Afford Anything - How Mike and Lauren Retired at 30 with an Average Income of $56,000 / Year

Episode Date: April 5, 2019

#186: Mike and Lauren have run a cleaning company, started and sold a biodiesel company, repaired and resold motorcycles, opened a coffeeshop, owned a DVD rental box, sold e-cigarettes, bought a storage warehouse, launched a YouTube channel with nearly 150,000 subscribers, moved to Manhattan, moved back to Florida, backpacked across Europe and gave birth to two children in Costa Rica. Whew. I’m exhausted by just writing their list of entrepreneurial experiments. Their willingness to take risks has paid off … big time. Mike and Lauren reached financial independence at age 30 and 29, respectively. Today, they join us on the Afford Anything podcast to discuss how they did it. For more information, visit the show notes at https://affordanything.com/186  Learn more about your ad choices. Visit podcastchoices.com/adchoices

You can afford anything but not everything. Every choice is a trade-off. A yes to one thing is an implicit no to something else. And that doesn't just apply to your money. It applies to your time, focus, energy, attention. It applies to anything in your life that's a scarce or limited resource. And so the questions become twofold. Number one, what matters most to you?

Not what does society say ought to matter most, like a big house or a fancy car? But what actually matters to you in your life? And question number two. how do you change your behaviors, your spending behavior, the way that you manage your time? How do you change your life accordingly? Answering these two questions requires a lifetime of practice. There are no simple answers. That's what this podcast is here to explore.

My name is Paula Pan. I'm the host of the Afford Anything podcast. Normally we are a weekly show. We air every Monday morning, but once a month, on the first Friday of the month, we air a first Friday bonus episode. And so this is the April 2019, first Friday bonus episode. Today, a couple from Florida by the name of Mike and Lauren join us on this show to talk about how they reached financial independence in their early 30s.

Mike and Lauren, as you are about to hear, have a fascinating journey. If you want to talk about entrepreneurship and hustles, they have done it all, ranging from having a cleaning business to a biodiesel business, to working as a gemologist, to starting a YouTube channel. channel to owning a one of those red box DVD boxes outside of a gas station. I mean, you name it, they have done it. And so their story is a perfect example, in my view, of what it looks like to be entrepreneurial and to get creative and try new things, not get stuck in a cubicle farm, not get stuck hoping for the next 3% pay raise at the holiday season.

They have a story that really exemplifies what it looks like to think very, very creatively about your life. Their two children were born in Costa Rica because, among other factors, giving birth in Costa Rica is a significantly cheaper. And there's more price transparency. They're going to talk about that in this upcoming episode. Let's go to them so that they can tell their story in their own words. This is Mike and Lauren from Florida talking about how they reached financial Independence. Hey there. Hi. It's been forever. So I'm really glad to talk to you and I'm glad to introduce you to this community. Yeah, absolutely. Thank you. We're excited. It's on the show.

First of all, tell me and share with us a little bit about each of you. Like, how did you meet, how long have you been together and how did you, this is turning into a big question already, and how did you come to FI? That is a big question. Well, we are Mike and Lauren. We started dating in high school. are high school sweethearts. So we've been together quite some time. We just celebrated our 10th wedding anniversary. Our story goes way back. And how old are you now? Well, Mike is 31 and I will be turning 30 in February. Wow. So, okay, 10th wedding anniversary at 30. Yeah. Yeah, we got married really young. I have started questioning my parents. Like, what were you thinking letting us do that? That's ridiculous. Where did both of you go to high school? In Florida. We met in Florida. Mike is originally from Ohio.

Sorry, I'm telling you're on. Yeah, no, I was, that's fine. I was born in Ohio, actually, and then moved to Florida when I was 10. And I am a true Floridian. That's a rare thing. Born and raised here. And we met and went to high school here. We did some college here.

And then we moved to New York soon after getting married. We lived in Manhattan. And then it was time to come back home. It was a little too cold for us there. We've always saved a pretty healthy portion of our income. usually at least 50%. And then sometime around 2012 or 2013, we really ramped it up and shot for 75%. And throughout those years got somewhere around 60 to 75%.

The year before last, we invested, we took 130,000 cash and invested in a nine-unit warehouse. That was owner finance. So the payment was huge. And at that point, we were cash flow positive, but just barely. Last year, got it refinanced and officially called ourselves financially independent because we have our monthly expenses covered by the warehouse. And we're just loving life from now, from here on out, I guess. So, spoiler alert, I've known you for several years, and I know that you initially found out about financial independence by reading the blog early retirement extreme, written by a blogger named Jacob. What led you to that?

I think I actually found J.D. Roth first, get rich slow. and kind of read everything he had written and then somehow found Jacob through, what were they called blog roles back then? Yeah. Yeah. Found Jacob from J.D., I think. And when you encounter Jacob, I mean, as the blog title implies, for all the listeners who are listening to this who are not familiar with that blog, so Jacob, as the title implies, is very extreme. Jacob lives on $7,000 a year. Right.

And so I'm saying this for the sake of everyone who's listening. When you encounter that blog and when you read Jacob's story, it is so extreme that for a lot of people it can be a huge turnoff. Yeah, I think it was just, I was able to see that there was balance. I think in a lot of things in life, there's some middle ground. You don't have to go to the extreme. So it's in between Jacob and consumerism is just a happy middle ground where you can live a relatively stress-free life. And I imagine our story is probably similar to a lot of people that then once Mr. Money Mustache came around, that he kind of, it was still an extreme form of saving, but a little bit more reasonable. And I would assume that's why we kind of got more aggressive towards our savings after, you know, the 2012-2013 era.

Lauren, how did you feel when Mike first came to you with early retirement extreme and all of these concepts? To be honest, I don't think he really mentioned too much about Jacob and early retirement extreme back then. I remember he listened to a lot of Dave Ramsey. I remember driving in his truck even and we listened to Dave Ramsey podcast. So he probably eased me into that part of it. And then it was probably Mr. Money Mustache that you really started bringing things up with me. So I think if he would have started me with early retirement extreme, I might have been like, whoa, this is a bit much, especially, I mean, at that point, I would have been 17 years old, 16 years old. So that would have been really a big thing to break up. So it was probably a little bit later that he brought up their financial independence early retirement. I liked the idea of it. And really naturally, we've always saved a lot of our income. So it didn't seem too crazy for us. So I was always just kind of, yeah, sure, let's see what we can do. One thing that strikes me when I hear you talk about this is that when you first encountered these concepts, both of you were so young that you hadn't

yet started your first jobs. You hadn't yet started earning a full-time professional income. You hadn't yet even begun to experience what in many people's stories later become, both the financial foundation as well as some of the consumer problems that ultimately lead people here. So how is it as a college student when you have this very different framework of spending, when you read blogs and podcasts, people talk about don't buy the big house, don't buy the big car, when you're a college student, you're living in a dorm room. How could you relate to that? I mean, mostly, I would say parents. Like both of our parents are not huge savers. So we kind of saw the fruits of that, like how that goes. And then you can just kind of take people's word

for it if you're introduced the idea and you just have people describing the rat race to you over and over and over again. I eventually just don't want the rat race whether you've really experienced it or not, I guess. You know, freedom is freedom whether you're escaping the cubicle or just escaping the fear of a cubicle, I guess. What did each of you major in in college? Mike was a business major for a year and a half. Year and a half. And then I started a cleaning company with a friend and things just got so busy. We were over six figures a year in the business, and I was just completely unimpressed with college,

and still am to this day, actually. I just last year, or this year, I was like 15 credit short or so of my AA. I thought I should at least get my AA, you know, I went for a year and a half of school. We can go down this trailer if you want, but college is such a joke. So I majored in business

and started this business on the side at the same time through luck, I'm sure. It did very well. And of course, as an 18 or 19 year old, I thought I can do college better, you know, school of life, school, hard knocks or whatever. It didn't need the money because the commercial cleaning company was doing so well and then dropped out. I kind of bounced around. Wasn't too sure what I wanted to do. I was looking more health field, maybe a physical therapy assistant, and ultimately went completely off of all of that. And that's why we moved to New York. I went to the Gemological Institute of America,

the GIA, and I got my gemologists. I did their gemology program. It was a six-month program. So I learned about diamonds and colored stones, and they're kind of the ones that created the three Cs to diamond grading and gemstone grading. So once we got up there,

we stayed for a bit, and I worked at Saxon at Tiffany's. Did either of you have student loans or student debt? I had, because it was a private school, for some reason, We went to a private Christian university. I could, such a mistake. But I think I had eight or 10,000 in student loans,

and my parents took eight or ten just for that year, year and a half or whatever. And so I paid mine off. And then your program, Lauren, was 18,000. And we just wrote a check for that. We paid cash for that. And then your mom took on a little for your pump each. My parents did Florida prepaid for me.

But then they had to pay just the difference between that and what the private tuition was. So this short answer is no, not really. You wrote an $18,000 check and cash flowed the gemology program. Where did that come from? Was that from the cleaning company? Being together, we had our little savings account. You know, the details are fuzzy, but I would say we probably had $25,000 or $30,000

cash saved that went towards that. Because I do remember it pretty much wiped us out. It was pretty close. And then we went up to New York and we, you know, had our $5 or $10,000 to our name to get started up there. Wow. I guess that's the other thing that strikes me when I hear your story is that you both started working from a very early age. Yeah. Yes. I've always been a bit entrepreneurial, sometimes with success most of the time, not a couple of them have done okay. And it's not like this cleaning company was like, oh, you know, to the moon for a year and a half. We had a contract that was, I think, $200,000 a year and then we had 14 employees. So out of that, you can imagine, you know, I made a better income than any. else my age that I knew, but it wasn't, you know, we didn't sell a tech company or something

for millions of dollars. I went back to all our tax returns. I think the most I made was $76,000 a year back in the cleaning days. Sounds very reasonable. If you make $76,000 a year and you're 20 and you've got a huge savings rate, then that makes a lot of sense. Yeah. You left New York. So Lauren, you were working at Sacks and Tiffany's. Why did you decide to leave New York? Was it just the weather? All of our family is still here in Florida. We did want to get back to them. All our friends here are here also.

And it was just the winners were brutal. I mean, a Florida girl. The winners I did not love. It ran its course and it was time to come back home. And we both had job opportunities here. And so it was just time. How did you have job opportunities? Well, Mike was through church, the church that we had met at.

And then mine was family friends of ours who own a jewelry store. They wrote a lot of recommendation for me when I went to New York to go to school, and they had just happened to move to a brand new, beautiful, huge building, and we're hiring. That worked out perfect for me. Nice. And Mike, what did you end up doing with the church? What was your role there? I did the, like, video production stuff. So they, you know, have the multi-camera, live stream, all that kind of stuff.

And so I kind of helped them get all that set up. And I was there from, that was 2012 to 2015. But there's some overlap because we then started our YouTube channel in 2013 as that was ramping up. There was a little bit of overlap where, you know, in between full-time YouTube and church shared, you know, similar responsibilities in some cases. I came back to that, which was a great time. And Lauren had her job lined up and she stuck around there until we had our first kid. Our son, yeah. So then during this time, so at this point we're at about 2012, you've encountered the early retirement blogs.

You've set your eyes on financial independence. You've developed about a 50% savings rate. I don't know how many numbers you're willing to share. Oh, yeah, everything. So then what were you making? You know, 50% of what? For the church, I was making 36,000 a year. And Lauren, you were hourly at, I think, 16 an hour.

So what is another 32,000 a year? You know, netting somewhere around 45-ish, I would say, 45 to 50. and then, yeah, saving 50 to 60% of that. Whoa, okay. There's a big how. You combined income of... Call it 50, yeah. Yeah.

Okay, combined income of roughly 50,000 after taxes. How do you save half of that? We had a very lucky living situation at the time. We were living on the church property that Mike was working at in this cute little house for, what, $600 a month? You know, average rent in our area would probably be $1,200 a month. This was kind of a, you know, run down 600 square foot house. So, you know, market rate might have been a thousand or

900 on that to us, $600 a month for a cute little one-bedroom house in walking distance to work. So that took care of housing. And then transportation, I could walk to work. So I only had my scooter. We didn't have a second car. And Lauren had a Prius. So, you know, paid off $5,000 car that gets 55 miles of a gallon. You know, that the rest of it is just a young couple with not expensive taste. We don't really spend money on clothes. I mean, our most expensive hobby is definitely travel. And even that we try to do on a budget.

So it just doesn't take too much to live, I guess. I'm assuming you made most of your meals at home. That is the one thing that we are terrible with. We're a bit better now with the kids. We just don't have the time to go out. We were so bad with food. We went out. And that was the biggest part of our budget was restaurants.

we had a really hard time making things at home. Yeah. But let's try and throw some numbers out there. So our housing was 600. Our car was paid off. Our insurance was $37 a month. Our gas was 40. And so, yeah, our food bill was probably 600 a month as well,

when it should have been half that at least. But in the grand scheme of things, really didn't affect things too much. You were saving 50% of your income. Where was that money going? It was going right into our Roth IRAs. for some reason when I heard about the Roth IRA, I thought it was just like some magical thing that we just had access to that you could withdraw your contributions tax and penalty free. I just saw this as this like turbocharged savings account basically that, you know, we could sock away at the time. I think the cap was 4,500 a year. It's 5,500 or maybe 6,000 now. I'm not sure. It's 5,500 in 2018 and 6,000 in 2019. Thank you very much.

So we socked all that away. We maxed those out every year since we were 18 and 17 years old. I just knew eventually we're going to diversify into real estate. I don't know why I always knew that. I guess I've always, you know, a lot of our YouTube channel is the DIY stuff. So I've always saw us either, you know, flipping houses or rehabbing and renting or. And I always really wanted a storage unit for some reason, like mini storage place. Yeah.

I was a tenant of this warehouse and got talking with the owner. We were able to just withdraw all our contributions from our Roth IRA and put that as a down payment on the warehouse. So another roundabout way of that you asked, where do we put the money? We put it all in our Roth IRA. And then also really just our savings account, we had a pretty big savings account in cash. And then also we had a regular brokerage account that once our checking was up to like 50,000, which is a ridiculous amount of money. But I knew we were going to do something with real estate. Then the rest just went in the taxable brokerage.

You started living on about 50% of your income in roughly around 2012. What year was it that you became financially independent? It would be 2017, yeah. Just this last August. Was the refinance. Technically, you know, that's why it's so hard to pin down when it was, because technically, the day we signed the papers on the warehouse, you know, we paid $480,000 for it, and we just got an appraisal.

It's worth $8.50. So it's technically all the way back then we could have called ourselves financially independent, but it didn't feel that way because our mortgage payment was $5,500 a month. And, you know, sales tax is another $600. And property taxes, another $800, blah, blah, blah. So it wasn't until we were able to refinance because we had an owner finance when we first bought it because it was so, you know, run down. We wouldn't be able to get bank financing on it. So I then spent the year rehabbing it.

Then we got it refinanced and a traditional commercial loan, which dropped that payment down to 20, a little, under 2,500 a month from 5,500 a month, which then freed up immediately $3,000 a month in cash, and then it was also profiting an additional conservatively another thousand. So the warehouse, as it sits, if I manage it, which is what we're currently doing, it will net us $4,500 a month, or we could hire a property manager at any point. I think they want 6.6% or something, and then we could drop that down. and still feel comfortable living off just those proceeds. What is your cost of living now?

Because now you have two children, yes? When were they born? Hudson, our son was born in February of 2016. And then Parker, our daughter, was born a year ago. She'll be one at the end of this month. We gave birth to both of our kids in Costa Rica. So they're both dual citizens. Oh, nice.

Yeah, we went down there and paid out of pocket for the birth. And kind of got a little vacation in Costa Rica, which was pretty awesome. Yeah. Cost of living now is also hard to pin down. We're living currently with Lauren's mom while we're trying to buy. We're either trying to buy a large piece of property somewhere in North Georgia or Tennessee or a barge in Europe. And I know those are two entirely different things.

But we are going either direction. We don't care. At some point, we would like to have both. So we're just kind of looking for the ideal situation of either. and then we'll jump on that first. So we'll follow the opportunity if a good deal on 50 acres comes up somewhere on the East Coast, then we'll snatch that up. Otherwise, we have a trip to Europe plan in April and then in November,

and we're going to hope to buy, I say this like you know what I'm talking about, but they convert Dutch barges, like the old commercial barges, that they would travel around the canals of Europe. You can buy them for like 50 to 100 grand. Of course you can spend whatever you want to spend, but you can buy them for like 50 to 100 grand and the cost to maintain them is, you know, whatever a boat is, but to more them rather is actually very reasonable. It's somewhere around $3,000 a year to have a permanent mooring and pay all of your licensing fees to actually

be able to travel all the canals of Europe. So that's where we're going at the moment. We're hunkered down just stockpiling cash and waiting for either an opportunity for a big swath of land or a barge in Europe. So then the Europe barge, would this be a personal expense? Would this be something you'd be doing for fun? Yes. Who knows? Gosh, you ask great questions.

So there's two sides of it. We could either buy something that's around 60 feet long, and it would be like a two-bedroom, two-bath barge just for ourselves, or we could spend a little more and get something larger and do private charters on it. charters currently go for anywhere between five and $8,000 per person per week. And so the thought was, we could buy something bigger and nicer. And in a couple weeks a year of doing private charters pay for the entire expenses and a huge chunk of the boat, I don't know if we want to get into that. Then it starts to sound a lot more like work. But it could also be fun. So if a 30 meter hotel

style barge popped up, we would take that if the right 20 meter or 15 meter pops up that we would just use personally, then we would buy that one. Everything's kind of just up in the air. We're very flexible and adaptable. I think you'll find that. If you look back, you can make lemonade out of anything, I guess. J.L. Collins says flexibility is the only true security. That's exactly right. Why land in North Georgia or Tennessee? How did that come up? Because it's very specific. That's the thing that strikes me. To be honest, we're really okay with anywhere. We have a specific vision in mind kind of, well, and not Florida is pretty much what we're looking for. It's just, it's too hot and humid here for most of the year. Our winters are beautiful, but the rest of

the year it's just muggy. And with the kids, we can't do much outside. And the mosquitoes are gross. So we want something mountainous. But east coast so that we're still close to family. Yes. We want to be within a couple hour flight of family. So that kind of rules out. some of the cheap land out west, unfortunately. Carolina's, North Georgia, I mean, even up Virginia. We even were starting to look, because we do love New York, the idea of maybe being kind of close to Manhattan and being able to do the train in. Of course, that's a lot more expensive.

But we're kind of not too picky. So we're just, that's part of the thing we want to do on our RV trip is to get a lay of the land and figure out what we love. I see. so both of these would be personal expenses, would be enjoying the fruits of what you've saved. Exactly. Yep. Yes.

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How did having children change your budget? They're a little too young for it to really change it yet. You know, you have the birth costs, which were just a one-time thing, you know, thankfully, there were no complications. It's just in the grand scheme of things, you know, a couple hundred dollars, maybe different a month. I think the trap that you fall into is you want to upgrade your house. I think a lot of people do once you have kids. In your car, which we actually got a smaller car when we, We had our son, our first kid, we ended up downsizing, which was weird.

But we like small spaces, and so we're not looking for the three-bedroom tube bath, you know, in the suburbs house. We're looking for a 60-foot barge or... Living in an RV is something that we are looking to do, hopefully you're in the future, so... Lauren, you're both living with your mom right now. Yes, yes, yes. Right. So how much space are you currently living in? and how many people are in that space?

Mike, you're better. So, yeah, so she, her house is kind of divided, the master on one side, and then there's the guest bedroom and then one other bedroom. So I build a temporary wall in one of the bedrooms. So the kids can have their own space, which not that it matters when they're this little. Right. So it's a normal 10 by 12 bedroom or whatever, 12 by 12, just with a wall down the middle. So they have two little, six by 12 rooms.

And then there's a bathroom and then our, you know, normal size bedroom on the other side. and then it's just her mom. So it is the four of us plus my mom. But my mom has got to be the most flexible, just go with the flow person. We are so lucky. Yeah, I mean, we have so much going our way. It's crazy. So my parents also live half a mile away.

So we probably spend four nights a week over there. So it's not like we're getting in each other's space. Her mom is so flexible. She works a lot. So she really has gone quite a bit. And even when we go out of town and we come back, I'm like, Did you love having a quiet house? She's like, I kind of just wanted the loud back.

It works out beautifully for all of us. Yeah, there's the times where we just need to go rent until we can buy something, just go rent our own space, but it just doesn't make sense. If she's happy to have us and we're happy here and it's... And we are spending some time, you know, away. We're going to be in Europe for a month at least this next year, and we're going to be doing some longer-term RV travel. So then it kind of gets hard if we rent something, but then we're not there, then we're paying for something that we're not going to be there.

We'll probably be gone most of January and February. So it really has worked out how it's set up now until we get something more permanent, which will be, you know, six months out of the year, we'll either be up north, cultivating land or in Europe, traveling at five miles an hour around the park. How much does it cost to have a baby in Costa Rica? What was the savings between having one in the U.S. versus having one in Costa Rica? I can tell you what it costs at Costa Rica. It's $3,700. And if you call ahead of time, they can tell you that. They can give you a list, a menu, if you will, of prices for everything. And when you call in the U.S., they can't really give you any answers. And in the end, they just say it's going to cost what it'll cost, which is very frustrating. Yeah, there's no price transparency here.

No. No. We were really drawn to Costa Rica for a couple reasons. One, the first hospital we called, they emailed over that alacart pricing. 3,700. I don't remember if that included the flights. So actually, the birth itself, I think, was 2,800. It was in the $2,000 to $3,000 range of what was charged to our credit card. And they took a credit card. You know, here we just, there was just a question mark. And we knew from our European travels, ideally we wanted to give our kids dual citizenship in Europe so they could have. an EU passport. But that's just not possible. There's no countries that allow birthright. Birthright citizenship. And so we liked Costa Rica.

We wanted to just give them dual citizenship. Three years later, it turns out, we found out Spain actually has, if you're a citizen of a former colony, which Costa Rica is, if you live there for two years, you'll be given citizenship? Yeah, if you're a permanent resident for two years, they'll give you citizenship. So if Hudson or Parker decided they wanted to go to college or university in Spain, they could do a couple semesters there and end up with their EU passport after all. We are permanent residence now. Mike and I, since we had the kids there, were permanent residents of Costa Rica. So there were just a lot of pluses that we liked. So we just kind of went for it.

Yeah. And it went well. That's awesome. That's really cool. Do you currently have health insurance? We are actually with the warehouse purchased last year, or the year before, our income was actually negative. So we have heavy subsidies from Obamacare. And so basically, you know, we're paying nothing for health insurance. So we could have had Parker here for free, I believe. But so Hudson wasn't our health insurance at the time. It would have been, you know, the best estimate they could have given us with, I think it was

around $9,000 after we paid our deductible. Parker was after the warehouse down payment, so she could have been free. But a side effect of having the kids in Costa Rica is because we're permanent residents there, we're also on their universal health care. So we pay into their Caha system. And so we pay $25 a month each for universal health care in Costa Rica, which, of course, we don't use at all. But it's there if we needed it.

If we ever needed it, we do have that option. To answer your question, yes, we have health insurance. but it's messy as well. Our whole life is messy. It's not, we don't have this neat cut and dry. Yes, we worked nine to five for 10 years earning this amount of money and we save this amount of money. It's this weird amoeba of, okay, well, we had this much money, but we put it into

Lauren's, you know, school. And then that worked out because, you know, she was making $60,000 a year. So that pretty much we're living off my income. So we now we're saving all of her income. But that was only for a year and a half. And then, you know, we'll start a business. And one will go well and then start another business and that one doesn't go well. Our life is a mess, but it's our mess.

Happy mess. Well, and I'm really glad that you said that because I've struggled with the same thing as well in terms of explaining my story and giving my narrative. When you're entrepreneurial, as you are, and you try a lot of things and you both in terms of businesses that you start as well as in terms of investments, there is no clean narrative. No. You're exactly right. It's not as simple as I had a really well-paid engineering or software job, and I made six figures, and I put it all in index funds. Like, that's a clean, simple narrative that anybody can. Yep. Or a military, you know, retirement. Like, it's just, and you think we'd get better at it with the number of podcasts that we do that we'd get at least some semblance of a story formed. So it's easier to say, but it's just sort of word vomit at this point. Yeah, it just, it's hard to explain, except that we spend only what we need to spend. We're not unhappy. We're not, we're not, you know, sacrificing anything in my mind, at least in your mind.

I definitely don't think we're sacrificing. And so that net result of that is you just keep inching and inching forward and through the magic of compound everything. So not just compound interest that are, you know, savings is growing, but just compound flexibility or compound DIY skills are I'm very curious to see our future because where are we going is the question. We know we got this far and it's working out for us so

I don't know. Mike, what happened with the cleaning company? The last we heard it was making six figures and gross and then what? So it started we just were going door to door 40 I think small clients that were paying less than a thousand a month or something like that

and then landed a big 200 no, 50,000 square foot church in West Palm Beach, their contract. And so that was the big, just overnight, we went from just the two of us cleaning these small offices by ourselves to suddenly needing to hire 15 people after a year and a half. So our contract was a year. They renewed for another six months. And then they fired the guy that hired us and just hired someone else to do the job of managing all the facilities. And they decided to go back in-house and not have it out. So the end of our contract ended just like that. It was over. And then we moved

from West Palm Beach, which is on the east coast of Florida, back to Sarasota, which is our hometown. And how long were we in Sarasota before? Then we went up to New York. It was a matter of less than six months, I think. No, yeah, because then we got married and then went straight to New York. Yeah. Yeah. So long story short, again, just fizzled, kind of. When you came back and you started working at a church with a salary of 36,000. What other projects were you taking on? You mentioned a YouTube channel. Was that making money? Yeah, that was doing okay. I also on the side started a biodiesel business. That was before we got married. Was it? Yep. Motorcycle dealership. Oh, motorcycle dealership. I kind of just have the Warren Buffett rule, you know, rule number one, don't lose money. So none of these

were necessarily stars, but the biodiesel business, basically I went door to door, collected the waste vegetable oil from restaurants, and then just resold it. Made enough money for six months, it made an income of three or four thousand a month, and then I sold the business for 15 or 20 grand or something like that. So that's kind of a good example of my serial entrepreneurship, quote unquote, that if I would stick with something, it would probably go really well, but, you know, I just kind of sold it. I got bored with it and I sold it not at a loss and moved on. What was the one he said? Oh, the motorcycle dealer ship.

That was with two friends who also worked at the church at the same time. And that was more of a hobby. I think they just wanted to ride motorcycles. Yeah, we just wanted to get, if you want to go back even further, in college, while we were doing the commercial cleaning company, we were also buying and selling motorcycles on the side. We would buy them, fix them up a little bit and sell them. and at one point I think we had 12 or 15 motorcycles on the porch of our townhouse,

and we were cycling through, because you can only register three motorcycles or vehicles per person per year, so we're cycling through our friends and girlfriends' licenses to get these things registered. It was a whole mess. Decided we wanted to go legitimate and started the dealership. And then that also just fizzled. We just, it wasn't as fun at that point. We were all working full time at the church, and that, was going well. So we just kind of let that one close down. Did a DVD vending machine before Red Box

was a thing? E-cigarettes. Oh, that, okay, so this one, e-cigarettes, which I'm glad looking back in hindsight now, I didn't get involved in this, but I did order from China, 5,000 electronic cigarettes. And this was before, I had to explain to people what electronic, like, they thought I was crazy. So of course, now, in hindsight, if I would have stuck with that one, you know how many of the these e-sig shops are everywhere. 5,000 e-sigs. How did you sell them? How did you distribute them?

Those ones I just went, walked around, and then eventually... Eventually, some of them ended up just in our closet for a long time. A lady bought a lot of them. You went door-to-door on convenience stores and things like that? Yeah, I got them in convenience stores. That's what it was. Yeah. So not all of them.

Of the 5,000, I think I was left with 2,500. And so that one was probably a break-even, if at all. the liquid in them spoiled. And so eventually, I think five years later, put them in the dumpster. And DVDs? The Red Box, right? Yeah. But it was before kind of Red Box. I had seen one. I saw a Red Box, I think in California. And I was like, this is the future. So I ordered a machine off eBay. He had it put in a gas station here in Sarasota. It went well. He also had, decided on a coffee shop in that same gas station, which is a whole other thing. But then the gas station convenience store was foreclosed on. Just got a lot of steam after that. I just

resold the machine on eBay. It's a mess. Isn't it a mess? This is awesome. I love this. So how does that happen? Like if you want to put a DVD rental machine in a gas station, do you just walk up to the attendant and say, hey, can I chat with your manager? Yep. Yep. Wow. Literally, that's how it happens. Oh, yeah. That's not only how, so we went in and asked if that was something that the owner would be interested in. The guys was talking to him and said that he had another open space. And Mike's like, hey, how about a coffee shop?

And so they built a coffee shop and put it in this gas station also. Mike's not afraid to ask random questions. And that's how we got here. Over my life, I've kind of figured out that it's about 20 to 1. So you'll ask 20 people. You'll get 19 knows and one yes. So I don't remember the exact figures for how many gas stations I went to before. I found the owner.

I think I happened to walk in when the owner was in the back doing stock room stuff. It was certainly not the first gas station I went to to ask if I could put my DVD machine there. You just were there at the right time talking to the right person. And that's how everything goes. That's how the biodiesel business went. And I mean, the warehouse. The cleaning company went, the warehouse. I was a tenant of this building.

I was talking to the owner because I had a water leak. in my roof and I said, hey, you got a lot of problems here and you're out of state. Are you looking to get rid of this? He said, yeah, definitely I'm looking to sell and I'm like, well, are you willing to owner finance? And he said, yes. And that's just as easy as it went. We had been looking for three years for a real estate investment. We were under contract for three other houses that fell through. It would have known just asking two questions on a phone call for something unrelated would have led to, you know, spending half a million dollars on a warehouse. The value of that warehouse went up pretty substantially. You said you bought it for somewhere

in the 400s and now it's worth somewhere in the 800s? Yes. I mean, it was worth that when I bought it. Well, not really because I put work into it. It's not that we've seen it appreciate that much. It's just it was in disrepair and the owner, it was a headache to him. And so to give you some figures, I paid $42 or $4.150 a square foot where going rate here in my town for something even in that condition was probably closer to $55 or $60 a square foot. So just negotiation, I guess, you know, allowed us that much improvement. So a big part of your strategy, at least with that, was adding value. Yeah. So it's the same rules that you're, you know, I'm sure you outlined in your course and that I've been getting the emails from you that, you know, I start with the 1%

rule. If it satisfies that, I try, I shoot for the 2% rule in this warehouse. It's pretty close. to that. I knew, you know, one of the units had fire damage, so he was not collecting any revenue there. One was empty, and two people were about ready to move out because they were just so sick of this old owner. Well, and some of them had no power because of the fire, right? And had not had power in their units for months, and just nothing was being done about it. So this place, you know, had the potential, but it was, I think when we bought the building, the revenue was $62,000 a year. And then this past year, revenue will be 134,000. So I've more than doubled our revenue in nine months of owning it. And that's just getting good tenants. He was out of state. So he just, any of the first person who

gave him a call and said they'd take it, he would rent to them. And then he treated his tenants horribly. So most of them were on the way out anyway. The reason why there was a fire is because he let someone live in the warehouse. And so they're running AC. And of course, the wires burned up and started a fire, and that was the opportunity that we were able to snatch up, the diamond in the rough, if there ever was one. Going back a little bit, you mentioned that you sold this biodiesel company for, what, 15 or 20 grand? How did you find a buyer? Craigslist. Everything I do is Craigslist. Apparently, you know, the new place is Facebook marketplace. I need to look more into that. 90% of the deals that I've made have all been Craigslist. Wow. In any capacity, it doesn't matter if it's a

car or the warehouse I found on Craigslist, the buyer for the biodiesel found on Craigslist. In the context of everything you've just said, the barge in the Netherlands no longer sounds extreme. No, no, part for the course for us, I think. I mean, it's maybe the most sane thing we've ever done to actually tie ourselves down to somewhere for six months a year. Yeah, that sounds very normal now. Yes.

So what I'm hearing as I talk to you and as I hear these stories is, try a lot of things, see what works, be flexible, be open, and live very frugally and invest your savings. Yes. That's exactly it. You hit the nail. Write that down, Lauren. Next time we need to summarize our lifestyle, that's exactly it.

Yes. What are you going to teach your kids about money as they get older? We're going to teach them, you know, the value of saving and choosing what you spend your savings on. So, you know, once they get to the age where an allowance is reasonable, then we'll do that. And I don't think we'll take on student loans for them. Of course, once we get to that age and they have their heart set on something, I'm sure as a parent, you change your mind. But I think that could be really damaging to a kid just to give them a blank check. The value of hard work, of course. Kids are just little mirrors of you. They really are.

And so I don't know that we really have to like lay it out. I think they'll see the values that are important to us as we go along the way. And there's teaching moments to just make sure that we, you know, make those a little more known to them. Yeah. Awesome. Well, I don't think I have any other questions. Is there anything that I haven't asked about or are there any lessons that you'd want to emphasize for the people who are listening? You know, like we said, be adaptable, be flexible.

Don't be afraid to fail, too. Oh, yeah. feel like that's a big thing that people are surprised that will do something and then change course quickly. But if you realize that something's not working, it's okay to move on from that. You don't have to stick with it. On the other side of the coin, don't romanticize failure either. I think there's a lot of that going around that failure being almost a right of passage. If you could not fail, choose not to fail. Definitely don't fail. But at the same time, it's okay. You're going to

fail. So be okay with that. Lauren, what are some of the key takeaways that we got from this conversation? I have six, and we're going to take a quick break to hear from our sponsors, and after that, we'll go into the six key takeaways. By the way, before we go into this break, I want to take a moment to say thank you to everyone who's listening for being so awesome, being so incredible about understanding that we do need to take breaks for a word from our sponsors. That's what supports the show. That's what keeps it going. that's what pays the team and allows us to grow.

So thank you so much for supporting our need for support. Thank you so much for being so awesome about the sponsors that we have. As my team will tell you, I spend a lot of time weighing the different sponsors, and I only choose the ones that I think you will want to hear about, the ones that I stand by and whom I believe that you would benefit from hearing about. So with that being said, we're going to take a break to hear from our sponsors. and I just want to say thank you to everyone listening. Afford Anything is brought to you by Skillshare.

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You can try it for free by going to freshbooks.com slash Paula. That's freshbooks.com slash Paula. And when they ask, how did you hear about us? type in, afford anything. FreshBooks.com slash Paula to try it free for 30 days. All right, we are back now. What are some of the key takeaways that we got from this conversation with Mike and Lauren? Here are six.

Number one. You have the ability to get ahead to move farther and faster when you learn from the mistakes or the challenges or the dissatisfactions that you hear other people talk about. As Mike and Lauren described, they never really went through the traditional W-2 cubicle thing, but they, from a very early age, realized that they wanted to build financial independence, even when they were still students, even before they had entered the workforce, they knew that they wanted something different. And they formed that viewpoint, not based on their own experience, but by listening to the experiences of others. You can just kind of

take people's word for it if you introduce the idea and you just have people describing the rat race to you over and over and over again. I eventually just don't want the rat race whether you've really experienced it or not, I guess. You know, freedom is freedom whether you're escaping the cubicle or just escaping the fear of a cubicle, I guess. I love that line. Freedom is freedom, whether you're escaping the cubicle or escaping the fear of the cubicle. So what I love about the, early days of Mike and Lauren's story is that they learned from the mistakes and the experiences of others. And of course, use your own judgment. Don't just blindly accept what people tell you. Don't just parrot what you hear other people say. Use your critical thinking skills. Use your

judgment. But listen to what others are saying because many people can provide insight into mistakes that you can avoid, things that you can learn that can save years of your life. That was one of the things that set Mike and Lauren apart at an early age. So that's key takeaway number one. Key takeaway number two. Medical treatment really lacks price transparency. As you heard in this interview, Mike and Lauren decided to have their children in Costa Rica, in part because they knew exactly what it would cost,

whereas if they had delivered those babies in the U.S., they had no idea what it would cost. And even when they called and tried to get that information, no one could actually give them that information. I can tell you what it costs at Costa Rica. It's $3,700. And if you call ahead of time, they can tell you that. They can give you a list, a menu, if you will, of prices for everything. And when you call in the U.S., they can't really give you any answers. And in the end, they just say it's going to cost what it'll cost. Lack of price transparency when it comes to health care, medical care is a huge problem in the United States. States, particularly for those of us who have extremely high deductibles, who have essentially catastrophe-only insurance, the type of health insurance in which our deductibles and our annual

out-of-pocket maximums are so high that, you know, we know that in the event of a real black swan situation, the insurance will kick in and will be covered. But for anything short of that, for more common ailments, we know that we're going to be paying for that out-of-pocket. We are in a situation in which those prices are hard to predict. And so at a actionable level, what can we do? Well, save as much money as you can because you want to make sure that you have enough to be able to cover that deductible and to be able to cover that annual out-of-pocket maximum. That's one thing that you can do. And then the other thing that you can do is when and if the situation is appropriate, research medical treatment.

tourism. That's something that we should do a show on, do an episode about sometime in the future. Research medical tourism and think carefully about whether or not you feel comfortable with it and whether or not it is right for you because it very well may be. I will tell you, I have had medical treatment in Thailand. Granted, I am a sample size of one, but in my own very personal anecdotal experience, it was great. That being said, don't take my word for anything. do your own research, talk to other people. And you know what? Send me a direct message on Instagram.

If you can recommend somebody who is truly an expert in medical tourism, because I would really like to deep dive into this topic on a future episode. My Instagram is at Paula P-A-U-L-A, P-A-N-T. But to round this out, the second key takeaway is the fact of the matter is that if you live in the U.S., the situation that we live in is that we don't know what all. a lot of medical treatments are going to cost. Common things such as childbirth, we just have no idea what these things are going to cost. So other than leaving the country, if you are going to stay in the United States, make sure that

you have a really solid emergency fund set aside so that you are going to be able to meet that deductible or to meet that annual out-of-pocket max if and when the situation arises. That was a bit of a bummer takeaway. All right. Let's move on to key takeaway number three. The more unconventionally and the more creatively you live, the messier and more complicated the narrative gets. As you heard, it's difficult for Mike and Lauren to weave a clean narrative thread to describe how they reached financial independence because their life does not follow this incredibly simple, I worked a job, I saved some money, I invested it in my 401k, now I'm retired.

It doesn't follow that very simple narrative. The more unconventionally you live, the more that life gets complicated and it gets messy and it gets extremely hard to describe. Our whole life is messy. It's not, we don't have this neat cut and dry. Yes, we worked nine to five for 10 years earning this amount of money and we saved this amount of money. It's this weird amoeba of, okay, well, we had this much money, but we put it into Lauren's

school and then that worked out because she was making $60,000 a year. So that pretty much we're living off my income. So we now were saving all of her income. But that was only for a year and a half. And then, you know, we'll start a business and one will go well and then start another business and that one doesn't go well. Our life is a mess, but it's our mess. And so here's the thing. If you do decide to live a more unconventional life, if you start side hustles and become entrepreneurial, here's what's going to happen. You'll start a business and then you'll start another business and then you'll close the first one and use the proceeds from the first one to invest partially in the third but also partially in some rental properties. And then you'll

take some money out of your retirement accounts to fund partially project A but also partially project B. And basically what's going to happen is that life is going to get messy and tracking and managing and logistics and paperwork. All of that is going to get really complicated. And talking about it is going to be insanely complicated because people often think the narrative is simpler than it is. And the only truth, the only honest truth is that it's not. So if you currently have a W-2 job, you invest some of the money that comes from your W-2 job, and everything is pretty simple right now, what I'm trying to tell you is don't expect it to stay simple in the future. And that's perfectly okay. I just want to set that expectation. Because once you start living a bit more

conventionally, you'll find that the world just wasn't built for that. Even the most seemingly innocuous tasks or questions lead to a wide variety of complications. If you're spending the next year and a half overseas backpacking your way across Southeast Asia and Central America and South America, then things that you never thought would be complications suddenly become complications when a contractor that you've been working for snail mails you, a 1099 miscellaneous form as a tax form and refuses to give you a digital copy of it, but you can't access your snail mail because you're currently in Argentina. Well, guess what? All of a sudden, this thing that if you were at home would be simple is now a piece of complexity in your life. And so take that small

example and multiply it by a thousand. And that's what happens when you start living this unconventional. dimensional life. And that's not to complain. It's not to say that you shouldn't. It's really just to set the expectation that it's not all ponies and unicorns. And sometimes you'll be overseas and you'll log into a website and you'll find that they have a firewall blocker and they register that your IP is not coming from the US. And so they won't let you log into your website. But that's like an important financial website that you have to access and like the whole thing just gets really complicated. And then you end up on the phone with tech support. And like all of a sudden this chore. or this errand that was supposed to take five minutes or that would have taken five minutes had you been

stateside takes two hours. And similarly, there are other innocuous questions like if you're describing a business that you started with a upfront $25,000 investment, right? And somebody says, oh, where did that money come from? Sometimes there's not a simple answer for that. Sometimes the answer is not as simple as, oh, well, I had a job and I just saved up some money. Maybe the answer is, well, I had a company and then I sold it and then I used part of the proceeds in order to invest in this thing. And then I borrowed against this thing and I took the money that I borrowed. And I mean, you get it, right? So these innocuous questions can sometimes be very, very complicated.

Something that Emma Patti and I often talk about is when people will ask us like, oh, you know, what's the mortgage on that house or what mortgage do you have on that house? It's really not as simple as mortgage A goes to property A. mortgage B goes to property B. People often want to think that because people often expect that things are simpler than they are. But if you have a rental property and you cash out refi against it and you use part of the proceeds from that to renovate property B and part of the proceeds to renovate property C and part of the proceeds to make a down payment on property D. And then you cash out refi property D and use that to pay off. part of the remaining balance on the mortgage for property A, I mean, the whole thing becomes

a flow chart of what goes to what. And so when you are talking to somebody and they ask what seems on the surface to be a very straightforward question, the reality is there's not a straightforward answer. I feel like I'm belaboring the point, so I will end there. But I just want to provide that window of insight into anybody who who might one day start to start businesses or start to make investments and all of a sudden and to their great surprise realized that this is not as simple or specifically not as straightforward as they might have thought. It's really not. There's no step by step. There's no clean recipe. It is the messy middle. And even after you've succeeded even after you've reached financial independence, you're still living in that messy

middle. Key takeaway number four. Everything compounds. Oftentimes, we hear about the concept of compounding only in one very narrow context. We hear about compound interest. Typically in the context of you put your money into index funds in an investment portfolio. They grow at an 8% long-term annualized average rate. And over time, over the...

the next 40 years, that growth builds upon itself and blah, blah, blah. That is how most of us are familiar with the concept of compounding returns. But what we learned in this conversation, one of the takeaways from it is that it is not just interest in an investment account or growth in an investment account that compounds. Everything does. skills, flexibility, any advantage compounds upon itself and builds upon itself. It's hard to explain except that we spend only what we need to spend. We're not unhappy.

We're not sacrificing anything in my mind, at least in your mind. I definitely don't think we're sacrificing. And so that net result of that is you just keep inching and inching forward. through the magic of compound everything. So not just compound interest that our, you know, savings is growing, but just compound flexibility, our compound DIY skills are. I'm very curious to see our future because where are we going is the question. We know we got this far and it's working out for us.

So I love how they talk about compound flexibility because it's absolutely true. The more flexible your schedule is, the more that you can spend some of your spare time doing things, that will allow your schedule to become even more flexible in the future. Likewise, with real estate or with investment properties, you can get into a cycle of compounding houses, right? When the first house, you're making a little bit of cash flow, nothing no big deal, nothing right home about. But then you buy the second and the third,

and pretty soon you're producing enough cash flow that your properties start cash flowing properties. If you listened to our interview with Rich Carey, In episode 136, this is exactly the experience that Rich Carey is having. He has 20 single-family homes in Montgomery, Alabama. He's stationed overseas. He's stationed in South Korea in the military. From South Korea, he's bought now a portfolio of 20 homes all in Alabama.

And they're cash flowing well enough that now his homes are buying homes. So that's a perfect example of how compounding shows up in our lives in ways that are broader and more nuanced and more varied. than simply compound interest in an investment portfolio alone. So that's key takeaway number four. Key takeaway number five, don't be afraid to make many small bets. You heard in this interview Mike and Lauren describe a lot of businesses that they started, oftentimes with some money, they definitely put some money on the line. It was never so much that they stood the risk of ruin,

but it was enough that if their experiment did well, they knew where they would double down. And so we heard stories of everything from a cleaning company to a biodiesel company, to DVD rentals, to a cafe, to even purchasing e-cigarettes. I did order from China, 5,000 electronic cigarettes. And this was before I had to explain to people what electronic, like they thought I was crazy. So, of course, now in hindsight, if I would have stuck with that one, you know how many of these e-sig shops are everywhere. What all of these examples have in common is that Mike and Lauren are not afraid to lose a little bit of money as long as it's a reasonable amount and the potential upside is worth it. Yeah, ultimately, the e-cigarette business really went nowhere and they ended up having excess inventory that they had to throw away.

But guess what? They're financially independent anyway. Now, that's not to say that you should blow your money or lose it or like throw it into a dumpster fire. It's simply to say that rewards require risk. And that leads perfectly to our sixth and final key takeaway. And I will let them communicate this one in their own words. Don't be afraid to fail. I feel like that's a big thing that people are surprised that we'll do. something and then change course quickly. But if you realize that something's not working,

it's okay to move on from that. You don't have to stick with it. On the other side of the coin, don't romanticize failure either. I think there's a lot of that going around that failure being almost a right of passage. If you could not fail, choose not to fail. Definitely don't fail. But at the same time, it's okay. You're going to fail. So be okay with that. Nothing is a failure so long as you use it as a stepping stone forward. It is not a mistake, it is a lesson. And any money that you quote unquote lose is tuition in the school of life. If you can maintain that framework, if you can maintain that attitude, be scrappy, get back up when you fall, try new things, lean into what's working, ask questions, think critically, trust your gut, live frugally, don't let your tastes get too fancy.

you can, if you do that, live an adventurous, fun, creative, fulfilling, meaningful, and unconventional life. Those are six key takeaways from this conversation with Mike and Lauren. And congratulations to them for reaching financial independence at such a young age. I really hope that they end up getting that barge, the Dutch barge, because that sounds awesome. Oh, and by the way, can I make one further note? Did you hear the level of flexibility that they have? You know, when they're like, well, you know, I'd like either a Dutch barge or maybe some property in North Georgia or Tennessee. And then they followed that up with, but I'm not really committed to North Georgia or Tennessee.

I'm open to, you know, anywhere. That level of flexibility, that's beautiful because when, again, as J.L. Collins says, is flexibility is the only true security. And when you aren't rigid about what you think you want, you leave yourself open to the ability to follow opportunity and to try new things and to take advantage of opportunities and adventures that hadn't been part of your plan. That's one of the things I love about Mike and Lauren's stories. You hear that flexibility in basically everything that they've done. They have this great blend of hard work and persistence and determined. combination combined with like relax and go with the flow.

So those are some lessons from this conversation. I would love to know what you think. Please head to Instagram. You can find me at Paula Pant. Leave a comment on what you thought about today's conversation. If you enjoy today's episode, please do three things. Number one, most importantly, share this episode with a friend or family member, particularly somebody who you think would be intrigued by their story or somebody who's

entrepreneurial or maybe somebody who's always wanted to start a business, but it's too locked in fear, the fear of failure, because I think that their story might be able to help people break past that. So if you know somebody who is going through excessive analysis paralysis, share this episode with them and see how it lands. So yes, number one, share this with a friend or family member. Number two, hit the subscribe button in whatever app you're using to listen to this podcast. And number three, please leave us a review. These reviews are incredibly helpful. for helping us book awesome guests on this show. Right now, as of the time of this recording,

we have 1,370 ratings on Apple Podcasts, the thing that's formerly known as iTunes. So please help us get to 1400. You can go to afford anything.com slash iTunes to leave a rating and a review. The rental property investing course is coming out soon. We will be opening enrollment on April 8th, And enrollment's going to close on April 12th.

So if you want to enroll in the course, April 8th through April 12th are the dates in which you can enroll. And if you go to Affordanithinging.com slash VIP list, that's where you can get more information about that. Again, that URL is Affordanithingcom slash VIP list. Thank you so much for tuning in. My name is Paula Pan. This is the Afford Anything podcast. I am broadcasting out of Austin, Texas, where I will spend. the next five weeks. Or actually, I guess by the time this episode airs, I'll be spending the next

four weeks there. My best friend just had a baby. And so I Airbnb beat a house that is half a mile from where she lives so that I can help out, do some laundry, run some errands for her, just do whatever she needs, and be here for the first five weeks of the baby's life. This is what it's all for. This is what's so cool about freedom and flexibility is that when these important milestones happen in the lives of people you love, you can be there for. it. So I am broadcasting out of Austin, Texas right now. And I'll be posting pictures and sharing stories on Instagram. So please join along for the adventure. Thank you again for tuning in. My name's Paula Pant. This is the Afford-Ommy podcast. I'll catch you next week.