What’s up investors we’re going to be doing one of those coaching calls that you guys like to buy curiosity learn from other people’s mistakes. Check out all the past coaching calls on the passive investor members I think we’ve got over a couple of dozen of these calls and it’s also found in the YouTube in the coaching call section, but in the members section, which you guys can get access to by joining the firstname.lastname@example.org slash club, it’s free.
I arranged everybody by accredited and then crazy accredited section on. So you guys can find where you are. The guy we’re interviewing today, his net worth around $250,000. But, just like a lot of the younger guys in our group, which we have a wide range of investors here from, in Europe, 20 years old, all the way up to 60, 70 years old, Richard here, he’s not making big money yet, but he’s a chemical engineer.
Those chemical engineers, I swear are the smartest engineers. AutoCall no offense to your computer science guys, his net worth wrong. Quarter of a million. Soon, this guy is going to be making some bank, cause he’s only been working for maybe a few years thus far. But he’s doing everything right.
And this is how a lot of you guys are the guys who max out your 401ks, very diligent savers. Maybe you don’t have the whole family and children thing quite yet. It’s something I’ve learning about personally these days. But you’re setting up the framework to get yourself on the path to financial freedom.
Most people come into our group and they’re already in their forties and fifties. And, but luckily they’ve, have time on their side and they’ve amassed a million, $2 billion of net worth. But this guy right here that we’re going to be interviewing today and doing the coaching call. This guy will be availing dollars network easily, late twenties, maybe early thirties.
It’s amazing. And it’s cool to see people get off the straight path. It’s subsequent around doing things like, being achievable. You guys can check all the crazy stuff I would do to save money, which I’m not super proud of, but Hey, that’s what I used to do. And I live very frugally.
Again, a lot of those cheapo tactics email@example.com slash sheeple. And you know why I’m on the subject, one of the things that got me to the next level from a letter rentals to announcing a few thousand plus was joining different masterminds, actually spending money to get her on the people that took me to the next level.
That’s what the family office on a mastermind is all about. We just bought the pricing a little while ago. We continue to bump the pricing, every couple of quarters to increase the caliber of that group. We have about 70 people in there. And if you guys want to learn more about the group, because you’re tired of hanging out with broke guys or people that are investing in their 401ks and all that nonsense check us firstname.lastname@example.org slash journey.
And during the show.
Hey, simple passive cashflow today. We are going to be talking to a non accredited chemical engineer. We’re going to be doing a coaching call and guiding him on his way. But yeah. Thanks for doing this, Richard. No, thanks for having me late. I really appreciate you taking the time. Yeah. So let’s give some folks some contexts.
How old are you are? When did you graduate? Bring us back today. And then all of these financial profiles everybody’s situation is different, but I’ll be honest. Nobody’s really a special snowflake. Everybody follows the same five to 10 categories, but tell us a little bit about yourself.
I graduated in may of 2017 with a degree in chemical engineering and I moved to Houston shortly thereafter, where I’ve been working as at a chemical plant the last three and a half years. So I’m 27. Just about to turn 22. And I was introduced to financial independence about two years ago, two and a half years ago by my friend, Jared.
And then I went down the rabbit hole and decided real estate was the way I was going to go. So I’m currently living in a house act, which is a duplex in Houston. I have the one side printed out and then I have a room for rent in my unit, but I currently do not have one. And then I recently in July just purchased those second real estate property.
And I did a successful Burr and basically only left in the financing charges with that property. And so that one’s a pretty successful first hard money loan as well as a refinance. Richard’s a example of a younger guy. His net worth is under a runner on a quarter million bucks. But I would say your in fact, it’s just that you’re pretty connected.
The right people, your buddy, Jared knows another guy that knew me and all you guys are all like each financial independence retire early and type of guys. Sure. You guys get your stuff together. You guys will be on your way in 10 years, for sure. For those of you guys don’t know what chemical engineers are, probably the smartest engineers of the bunch, your salary hasn’t really taken off yet.
You’re still in that first scrappy job, is that I switched companies a year and a half ago, and so I got a bump up to what I would say was the market value for chemical engineers here in Houston. That’s probably about the average for a non oil and gas. But that doesn’t include a bonus this year.
We didn’t get it with the whole markets and the company being a, not the best financial spot. I’m eligible for up to a 20% bonus. When that kicks in, like that could be a significant bump to my salary. Where do you think your ceiling is five years? Five years at this company. I don’t think it would be too much higher.
I could probably see it again. Closer to a hundred at that point without making us promotion up. But it’s a pretty small company. The one benefit I really is it has a good work-life balance compared to a lot of other . Got it. And that’s probably, you got that from your buddies, right on all three trio is you guys are all about quality of life instead of just making a whole bunch of money and spending it for briskly.
Yes. And and right now I’m able to actually work from home. So that’s been saving me a significant amount of money on gas and just all around time. Yeah. So sometimes I look at this in a different order , if you guys are checking out the podcast, go to my YouTube channel, we have the personal financial sheet, but in the upper right-hand quadrant, you have the net worth.
That’s where I take a peak at first, again, about a quarter million dollars net worth. And then we look at how he’s making money on a month to month basis, about $7,000 of salary coming in. But in if he had a bonus, that’d probably be up a little bit. But then I look at use as a cash, which is his expenses.
And there’s a whole bunch of you guys out of the bay area. Who you are that make over 200, $300,000 shit. You’re only able to save about the same of as it’s a rigid here. The thing that we don’t really care about is this net cash flow. That’s all your income minus all your expenses.
And he said, he’s probably able to save maybe 30 to 40 grand per year. That’s pretty good, man. Keep doing that maybe four or five, four years. That’ll definitely start climbing up over 50,000. If you keep buying assets, that would be income.
If you’re a guy making over 200 grand a year and you’re not saving 40 grand, at least you got to take the belt somewhere. There’s something going on. I was just talking to a guy yesterday. I made up laugh because it’s I got five kids. It’s okay, that makes sense.
I will say I do have the benefit. I’m unmarried and I do not have any children at this time, so yeah. So you’ve owned some real estate before. Talk to us about how you picked that up. One of these is a house hat the first one that I inquired back in March of 2019 was a house hack.
It’s a duplex townhouse connected units. And the one side’s been rented out from the day I purchased it within an older lady and her son lives there. And that basically covers all of my HOA fees, the taxes and insurance on the property. And so then if I don’t have a roommate, then I’m basically just paying a mortgage and interest in principle, which would be cheaper than, and rent for the size of property that I’ve got.
I’ve had a little bit of difficulty getting roommates. The area’s a little farther than the energy corridor, which is where I was hoping to get younger. College-aged students who wanted to intern or take work duties there, but I haven’t seen as much interest it’s a little bit farther, but.
To hang out with. Yeah, exactly. I did have a roommate for roughly six months of the first year. And then I had one that moved in March of this past year and immediately lost her job afterwards. And so she left and I haven’t been able to fill it since COVID hit. Yeah, that’s cool, man.
But I would say at five, 10 years, you probably don’t want to do that type of stuff. Are you looking to move out or what’s the next month or so about another single family home to here. Yeah, so this one was a, I would say a home run for me. I bought it in July from a wholesaler, used hard money on the deal.
Basically bought it at one 15, put $39,000 into it. And it praised at 2 25. And so I was able to refund it. At a 30, 70% loan to value with a 3.625 interest rate. So it’ll cashflow roughly what like 130 bucks a month. And it ends up being I’m trying to remember the number. It was like a 12% return on equity, plus a, like a F I ended up with you include the debt.
Capital appreciation or the forced equity. I ended up with a 413% return on my investment. So we look at it in terms of that’s all nice and find a Debby after the smoke clears. But what is the, I don’t really pay attention to, oh, it’s cash flow. It seems counterintuitive because we’re all about simple passive cash flow, but I’m assuming your cash flowing on it.
But we look at the net equity here, how much debt equity is sitting in there. And it’s not too much. You could probably pull some of that out or re leverage, but I think this is a good foundation to keep building more and more. And you’ll see in the next two, three years, this will definitely peak over a hundred, this particular property, but. What’s the plan with the house hack. The plan is I eventually want to move out. And so I’m currently looking for another property that I could house back. So I’m looking for a one that’s closer to the center of the city and one that I could live in, like an ADU or a garage apartment, and then get a single family loan on.
Yeah, it’s just a rambling man making money as he moves around town. That’s awesome. Do it now while you’re younger. Yeah, exactly. One thing I would say if you had a little bit of equity in there, like it’d be 60 or grand or more, or maybe you’re there. See, before you move out, maybe try and be leverage the property, squeeze all that out.
As an owner, occupied property, the freight before you moved. Yeah, just a squeeze that lemon right before you lose that opportunity. But right now it may not be worth it, the payload origination fees or that probably not. And honestly, the neighborhood’s a little rougher than I thought it was going to be when I bought it.
And so I’m not sure how long I intend to hold this property. If I can move out and potentially sell this one, I would look, I would probably look to do that before refinancing it. Yeah. What is your thoughts on this whole birth thing? Is it just, are you going to keep doing that in a few years or something you’re going to grow up?
Oh, when your network gets over a certain point? I think I would probably after a while, I’d want to get into more of a passive side, but it’s just at where I’m at to shell out 50,000 in cash. It takes me a very long time to save up for that. And so then I’m doing a deal every year and a half at the, really the earliest.
Yeah. Right now it’s taking you what about 12 to 15 months to save up 50 grand right now. And then that would be a significant portion of my network into one deal that I’m just handed off the money to. But talk to your buddies a lot. Yeah, exactly. So this was my first one doing like a major rehab.
And so I actually didn’t mind the rehab process. I found a really good contractor. He’s really honest. And like he found some things he did not charge me or he finished in the timeline. So with the current job that I have in the flexible hours it’s not that big of a deal. If I need to take an afternoon off and go look at it.
The property or go out there and do my checks on all the repairs. So for me in the time being it’s actually probably the best use is to try and use the burn method to generate equity. Cause it’s, once you have the equity, it’s easier to find cashflow than to take the cashflow and create equity. Yeah. You got to start a fire right now.
You’re just trying to get a spark boy with the burgers. But I would say. Richard’s different than the average person. He’s got a couple things going on for him. Number one, he’s local to the area. So he’s able to do it. He’s not some guy out at California, Hawaii for a property in Kansas city for goodness sake.
And secondly, Richard’s a smart dude. He’s a freaking chemical engineer. He’s in like the contractor, the builder, kind of role. It’s not just some it guy that is trying to manage remote work. So that’s another reason why I’m successful at doing this. Yeah, I definitely would’ve said it would’ve been, it would’ve been very challenging to do that project if I wasn’t in the area and being able to drive out there and check on things and just do the proper due diligence, I would have had to put a lot of trust in them.
If I wasn’t doing it locally. And also one thing with the Houston market is there’s a wider variance in the prices. You can find some pretty inexpensive houses and then you can find some really expensive houses. And so it really benefits the bird because you can generate a significant amount of equity, but it’s harder to cashflow, I would say in Houston, single family houses, but you’re doing what you can work with, right?
Like you’re you just happen to live in Houston and move around. What’s your geographic blends? I definitely like the warmer area, but I’m not D definitely tied to Houston area. I’d be open to other markets or other areas I used to, I grew up in Illinois, so I’m from the Midwest. So we’re going to look at your deposit, your sick, your security deposit, or your savings deposit, checking account.
You’ve got it scattered around. We don’t really talk about this type of stuff, but what’s with chase bank, man, I get into a credit union. No, so the, I just had the chase bank from when I went to college. And so I had a couple of those accounts open and so I just opened a second one when I started saving for my rental property, but look into there’s some savings accounts.
That gives you like two to 3%. They’re called a rewards checking accounts. And I did this for years. Like you have to do like an annoying 12 debit transactions per month, then log in and do these statements. And I would do this for years where I would go to the gas station and call my stupid debit card 12 times.
Oh really? He was incredible waste of time. Back then the interest rates are a little bit higher. Three to 6%. Okay. Jess, I was doing that for 10 years and I just decided like a few months ago I was going to stop doing that stupid stuff. But for you, every little bit counts. Yeah.
I was getting 2% on the discover account. That’s where I had most of my money before I bought the bird property. But I had issues with the payment system. They didn’t, they stopped letting me use Zelle. And then also with that, the interest rate dropped from two and a quarter down to 0.6. Yeah. You gotta play around with it.
Cause like you can also do like little 1 cent PayPal transaction. Yeah. Or another novel is doing a Venmo sometimes fill out about info to debit transactions, but it all, it’s all over the place. You just have to do it 12 times and see if they give you the higher interest rate, but nothing, the old going to the gas station, pumping gas for 36 cents every single time.
But you can’t do that more than three or four times in a roll, if not on the phone, call on your cell phone and say that. That’s happening. So I don’t know, man, I am telling you to waste a lot of time, but I feel like you liked that type of stuff. So whatever floats your boat or there’s commodity direct is another bank account that gives you 1% or 0.6%.
That one you don’t have to play stupid games. Okay. Co-morbidity Comenity and there’s new folks. Is BlueVine is what I’ve been using for business checking accounts. And now it gives you a Dick 1% and that one, you don’t have to do any stupid 12 transactions per month. Okay. So try those two.
But chase is nice because you can wire stuff. Yeah, don’t do that. The Wells Fargo one, like I’d signed up because they gave like a $400 sign on bonus if you hooked up a direct deposit and stuff like that. Yeah. I know. It’s all the time wasters.
Yeah. Okay. You got some term-life it’s this pretty small. Yeah, that was one. My parents took out on me when I was a infant. Yeah.
You’re screwing around with Bitcoin and ground floor is like the startup. Yeah. So the, so it’s like hard money loans. They let you do a very small dollar amount. So with that, like three, just under four grand, I’m invested in roughly 300 different loans. So it’s pretty diversified. And I’ve been getting a 10.8.
Interest on my money. Is that pretty secure or what’s your thoughts on that? So far so good. I haven’t had there’s I’ve I think we’ve lost money on three of the loans that I’ve done so far. And so I started out and basically what I do is that every time I get paid, I put 50 bucks into it.
And then I’m just rolling any money that I’ve made. So I’ve made roughly like 300 bucks over the last like year or so. Okay. I’m looking at the website now. So like they, they diversify it for you over a whole bunch of people. No. So you invest in the individual loans, but they have a very low minimum investment.
So you can invest in a loan as a little as $10. What do you, what’s your increments? How do you break it up? So I just do $10 on all the loans. And now I’m starting to get the point where I. I’ve been putting it in every loan that they basically have. And then I’m starting to get to the point where I’m putting $20 in.
Are you, if I move, sorry, go ahead. Are you cherry picking like the better paper because they grade on a, B and C, so I tend to start with the, and that’s how they also do the interest rates. So I typically am just putting it in mostly the C and D, which is 11%. Normally or higher. But but when I first started, I was just putting them in everything.
And I had just as many loans that like were in category a default as I did in category D. So I figured I’d go with a slightly higher interest rate. Yeah. It looks cool. If I were to do this, I would go to more than a and B type of graded paper. What’s the rate for what’s the rate for AP. So the lowest they’ll go is like 6.4, but like they’ll have A’s that go up to seven and a half.
And then BS will be from like seven and a half to nine. And then CS there’ll be anywhere from nine and a half to 11. And then anything higher than 11 D yeah. Occasionally you’ll see a year and a half, but that they get up to 17, but that’s the highest I’ve seen. That’s cool. I, what I don’t like about these crowdfunding websites is like the broker dealer, the guy administrating, all this stuff is making a huge cut, like huge.
So they’re taking a lot of of the profits on these types of deals. So like for example, if a B class node is giving you 6%, it really should be paying out 8%. A quarter of the profits, but yeah, if you can diversify at school and it’s probably fun too. I bet it’s why you’re doing it to this.
Yeah. I started doing this when I, when I first got into financial independence, like I was like all gung ho. I made an offer on a property and it, I didn’t end up getting it. And so I didn’t have anything and I had to, re-sign a lease for another 12 months. And so at that point I was like I’m not going to be able to buy a house anytime soon.
And so I started doing this as a way to earn some extra money and I’ve just kept going it over the last couple of years. Yeah.
They do have an IRA form. So if you wanted to invest through an IRA, you’re able to do that as well. The downside interest is all ordinary income, right? It’s yeah. It’s interest income. Yeah. But you’re doing also HP, which gives the 10%. What, why do you do grout for, is it just for diversification or you want a better rate or what’s the motivation?
It was just I’d started ground four before I was able to invest in HP. So I wasn’t able to, Jared told me about the 2015 fund, but it was already closed. And so then I waited until they did the 2018, the HP servicing one. But HP probably gives you a better rate than there be glass paper. Yes. Why are you still thinking Ron Flor out of curiosity?
It was just more habit. And also I hadn’t seen the returns realistically from HP. It’s all one company. So I didn’t, it was just more of one partnership if something goes wrong. Yeah, no that’s yeah, that’s good. Yeah. Should I just say diversification, even though it’s a lower rate.
Yeah. Way we do it. I would say the only thing is just as your life gets more complicated and your net worth goes up some better to simplify it. But yeah, you’re learning a lot during doing all these little things. That’s all I did it. I did a whole bunch of stuff that I wasted my time. And Laura, on the topic of wasting time.
What about trade lines is going around with that? I have not. I looked into it a little bit, but I was. A little risky. I don’t know. It seems a little different. I don’t want to get a car consoled. I swear by it, man. You’re making a lot, like you got 11 grand and this type of random stuff that’s comes out to a thousand dollars a year.
Give me a break, man. If you have a credit card, you can make that in yeah. You could probably make that in a year, which just has one credit card with okay. I do have a decent amount of roughly 50,000 in credit card. You need to have the car older than a couple of years.
The longer, the better that’s the jail. I think I’ll be coming up on two years coming up, January timeframe for several of my cards. Yeah. So if you guys want to make, I made tea, I make 10 grand a year during that silly hobby trade nights. If you guys are listening, check out the I-Corps simple, passive cashflow.com/trade lines.
There’s a way to be safe about doing it. But yeah, just, I would say, just learn about it, but that’d be a great way that you could make another five to 10 right there. And that’s big for you, right? Because every year you’re making 30 grand that augments your savings 20%. Yes. And then you got some, your deferred comp TRPs here.
Are you contributing any more money to your retirement 401ks? So not to the 401k or the IRA, the Roth IRA. I’ve only, I still contribute a little bit to the HSA every single year. And I also get a company match, so I come January, I’ll get a thousand dollar bonus just for have an HSA. And then my, the current pension is I have no control over that.
The 5% interest rate on the current balance is what I do. Yeah. Awesome man. Got it. You’re on the right people that think the stuff is garbage. One thing that’s nice about the fidelity, the 401k, they were at my firm, my older, my old company. So I have access to all those funds if I needed to. So in the back of my head, I keep that as a true emergency.
If I lost my job and I needed to keep things running, that’s what I keep that in there. Cool. Cool, great strategy. Most people are there listening. I would say 80% of them are still on the fence. So withdrawing from their 401k because we’ve all been brainwashed. Yeah. Maybe if there’s any kind of words of encouragement there or epiphany that you saw that ultimately made you, I know you had the right people around you that kind of took the poach.
You bought the truck. Yeah. It’s definitely hard turning down the match and what I really stopped was when I switched companies and I just didn’t sign up for the next one. And that was how I jumped off. But it’s definitely not easy. Like I really had to commit to the real estate at that point.
So what is your current company’s match now? So they will do one-to-one up to 600. And my previous one would do a 6% on the first eight. So they would do one-to-one on the first floor and then half on the next floor. Yeah, I was talking to that guy yesterday. Boeing does one, one for one up to 8%, but I was still like do the math man.
It doesn’t make sense. You’ll cross over probably a few years ahead. If you just asked the money, I grew up pasture yourself. And it just depends on what you’re limited on. Yeah. And I’m okay. Like doing the match too, but once you moved jobs, get it out. But that’s another problem. People stay at their jobs a long time, which is pretty rare these days.
Yeah. Cause that was one of the things I did look at doing if they offered in-service rollovers, but both companies I had didn’t offer. Okay. Are you guys, a lot of the younger guys that you guys hop around jobs so much that yeah. Just put it in, get vested and then pull it right back. And we changed companies.
Yeah. And that’s part of the reason too. That was an easier decision at my new company. You don’t, you’re not fully vested on the match for five years. So I was like, I don’t even know if I’ll be here for five years. And so to me putting it in and possibly getting 20% of the match, wasn’t worth it. What are you?
So you said, great idea. If you guys haven’t picked up on that is he’s using this money as its emergency savings account, but what are you, what do you have this stuff sitting in? Oh, index once. Okay. Like a Greek Vanguard 500 type of thing. Yeah. Different mix of whichever one they offer. So yeah. Why not do a money market?
What was your thought process? Or like a, something way more conservative or semi-conservative.
I still it’s. I just left it in. Cause when I first started getting into financial independence, the first things you find are index funds. And so I just haven’t really looked at it since, and in my opinion, it’s not a significant dollar amount in terms of if the market dropped 50%. Yeah, I’d lose 10 grand or 15 grand.
It’s not like I’m sitting there with hundreds of thousands that I would lose a ton of money on. Yeah. It’s keep it on red mentality. Just let it ride. Yeah. Significance. No, that makes sense. Makes sense. And also these are all logical and with my mindset too, I’m not going to ever run my bank.
Zero, like really low to invest at a deal. And so I’m always going to keep some cash available and this is being a little bit more aggressive and the cash is a little bit more conservative. Yeah. And all this stuff for you. Like I’m getting really nitpicky because you’re not working with too much.
But this is the foundation for when you get over a half a million, then you won’t really care about all this stuff, at the year to tweak this, maybe think about it. Taking the Roth out because you’ve already paid your contributions into it and just taking it out cash to invest it.
We talk about this a lot. Why do you not want retirement accounts? Number one, you’re going to be retired well before you’re 50, on the way to your semi to get it. Number two, your tax bracket is probably a lot lower today. So you want to pay your taxes on it today, Dave, in the future, number three, where this country is going, taxes are going to be going way up.
Okay. What a lot of people don’t realize is number four, get when you invest in a retirement account, you don’t get the passive losses from your investments. So that is you need the passive losses, especially from the syndications to get of the simple, passive cashflow gravy train, which is all about lowering your W2 activity, come and paying little to no taxes.
And you don’t get that opportunity to do that. Yeah. You’ve got to get real estate professional status at 750 hours, but you don’t get to do that until. You get those passive losses. So that’s the fourth reason why you don’t do retirement accounts, but something to think about, like Richard, like just maybe take out the broth, cause you already paid a tax on it.
So it’s not really that big of a deal. And at least take out the contributions not the gains. Cause you take out the contributions. You don’t need to pay the penalty on that 10% penalty. Oh, okay. So drain that out. But at the same time, you want that magic number. I don’t know what that is in your head, like 20 to 30 grand of emergency savings.
Yeah. But if you have to increase it, we’ll then put money into your 401k via the match. Let’s work backwards. How much of emergency savings do you want to have? You have 37 grand right now, realistically. So the pension is like illiquid, so I wouldn’t be able to get that.
So I have roughly 30,000 in there. I would want at least probably 20,000, because that would give me roughly nine months of if I lost my job and I had just made an investment. Okay, cool. And that number everybody’s different. You’re basically picking that number out of the sky, but let’s go with that. You want about 20 grand in there?
What I would do, I’m sure. More than half of this is contributions. I’ll take that out now. And then maybe in the next six months you replenish, maybe even before the end of the year, you do a catch up a deposit into your 401k and get that match to replenish that, whatever you take out of here and put back in here.
Okay. And then this. I would just get rid of it. Just cash it out. Cause it’s trying to simplify things too, right? At the same time. Yeah, no. So I had actually used, so I had opened that one when I was co-oping to start investing when I was still in college and I actually pulled out the original contribution for the down payment on the first property.
So all of that money is gains, have zero basis. Yeah, I would just get rid of it. It’s just, you don’t need another stupid letter showing up in your mailbox every month, every quarter, simplify life. Of course, I’m telling you to do this because you’ve already shown proof of concept for what you’re doing.
Most guys are still at stage one, but you’ve I feel a little bit more comfortable pushing you in closer to the edge, but you got to decide what you want to do, but that’s a good point. And then student loans. Lucky you don’t have too much of it, but tell us a little bit, like where you started off with Ben and your strategy to get to this point.
Yeah. So a little bit goes back. So I did a co-op program, so I, it was a work study. I did five work sessions over five years. And so I graduated with about 18 months of experience and they actually paid me. Extremely well, I was getting probably close to what a full engineer was making my final year. And they were also paying for my housing in Chicago, which was tax-free.
So that ended up putting me in a position when I graduated college with a roughly 20,000 in cash. And 30,000 in student loans. And so I started rapidly paying down the student loans and then for the first eight months of my working career, and then I kinda got the bug of, I wanted a new car and I’d always told myself once I paid off my student loans that I’d get a new car, but I ended up Deciding that I wanted the car sooner.
And so that’s when I took out a more expensive car loan for me. And so I, at that point I reduced my student loans to the minimum payment and then it had been paying down my car loan. Yeah, man, like what’s life without a nice car,
a guy getting the financial independence. So yeah. So I actually just refinanced it from the. So I extended the paydown a little bit. So we reduced it from 6 55 down to 4 52. And so I’m going to just going to make the minimum payment on all of these loans was my plan and then take the extra cash and invest it.
Yeah. I never liked the cars. So you get a nice car. I would say, are you a car guy or is it, it was just, I didn’t want to always have the crappy car. And so I yeah. A bunch of my friends got nicer cars and that I wanted to keep up with the Joneses and it was a mistake, but I honestly think it was good because it prevented me from buying too much house on the first property.
Cause I could have gone to the bank and said, Hey, I just have a student loan payment of 150 bucks. And they would’ve given me a loan for, I don’t know how much, if you’re a car guy. Lease is what I say. Cause he be getting a new car next year probably, or this year. Another reason why not all people talk about it, but the reason I do that is write it off to the whole thing, these payments, as opposed to doing this silly 50 cents.
So yeah, I don’t do the mileage personally because I don’t drive that much. So it’s 50 cents a mile. It’s like worth it to me. Cause I don’t drive anywhere. I don’t sit on traffic, but you might, but know when you get, if you’re a car guy lease. Okay. Yeah. I’m definitely not a car guy. This is more of a, I wanted to keep up with the Joneses.
So that was my one main mistake. Not stay single the rest of your life kind of guy. Yeah. So I, my, my plan is to just keep the car cause it’s a decent car and yeah. Run it until the wheels fall off. So yeah. Yeah. But these student loans, they’re so low to, you said you paid off some of the higher ones and it’s such a small amount in a logically.
You just keep paying it off. But at some point, just knocking it ahead just to simplify your life too. Yeah. There’s a lot of this. It’s just finding a balance to pitcher your highest and best uses. This stuff. Yeah. Not screwing around with acorns or doing full transactions on your debit card. Exactly. And I realized that too, with that property, it was a little bit scary going through and taking out the roughly 13% interest rate loan to do all the work. But once it worked out, like it was oh, that was all it was. And I’m just looking for the next. Yeah. And that’s where trade line comes in.
Right? Two trade lines is like five, 10 grand a year. For a little effort, I think that’s going to be a big thing for you to help them speed this up. That definitely can get you up to probably about a house every nine months to that. So this is how I see your started progressing. You just keep buying a few more of these, add a few more properties on citizens, real estate or.
Spreadsheet. And then probably that I’ll take you out a few years and then maybe you dabble in some syndications or maybe you really like this stuff. But I’m suspecting, you’re probably going to be a lot more busy at your job somewhere on your five and 10 in your career. They expect you to take management roles.
Which you may, I don’t know. What’s your thoughts on that? Are you going to take that progression tracker? Yeah. I’m planning on being out of there by that point. So yeah. It’s not your gig. Yeah. I think I’d want to go find something else to do by the time. So five years I’d be 32. That’s what I’m trying to figure out a way to do it by then.
Yeah. That’s a, you just have to find a balance in life, right? I’m sure you’ll make a little bit more than seven grand a month and that’s all you really need. You can keep driving to all these, but if you want like event later, you’re going to have to level up. Yeah.
But is plenty getting into their net worth of 200, 200 grand is the hardest part. I feel like it’s just now you’re on the track. Probably net worthwhile, just you’ll see a half a million probably in the next three years. Again. Yeah. And if I could do a one or two more burrs, like I would easily be there at that point.
Yeah. Then maybe two to three to get up to a million. And then you’re off to the races after that point. Yeah. And for example, I would say about a hundred thousand of that was within the last four months, just between my salary and then completing the Burr. I generated $70,000 in equity on the Burr alone.
So I basically made my year’s worth of salary. By doing that one project. Yeah. Why would you want to take a manager role, that deal. Exactly. Rather do some straight lights. Yeah, I guess I got to check out your course a little bit more, but yeah. Any other questions or anything you want to talk about?
At what point would you say I should start thinking about syndications, like investing in those. So for most people I would say get up to half a million at least, but you’re already so connected. That’s how you got into this stuff in the first place. Like you have the great ability to invest via proxy.
You got people around, you already investing in syndications testing the water, so by the time you’re ready, which you could probably do it now. You just jumped right on in, into the lake. No, this is this kind of what I call like investor proxy. If you have a couple of guys here, your buddies I’ve already invested in, they found that they’d found a good operator.
Then just jump in, how bad can it be? It’s the ones where a lot of investors are like really dumb these days and they just want to sound cool. So they say, oh yeah, some really good. And you come to find out that they didn’t even invest their money in it. They just, I don’t know what the heck they’re going off of.
A referral is great, but it’s not as good as like a real referral where somebody is actually investing money with. I got hurt a couple of times where investing with that silver level referral. The empty referral, what I call it, it’s just like when people are trying to find property managers.
Oh, ABC property managers. Good. Do you have any houses with them? Where did you just hear? Because they happened to be the sponsor of their local Rio or whatever. Yeah, no, and actually one of my, my, the person I use as an accountability partner, he referred me to a property manager and so he’s 30 and he has 30 properties of his own and he manages now 50 properties all with his own company.
And so that’s who I’m using. So I treat him as a pseudo mentor as well with how he viewed the bird. But that’s, I think, you’re different than most guys, your ability to do these burgers. Number one, you’re a smart engineer. It’s not, I think that’s not most people and you’re local too.
So at some, it’s probably a grind for you to do this. And so at that point, it’s to get your friends to stop doing this at some point you’re the one who’s going to dictate. But maybe, I don’t know. I don’t get the sense of that. Like you, this doesn’t really get your blood going. It’s not fun.
I don’t see you doing this for a super long time. Yeah, no, I can see. And I tend to find myself I get really focused on a certain area for a couple years and then I’ll get bored with it and then want to move onto the next. Yeah. So let me ask you this. If it’s not your career, And it’s not flipping a lot of houses to inflate your ego.
What do you want to do in five to 10, 10 years when you’re financially free and you have $6,000 of passive income rolling in every year? Yes. I definitely want to figure out a way to fix the education system. So I, cause I would have been a teacher if I didn’t do engineering or teaching paid would engineering paid, but I definitely think our school systems could use an overhaul and figuring out a way and doing a proof of concept.
The being financially independent would give me the time freedom and the resources to figure out how to do that. Teach financial financial education or just some other subject or, other subject, but it would have it would definitely be more of a life. Stuff, not so starting a business entrepreneurs, like using the science, using the math in real world situations, just not a math problem to figure out how to do it.
So I’m not, I don’t have it quite lined out exactly what I want to do or how it would work. But I definitely would, I think our school system severely limits. The growth of a lot of people and you have to do a lot of unlearning once you graduate. Yeah. Fortunately the people teaching it are products of the system.
And yeah, and I’m not blaming the teachers. They’re like, they’re doing their best and they sacrifice a lot. And so I just, it’s hard to teach what you don’t know. So yeah. I’ve tried to go back to some of the local high schools here at my old high school and let’s see if they will.
Somebody to teach this stuff, but they just look at me dumbfounded thing. Are they thinking I’m trying to sell life insurance or something like that. But I’ll let you know how that goes, but I’m not having very much luck on my side, even though I’d like to, I’d like to write the right, the wrong in the world, just like yourself.
But I don’t know. It’s frustrating. And people need it yet. People are. Open-minded to it. And I’m getting to a point where I’m just tired of it all. Just like whatever guys, numbers, speak for themselves. And that’s what that net worth line is not to get sound egotistic, but it’s that’s the score, right?
Who’s figured it out. Who has the best ideas on how do you build a career, how to use the money to grow your network. That’s not everything. That’s just not how the system works. You’ve got to go to school. You got to go get an education degree. That’s what they want. That’s the sound system still.
Yeah. So now that, and then it’s just helping other people. So giving back, whether it’s supporting people in disaster situations or being able to do things that you couldn’t like, that’s what, financial freedom would give me the ability to do that, where it’s more difficult at the time.
Yeah, it’s just going to have to make more money. And so the, money opens doors, I think, if you can brand yourself with the right authority, which you have to pay for, it can open up those doors where you get the authority to help out people in that manner to get past the gatekeepers.
Yeah. I’ll let you know, man, trying to figure it out.
All right. Appreciate it, Richard. If you guys want to do these and participate out there into the free world join our investor clubs, it’s simple. Passive cashflow.com/club. , we’ll see you guys next time. Thank you.