I'm obviously, I would spend zero money if she gave me the opportunity.

• 1:22Speaker 02

  You guys made some very hard decisions. Hey, we're gonna start saving 50%. We're gonna start building so we can get ourselves out of the hole. What's next? Where are you going towards? What was the reason for all those hard decisions you guys made to put you in the position you're at right now?

• 1:42Speaker 02

  All right, so from, from Tennessee, right? You, you said you were here for one year. Where were you from before Tennessee?

• 1:48Speaker 04

  Uh, the Chicago suburbs.

• 1:49Speaker 02

  Chicago, so Chicago, Tennessee, and then went to Florida, graduated from Florida. But y'all started dating or y'all just met sophomore year?

• 1:57Speaker 04

  Uh, we dated briefly, like high school dating for just a few months and then didn't.

• 2:02Speaker 03

  Went our separate ways.

• 2:03Speaker 04

  Went our separate ways.

• 2:04Speaker 02

  What was the thing that like brought you back together?

• 2:06Speaker 03

  We always stayed in contact so during college, so.

• 2:08Speaker 02

  MySpace.

• 2:09Speaker 03

  Yeah. I did have MySpace accounts.

• 2:12Speaker 04

  It was before social media really, so it was like texting or whatever. And then my junior year in college or senior year in college, we just kind of rekindled and the rest is history.

• 2:23Speaker 02

  I love it. That's awesome. And how, how long have you guys been married?

• 2:26Speaker 04

  It was 15 years last month.

• 2:28Speaker 02

  Happy anniversary.

• 2:29Speaker 03

  Thank you.

• 2:30Speaker 04

  Thank you.

• 2:31Speaker 02

  What about family situation? Any kiddos?

• 2:33Speaker 04

  Oh, yes. Two. Two girls.

• 2:34Speaker 02

  Oh, nice.

• 2:36Speaker 04

  Yeah.

• 2:36Speaker 02

  Two girls. You know a thing or two about that, don't you?

• 2:39Brian Preston?

  You did too until you had a son.

• 2:40Speaker 02

  Yep. I was in the two-girl gang, and then we had a little boy. What, how old are your girls?

• 2:44Speaker 04

  Our oldest is 11, and our youngest will be three in September.

• 2:48Speaker 02

  Three in September. Oh, those are fun ages.

• 2:50Speaker 04

  They are ages.

• 2:52Speaker 02

  They are. They are. They are ages. Would you guys say that you are in the messy middle? You feel like you're at this stage of life where, man, life is just real busy, real crazy, real hectic all the time?

• 3:01Speaker 03

  There's a lot going on, for sure.

• 3:02Speaker 04

  There is.

• 3:03Speaker 03

  There's a lot going on. Work, home life, all kinds of stuff.

• 3:05Speaker 02

  And what do you, what do you guys do professionally? What's your vocation?

• 3:09Speaker 03

  So I'm in the military. I'm a submarine officer. Been in for about 16 years now.

• 3:14Brian Preston?

  Nice.

• 3:15Speaker 03

  Yep.

• 3:15Speaker 04

  And I run the operations and kind of back-of-house finance stuff for a large design-build firm out of Washington DC.

• 3:25Speaker 02

  And so in finance? I like that.

• 3:27Speaker 04

  I mean, light. I am not a CFO by any, I am a COO. Very different.

• 3:33Speaker 02

  I love that.

• 3:34Speaker 04

  I just wear a very small finance hat.

• 3:37Speaker 02

  Now, where do you, where do you guys live currently?

• 3:39Speaker 03

  So we're in Fernandina Beach, so Amelia Island area.

• 3:42Speaker 02

  Awesome.

• 3:43Speaker 03

  Very close. The base that my submarine's at is in Kings Bay, Georgia, right across the line.

• 3:48Speaker 02

  Gosh, you know how cool the sentence is, the base for my submarine is that is something I've never even come almost close to saying in my entire life. Well, it's wild, because, right, like, you guys shared a lot of your financial information with us. You sent us over a net worth statement, and it was pretty crazy, because how, how old are you guys?

• 4:06Speaker 03

  So I'm 39.

• 4:08Speaker 04

  38.

• 4:08Speaker 02

  38 and 39.

• 4:09Speaker 03

  Thank God we got this in before 40.

• 4:11Speaker 02

  Right, right. So still young.

• 4:14Brian Preston?

  Forty's still young in ours. The older, the older I get, the younger everybody else is.

• 4:18Speaker 02

  Isn't it kind of funny how true that is? So obviously, you guys, still young, but you sent us over the net worth statement. When we look at it, it is astounding. You guys are sitting here with a total net worth of nearly $4 million. Like you said, you haven't even hit 40 yet. But it sounds like this is not, it hasn't always been this way, right? Is that a fair assessment?

• 4:42Speaker 03

  For sure. So there was, there was a lot of times, I think I sent in some other information just about like what our incomes were early on. It's definitely been a long like building process where we had pretty high savings rate to start, where I was pretty, pretty hard on her in terms of, well, let's not, let's not spend so much money or not spend any money almost. So fortunately I've lightened up over the years. But yeah, we were, I enlisted in the Navy and so at the very beginning, we started out with, I think we were about $35,000 in debt and-

• 5:13Speaker 02

  When was, when was that?

• 5:14Speaker 03

  So like almost right when we got married. So in 2010, yeah, there you go.

• 5:18Brian Preston?

  We've all been married 15 years, so about 15 years ago.

• 5:22Speaker 03

  Right, exactly.

• 5:22Brian Preston?

  So it started at zero.

• 5:24Speaker 02

  So hold on, you said 15 years ago, you were $35,000 in debt, negative net worth?

• 5:30Speaker 03

  Correct. We had no assets.

• 5:32Speaker 02

  And here we are, 15 years in the future with four million dollar net worth? There's a story there, right? There's some, you gotta walk us through. How, how did this happen? How'd we get here?

• 5:44Brian Preston?

  Well, I need to know how bad it was because I mean, the air is pretty thin where you are right now. But I think a lot of people who are gonna watch this, I wanna, I want them to be able to see themselves and some of the struggles y'all had and then let's, then we'll get, be able to expand and say, what changed? And you know, what, what made you guys like wake up? And then what did you have to do to get yourself out?

• 6:03Speaker 03

  Yeah. So when we first got married, the debt was car loan debt, probably some bad decisions in terms of purchasing a car, definitely not by the requirements that you guys have.

• 6:13Speaker 02

  No, 20, no 23.

• 6:14Brian Preston?

  Give us some color on this. What type of car are we talking about here? You went in the military. Military guys are notorious for buying really cars.

• 6:20Speaker 03

  I did probably what everybody else does in the military. As soon as you get your first paycheck, I think my first year I made $18,000 total and I bought a car, like a used Lexus. That was like $25,000.

• 6:30Speaker 02

  Oh, nice. Of course.

• 6:31Speaker 03

  So more than my annual salary. So we had that car loan. She had a car loan at the time and then we had some student loan debt. And then she brought a decent amount of credit card debt into the, into the marriage too.

• 6:45Speaker 03

  So yeah, so we started out there and I think she moved up to where we were living in Charleston, or where I was living in Charleston. And I looked at all of our bills and I was like, well, we can't even make all the payments on all of these bills.

• 6:57Speaker 02

  Like the minimum payments?

• 6:58Speaker 03

  Yeah, the minimum payments and our rent and like, we don't have, like, that's not even taking into account food at that point in time.

• 7:04Speaker 02

  Like, we don't have enough money to even cover the minimum requirement to keep us afloat?

• 7:09Speaker 03

  Correct. So, and credit to her, like, she uprooted her life when we got married and moved up there to live with me. And I was like, hey, like, we need to make more money. And like, right now. So she-

• 7:21Speaker 02

  Because you were making eighteen thousand dollars at the time?

• 7:23Speaker 03

  Correct. I was making eighteen thousand dollars a year at the time. And so she went out and got not one, not two, but three different jobs at the time. So she had like a nine to five during the day. She also got a job working at a restaurant and got another job on top of that to at least get us to the point where we could pay off our bills. And then I started reading personal finance books like a crazy person.

• 7:45Speaker 02

  How long did you have to do that? How long did you have to do like the three job thing?

• 7:48Speaker 04

  Um, several years, I would say. This was pre-kids and we were twenty-four, twenty-five. It's like a different level of energy. But yes, I was working nine to five. I was working at a restaurant and I was bartending at night. So not, you know, seven days a week, but enough. And, you know, his income is finite, like, it's fixed. There's no, he can't get a second job necessarily. So it was up to me to try to make up for some of that. I spent a lot of-

• 8:15Speaker 02

  But obviously, there was something, so like, you made these car decisions and you had some credit card debt. Like, I'm assuming credit could just consumption?

• 8:21Speaker 04

  From college.

• 8:21Speaker 02

  General consumption stuff. Did your behavior change? Or did you just start making enough money that you could pay for the stuff you wanted? Or did you start recognizing, oh, maybe we don't need to do the same consuming that we have been doing? Walk us through that.

• 8:34Speaker 03

  Yeah, so, so, once I started, I think I'm very lucky in that personal finance has always been very interesting to me. So I started reading, you know, I just started consuming as much knowledge as I possibly could, just trying to learn on my own. The first couple of books that I read were Rich Dad, Poor Dad, and then Dave Ramsey's book. So

• 8:51Brian Preston?

  Total money maker.

• 8:52Speaker 03

  Total money. Correct. Yeah. So we like from that I created a budget. Mint was still a thing back then. So I created a pretty strict budget back then and just kind of convinced her to get on board with it. And we like started out like a year later, probably we created a savings rate of around 50%. And then just maintained it for the last, you know, 15 years of our life. It was tough back then.

• 9:14Speaker 02

  Yeah.

• 9:14Speaker 03

  And it's gotten easier as you know, our incomes have grown.

• 9:17Speaker 02

  So, but you've maintained it like it was 50% when you were making 18 grand plus three jobs.

• 9:22Speaker 03

  And so once, yeah, once she got the three jobs and then we had that and we could cover our bills. Once we got to a point where that was possible, like I, I think probably our combined incomes, my income obviously went up a little bit. And then she was probably making around 50. Once mine got to around the $50,000 a year. And our combined incomes were around a hundred thousand a year. That's when we probably hit an actual 50% savings rate. And then just maintained it as our incomes grew.

• 9:45Brian Preston?

  Were y'all on the same page from the get go? I mean, truthfully, for Alex to go take on three jobs, you must have, I mean,

• 9:54Speaker 02

  Pretty convincing.

• 9:54Brian Preston?

  You caught fire too. So how did that whole discussion? I mean, there has to have been a conversation y'all had where y'all had to sit down or something, because these are not like something you just come to and say, hey, by the way, I'm going to need you to go get three jobs. By the way, we're only going to live on 50% of what you make on those three jobs. There has to have been some pretty stark conversations that were had there.

• 10:15Speaker 04

  Yeah, there were definitely some bumps in the road. I, I am certainly the spender of the two of us and he is very much the saver. So there were a lot of, I would say frank conversations, you know, I mean, I would do a trip to Home Goods and come home and he'd say, you can't spend that kind of money. I mean, it was, it's true. We were just, I, I came from a, you know, I went from my parents' home to college. And then I got married right after I graduated college. So I never lived on my own. I got married instantly. And so it was very much a learning experience for me as well. And that there were definitely some tough conversations, some tears.

• 10:56Brian Preston?

  Were there fights though? I mean, or did y'all just, did y'all have very healthy? Cause that's the thing. I just want people who watch this to know that there is a better way out and that you're, no matter how bad things seem when you're in the moment, if you just start making those small steps, there is a path out. So that's why if you could share any guidance on. The pain, but then also how you started getting traction through that. Cause I think people will learn from that. And that's what Bo and I were talking about when we looked at your situation. We're like, if we just show our public, this is a $4 million attractive couple that, you know, is under 40. People are gonna be like, they're gonna, they're gonna throw their hands up. And I think there's a story here that a lot of people can learn from.

• 11:40Brian Preston?

  And I want y'all to be able to open up and be able to share that.

• 11:43Speaker 04

  Yeah, I mean, there was probably a healthy mix of fights and really frank conversations. You know, it was, um, you know, education on my part. Um, and I didn't get that education growing up. I'm an only child, so. And basically when I got married, my parents were like, well, she's your problem now.

• 12:04Speaker 03

  Yeah, there's some, there's some good, we're good bouncing off of each other. Cause she, she is more of the spender of the two. And I'm, I'm obviously, I would spend zero money if she gave me the opportunity. I'd save a hundred percent of our income. But there's some, there were some instances where, you know, some arguments that we had early on after we purchased our first home. Um, I very much pushed for the, the real estate journey that we went on to buy like rental properties in the military. Um, I don't think she was fully on board at the beginning with that. There's, I mean, there's specific instances of arguments that we had. Maybe not arguments is the best word, but she bought pillows one time, uh, prior to.

• 12:41Brian Preston?

  Talking to the man right here.

• 12:43Speaker 02

  They kill me, the pillows, every time.

• 12:46Speaker 03

  She spent like a hundred dollars, I think, on pillows before Thanksgiving one year where our family was coming in.

• 12:50Brian Preston?

  Was that for all the pillows or just one pillow?

• 12:51Speaker 03

  It was like two pillows.

• 12:52Speaker 02

  But for, but for like Thanksgiving pillows, right?

• 12:55Speaker 03

  They were going on our couch.

• 12:55Speaker 02

  Like, these are like, just throw pillows.

• 12:58Speaker 03

  They were going on our couch. And I mean, we had a, a pretty big argument over that. Cause I was like strict on the budget. I was like, that's, we can't spend a hundred dollars. Why do we spend a hundred dollars on pillows? Like, what do we need that for? So those are kind of the small things that happened, you know, as we were, as we were going through our journey, especially at the beginning. It definitely got easier after we set those initial like, kind of guardrails up.

• 13:18Speaker 02

  So was it budgeting that y'all did? Hey, here's what we're gonna do.

• 13:20Speaker 03

  We were strict about budgeting back then.

• 13:23Speaker 02

  Walk us, how, I mean, how'd you do?

• 13:24Brian Preston?

  Jump meet weekly to discuss how, I mean, where's the accountability on that?

• 13:27Speaker 03

  I was updating the budget and I was encouraging her kindly to update, update the budget. Cause you have to like categorize back then, like all of the credit card like events that happened. And I was like, hey, we're two weeks in and we're already going to be $50 over in shopping. So cut it out. We called it fiscal fast. We still use that word.

• 13:49Brian Preston?

  Oh, I love that.

• 13:50Speaker 03

  Yeah, to this day, like, hey, we spent too much so far this month. Let's go on a fiscal fast for two weeks and not spend any money other than food and water.

• 13:57Brian Preston?

  Were you on board or was there any resentment towards this initially?

• 14:00Speaker 04

  Um, I understood the why we would have to do that. Like, you know, there is a fixed amount of income. We don't, you know, I'm just very used to being able to put things on credit cards and I just didn't really have that money education in high school or college. So it was, it was definitely difficult, but I think that we, we don't argue too much. He's just very much an educator. And I, and he presents, you know, the facts as they are on black and white.

• 14:30Brian Preston?

  Overwhelming arguments.

• 14:32Speaker 02

  Yeah. We can't afford Thanksgiving pillows. Oh, thanks, honey. I see that we can't afford.

• 14:37Speaker 04

  Yeah. So the budgeting was new for me and it's, I actually ended up enjoying part of it. You know, it's very analytical, very logical. I didn't love seeing the numbers be so low.

• 14:54Speaker 04

  But it was just kind of where we were at that in our season of life, but.

• 14:58Brian Preston?

  And who's, who, who came up with the idea that you should go get more jobs? I know, you know, Matt's kind of laid out, he couldn't go get the job, but at some point there was a eureka moment. That we just need to go make more money. So who came up with that idea?

• 15:11Speaker 04

  Um, well, I got my, so, you know, I graduated in 2009, right on the heels of, you know,

• 15:17Brian Preston?

  Great recession, yeah.

• 15:18Speaker 04

  A pretty intense economic downturn. So my nine to five did not pay well.

• 15:22Brian Preston?

  Right.

• 15:23Speaker 04

  And so there was, you know, an opportunity for me to get a job on base at a bar that paid very, very well for very, very little effort.

• 15:34Speaker 04

  And I mean, it was, I feel like mostly me. I was like, hey, here's an opportunity for me to, and he was working so much that I was either do that or be at home.

• 15:44Brian Preston?

  Right.

• 15:45Speaker 02

  And there's at least a productive use of time.

• 15:47Speaker 04

  Yeah. And I wanted the Thanksgiving pillow, so.

• 15:50Speaker 02

  So you guys went, so you had this, in 2010, you had this negative net worth. You said, hey, we bought our fir-, like, how, because I know there's a lot of people out there listening, thinking, okay, I'll never be able to buy a home. I'm not in a situation where, how'd you do that? You said you went on this real estate journey. Walk us through the process. We've been getting your very first home. Like, how'd you save up for the down payment? Were you investing? What were the things that you guys were doing to allow you to just take that first step?

• 16:11Speaker 03

  Yes, so the, the first home that we bought, and actually, the first few homes that we bought, the military has a pretty nice availability for something called a VA mortgage. VA mortgages, at least for your first home, or even, I think, your first couple of homes, you don't have to make a down payment for them. You do have to pay, like, the VA funding fee and things like that.

• 16:28Speaker 02

  So zero percent down, but there are some fees, was it?

• 16:30Speaker 03

  Yeah, so it was probably, we probably had to put 3% max down on that first home. So we didn't really have to save that much money. And I, I waited until I did get, like, my first bonus, once I completed all of my training for, back then, I was enlisted, so completed all the training pipeline. They give you a, a nice bonus if you, if you sign a contract to stay in for a little bit longer. So, yeah, we purchased our first home with only a, a fraction. And because I had read a couple of books about, let's build some assets up, first home probably wasn't a great investment property, but we learned a lot from it.

• 16:59Speaker 02

  Now, were y'all living in this home, or was this a rental property?

• 17:01Speaker 04

  We, yeah, we've, we've lived in every home that we rent out now.

• 17:04Speaker 02

  Okay, so you're one of those, did you buy a house? And then, when you go to buy the next house, you rent the house that you?

• 17:11Speaker 03

  Exactly.

• 17:11Brian Preston?

  How long are you staying in it, two years?

• 17:12Speaker 03

  It's, it's dependent on, you know, how long I'm stationed somewhere. Usually, that averages out to be about three years at each, at each duty station. So approximately three years. And we, we purchased each one of them with the intent to rent it out in the future. So that's another sacrifice she's made, because we're buying a lot, a lot less home than we can afford, just because those are the homes that'll be profitable when we leave.

• 17:31Speaker 02

  How do you feel about that? I mean, obviously, again, even that's a tension point. Hey, we're gonna start our family, and we're gonna grow our family. And instead of buying our dream home, or the home that really we love, we're gonna just buy this other home.

• 17:40Brian Preston?

  Just keep doing starter homes.

• 17:41Speaker 02

  Then we're gonna be able to rent. And we're gonna rinse and repeat.

• 17:43Speaker 04

  Yeah.

• 17:43Speaker 02

  How did you guys get on the same page with that?

• 17:45Speaker 04

  Well, the argument changed from Thanksgiving pillows to, you know, hundreds of thousands of dollars worth of homes. But the first, I mean, we have quite a bit in our portfolio now, and the first three- I would say were pretty easy conversations because I wouldn't say it was less than we could afford. It was probably right where would be like normal. Now, our last house is a little bit different, but he's been more nimble in giving me some money to help renovate or make it somewhere where I am okay living for 36 months.

• 18:22Speaker 03

  And I'm dangling the carrot of, hey, when we retire, we'll get the house that we want.

• 18:26Speaker 02

  Oh, it's coming.

• 18:30Brian Preston?

  We kind of resemble the area y'all think you're retiring to, so we kind of know what you're in for. You do too, because y'all are from these parts.

• 18:37Speaker 02

  So, did you know, because again, I think a lot of people, did you know real estate? Did you have a background in real estate? Because obviously now you have a real estate portfolio. How'd you figure out how to rent them? How'd you figure, like, how'd you figure out all those pieces and parts out?

• 18:49Speaker 03

  So, so originally, and this has definitely changed over the years, originally, this was, it was my like push to do this. So, I was kind of like, here, I'll do it all. I'll pick the house. I'll do all the work that's required to like find tenants and then like the maintenance of the properties. We found out pretty quickly after the first house that I'm good at the numbers portion of picking a good rental property and less good at the managing tenants and finding tenants. So, that pretty quickly shifted over to her. I think our first rental property.

• 19:16Brian Preston?

  Give me some color on that, though. Is that meaning you were having trouble with when they didn't pay their rent being hard on them? Or was it meaning you were having trouble with just the ongoing maintenance? Where was the struggle set?

• 19:25Speaker 03

  It was, so placing tenants was, was one of the problems. I didn't do a very good job of doing like background checks and things like that. So, we put a convicted felon in one of our properties and someone who had defaulted on their previous or got kicked out of their previous rental property. That was the same, same family.

• 19:43Speaker 02

  There wasn't any sort of background process here, right?

• 19:47Brian Preston?

  Are convicted felons, are they, are they least consistent with paying their rent?

• 19:51Speaker 03

  So, they left in the middle of the night.

• 19:55Speaker 03

  And we had something like a $10,000 like repair to do to fix the home for the tenants.

• 20:01Speaker 02

  Was this the very first?

• 20:02Speaker 03

  This is the first one.

• 20:03Speaker 02

  This is the very... So you guys went through this experience and you had a bad tenant and it cost you a lot of money and you still said, "Hey, you know what? Let's keep this thing rolling."

• 20:10Speaker 03

  Well, that was like, that was like an expensive seminar. So there's a lot, a lot of, a lot of things to learn there, but then we learned those things. And then I transitioned that portion of it over to her. And she's done a much better job at managing, managing the tenants.

• 20:22Brian Preston?

  So what did you pick up and do? Cause he's already giving you tremendous credit. So you obviously, first, first thing, we're not gonna put felons in our houses anymore.

• 20:30Speaker 04

  Proper vetting process. Um, I, while personal finance is something that's very interesting to him, I manage people all the time. And so being able to be hard, hard on people is something that comes naturally to me. But also like having an ironclad lease, making sure that I'm educating myself on state laws, tenant landlord laws in my spare time. And, you know, it really just took an evolving of that and the vetting process. And really, everything else comes pretty, we joke that when it rains, it pours. We don't hear from our tenants for like a year and then four of them have an issue. But, so most of the time, I'm just kind of smooth sailing.

• 21:12Speaker 04

  But for example, when he was on his last patrol, we were turning over two properties in a different state and we don't use a property management company, it's me. And so that was actually probably the toughest time that I've had with the girls and then also working full-time.

• 21:26Speaker 02

  Cause you're having to like go to the property to go deal with...

• 21:29Speaker 04

  Or find somebody to go to the property and do walkthroughs and, you know, work with our tenants who are moving out and find new tenants to move in. And so that, that was probably the most difficult time, but we weathered it. And it was, you know, the good thing is we are now have enough of a buffer that if it has to sit vacant for a month or two, it's not the end of the world. And so that is very reassuring and, you know, a comfortable person is, you know, makes better decisions, I would say. So I wasn't super, you know, strict on finding the next tenant who was even remotely qualified to move in. We're just trying to find the best tenant.

• 22:04Speaker 04

  And so, you know, it, it has definitely been a learning process, but the, the lease education was probably my, something to fall back on for me to, we've never had to initiate eviction proceedings. Thank God.

• 22:18Speaker 02

  Well, they've been so conned, they just leave in the middle of the night. That makes it a lot easier. Did you have a, a real estate strategy like, hey, we know that one day we want to own five rental properties or we know that we're going to like, how did you approach, or did it just kind of happen through time? Cause again, I think a lot of people are curious about, hey, here's where I'm today and this where I want to be 10 years in the future. How strategic was your plan in terms of acquiring properties?

• 22:40Speaker 03

  Yeah. So I, when I looked at, or when I read the, one of those first books about like building up assets and things like that, I felt like there were three, three ways people made a lot of money in life. It was either through real estate, through owning your own business or, or through the stock market. And so I try, I, I figured, well, let's try and do all three of those. I feel like real estate and managing properties is kind of like having your own business. So I wanted to build up those assets, but I had no idea what I was doing. And then also investing, you know, as much money as I could. So that's why we, we had the huge savings.

• 23:12Brian Preston?

  Every one of your houses, ones that y'all lived in, cause you said that, I think y'all said that clearly. So you kind of let life be the driver of

• 23:19Speaker 03

  Right, exactly.

• 23:20Brian Preston?

  You got relocated.

• 23:21Speaker 03

  And the, the probably the biggest mistake that I made, arguable that was a mistake. We haven't purchased every place that we've gone. So I went to New York very early on when I was still in this and didn't make a lot of money. We could have purchased a home there, which would have been a great time to purchase. This is like 2012 or 2013. Something I could have purchased an apartment there and we didn't. So that's one of my bigger regrets, but it's usually just been, we either rent or buy and buy if there's something that I can find that I think we can profit from when we, when we move again and have to rent it out.

• 23:50Speaker 02

  So you've never bought a speculative rental property thinking, I'm going to put a tenant there tomorrow?

• 23:55Speaker 03

  No.

• 23:55Speaker 02

  Okay.

• 23:57Brian Preston?

  This is kind of like a quasi, it's, it's not like you hear house hacking and you hear about duplexes, quadplexes and things like that. But in its own way, this is because we all know the government does have very good benefits for, for service members for all the things that you don't make them pay. There are benefits and other things in this. You're basically, I was about to say exploit, but you're really taking advantage of, of a loophole in the system on purpose.

• 24:22Speaker 02

  Right.

• 24:22Brian Preston?

  To kind of do a, a quasi house hack.

• 24:25Speaker 02

  Right.

• 24:25Brian Preston?

  That you've been able to build wealth off of. Cause the reason I say that and I want to share. Is that, and I'll ask you this, this pointed question, because you've broken some rules.

• 24:34Speaker 02

  You see him excel, he knew it was coming.

• 24:38Brian Preston?

  Managing property out of state is one of the hardest things. I mean, you've already kind of explained some of, some of it, Alex. And then also just getting into real estate at the beginning, like before you had, you were broke as a joke. And then your first endeavor into the wonderful world of finance is let's go take a levered product. And put tenants in there, convicted felons, and see how we turn this, what could go wrong? But you've come out on the other side. Is there something, I just would, so people watching this, I'd love to know your insight on how is out of state property? And then also looking, because now you kind of have developed an expertise. What do you see for people looking at the market now? Could they do what you've done? Or is, are things changed in the, in the, in the landscape to a degree?

• 25:21Speaker 03

  It's definitely tougher now, but I, we did just purchase a rental property because we, I just moved down to, to Florida within the past year or so. So the home that we purchased was an assumed mortgage, an assumed VA mortgage.

• 25:34Brian Preston?

  Oh, that's great. Good for you.

• 25:36Speaker 02

  Hey, what's an assumed mortgage? Can you educate our folks on what that is?

• 25:40Speaker 03

  So I don't know all of the products. I know FHA loans and VA loans are typically assumable mortgages.

• 25:46Brian Preston?

  So what's the interest rate?

• 25:47Speaker 03

  So it is the lowest interest rate that I have on any home. It was the home that we purchased a year ago. It's 2.65%.

• 25:53Speaker 02

  So for those who don't know, an assumable mortgage is one where someone is already in the house, they're going to have a mortgage. And when you buy the house, you not only buy the house, but you take over their mortgage payments. You just pay them the difference in the equity they have in the home. So then they get to continue paying on that mortgage. So rather than having to buy a home at today's prevailing interest rate, you get to take it at whenever they bought the home. In this case, when it was 2.65.

• 26:15Brian Preston?

  Did you have to pay a huge premium for that?

• 26:16Speaker 03

  So yeah, the problem is you, you typically do have to bring some cash to that, especially if housing, housing prices go up. So that's the highest down payment we've had to make.

• 26:22Speaker 02

  Because you've got to make them whole on the right.

• 26:24Speaker 03

  You can get like another loan to cover that if you wanted to. I didn't really want to do that. We had to pay like a hundred thousand dollar down payment to make up the difference. But still, it's a $400,000 loan. That's, that's super low interest rate.

• 26:36Speaker 02

  That's amazing. That's amazing. So you have this like real estate portfolio, but you also, again, if we look at the net worth statement, you have a really healthy real estate portfolio, but you also have a very healthy, liquid portfolio. So it's not like you did all real estate. How, how were you able to balance both of those? Cause a lot of times we see people who try to go headlong just into the real estate thing and they have no liquidity. How are you guys able to do both?

• 27:00Speaker 03

  Yeah. So I, I still have, I mean, we, there's a lot of loans up there and a lot of money in debt. Looks like a lot. I don't typically look at it nice and compactly like that. I feel like we've always had a, a healthy fear of debt, like the, the Dave Ramsey's book scared the crap out of me in terms of debt. So when we started out, um, my plan was to never buy, um, a house or enough homes that we couldn't cover just on our own. So I always wanted to make sure that we increased our, either our income or didn't purchase until we could cover all of that on our own. And then really it was the, the savings rate and then intentionally doing things that would help us increase our income later to where I could start saving more into, into the stock market and.

• 27:42Speaker 02

  So as you were saving for the down payment for these houses, did you cut off your like 401ks and your IRAs? Or did you figure out how budgetarily to do both of them? Hey, we're still gonna save, I'm gonna use 25%, 25% into the retirement portfolio, but we also save cash for the next down payment?

• 27:58Speaker 03

  So we were, we were prioritizing saving into investing. So hitting up all of our tax advantage space and maxing that out. As early as I could, uh, that was like goal number one was max out those. And then real estate was kind of a secondary goal as, as we went. And again, those, those first few homes, I, I brought very little cash to the table. So the cash that, uh, we brought to the table here later on, mostly just came from our investments. I would, I would take out money from that, uh, as necessary to pay down payments.

• 28:27Speaker 02

  Love it. So one of the things you were obviously doing is in addition to saving in the tax advantage accounts, it sounds like you were using a bridge account. You were saving into after tax brokerage accounts with the understanding that, hey, this can be retirement money, but this can also be intermediate term money. That's one of the things we talk about in step seven of the financial order of operations. When you are building up that bucket, it does give you flexibility when opportunity. present themselves like going to assume a mortgage at 2.65% you have capital where you can do that which is awesome

• 28:55Brian Preston?

  yeah a lot of people think cash is trash but I've tried to and I explained this in millionaire mission is that I have found cash to be a very valuable tool in wealth building when you have extra of it when everybody else is scarce in the resource and that's exactly because I think a lot of people probably couldn't go take that assumable mortgage that easily so you're able to step up and that's what everybody says hey man you're so lucky no luck is that intersection of preparation and opportunity and that's why sometimes cash now I don't want you to do it this is why it's a step seven eight is where I tell people to start building up extra cash for opportunity

• 29:32Brian Preston?

  it's more of steps one and four to keep you out of the ditch but it is one of those things where I think you guys have found some benefit in keeping extra cash around as well

• 29:40Speaker 03

  we wouldn't have been able to to I mean we are lucky in terms of where where things were along the way but we wouldn't have been able to do purchase this home and assume this loan 10 years ago because we wouldn't have had the the access to that kind of money

• 29:53Brian Preston?

  if you were given guidance to somebody who's starting fresh because we're gonna minute we're gonna answer some of y'all's questions is out of state real estate where you would start or do you think just because you had a unique opportunity being in the military

• 30:04Speaker 03

  yeah I think I think that is more of a unique opportunity I do think there you can learn a lot by just jumping in kind of and starting the process like if you do want to get into real estate it's good to like read up and learn about things before you do it but really the the place that you learn a lot is is that first home yeah that's through the failures like you learn all the mistakes and you learn all the things that are gonna cost money the things that you weren't thinking about beforehand so there was a pretty big gap between we bought our first one to bought our our fifth or our second home it was like a five or six years worth of like figuring some stuff out learning that I'm not the person to manage it she is because she's way better at it but yeah that process jumping in I don't know that out of state real estate is probably where I would start that probably

• 30:44Speaker 03

  increased the difficulties for us at the beginning probably local areas you know the areas more you know where people would like to live

• 30:53Speaker 03

  you can go like fix the the toilet clog on your own instead of paying 200 bucks to have a

• 30:59Speaker 02

  Plumber come out and do it. I don't want to go fix the toilet.

• 31:02Speaker 04

  We don't really do that too much now, but having like local tradespeople like, you know.

• 31:06Speaker 02

  Having your contacts that you can help take care of it.

• 31:09Speaker 04

  Mostly in the same area. So that actually is really beneficial for us because you know, there's three homes that we have outside of Charleston, South Carolina, and we have the same plumber. We have the same HVAC person.

• 31:20Brian Preston?

  It's not a bad place to have property too. I mean, those are great, those are great areas to have real estate.

• 31:25Speaker 04

  Yeah, but the out of state piece, we didn't really get a choice, right? So we go where the Navy tells us to and when the Navy tells us to go there. So yeah, it wouldn't be something I would necessarily tell somebody who wants to embark on being a landlord. Out of state is definitely more difficult, but we just, we didn't have that choice.

• 31:43Speaker 02

  I do.

• 31:45Speaker 00

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• 32:40Brian Preston?

  And I know you probably have more questions, but I did want to talk about, because y'all have done something so strict, meaning that you've only lived off of 50% of your money. But now we look at your net worth, it's big. Are y'all transitioning to where, because you know, there is a fine line between financial mutant versus financial miser. Do y'all feel like you're loosening up? Because I, look, confessionally, I was a tightwad. We even tried to brand something, you know, where we are so proud of our tightwad lives. But as I've had more and more success, I've realized I had to give up my tightwad card because I, we were traveling nicer, we were doing things, and I felt like I was a hypocrite if I wasn't honest, that my lifestyle creep, it was still very healthy, based upon income and

• 33:22Brian Preston?

  everything else, but there was a transition that had happened in my life. Are y'all experiencing that? Are y'all still in this, like, lock down?

• 33:29Speaker 02

  You see how you look at him?

• 33:30Brian Preston?

  I mean, I see y'all working, and I don't mean for this to be uncomfortable.

• 33:33Speaker 03

  She's probably, she's probably got a great story of where she thinks that I probably changed, or at least that's where my sister thinks that I changed. But yes, definitely, I was a miser. She can talk about.

• 33:43Speaker 04

  No, I mean notoriously, you know, his friends and family know that he was a tightwad, cheapskate, however you want to phrase it.

• 33:50Speaker 02

  Some say frugal, some say otherwise.

• 33:51Speaker 04

  Exactly. I say he's like a chipmunk, right? He was like swirling away for a rainy day. We all, we already, you know, have on the table that I was the spender, so I was always trying to be like, we can, we can do this, we can do that.

• 34:03Brian Preston?

  I don't think, by the way, to live in this environment, I don't think you're truly a spender. I think just in relative terms, you're a spender to him.

• 34:09Speaker 04

  Thank you. I appreciate that. I will be using that later. No, but you know, there, I would, I think that you said lifestyle creep is very much right on. We, as have continued to evolve and have gone on a little bit nicer vacations. I think that's probably what you're referencing, is we went to Italy, and he did some serious shopping, and got a little taste for some of the finer things in life, and was like, okay.

• 34:34Speaker 02

  I think I bought two things.

• 34:35Speaker 04

  Yes, he bought two things. But we knew, you know, we made a plan before we went there, like, okay, we're going there. This is what they're known for. This is what we'd like to buy. So it wasn't like, you know, just frivolous or anything. We had gone with intention. But I think he got a little taste of what that could look like, and came back. And I wouldn't say that it's completely absolved, but he has, and then pendulum hasn't swung the other way, if you will.

• 34:57Speaker 02

  He's loosening, is what you're saying.

• 34:59Speaker 04

  He has quite a bit.

• 35:00Speaker 03

  In my mind, I've loosened up.

• 35:02Brian Preston?

  Is that me, the Ferrari or Lamborghini sitting in the garage at home?

• 35:04Speaker 02

  No, man, that was gonna be a lot. I was not, I was thinking it might be a lot. I wasn't thinking.

• 35:08Brian Preston?

  That's what I was gonna say, man. We're talking about Italian, man.

• 35:10Speaker 03

  I bought some Florentine leather shoes.

• 35:13Speaker 04

  Oh, nice.

• 35:15Speaker 03

  They were like a hundred bucks.

• 35:16Speaker 04

  But for him, it was a pivotal change for us because he was very used to not spending any money. And so, you know, we would joke when we got our credit card statements that it was like 99, 1%, you know. But yeah, that was probably where we started to see a little bit of a shift, maybe. But I would say most people would probably still categorize him as a little bit of a conservative when it comes to that.

• 35:45Speaker 03

  I mean, I recognize the 50% savings rate is higher than even financial advisors recognize.

• 35:50Speaker 02

  Sure. Well, I'm curious about where we're going, right? Because obviously, 2010, we had a negative net worth, right? You guys made some very hard decisions. Hey, we're gonna start saving 50%. We're gonna start building so we can get ourselves out of the hole. I would say that you have now gotten yourself out of the hole. Here you are, not even 40 years old, you have a $4 million net worth. What's next? Where are you going towards? What was the reason for all those hard decisions you guys made to put you in the position you're at right now?

• 36:18Speaker 03

  Yeah, I've really been pushing the FIRE movement, especially to her. I really, I want to retire, or at least have it to where I can do whatever I want. And if I make money out of it, great. Or if I don't make money out of it, great. Like, my, my plan is, once I'm done with it-

• 36:33Speaker 02

  You want financial independence?

• 36:34Speaker 03

  I want financial independence as soon as possible, so that, you know, we have the availability to do whatever we want, whenever we want, both for me and for her. Like, we've both worked very hard over the past 15 years. And eventually, when I retire, the 20-year career so far, and I want to be done, and do something that's just enjoyable or fun, and have the availability to spend more time with my family. Because I go away for months at a time and don't see or talk to anybody.

• 36:59Brian Preston?

  Refine that vision, though. Because how many more years do you have in the military before you have the option to retire?

• 37:03Speaker 03

  So, not that I'm counting down or anything, but I'm eligible for retirement September of 2029.

• 37:07Speaker 02

  Okay.

• 37:08Brian Preston?

  September of 2029. And then, do you think, is that done, done? Or do you think that there's still a transition period even after that?

• 37:15Speaker 03

  Um, so done done in terms of like still being in the military?

• 37:17Brian Preston?

  No, we're just working.

• 37:18Speaker 03

  Um, so my goal is to be done done if I can like again, if I find something that I truly enjoy, um, I'm okay to continue doing that. Um, and then we might need to bridge the gap just, uh, between then and full retirement. But in my mind, I'm done in 2029 and we'll kind of shift roles and I'll be the person that that maintains the the home and the and getting all the kids to practice and.

• 37:40Speaker 02

  So we're gonna stagger retirement. It's not you both are not planning on exiting in 2029?

• 37:44Speaker 04

  Oh, I think that's what we're here to discuss.

• 37:46Speaker 03

  Yeah, exactly. I mean, if she can retire and we can get everything that we want, then you know, that's definitely on the table.

• 37:51Speaker 04

  Um, yeah, I I love my job. Um, I have great flexibility within my work. Um, and I'm able to work remotely, so it works very well for our current life situation of moving quite frequently. So I'm actually not looking to retire when he does. Um, and I think that where we kind of want this conversation to go is kind of what that end goal is, why we have been acquiring these properties and living how we have been living. Um, for me, my end goal is to live in a quote unquote forever home. It might not be forever, but it will be for longer than we've ever lived in another home, um, where our children can, you know, go through primary and, you know, elementary, middle, like in one location. That is not something that we're afforded currently.

• 38:36Speaker 04

  So that's my end goal is that I'd like to just maybe put down roots somewhere. That doesn't necessarily mean I want to stop working, um, but it means that we don't have to move anymore.

• 38:47Speaker 02

  So when I'm hearing you say this, even even above even financial independence immediately, what you're looking for is foundation and roots. Like, how do we be in a place where we can be in our forever home? One of the one of the things that would be required, I imagine, would you have to be out of the military. So that way you're not moving, right? So that's gotta happen. Have you guys decided like, uh, this is the area we want to be? Or this is the title? Like, do you have parameters around what the forever home looks like?

• 39:13Speaker 04

  We have toyed with several locations. I mean, we're fortunate in that the Navy has really beautiful places that they have sent us to up and down the East Coast. You know, we, I think we'd like to be in kind of the Nashville metro area, which is where we want to, you know, set down said routes. But like you said, we can't necessarily do that until 2029 or so. But, you know, we constantly are sending each other Zillow listings and looking.

• 39:41Speaker 02

  Well, the good news about this area is if you're sending a Zillow listing now, odds are it'll be the exact same four years from now. That's right. That's right. It's not moving very much at all around here.

• 39:51Brian Preston?

  I do think it's leveled out to a degree. It's not, it's not doing what it was doing in 2021.

• 39:57Speaker 02

  Right.

• 39:58Brian Preston?

  So I don't think it's, it's going to continue to go up, but I don't think it's, it's not the crazy run up that we saw. I think that's in general for all of real estate, is that we're not seeing these huge spikes in prices, hopefully. There's still going to probably be the inflationary run up, so.

• 40:12Speaker 02

  Right. So when we think about planning forward, right, it sounds like, because are you going to have to move more times than the military? Is this last move to Florida the last one you're going to do?

• 40:22Speaker 03

  Maybe probably one more time.

• 40:24Speaker 02

  Okay.

• 40:25Speaker 03

  My current, my current job will be, I'll transition in about early 2028, maybe mid 2028, and I'll still owe like a year and a half or so after that. So I could move one more time, or maybe there's a job in the same base that I could, could try and get.

• 40:37Speaker 02

  And if we move one more time, I'm assuming current home that we're in, we're going to rent that and we'll go buy another house wherever we move to.

• 40:44Speaker 03

  Right.

• 40:45Speaker 02

  Continue this process.

• 40:46Speaker 03

  Provided we can find one that, that I, that'll be profitable money wise.

• 40:49Speaker 02

  We have maybe one more move, one more home.

• 40:51Speaker 03

  Right.

• 40:52Speaker 02

  In terms of the home, just so we can get some context, when you guys look at homes to buy for this type of strategy, what's the price one? I know it depends on the area, but historically, what, where are you guys at in terms of the price of homes that you buy?

• 41:05Brian Preston?

  Use the market value.

• 41:06Speaker 03

  Right. My goal is typically the P I, the P I T I and the rent that I can expect from it having a thousand dollar delta between that.

• 41:13Speaker 02

  Okay.

• 41:14Speaker 03

  So the, the home values that we purchased have gone up. So the home that we just purchased was about $500,000.

• 41:19Speaker 02

  Okay.

• 41:20Speaker 03

  It would probably be around that price point. But again, we'd have to find like an assumable more. Mortgage or something to make the numbers work more than likely.

• 41:25Speaker 02

  Meaning like, hey, if we if we have to go buy a house at six and a half, seven percent, it's probably just not gonna work.

• 41:31Speaker 03

  It would be very difficult, or we'd have to buy a house that's much cheaper, like, less than $200,000 would be the only way I could see that being possible.

• 41:39Speaker 04

  Based on the areas that we've lived in, what rental potential?

• 41:42Speaker 03

  There are not.

• 41:43Brian Preston?

  Not that you want to have your two children in.

• 41:46Speaker 04

  Right.

• 41:47Speaker 03

  Especially not on your major military basis, too, because those are pretty built up areas usually.

• 41:51Speaker 02

  So as you guys think about 2029 and being you retired and you kind of setting down roots, when you think about, I mean, obviously, you do have a lot of debt, right? I mean, there's not a lot of folks out there that have a million plus dollars in debt. You guys happen to fall into that camp. When you retire, is that something that has to go away? Or are you comfortable having debt when you retire? And we haven't really talked about, you know, this dream home, like, is it 500,000? Or is it something different?

• 42:22Speaker 03

  Yeah, so I'm I'm OK with the debt that we have there just because the rental property, there's a there's a delta there in terms of like how much money we're we're profiting off of them and what the interest rates are on those. If we purchased a new home at like six to six and a half percent interest rates, or whatever they are, to be honest, I'm not 100% sure because I haven't I haven't purchased a home with that interest rate. I would be much more inclined to pay that down quickly and get rid of that that debt. And that's kind of the plan if we purchase a home, like the range that we've been kind of talking about and kind of planning for on our own is around the $2 million range. And then her continuing to work and me maybe getting some some side work and paying that down

• 43:03Speaker 03

  at least as as much as we can and maybe resetting the loan so that we have a smaller smaller monthly payment because the fixed expenses are going to be significant.

• 43:14Brian Preston?

  Is there any desire that you just pay cash for the $2 million home?

• 43:16Speaker 03

  I've thought about it. It makes me nervous to to spend, you know, half of, well, half of what my portfolio might be in in five years if we can continue on the saving train. Spending half of that immediately on it would would make me more nervous than I would almost want to work long. Just to pay it down with my, the money I make from a new job.

• 43:36Brian Preston?

  I like hearing you say that because there's some maturity in that answer and the fact that um, I think a lot of people's emotional reaction is let's just pay cash for the house. We have resources. But I was telling Bo when we were reviewing your situation, is there's also a lot of value to being able to have access to your capital when you're making big life changes. When you, because when you leave the military, when you move to a new part of the country, there's just gonna be a lot of moving parts that are going on that your life's not gonna feel completely settled. And to basically take half of your capital, lock it into this house, it takes away a lot of flexibility. And there's a lot of decisions I've made in life where yes, I pay a premium and I look at it as almost like an insurance policy, where I pay, I'll pay a mortgage or I'll carry something,

• 44:20Brian Preston?

  but it just gives me so much more flexibility for a time certain period. And then you can always go prepay a mortgage. At some other times, even and I know on a $2 million house, I mean, this potentially could be a hundred thousand dollar decision that you're paying interest on a mortgage for a year or two and you might incur some interest. But I think it would be worth it because you guys are the CEOs of a four million. By this time, this will be well over $5 million. That seems like a small price to pay. I know on paper, a hundred thousand dollars for the interest seems crazy, but for a $5 million enterprise, it seems like an okay thing to give maximum flexibility. Because I still don't even know, the thing, the way you gave your answer,

• 45:05Brian Preston?

  will you be happy being fully retired? I mean, that's why, that's why I think having access to capital is gonna be a very valuable thing as you're trying to figure out a lot of those life things.

• 45:14Speaker 03

  Yeah, I might, I see myself probably finding something to do with my time, other than just, you know, sit at home and play golf all day. Um, I mean, it could be anything. Like I, I really do truly enjoy consuming information on personal finance. So, I mean, I might try to get into that field. I kind of have planned beforehand and gotten my MBA while I was in, in school and started taking coursework towards getting a CFP accreditation.

• 45:41Brian Preston?

  Let's go. I wonder if there's any firms in the area that they're trying to move to.

• 45:46Speaker 02

  You said you're thinking about middle Tennessee, Nashville. I'll have to scroll through the rolodex.

• 45:51Brian Preston?

  We have military guys who were actually clients and then transitioned into into becoming financial advisors too.

• 45:58Speaker 03

  So yeah, that's definitely.

• 45:59Brian Preston?

  There's precedent for that.

• 46:00Speaker 03

  There's definitely interest in doing something like that. And I think I would really enjoy it because I'd get the opportunity to help people and kind of go down a similar path that I went down where I had some success from from basically nothing and no true knowledge. So I think that would be interesting to me, but we'll see what happens. I got to survive the next, you know, sea tour here and get through all the of a pretty arduous lifestyle for the next few years.

• 46:26Speaker 02

  So, okay, when you think about where you are today, you have cash flow rolling in from these rental properties. Are you you're not are you using that cash flow to then satisfy the debt? Or are you building up that cash flow and just kind of letting the minimum mortgage payment happen on the rental properties?

• 46:41Speaker 03

  So it's we're making minimum mortgage.

• 46:43Speaker 02

  Minimum mortgage. So you have cash flow coming in, at least a thousand dollar delta was your goal per rental property coming in. You also have a 50% savings rate. So have you guys like played with, hey, just from where we are now, if we think about the way that we're going to accumulate and the way that we're going to build, just between 2025 and 2029, we're likely going to have a lot of capital in 2029 to figure out how to make that housing decision.

• 47:05Speaker 03

  Right.

• 47:06Speaker 02

  Have you projected that out at all?

• 47:07Speaker 03

  Absolutely. So I actually went over it with her pretty recently. I think I listened to one of your shows where you did like an annual like meeting.

• 47:14Speaker 02

  Uh huh. Yeah, that's right.

• 47:15Brian Preston?

  We took a day off of work and actually turned it into a really fun event.

• 47:19Speaker 03

  So every once in a while I'll like just show her like our net worth statement because I track it and update it. And I'll just show it to her like, hey, we had a great year. But I listened to that and I was like, well, maybe I should have like an actual meeting where we sit down. And I'm like, let's show her the numbers on like where I plan to be and give her a couple of different ranges of options to where we show, you know, what's going to be possible when I retire in in four years and how much money we're going to have. And that's where we kind of came up with the budget of $2 million. So we were talking about a higher budget, but I was like, I don't I don't think that we're going to have enough money.

• 47:50Speaker 02

  He's like, I just bought the $100 pair of shoes. Push me further than this.

• 47:54Speaker 03

  Here's what the numbers look like. Here's like the, the poor, the do do plan. Here's the, here's the, you know, down to earth. And then here's the like, probably best case scenario. And I showed her what those numbers would be with the different projections and how much we'll have. And that's kind of what we're basing our budget off of.

• 48:09Speaker 02

  So on your projection, are you going to have the ability to pay cash for the home? And you're going to be able to make the decision, either we pay cash for the home in 2029, or we do a mortgage? Are you, have you projected out that you'll have the flexibility to do that?

• 48:21Speaker 03

  I do think that we'll have the flexibility to do that. The numbers that I came up with, based on our savings rate and how much we save per year, was that our actual like investable assets would have, or our actual investments, not including like the, the, the real estate that we'll have, would be around four to four and a half million, depending on what kind of rate of return the stock market and our portfolio gets.

• 48:40Speaker 02

  Sure.

• 48:41Speaker 03

  So yeah, we could pay that, pay almost half of our investable assets down to do that. There would be a pretty big tax liability. I feel like that would, that we'd incur if we did that. And I don't love that portion of it. And then that would put a lot of money into just our primary residence, which I don't love doing that either. So I think I'm leaning more towards taking out a loan and just making a down payment, but, but it'll be an option.

• 49:03Speaker 02

  Well, one of the difficult things to project is, is there's just so many variables that can change. I mean, obviously we have young children. You don't know exactly what your lifestyle is going to look. You're going to have one other move. So you don't know exactly what 2029 is going to do. But what you do know is, okay, we have this high probability of this outcome that we want to have. And I think you're doing the exact things necessary by taking the steps now to build towards that. So that when you get there, you do have the choice to say, okay, well, then we have capital. We can either pay for this home, or we can have a mortgage. Because what we've seen working with clients is that it's not an all or nothing, one or the other. A lot of times we'll have clients who end up retiring or going into financial independence, and it makes sense for them to liquidate portfolio assets and be completely debt free. In other scenarios, based on where interest rates are, and based on where cash flow is, and based on

• 49:48Speaker 02

  where portfolio assets are, a mortgage makes a lot of sense.

• 49:52Brian Preston?

  Or even account structure.

• 49:53Speaker 02

  Or yeah, even account structure.

• 49:55Brian Preston?

  It made, it made no sense to go gut the portfolio for the, the sake of paying taxes, just so we could be debt free, when there was probably a more balanced. Approach to let you in a tax efficient way, make the decision, still prioritize paying off the debt, but, but not just giving Uncle more money for the sake of just being cash, you know, debt free.

• 50:15Speaker 03

  Right.

• 50:15Brian Preston?

  Right out of the gates.

• 50:16Speaker 03

  Right.

• 50:17Speaker 02

  So the difficult question to answer is which was the right, uh, what is the right move?

• 50:21Speaker 03

  Right.

• 50:22Speaker 02

  Depends. And it's going to depend even more from now until the time that you get there, but you're doing the things necessary to position yourself to be able to make that decision.

• 50:30Speaker 03

  Right.

• 50:31Speaker 02

  At that time. Does that make sense?

• 50:32Speaker 03

  Yep.

• 50:32Speaker 02

  Is that helpful? Is it helpful that our answer was it depends?

• 50:36Brian Preston?

  I would love to know if there's any specific questions you guys would love to get our input on. Because I was, I told Bo when I saw y'all's situation, I was like, you guys have done such an incredible job. It's, it's commendable what you've done, but the things, if I was your advisor, I would love to kind of be your personal coach on how to maximize the life component too. Because I see, I see a lot of coachability here on that you've built tremendous assets, but you're probably trying to figure out, how do you transition to where you're still saving or building, but also you're just maximizing your thirties, your what's left of your thirties, but then you.

• 51:16Speaker 02

  Don't say that.

• 51:19Brian Preston?

  As a guy my age, I just want everybody, and there is a balance there because you get to, the crazy thing is you get to the top of the mountain and you get, you, you started checking off the all the boxes of all the things you thought you wanted to do financially, you'll find that that's kind of empty. If you don't build it, pack into, into the, the, the memory category and the life experience category, all the stuff that lets you feel life well worth the live, you know, fulfillment and all the other things. It's not just about getting to the goal. It's the journey. I know that sounds so cliche, but it really is the truth of life. And that's the biggest things that I was looking at y'all's situation. They go, they need a coach because y'all don't, because y'all have done so good at developing and building, but who's making sure that y'all are actually saying it's okay to release?

• 52:04Brian Preston?

  Cause that's the hardest thing for most people like you. I bet y'all are going to have a very hard transition into spender or consumer of these resources because you've been so rewarded for.

• 52:13Speaker 02

  Being as tight as possible, that there's just, there's a balance there.

• 52:18Speaker 03

  Right. I mean, it's definitely something I'll need help for because I think that was one of my questions when, when we sent in our things was, you know, I'm already nervous that we're going to spend too much in retirement.

• 52:27Speaker 02

  See?

• 52:27Speaker 03

  And I'm, I'm concerned about, you know, things like sequence of return risk and like what's going to happen. Like, are we going to spend too much money immediately? I think I will, I'll, I'll need to be pushed to, to spend money. I'm going to be like, if we can live on what we, what we're, what we got right now from the rental properties and just my pension alone, let's just let everything else grow. We'll be fine.

• 52:45Speaker 02

  How does that make you feel? When he says that, when he says, let's just live, let's, let me, let me retire and let's live as small and as tight as we can. How does that make you feel?

• 52:54Speaker 04

  Well, I mean, the pendulum has really, he, we do live a very comfortable life now. We are, our children want for nothing. You know, we have, I feel a good amount of discretionary income. We go on fun trips. We fly the way that we want to fly and, you know, I, I don't think that we are missing out on anything. The, the military is probably what limits us the most, just based on like what we can do and when we can do it. So I am very excited for when that limitation is off and we can book a trip, you know, six months. We can't do that right now.

• 53:31Speaker 02

  Right.

• 53:32Speaker 04

  And so I am, you know, I trust Matt inherently and, you know, he's certainly led us on this journey and been very, very successful. We certainly had some bumps in the road in the very beginning, but I feel now we are well into our groove and feel very comfortable with how we manage money together as a team. It's always been a very, very team effort. And so I, I mean, you know, I, I listen to what he has to say. It's, it's passion. He really, really enjoys it much more than I do, if I'm being very honest. And you know, I, we have lanes within our marriage. And this is his lane. And so I know that he wants what's best for his family. And so I would, I don't know, follow him.

• 54:16Speaker 02

  So she said.

• 54:17Speaker 03

  I'm usually the green light. We'll spend however much, we'll spend however much I want. It sounds good to me.

• 54:22Speaker 02

  I love it. So this doesn't get you in a pretty good place with that. But is your desire, okay, hey, we're just gonna live off the real income. And we're gonna live off the.

• 54:32Brian Preston?

  You also got a pension that will be coming in.

• 54:33Speaker 03

  Right.

• 54:35Speaker 03

  It's not my desire. So I'm planning on like, once I retire, having a 3% withdrawal rate. Just because I am retiring so early and using that as necessary. If she does decide to continue working, even if that's an option or not for her to stop. I may delay that, you know, a few years. Probably don't need to. We probably could start withdrawing that. But we would use that money to pay down the, the house that we purchased. If that's what we decide to do. But she, she does push us to do, to do more. I mean, we flew Southwest when we came up here. So it's not like we were flying first class when we came up here.

• 55:09Speaker 02

  Every seat on first class.

• 55:11Speaker 04

  Very true, very true.

• 55:15Brian Preston?

  We used to be Delta boys. We've been coming from Atlanta. But you moved to Nashville, you very quickly become accustomed to flying Southwest.

• 55:23Speaker 03

  Yeah, that's fair. Yeah, it was the only direct, so it was great. We've got a two year old on the plane.

• 55:28Speaker 02

  Cause you've probably done this exercise, but if you've gone to moneyguy.com slash resource. We have this little WOLF multiplier tool. We even have like a compound interest calculator. And if you just like fast forward to what your assets are gonna be in 2029. And you're just to drop that in there and said, hey, if we just left these assets and let them grow. And we have a 3% withdrawal rate. They get really big, right? Like it, you know, you're.

• 55:51Brian Preston?

  Well, it's gonna be over $10,000 a month.

• 55:52Speaker 02

  I mean, it's gonna be, it's just gonna be big, big, big numbers. And so I guess, I guess my question is, is what's the, when you look 40 years into the future. What's the long-term goal with these resources that you've built? Like, I know your goal immediately is to survive, but what's your goal at the end of the line?

• 56:10Speaker 03

  I mean, that's probably some joint stuff like I would like to not leave just like an enormous, you know, estate to our kids.

• 56:19Speaker 02

  You're picking up exactly where I'm going.

• 56:21Brian Preston?

  You better start thinking about that now.

• 56:22Speaker 02

  You picked up what I'm saying.

• 56:24Brian Preston?

  Cause living off of 50% of your money is gonna lead to a lot of money.

• 56:26Speaker 02

  And we're not suggesting that you spend more money needlessly, but we also don't want you to not do the things that you really care about doing and you really value doing just because you can't, just because you can live on this like small lifestyle, doesn't mean that you should. And that's where the, I do think having these like annual meetings, my wife and I do it. We, at the beginning of the year, we said, hey, what trips do we want to go on this year? And let's plan all the trips out, big ones, little ones, quick ones, long ones. And we do that and we make sure we stay calibrated around making sure we're doing the things now that we really find value in, really create memories in, while also still planning for the future.

• 57:02Speaker 03

  Right.

• 57:02Speaker 02

  Cause I'm just, I don't wanna say worried, I'm never worried about somebody having too much money, but like you guys are very much in that camp that it could happen if you stay so, so tight forever. Does that make sense?

• 57:14Speaker 03

  Right. So I mean, traveling is something that we do love to do. So we'll definitely do more of that when it's, when it's available. So I think our travel budget will definitely grow. It'll probably take some pushing though for, from, from her or maybe my sister's pretty good at pushing me. She likes to travel with us too. We, we enjoy some time as a family. So, so that'll be a big expense. I love to play golf, don't have the opportunity to do it as much. We'll probably join some type of club to where I can play a little more golf and be part of that environment.

• 57:46Speaker 04

  And I think, you know, our, our children's education, right? So, you know, college is, we want that to be something that, you know, they might not have to incur debt to do. So they can start, we don't, we had planned to not leave them a ton of money in our estate. So, but we want to be able to cover their education expenses to get them kind of on the right path and any potentially like additional schooling that they would want to do. So that would probably be another large expense that we would have to incur. Several hours.

• 58:18Speaker 03

  I think we have some philanthropic ideas and thoughts that we wanted to do. One of the biggest benefits I had, even though we did have a decent amount of debt when we got married, was I didn't have any real school loan debt. And that's a pretty big aid in starting out your life. So maybe creating a scholarship somewhere in the places that I've been, the places that she's been, for people that, you know, you want to be a submarine officer, great, here's free tuition. So maybe we could fund something like that, I think, to use some of our wealth to kind of give back and give people some of the same benefits that I had when I started out.

• 58:49Speaker 02

  Did you always know you wanted to go in the military? How'd that come to be?

• 58:53Speaker 03

  No, so I thought that I was going to be a professional baseball player.

• 59:00Speaker 03

  Yeah, as a 5'11" right-handed pitcher that throws like in the mid 80s, I thought for sure MLB was where I was going to be. So yeah, I got through college, used up all my eligibility, nobody called, unfortunately. And so that was a pretty big, like drastic life event where I was like, man, I don't know what I'm going to do now. And that's when I enlisted in the military, just kind of off of a whim. I literally went down to the recruiter's office, walked in, and the first person that talked to me was a Navy recruiter. And so that's the reason I joined.

• 59:29Speaker 02

  That's how you decided?

• 59:30Speaker 03

  That's how I decided.

• 59:31Speaker 02

  Wow!

• 59:32Speaker 03

  Which...

• 59:33Brian Preston?

  Serendipity of life happens.

• 59:37Speaker 03

  Best thing that happened.

• 59:38Speaker 02

  Man, how long has he didn't walk into the rodeo clowns? Or the very first ones that were sitting there?

• 59:42Speaker 03

  Holy cow. Yeah, it was very fortunate.

• 59:44Brian Preston?

  Which branch of the military is the rodeo clown's?

• 59:47Speaker 02

  That joke doesn't hold water if you really play it out.

• 59:53Brian Preston?

  Because those guys, the branch of service love picking on each other. So I was going to put you on the...

• 59:58Speaker 03

  Yeah, I'm not going to say that one.

• 1:00:02Speaker 02

  You guys are in a fantastic spot. You guys are doing all the right stuff. Are there any other things that we can speak to? Anything else that we can answer for? Anything you're curious about as you do plan for? You're still a number of years away from this next transition, but as you move towards it, are there any questions we can answer that'd be helpful for you?

• 1:00:18Speaker 03

  I mean, I'm most concerned about I'm I felt very comfortable and did a lot of research on building wealth. I have not done and there's really not that much out there. I feel there's not like a ton of people writing books about like, here's how to draw down your retirement assets. That's what I'm concerned about. I like, I know I should build some different buckets of money to have different options, but in terms of like actually planning that portion out, no clue. I have some ideas in my mind, but I don't know what the most efficient ways to get that done are gonna be.

• 1:00:47Speaker 02

  Do you know why there's not a lot of literature written on that?

• 1:00:50Brian Preston?

  Immediately popped in my brain, too.

• 1:00:52Speaker 02

  Because it's pretty individualized.

• 1:00:54Brian Preston?

  Everybody's different.

• 1:00:56Speaker 02

  If you even just think here in the past couple of months, even the way that our tax policy operates is different today than it was last year, you know, just based on legislation. And so how you're going to draw down your assets is going to depend specifically on your unique situation. I mean, there's some like general rules of thumb. We talk about the financial order of operations, you know, you fill up your tax free first and then your tax deferred, and then you do your after tax. Well, in distribution, you kind of move in reverse order, sorta. You pull out after tax and then tax deferred and then tax free. Unless there's a reason to do it a different way, right? And so there are things where when you get into this, you guys are gonna have a huge planning window from 2029, early 40s, all the way out until age 75, when you have to start

• 1:01:38Speaker 02

  taking RMDs, or age 65, when you are eligible for Medicare. So there's tons of planning that you're gonna be able to do that how you draw down your assets will likely change year to year. Or even if you draw down with a pension coming in and with rental property income coming in, you may not be drawing down. It may be, how do I shift my buckets? But that's where it gets so unique that there's not literature on it because it's not a one size fits all. It's a one size fits one in most circumstances.

• 1:02:07Brian Preston?

  Yeah, I had, we had a gentleman who reached out to us who's, you know, trying to get his CFA, was asking for some life insight. And one of his questions, it kind of made me chuckle because I think a lot of people, he was like, if y'all use passive investments, how do you add value to your clients? Because I mean, we're very transparent. We love index funds. And if you're hiring a financial planner for just investments, you're gonna be woefully disappointed because I feel like commodity, you know, investments has been commoditized in a lot of ways because of how efficient index funds work. But what I tell you are our gravy.

• 1:02:42Brian Preston?

  And I'll even say the biscuits and gravy of what we do is really the financial planning for clients, just like, you know, somebody like yourself who doesn't, because everybody's journey is so different, you really do need somebody that kind of holds you accountable, both in the good way of, I think people are shocked, they think of Suzy Orman, who's told everybody, no, no, no, on everything they did, if you were around in the nineties and you remember those shows, we're the exact opposite, I'm like, go, go, go. Clever. Because, well, it's just because so many people are so rewarded for being disciplined, and I'm all about it, but at some point, you have to ask yourself, what's the why? And what do I enjoy, and so that I don't have regrets, because that's the thing, like I said, you get to the top of the mountain, you just don't want to have regrets, because

• 1:03:25Brian Preston?

  you realize how precious life is, and talking about the kids, my oldest is a senior in college, she, and it's so cruel, and I've talked about this a lot of times, if you've done your job right, your child gets more and more independent, which rips your heart out, because the older you get, the more sentimental you get, so I just try to make sure every one of my clients understands that money is just a tool, and we have to take this tool and figure out how we get as much life, to where you come out the other side, not just to give your kids money so that they're entitled and they don't want to go work, but so that they get the best life and the memories, so they hopefully come around more, and you get to really feel like you've checked the box on everything i- in the best version of yourself. And that's the part that I think that we're never going away as financial planners, that's

• 1:04:09Brian Preston?

  why we can do this abundance cycle where we give away so much free advice, because we know at the end of the day, the complexities of life and success is go bring more and more people through the doors. I didn't mean to turn it into an infomercial, but it is one of those things where I think a lot of people go, what do financial planners do? And this is exactly why I love that we get to do this show, because Making a Millionaire opens up that curtain and lets people kind of walk in and have these discussions, and because I love analytical couples like yourselves, because I would have loved if I could have met y'all in your 22 and 23-year-old versions, because y'all, now y'all have so much confidence, you're very humble about what you do, but between you running the analytics of understanding the lease terms and of each state.

• 1:04:51Brian Preston?

  It just made me smile internally. It's like, oh my God, she's become an expert on these terms. And then you're obviously, you have an aptitude towards personal finance. And it's just fun for me to see people as they grow and develop this expertise, that there's also another transition that's in your future on how you become the CEO of this enterprise to just navigate the fun parts, analytical parts, and just build a life that you're very happy with.

• 1:05:16Speaker 03

  Yeah, we were definitely throwing darts at a wall there to start out.

• 1:05:20Brian Preston?

  Some of those darts hit.

• 1:05:23Brian Preston?

  This show was completely different because I'm curious to see where Bo goes. Because normally we give homework at this time and I haven't heard us. I mean, we've really been putting on, this has been like a TED Talk. Thank you for the TED Talk on how you build wealth incredibly well, starting from zero. Hopefully, a lot of people are going to learn a lot from this.

• 1:05:41Speaker 02

  Here's what we know. You guys in 2010 had a negative net worth. You said literally our debt payments were so much that we didn't have enough money to cover the minimum payments. And here we are 15 years in the future with a $4 million net worth. So when I think about homework items for you guys, homework item number one, keep going. Keep doing the things that you're doing. What has given you success with the same that it takes you through this next transition? As you move towards 2029 for potentially your first retirement and figure out where your retirement lies. The second thing is, this is the time to begin thinking about what am I actually retiring to? I know what I want to move away from. I know that I want all this freedom. Once I have it, what are the things that I'm going to do?

• 1:06:23Speaker 02

  What are the things, because I'm still going to be pretty young as a retired dude? How am I going to navigate that? And then the third thing I think will be so valuable for you guys is figure out what are the goals? Like the long-term life goals you have that you want your money to allow you to accomplish. You had a goal a number of years ago that, hey, we want to be financially independent. It is very likely that in the next couple of years, you will have checked that box. We are indeed financially independent. Okay, then what's the next goal? What are the outcomes you want your money to allow you to be able to do? And begin dreaming about those things because that's when you actually move into that abundance level of wealth, where life is about more just doing what you want, when you want, how you want.

• 1:07:03Speaker 02

  It's about doing what you, knowing what you value and doing what gives you purpose on a daily basis.

• 1:07:10Speaker 03

  Yeah, that sounds good. Thanks for having us on. I look forward to planning out the rest of it. It's exciting now. That's why we're doing it so far in advance of it is because it's fun to kind of think about being financially independent because that has been a goal of mine and ours for so long now that I look forward to planning the fun part of it, which is living the life after we built it.

• 1:07:31Brian Preston?

  Matt, Alex, you've been a joy. I mean, this really has been fun. I feel like we've learned a lot. Hopefully, the audience has learned a lot. If others want to apply for Making a Millionaire, where do they go?

• 1:07:42Speaker 02

  Yeah, if you'd love to be a guest on Making a Millionaire, you can go to moneyguy.com/apply. Or if you want to check out any of our tools and resources, you can go to moneyguy.com/resources.

• 1:07:51Brian Preston?

  So guys, thank you for tuning in. Matt, thank you. Alex, it's been a pleasure. I'm your host, Brian Preston, joined by Mr. Bo Hanson. Money Guy team, out.

• 1:08:01Speaker 02

  Making a Millionaire is hosted by Brian Preston and Bo Hanson. Brian and Bo are partners at Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities laws and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through Making a Millionaire. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.

• 1:08:44Speaker 06

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