BiggerPockets Money Podcast - 19: The Ultimate Real Estate Retirement Plan with Chad Carson

Episode Date: May 7, 2018

Chad Carson has never had a “real job.” Instead, he has parlayed his experience helping with his father’s rental business into his own real estate rental business. Now, Chad owns enough real estate that he’ll never have to work at a real job. In fact, when we spoke to Chad, he called us from Ecuador — where he’s been living for a year in order to submerse his children in the Spanish language. His rental business ran itself while he was away. He was able to take an extended vacation and truly delve into the area — and now his children are bilingual! Chad’s take on “mini” retirements is very interesting. He obviously loves what he does, but he also enjoys spending time with the people who matter most: his family. Real estate provides him the opportunity to work at his own pace. This episode gives you an alternate look at early retirement — it doesn’t have to be permanent. Links from the Show BiggerPockets Forums FinCon BiggerPockets Money Podcast 12: How to Become an “Overnight” Success in 10 Short Years with David Greene Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money Show, show, show number 19. He was working for this guy who was obviously pretty wealthy. He was this boss or something like that. And the guy said, hey, Louis, you want to learn how to become rich? And Louis is like, yeah, yeah, I'm 20. I want to learn how to become rich. He's all right, Louie, here's what you got to do. Right now you're making $30,000 a year.

You've got to learn to live on $30,000 a year. Got it, Louie? Oh, yeah, I got it. Okay. Next thing you got to do is you've got to learn how to make $60,000 and still live on $30,000. Got it, Louie? Yeah, I got it. And then he kind of kept on going on the story.

Next thing you got to do is learn how to make $120,000 a year. You've still got to live on $30,000 a year, Louis. You got it. And he kind of like was driving it. And he's like, I got it. I got it. All right, good. And he said, if you can do that, Louis, then you can't help become rich.

It's time for a new American dream, one that doesn't involve working in a cubicle for 40 years, barely scraping by. Whether you're looking to get your financial house in order, invest the money you already have, or discover new paths for wealth creation, you're in the right. right place. This show is for anyone who has money or wants more. This is the Bigger Pockets Money Podcast. How's it going, everybody? I'm Scott Trench. I'm here with my co-host, Miss Mindy Jensen. How are you doing today, Mindy? I am doing great, Scott. I'm really excited about today's show because we interview Chad Carson from Coach Carson.com, and I just really enjoy every time I get to talk to Chad. He's such a nice person. He's so smart and he's so giving with his information. Yeah, I've known

Chad for a number of years now and just really impressed that what he's built and how he did it. I mean, just a hustler throughout his entire life is evidenced by him playing Division 1 football at Clemson as a linebacker. And then obviously building this huge real estate portfolio from scratch after graduating. So really impressed with the guy. We're going to hear all about his story today. He's coming out with a new book, I think in August, which is going to be awesome about how to retire using real estate investing. Just really, really excited about it. This episode is probably best geared towards folks that want to use real estate as a tool to achieve a lifestyle result. So Chad is very outspoken about how for many of us, a small real estate portfolio that covers the basics that provides more than enough is plenty and that there's a stopping point.

You build your real estate portfolio, you achieve your desired amount of cash flow and wealth, and then you use that to design your lifestyle. A lot of people, when they hear about using in real estate investing or entrepreneurship, you get carried away and keep going bigger and bigger and bigger and bigger and end up missing what they were doing this all for in the first place. So that's what you're thinking. You're going to really get out of today's show and I'm really looking forward to it. Yeah, he's a big advocate of focusing on the end result and making a goal, hitting your goal, and then, you know, stopping and taking a break and, you know, look around and see,

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your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP Money. All right, Chad, welcome to the Bigger Pockets Money podcast. How's it going? It's awesome. Thanks for having me on. I'm excited. Yeah, I'm very excited. I know you've built an awesome real estate portfolio, live in a unique lifestyle that's been made possible because of that, and I'm looking forward to kind of hearing about it. So maybe we could just start from beginning. What do you consider the starting point? When did you get the idea to begin pursuing financial freedom? And how did you kind of take those first steps to move in that direction? Yeah, so my story

begins right after college, I think, with financial independence. I graduated it with a degree in biology in German, which has absolutely nothing to do with any of the stuff I currently do. Let's take one quick second. Where did you graduate from? I was at Clemson University, so go tigers. And what sport did you play there? I was a middle linebacker and I had a much bigger neck and big old shoulders at that point. Yes, I guess that is the beginning of my story.

I was playing football in college and I got a college scholarship that paid. So I didn't have any student debt, which was awesome. And I graduated. and I was actually thinking I was going to go in the NFL for a split second. And the reality of NFL and how good they really are kind of brought me back down to earth. And so I started thinking, all right, what do I want to do now? This is kind of exciting. Let's figure it out.

And I thought about med school. I actually applied to five med schools. I thought that was sort of my natural path because I was just interested in that, interested in science. Also thought about business. Ironically, a lot of football, not ironically, but a lot of football players got recruited to be like investment bankers and people like, in these intense kind of financial positions that paid pretty well.

So I thought about that too. But then my dad had rental properties growing up, and I always hated the rental properties, actually, to kind of come to think of it. Because back in middle school, he and my brother and I, he would drop us off at a foreclosure house he bought in Georgia during the summer. It would be like 95 degrees. The refrigerator would be full of old food.

There would be like mice running around in this vacant house. And he would say, all right, boys, I'll be back in three or four hours to pick you up, clean this house up. And we see like, this is crazy. That's why you have kids. That's why you have kids. Slave labor for your real estate empire. Yes, exactly. We were horrible labor. I can't imagine how he got any kind of return on this effort for time. But we complained about it. And who would ever do this? And then when I graduated from college, I was just sitting at home kind of thinking about what to do. And I picked one of the books off the shelf. Oh, dad kind of knows what he's talking about. He was actually buying rental properties growing up. So I had the benefit of a good example of entrepreneurship. I think that's something a lot of people don't have. And so I decided that, you know what, I don't have any college debt. I own my car free and clear.

I could sleep in that if I had to. I'm just going to start investing. And so I had a buddy of mine from college. He graduated a couple years ahead of me. And he had his father had owned mobile homes growing up. So he had kind of a similar background and interest. And we decided to start investing in real estate. And that was it.

I got started with that as an entrepreneur, not really investing, but I was a bird dog finding deals for other people. beginning with my father and then continuing on, I moved back up to South Carolina. I was originally from Atlanta to Georgia. And I moved to South Carolina, my business partner and I started buying and selling houses, finding deals, eventually owning rental properties. And that was sort of my, you know, the financial engine that took me, took me the rest of the way. Can you maybe go into a little bit of detail about how you prepared yourself financially to buy those first few rental properties? Like, what did you do on the personal finance side of things,

maybe outside of the real estate strategy piece to get access to those first few deals. Yeah, I mean, I think the lifestyle is one of the most important parts of it because in my first year, I lived in my parents' house. So I made a little bit of money, you know, finding deals for them. But then, you know, I was just living at home, living cheap. And so it sort of began this pattern of just living frugally, which I know from hearing other guests on your show, that's not an uncommon type thing. So I was able to save almost all my money in the first year. The second year, I was in business. I started with my business partner, and I just lived in his spare bedroom. He had this, I didn't realize he had this extra room in his house. And I walked in there one day

and there boxes everywhere. And underneath the boxes was a bed, this old single bed. And I was like, can I sleep on this bed and stay here for a little while? It's like I kind of bummed off of him for another year and we lived off ramen noodles. And it was awesome. You know, we had a good time. And then, you know, so, I mean, those two or three years making, we didn't have any rental properties at that point. And, really, it could have been any job. It was just an entry-level entrepreneurship job, but it was even worse than job security at most jobs. If I made 30,000 bucks, you know, it was all at one time, six months into the year. The rest of the time, I was kind of just

eating crumbs and living off savings, that kind of thing. And so I think that kind of attitude of, you know, as an entrepreneur, there's no guaranteed cash flow. That was just instilled in my brain really early on. Therefore, your lifestyle has to be flexible and resilient because you just don't know what's going to happen. And like fast forwarding down the road, like 2007, 8, when we had some, everybody had some hiccups. If you were in the real estate game and you own properties and you're buying and selling, 2007, 8, 9 are pretty difficult. But I think having those early kind of lifestyle type cushions made it so that it wasn't as big a deal. We were able to tighten our belt. We didn't use most of the earnings that we made. And now we were able to sort of

kind of keep that margin really high on our lifestyle. So, So was that first purchase in 2007-2008 or when was that first purchase in relation to when you got started and how much money did you have to bring to the table for it? Yeah, so we began in 2003 and just doing the wholesaling and that kind of thing. And then three years later, so four or five, six, probably, 2006 was when we really started holding properties. So 2006 and seven, we actually bought a really good number of rental properties. Most of those were owner financing type purchases.

And that kind of goes back to my particular story, which I don't think's normal for everybody, but I wasn't at a W-2 job. I had good credit. But for me to go out and get mortgages and get my five to ten mortgages was just not the, it wasn't in the cards. It wasn't my, you know, what wasn't what strength I had. I was really good at finding deals. And so I had to get really creative with the financing, both with seller financing was a pretty good source of the deals that I had, and then also private money. So I had just people with self-directed IRAs, other people who has had some money in the bank. I've built relationships with them over time. And so they would let me buy the properties.

And to answer your question, Scott, I didn't have a lot of cash early on in some of those rental properties. It might have been, you know, $5,000 on the first rental. It was like a $100,000 purchase, $5,000 down with seller financing. That was one example. And I had several deals like that afterwards. So, you know, it was just mainly from saving some of the flip. So I'd make $20,000, $30,000 on a flip.

And then we'd save, we'd live off of some of that, save a little bit, build up some of reserves, use about five or ten grand for a down payment, and then start building those kind on the side of our flip business. So you were bringing almost no money to the deal. You had a partner. Did your partner have a job? You said you had good credit. I thought you had to have a job to have good credit. Well, I never didn't have any credit early on. I had like one credit card. It read one credit card in college. And, you know, so I was just paying a credit card. That was basically all I had. And my business partner was a little bit better off than I was, but not much. He had an internet business. And in 2003, like having internet business was pretty much like, what does that

mean? You know, it doesn't, it was not the ad revenue. It wasn't as good as it is today. It's actually done a lot better for him now. But at that time, he was just making enough money to sort of pay, he owned a home. I mean, he was able to pay his bills and kind of live for a 30, $40,000 year lifestyle. That's sort of what his internet business did. So between the two of us, our partnership was was basically like a labor partnership. Like we split up the labor of this flip business. We said, all right, Chad's going to go find the deals. And he's going to work on getting the financing.

And then as soon as we bought the property, I would pass it on to my business partner. He would work on managing the rehab, remodeling it, fixing it up. He would also manage getting it usually flipped for us. It was a kind of typical early on scenario. So he would kind of work on those two parts of the business. I would work on the other two. And we just had sort of like an assembly line of two people. just kind of hustling and making the deals work.

And over time, that's evolved a little bit. Like his other business has gotten much more busy and was much more lucrative. And so he spent a lot more time that became more passive and the kind of day-to-day management of properties, whereas I was the person who would manage our rental properties that we have. Eventually, we hired, you know, or got, you know, hired some help to do some of the kind of day-to-day work. I've never done any contracting work.

Like, I'm just, I'm not one of those handy people who knows how to fix anything like, you know, Carl and Mindy. You guys amaze me, but I'm really good at making a punch list. I'm really good at figuring out the vision for the property and then hiring other people to do it, write checks, which is kind of serving me well back to financial independence because it wasn't much of a transition to stop doing all that because I never was doing all the kind of in-person stuff. So if I'm long distance managing people from abroad where I am in Ecuador right now, for example, it's not much different than when I first started.

I'm just picking up the phone, calling somebody and saying, hey, can you get that done for me? Where are these properties located and how was it going through the recession there when you said you got to start in 2006-2007? Yeah, so we're in South Carolina and our main holdings from the upstate of South Carolina. So you have like the lower state with Charleston on the ocean and we're kind of near the foothills of Appalachian Mountains, a little small college town. And so when we first started, we were just buying like single family houses and kind of in the area, families would rent them. That was sort of our normal kind of rental. we also kind of evolved because we're in a college town to doing student rentals. And so our niche primarily, this started off with a house hack for me.

Like I just, I lived in one unit and running out three other units. So I'm the house hacking club. I join you guys. But the main thing for us was with student rentals was like these lower price kind of student rentals. We would buy a duplex, triplex, quadruplex. And in a college town, you have sort of this range of rents. You have like the upper end rents are people like these luxury housing, and people in these big huge pools and clubhouses and expensive kind of nice finishes,

like a luxury type apartment. That's kind of the top end of the market. We were trying to be like finding the grad students and the students who are going to stay there for three or four years and get a degree as a PhD student or something or an international student. So we started finding that little niche of people initially through my house hack and then through some other properties. But the issue we had, going back to your question about the recession, was we were sort

in our growth mode where we're buying. buying a flipping properties, living off of that, using some of the flip money to buy rental properties. But as most people know, like, rental properties don't make a lot of money early on. You know, you're leveraged. We were leveraged for sure. And we actually grew too much in 2007. I actually got too good at finding deals. I was getting really good at sending direct mail out. I got really good at getting referrals coming in. I just had lots and lots of the leads. And I was good at getting better at negotiating with different kinds of seller financing, creative financing. And so we found ourselves in 2007 in the position where we had 50 closings,

like acquisition closings in one year, like 2007, right before the thing, you know, everything hits the fan, you know. So it's kind of comical now to think about that. And so we did some things well, we did some things not well. The things we did well, like I said earlier, we were pretty disciplined with our lifestyle. It didn't change from college lifestyle. Even though we made, we're making the hundreds of thousands of dollars flipping houses, the year. before that. We weren't spending more than we did when first started off. But the other thing we did well is we saved a lot of that money to put it aside as reserves, just because we just a little bit, I don't know, maybe we were paranoid. Maybe we just didn't know what was going to

happen. The thing we didn't do well, though, I think was getting undisciplined with our fundamentals of buying assets. So we bought some properties where, oh man, the financing is great. This is seller financing or this is a 3% interest rate, you know, something like that. But yet the location was horrible. It wasn't going to attract great long-term tenants. It didn't fit into the business model of what we were trying to do. Or we bought some properties where we underestimated repair costs, those kind of things. And a lot of those aren't abnormal for somebody getting started. But it's kind of come to me now that if you grow really fast, really early, everybody's going to make mistakes. But if you go really fast, you're actually going to compound those mistakes and they're going to bubble up

even more. And so that was the mistake we made. We had a group of properties. They weren't majority of our properties, but they were a group of properties that either had negative cash flow, were not good tenants. And it took us through the recession and then a couple years after, and we even still have today a couple of those properties to get rid of them, to deal with those problems. And so we used up a lot of our reserves, or we ate into those reserves, both dealing with the recession, just people losing their jobs, tenants turning over, kind of that normal kind of stuff. And then also just eating some of the mistakes we made, just having to spend cash to pay for those mistakes. And so we survived it though. And I think going back to why we were able to

make it through the recession after growing and making some of those mistakes was living inexpensively, saving money, and also these relationships of private lenders that I've mentioned, like having, instead of having like local bank commercial loans where if they think you're overextended, they could call the loan due, you know, we went and talked to private lenders and to our seller financing people. And we didn't have any balloon notes. We didn't have any kind of things where we had to pay all the money back right away. It was just, all right, we've got these properties. I know you're reading the news right now that things are kind of bad, but we're going to still keep paying our, our maker payments. We're still getting rent. Things are kind of a little bit tough, but we're

going to be fine. And so it was, it was not a pleasant experience, but it wasn't like a disastrous experience for us either. Yeah, I think it's really important to note that one of the best things you just said was you had reserves. And one of the most common questions that we get on bigger Puckett's forums is how do I start investing in real estate with no money? And then bad credit is usually part of that too. And there are ways to get into real estate without using your own money to purchase the property. But you do need some sort of way to pay for the repairs that always come up. Something breaks every time you buy a house. Like the next day, there's something that's broken that's like not even noted on the inspection report. And it just, that's like Murphy's Law rules real

estate and having those huge reserves that you didn't touch is really, really, really important. And I want to just make sure people hear that and realize that you made it through in an over-leverage situation by having this huge set of reserves. You didn't just spend all your money. I mean, you could have got, you had 50 closings in 2007. You could have probably easily had more if you would have just spent all your money. So that's really important to, I just want to highlight that part. For sure.

Yeah. And it's just like your personal life. You know, I think everybody here's in the personal life. They're supposed to have some kind of cash set aside for a rainy day or for an opportunity. And your business is the, I mean, it's the same way or even more important. You know, think back about it. The reason I, we really felt that those reserves are important is because I felt an obligation. Yeah, I wanted to make a profit.

I want to survive. But it was more like to these people I've made a promise to being leveraged. You know, they were individuals that had loaned me money. They were including, you know, my grandmother was my first private lender. Like my grandmother, she heard, or she wasn't my first, she heard about me paying 10% interest in these private lenders on some of our flips like at Thanksgiving dinner or something. She was, first she was worried about me. She's like, you can't be paying 10% interest. That's ridiculous.

You know, you're going to lose your shirt. And then the second thing, she says, well, wait a minute. Can you loan, can I loan you money to make 10% interest? So I had these individuals like her, like other people whose retirement was, you know, was depending on us doing well for them. And so having reserves is a way of ensuring that you can keep your promises. And I think that kind of did it for me as much as anything. But it's just a good habit to get into because that's, I think the main thing I've learned about markets and about ups and downs is that you think you can predict what's going to happen next. You know, you'd be the first one.

I mean, Lauren Buffett, some of the smartest people in the investment world call people who try to predict markets, you know, not any better than fortune tellers. You know, people reading, you know, reading your palm or something. And so that's something that we all need to take home. And so instead of trying to predict what's going to happen, try to be resilient and flexible with whatever's going to happen. That applies right now in 2018 as well. It's like, what's going to happen next? You know, we can make some guesses.

But if you want to be flexible, you've got to hedge with cash reserves, with quality properties, with fixed interest loans. I mean, there's a lot of things you can do as a financially savvy person to hedge for those next steps. And then it's just comes down to personal, like, want to. And I think I didn't mention that a lot, but the fact that if you're willing to hustle, if you're willing to go, when it gets tough, go 80 hours a week instead of 40 hours a week. If you're willing to, you know, do that extra step. That's kind of that entrepreneurial hustle muscle, you know, the people that, you know, you just got to use it. I mean, and that's, you can't account for that kind of, what kind of results you can get by doing that.

I remember listening to David Green's interview with you guys. And I was like, yes, yes, yes. I mean, when he was hustling in college, when he was hustling early on, that's a wildcard. That served me so well in football. That was a thing that I had a little bit less talent than a couple other guys I was competing with. But that hustle and that, you know, want to and that desire is just amazing. You can't underestimate what it does, particularly when things go badly. And that's kind of when that resilient that, you know, are you going to, you're going to just back down from it?

Are you going to actually step up, do what you have to do, and make it happen? That's sort of the way it works in the down economy as well. I love that philosophy because there's, you know, I would even add one more thing into that. I mean, you mentioned a couple things that were reducing your risk there, the cash reserves and the hustle. I'd actually add two more things, but that I think also probably helped you reduce your risk, maybe even unconsciously. And let me know if I'm wrong here. But first is the spread between your cash flow and your expenses with the property, not just your cash reserve,

but the fact that you're even in a down market, hopefully you're at least break in even or even having a small positive cash flow, just slightly less positive cash flow than you had previously. The second one that I would add in there would be education. The more educated you are, the more and maybe networking as well, the more people you know, the better educated you are. I think that can go a long way to reducing risk as well. Absolutely. Yeah.

Yeah. I mean, so I'll mention a couple of negative cash flow properties, but there were some positive cash flow properties as well that it kind of brought us through there. So, you know, if you win three and you lose one, I mean, in the end, you can do, you can still do pretty well. So you're right on with that. And education is absolutely in network. I mean, education, like having like, even if there's something you already know and you

listen to a podcast and it just kind of confirms what you are kind of path you're already on, it gives you hope, you know, it gives you like, yeah, I could do that or that could work or, yeah, I'm going down the right path. And I had a lot of that. Bigger pockets was a big part for me of just like just being on there and knowing other people are going through the same thing you're going through. that's really big. And for me, like local networking and local meetups were really helpful.

Like I had some, you know, two or three kind of private investors who we knew each other well. We, you know, went out to lunch or coffee every once in a while. They knew what we were working on. And so having that trust and that confidence with a real person is something that brings you through. Like one thing that makes me nervous about having a long-term portfolio and real estate of all, like, bank commercial kind of debt is that, you know,

you kind of lose that person-to-person relationship that you have with partners and with private lenders. And so I'm not saying that bank debt's bad, but I know for sure in our case, like having those people that you can reach out to and say, hey, here's what we're doing. Like, we didn't have any like really, really bad situations. But if they've gotten bad where we had to refinance or we had to extend the loan or something like that, talking to a real person and having that relationship with them is a much different proposition than go into the bank and saying, hey, can you extend my loan?

say, no, pay us our money. That's just the bottom line. And I had friends who went properties in 2008 because of that exact phenomenon. There was a guy who had a million plus dollar equity portfolio, these rentals, and he owed about a half a million bucks to the bank. And he couldn't get refinanced. There was a balloon on the note. He had to get it extended. And they just, they wouldn't do it. They needed their money because they needed to pay their creditors back as well. And so, he ended up losing the properties, not they sold them before the foreclosure or something like that. But the point is he lost, you know, a bunch of equity because of relationships with the lender. And I think that's, that's something for people to think about kind of not only like your reserves,

not only your cash flow. If you do have leverage, like what kind of leverage do you have, what the terms? Who is it with? Those kind of things can make a big difference on whether you can be resilient in the next, you know, up and down. Okay, so I've got some questions here. You studied, what was it, German and biology? Biology is German. Okay. So what sort of financial education did you have as a kid? I didn't speak, I don't, I don't speak German. I didn't study German. So maybe they talk about finances a lot there. But you're very financially savvy, but you grew up in America going through the American school systems where they don't typically teach a lot of financial education. Did your parents talk about money? Like I'm really, I'm so impressed. I keep. coming back to this one point, I'm so impressed that you didn't spend every dime that you had from your flipping business and that got you through. I mean, the 2008 crisis was really, really,

really bad. And so many people lost their shirt, especially real estate investors, because prices were so high. So where did you learn how to do all this? I think I'm going to borrow another Warren Buffett phrase is I won no varying lottery in terms of just being able to observe, you know, Like, you know, my parents didn't, but they made good money. So I came from like kind of an upper middle class or, you know, good money kind of background. But at the same time, that doesn't guarantee they're going to talk about money. But my dad was an entrepreneur, was a real estate investor. But he had some failures.

Like, he had some businesses that did not work. And I think that was the most educational thing to me was like, was just seeing how an entrepreneur kind of has to be resilient, it has to keep going. And he would come home at the kitchen table. My mom and dad were business partners and they would talk about it. and the good and the bad stuff. And that was so helpful for me. It's kind of informed my own ideas about how to discuss things with my kids.

I have a five and seven year old two little girls and not only with money, but just like everything. You know, are you struggling with something? Are you having a challenge in your business? Like don't hide that from your kids. That's a really big educational experience that they get to be at the kitchen table, seeing mom and dad or whoever, if it's just mom, it's just dad talking about this is really helpful. So that was helpful for me, observing.

Also just getting, just seeing mentors and seeing other people. Like I think one of my early mentors was a professor at Clemson. And he kind of took me under his wing. And he was teaching a business class. And he told me about real estate investing, how he was looking at rental properties. And so I asked him if I could just ride around with him. And so I rode around with him while I was taking classes and kind of looked at what he was doing. And he told me a story about when he was 20, about my age, he was like 22, 23 years old.

He was working for this guy who was obviously pretty wealthy. Like he's this boss or something like that. And the guy said, hey, Louis, you want to learn how to become rich? And Louis's like, yeah, yeah, I'm 20. I want to learn how to become rich. He's all right, Louie, here's what you got to do. Right now you're making $30,000 bucks a year. You've got to learn to live on $30,000 a year.

Got it, Louis? Oh, yeah, I got it. Okay. Next thing you got to do is you've got to learn how to make $60,000 and still live on $30,000. Got it, Louie? Yeah, I got it. And then he kind of kept on going on the story. Next thing you got to do is learn how to make $100,000.

20,000 bucks a year, you've still got to live on 30,000 bucks a year, Louis. You got it? And he kind of like was driving it and was like, I got it. I got it. All right, good. And he said, if you can do that, Louis, then you can't help become rich. And it was like, you know, a light bulb for him. And I remember him telling me that story and also reading like the millionaire next door, some of these other books. It was just kind of, it was just, all right, that makes sense. That's rational. That makes, you know, you live off less. You create this gap, which is in the financial independence community. That's like, that's the core fundamental. You know, you just build. this big savings rate and you live inexpensively. But then on the other side, you try to make more

money. You try to get good at making money and just create this big gap between the two. And so I think that story hit home. Also see my parents who made good money not living that high on the hog. You know, those are both pretty informative for me. I love this story. This is exactly how what you just kind of said earlier about how you just like were able to observe these things and pick up, oh, that's obviously correct common sense that I'm going to follow and apply. Like that's how I feel about how doing things. And I think our stories are similar in the sense that we both started this kind of pursuit of financial independence, just like really good habits financially, immediately out of college as kind of young, maybe single folks that just kind of applied those

things. Why didn't other people do this? Why doesn't everyone else do this right out of college? Because we know that it gets a little bit more difficult. You have to make some changes to maybe we roll back that lifestyle later on, but it's so easy if you just start and apply this immediately after graduation before that lifestyle creep kind of hits them. Yeah. I think part of it's culture, which is one thing I love about bigger pockets, is like I just, I think what you're doing and we're doing is creating this culture of people who value these, these things.

And so it's kind of like the Dave Ramsey show, you know, when he comes on the beginning, says this, I forget exactly what his phrase is, but he's like, the BMW is not the status symbol of choice anymore as having debt paid off. Yeah, the paid off mortgage. Yeah, the plate off mortgage is the status symbol of choice. Well, like, for us, like, a savings rate is the status symbol of choice, or the freedom and flexibility is the status symbol of choice. Like, we, when you flip your priority levels and your values of a culture from, I want to go get

this house and I have this dream house right out of college and I deserve that and I earn that. You know, this is me. That's a cultural thing. That's nothing built into that. This is something that says you can choose to have that priority, but even more, even better, is you can be around a bunch of people who also have those priorities. You can listen to podcasts who have those priorities. It's going to make it a lot easier for you to make those choices.

And you're going to have your kind of your crew of people who are kind of doing the same thing you do. It's not an intelligence thing. No, I don't think I was more intelligent. I think it was hanging around people who are doing it. You're much more money smart than other people. So kudos to you for not getting distracted by my waving of my hands. You said, I deserve this. No, you don't deserve it.

If you can't afford it, you don't deserve it. If you didn't, you know, why do you deserve a big house? You don't deserve a big house just because you got a job that pays you $10,000 a year more than your last job. You don't deserve a brand new car just because, you know, if you've got a car that runs, if you've got a house that covers your body and, like, shelters your body, I guess, you know, fits your needs. You don't deserve a bigger house. That's not why you buy things.

You buy things because you need them and you don't need a bigger house. You don't need, who needs a 10,000 square foot house? That's the most ridiculous thing I've ever heard in my life. And there isn't one person that I've spoken to on this show or at FinCon, which is, you know, the financial media conference that have recommended spending every dime you make. The story about Louis, live on $30,000 a year. It doesn't matter how much you make. If you can live on $30,000 a year and be happy, stay there.

You know, everybody who comes on this show talks about how frugality is a part of their financial independence path. And frugality doesn't mean living with nothing. I think that's really important to point out. A lot of people are like, oh, I could never do that. I would never, I could never give up, you know, insert luxury item here. But you don't have to give it up. You don't have to give up, you know, the things that are really, really important. You give up to things that don't matter. Like, what kind of car do you drive when you're at home? Toyota 2000, Toyota, Avalon. We have one car now. One car for four people.

How can you possibly live like that? Don't you feel deprived? Crazy. I know. Well, we've been living here in Ecuador for 15 months without any car, and I'm kind of dreading having to go back and, like, drive it. This has been really nice. I didn't realize you'd been in Ecuador for 15 months. Yeah, I can't believe it either.

It's just kind of flown by. But, yeah, we came here in January, yeah, one year, and then now it's May or April. And so, yeah, we're coming back in May. And it's, I think this, my story here in Ecuador, but also going back to like 2007 and the kind of downturn, there's something else I forgot to mention that was probably the biggest aha for us that had to do with frugality, it has to do with happiness. Was it when we got so big and we were growing and buying selling and doing all this stuff, it was really a wake up call. And I have to credit my business partner because I think he was more like attuned to it. I was just, let's go buy some more. And he said, well, wait a minute.

Let's kind of step back and think about like, you know, why are we doing all this? Like, what are we actually trying to accomplish in our lives? Like, is this business like serving some goal? And we're like, oh, wait a minute. You know, we had basically kind of borrowed goals from listening to other people. It'd be like the equivalent listener of a podcast and somebody says, yeah, we bought sold 50 houses this year. And the other person listening says, I want to do that too. That was kind of like what we were.

And there's some value to copying goals from other people or modeling other people. But at some point, you have to kind of own your own destination. And so for us, we looked at it and we said, you know, we're busy. We're buying a selling house. It's like, let's just write down. Like, what would we do if we had all the money in the world? Like if just you waived your magic wand, money was not an issue, like right now and also five to 10 years from now, what would you do differently?

And for me, like, for both of us, like, we love playing pickup basketball for two hours in the middle of the day. Now, how much does pickup basketball for two hours in the middle of the day cost money-wise? It's free. We can just go to this gym and play with these people. But what other things would limit us playing basketball for two hours in the middle of the day? Buying and selling 50 houses per year. And so it was like, it was like, what are we doing?

You know, we're not even accomplishing our goals. And as I met my wife, would become my wife, and we started thinking about our own goals. It was about travel. It was about starting a family. It was about spending time together. It was about learning. It was about a lot of other things. I love business.

I'm never going to stop doing that. But there were these other things. money can't buy. That was like the biggest aha for me. And so that's that's sort of where I started thinking about this real estate business as a more of a tool in a toolbox and not letting it become this like all-encompassing dominant thing that controls your life. And I think I've noticed that with myself and also with a lot of other real estate entrepreneurs is it can take on a life of its own. It can get its own importance. And then you can kind of manufacture goals to support this idea that you need to have this big business that's taken over your life. And you can say,

I want another hundred deals. I want another hundred deals. When really, you might have five properties and that might do exactly what you need for your life. And so that was like such a big aha moment that I think a lot of people need to hear somebody else say that to say, you know, it's okay not to be the biggest, the fastest and all that because your life and what you define is important for your life is the most important thing. And the money in the business is just a tool for that. Yeah, I think of that every time I read on the Bigger Pockets forums, I want to have a thousand units. I'm like, why? How much money do you need? And I think this comes back to my frugal background and frugal nature. I'm a grandchild of the Great Depression. So my parents both come from huge families

who ran through the Great Depression and they didn't have any money. They never spent any I don't want all of these. I mean, that's a thousand properties is a lot of people you have to deal with. I don't want to deal with that many people every day or every month. I mean, how many checks can you cash? How much, how much money do you need? And this whole, I want it all isn't really the best choice in my opinion. Yeah. And I'm glad they're like, you know, capitalist mavens who like take over the world. I'm glad Elon Musk is like a workaholic who wants to send rockets tomorrow. It's like, I'm really excited that there are entrepreneurs in our system who want to go for it. But my point would be like, if you want to buy a thousand units, do it because you love it.

Do it because you want to build this thing. This is like your purpose in life to build a thousand units because you know what? You can live just fine on 10 units. It's just just saying. So if you're going to buy a thousand units, just make sure you've got the right reasons. I'm not criticizing anybody who wants to get big and do that because that's awesome. That's just really cool. And it's cool to see the people are doing that.

But on the other end, there's so many of us who don't want to become like this real estate entrepreneurial, like, empire builder. We just want to like spend more time with our kids. Or we want to travel to Ecuador and learn a new language. Or we want to go, you know, take a break for a while and take a mini retirement. And that's okay too. And there's a huge variation of what is defined as success. But success on the surface can seem like more, more, more, better, better, faster, faster,

when that's not the case. And financial independence is such a unique individual thing. And we've got to start with that, which I did not when I first started. I just let the business control it as opposed to starting with the life goal and then working it backwards from there. Well, let me chime in here. You know, I'm 27 here and still kind of working out what my life's going to look like in five, 10, 20 years. You know, I don't know that versus, you guys have families and kind of know exactly where you're at and what you kind of need to get to that desired end result there. So what kind of advice would you give to someone like me who's like, you know, I'm building for this future that's a little less certain than maybe that what you guys have already got here.

How do you kind of determine a number there or end goal for your business? Yeah, I was in a very similar situation where, you know, I was, it's undefined. And in many ways, my own future is undefined too. So I'm 38. I don't know what I want to do when I grew up either. But the thing is, like, financially, like I borrowed this term from something. some non-real estate financial kind of thinkers and bloggers where you try to have like two different goals. One is like an income floor. Like for me, like I always had an income goal.

I want to make a certain amount of income every month. I want to have real estate pay for a certain amount of income to cover my basic expenses. And so let's just like choose a number. Let's just say like it's $5,000 a month. And let's say you want to have your real estate cover $5,000 bucks a month. So when you get to that level, maybe that's your like, my family can live very comfortably on that or if your number's 10,000, your number's 10,000. But there's some number like that. When you get to a place where you have your portfolio of producing that much income and is stable and it's resilient and it's safe, that's a really big milestone.

Like that's sort of like the peak of financial independence in some ways. You know, you've done something well. But the other thing that the kind of note was that I learned for myself was there's a bunch of plateaus. Like as you're climbing towards that kind of, you know, that big plateau of having that income, you might get $1,000 a month, and then $2,000 a month, and then $3, you know, you've got these milestones. And for me, like, so my recommendation to people in their 20s is, yes, like, shoot for these big goals, like, long run. Like, I want to have this big number, but also realize, like, that's a big, that's on the peak of a mountain.

That's, like, way up there. And if this is a mountain climb, it's going to take a long time to get there. Even like, even like a short climb is five to 10 years. You know, that would be really quickly reaching financial independence. And so, like, take your time, you know, push it really hard. two or three years, take a break. And for me, like, I would take these many retirements where I would take three months at first, sometimes six months. Right now we're 16 months, you're 15 months, where you sort of detach yourself from your lifestyle. And this is like super hard for me to do

because like when as soon as I get into my like my groove and I'm going and maybe some of the other, you know, go geters like me or like this, it's really hard to step back from that go get itness and say, you know what, I'm just going to like detach myself and kind of make myself get out of the bubble I'm in right now. And every time I've done that, that has been the best kind of life-centering, goal-orienting thing I've ever done. Like I went in 2009, like in the midst of the recession, I took a many retirement. My wife and I went for four months. We started off in Spain for six weeks and kind of roamed around there. And then we went to South America to Peru, Chile, Argentina, and just kind of had our backpacks and went along.

And I remember physically, it was like four or five weeks in in Spain. And we were sitting in this little fishing town called Codacase. He was on the Mediterranean coast, just this lazy little fishing town. We were just sitting there all day, like reading a book, you know, walking, eating good food. And by the end of the day, like I had this physical sensation like a knot, like untying in my chest somewhere. And I was like, wow, you know, this is just so relaxing. And six months or six weeks before that, I would be like,

I'd be bored stiff like sitting there and just thinking and reading and reflecting my life. And that doesn't mean like I didn't get back into the entrepreneurial game after that. But like having that moment to sort of take yourself out, I had so many insights about which direction I wanted to go with my life. I had insights about what I did and what I didn't want to do. And so I can't recommend that enough. Like whether it's every week, take one day where you're just completely off, every year take a month off every three or four or five years take you know six months off

it's just like a natural rhythm like we're not meant to be these machines who just go go go go go for 20 30 years and then retire like we we are more built for these like go stop go stop and it not only makes you a better investor a better entrepreneur it just it helps you realize like what your priorities are and so i did that some scott and that was sort of an accident at first and it was super helpful And as I continue, I plan to just do that habit the rest of my life because life is just one big climb, right? You're just, you're always having some kind of goal to go for. And then you're always, and you're enjoying the scenery around you. You look around, you know, smell the flowers, have fun, enjoy it while you're also climbing towards these really cool, ambitious goals.

I love it. I got to try one of these trips. The last time I did a trip like that was after college. I just spent all my buddy and did not relax. for going around here. You did it wrong. No, it's all good. Whatever place you're right.

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and related to kind of these practical early retirement tips that we kind of discussed in the pre-interview. Do you want to kind of maybe move into those things and into that area now? Absolutely, yeah, that'd be good. I mean, I sort of touched on one that was sort of kind of a whole, you know, a core philosophy for me is try to, you know, number one, when you're, if you, if you have a goal for financial independence, particularly using real estate, but really any kind of, any kind of vehicle, work it backwards from your lifestyle or your life. What's important to you?

What matters to you? Like, what an ideal day? What would an ideal life look like? You're not going to figure that out like one sit down, you know, and you, it's always going to be evolving, but you at least maybe identify some things you don't. want to do in financial independence. And that's, I think that's, that's important. And then you also eventually maybe you'll have something to, you know, to move towards. Like for me, you know, real estate investing is always going to be kind of part of my, my story. But for me, traveling was something

I wanted to go towards. You know, once I had kids, it was like, oh my gosh, this is, I've got to spend more time doing this, being there for them, especially early in their life. And so that was something I wanted to move towards. And then, you know, once you had that, whatever it is for you, then you build your financial plan around that. And, and so I went. I talked about the income floor. Like, just set a simple number and this, you know,

it doesn't have to be like really exact. I don't think, I think sometimes we get so kind of wrapped up in the details of these future kind of dates, which are kind of, they're out there, you know, we can figure it out. And so if it's 60,000 bucks,

if it's 30,000 bucks, if it's 100,000 bucks a year, just just pick a number that it excites you and that you think is going to do pretty well. And then you start building a plan around that. And that's what I think bigger pockets is so, so awesome for. I'm actually writing a book for bigger pockets about this topic of how do you use real estate to kind of move towards that that particular goal that you have?

And there's a lot of different ways to do that. But some of the ones that I can talk about, some of the ones I really like, for example, are let's just say you work it backwards and you say, all right, $60,000 per year, $5,000 per month is kind of my number. And what would that look like for a real estate portfolio? And you might do something really simple. you might say, look in your area and you realize that, you know, I could buy a duplex or a house that rents for 1,200 bucks a month, let's say. And let's say that each one of those houses, when you pay all your expenses, taxes, insurance, maintenance, capital expenses, vacancy, everything, you have about 600 bucks left over every month on each one of those houses, right? And so the question would be, how many houses do I need to own and have them, let's just think of a real simple scenario. I had them paid off free and clear, no debt on them, because that would be a really resilient,

flexible portfolio to have in an early retirement. You know, what would, you know, I would have those properties paid off. How many properties do I need at 600 a month to meet my goal? I think I made my math hard here. 5,000 about it by 600. What is that? Let's say 500. Yeah, 500.

You got 10 properties, yeah. All right, 10 properties. I was supposed to do 10 in my head and somehow I got 600. But anyway, 10 properties would be your work it backwards. You say, all right, I'm starting with 10. All I need to do is buy 10 properties and get them paid off. And I've made $5,000 a month. And then there you go.

And so I think that kind of starting point, you started with your life goal, you get to this practical real estate goal. And then the only question is like, all right, what do I need to do next in order to buy those 10 properties and get them paid off? And that's where all these tactics and these wonderful things you learn on bigger pockets, about debt snowballs or paying cash for properties or trading up. There's so many different routes up the mountain you could use. But if you don't have some sort of kind of destination you're going towards

and have a general strategy, you'll sort of do what I did and you get off balance. And you say, all right, I need to go do all this craziness instead of just being pretty focused on a strategy and then by figuring out tactics that can get you there. Because tactics can get you distracted if you're not oriented towards. some kind of specific goal. And I think that that'd be one of my main messages, kind of as a practical tip for early retirement, is to think about what that orientation is for you, and particularly real estate is pretty simple. I mean, the math's pretty simple there. You just figure out what an average house would make after all expenses, and you just work it backwards. I want to counter an

argument that I know people are thinking right now as they're listening to you say this. What about when my expenses go up? You know, how do I know that 5,000 is going to be enough for me? Well, 5,000 is what it's bringing in today. But rents go up, prices go out, or house values go up. So your inflation, remember back to Louis, who can live on $30,000 a year all the time, you've covered this. You've covered it really well. And now your inflation is going to, inflation is going to go up with your expenses too. So I think this is a really great basic lesson in how to cover your living expenses with real estate. I mean, it's really, I hate to make it sound so simple. but it's really, see, really isn't that hard.

It's not that complicated yet. And the other thing I would say is like, you know, get to those goals first and then worry about some of the other stuff. Like, I'm certainly worried about inflation. I'm certainly worried about the uncertainty in the future. But let's take care first things first. Like, your life is the first thing. So why not reach some milestones?

Get that income and then let's start thinking about it. And one of the things you can think about if you're worried about 60,000 not being enough is buy, you can start moving from like just rental, properties, the more quality rental properties. Once you reach a destination where you have $5,000 coming in, you know, this is an example that for me, like I had some trailers and I had some little mill, they call mill houses in the South, but these old textile mills from the 1920s. These are the cheapest houses you can buy in some little small towns in the South. And but, you know, just because they were cheap, it didn't mean they were the best properties

to buy. And so we've been in the process ever since 2007 and six of like replacing some of these properties. You know, you sell them, you do a 1031 exchange, or you, you're, you do a 1031 exchange, or You just pay the taxes on them and you replace that with a better rental property or you use that money from that bad rental property, the equity to pay off a good rental property that is a long-term keeper. And those long-term keeper properties, if they're in a good location in a general region where the population is increasing, with economics are good, but there's diverse industry, the chances of you keeping up with inflation are pretty good with a basic little single family or small multi-unit kind of portfolio. So that's like one way of looking at it. You might hedge your bets just with that little portfolio. But the other thing that I do personally is I don't want to just depend on that. I also have a parallel in the background.

Once you've achieved that goal, you can also own some other properties or you can have your self-directed IRA invested in real estate or not invested in real estate. This isn't your only thing. This is just like your foundation. This is your income floor that pays for your lifestyle that does this. And then you have some other, like I have some leveraged investments. I have some properties that are still leveraged today. And I'm fine with that with long-term.

And those are like my inflation hedges. That's down the road. Those will pay off. They'll continue to grow. I've also had a self-directed. I have an IRA. Some of that's invested in like real estate notes. Rob moan money to other investors. Some of that's just invested in a passive index fund in the SP 500 or the, you know, the total stock market. So like there's some ways you can build some resiliency and some long-term flexibility in your whole portfolio. But like the first point is like get there. Get to a point where you can start worrying about that stuff. because right now you're working a job and you're using your whole life all your time, like the most valuable asset, working, working, working, working. And if you can get to that point where you have some income coming in from real estate

to pay for your lifestyle, then you'll have all sorts of time to think about it. You can start flipping some houses. You can start doing some other stuff. But very few people get to that point where their income is actually paying for their lifestyle. And that's the big deal. Yeah. I want to pull back from here and talk about Joel from F. had this amazing quote. We met him at Camp FI in January. Scott and I did. And he said,

he said, what's the worst that could happen? I have to go get a job. My worst case scenario is everybody else's everyday life. Like, what would be the worst that happens if $5,000 doesn't cover your bills anymore? And for some reason, you couldn't buy any more real estate. You can go get a job at Starbucks or McDonald's or, you know, wherever you can find a job. Go get a job coaching football. Maybe. I would love them. That'd be cool. I'll put in a good word for you.

All right, thanks. Yeah, so, I mean, your worst case scenario is not really such a bad thing. Exactly. And that goes back to what we talked about earlier during the downturn. Like when you and I and all of us are so much more resilient than we give ourselves credit for. And I think particularly when you're in a job that makes the better money you make and the more secure your job seems, the more difficult it is for you to have that kind of entrepreneurial security. And that's why I think real estate is like the ultimate early retirement plan and financial

independence plan. It's because it's entrepreneurial. It's half business, half investment. It's not just you sit back and just wait for the stock market to do this thing, which is fine. You know, that works too. But with real estate, like you are building your own skills. Like you're building your own knowledge, your own skills, your own ability to find deals. So for me, like I tell my wife sometimes, I was like, you know, yes, I'm kind of, I read

these other blogs about, you know, figuring out all these spreadsheets to make sure we never have to run out of money and do all this stuff. I said, that's pretty interesting intellectually, but I'm really not that worried about it. Like, I just, you know, to me, like those big portfolios that can support you the rest of your life are kind of like an insurance policy. Because I don't count on ever, you know, if I needed it, I'll go get the football job, or I'll be a bookkeeper or I'll be a, you know, whatever. I have so many skills as a real estate investor that I've learned that you could go apply. And you have so much ability to generate income and do things. And why worry about it? Like Joel said, I mean, it's at some point, you just got to live your life and go do it.

It's almost like your challenge that you kind of discussed here isn't worrying about whether your portfolio will sustain itself. It's you've built this massive portfolio. You know exactly how to go about starting from scratch and building a multimillion dollar, I assume, net worth with thousands or tens of thousands of dollars a month in cash flow. I assume you hit a target and maybe have surpassed it. I don't know the specifics of your portfolio. your challenge now is like, yeah, I need to stop trying to build towards the 500 unit portfolio and get my mind out of that and into more of enjoying life. It's almost like, oh, if I ever had that problem even come up, I could easily go back and just stop that mindset again for another few years and build, you know, another huge surplus over and above what I need. And it's because of the skills.

It's because of the four things that you mentioned. You're spending much less than you're bringing in. You're hustling. You're learning everything you can. and figuring out how to do this the right way. Yeah, and the other thing is once you free up your time, like what I found for myself, at least personally, some of my goals I had, like I wanted to start writing. I wanted to start teaching.

I wanted to start doing some of these things. And those were like not financial hobbies. Like I didn't plan on making money with those. But over time, if you get good at this stuff, like everything starts making money. Even the things you don't, not everybody's like mission in life is to do something that's going to make money. But like if you teach, if you write a blog, if you, these things that we're, like start off as hobbies, if that's your post-financial independence goal, those might make money too. And being a parent, I know, that's like a number one job, right? You know, doing that is

like awesome. That doesn't pay you money. But I've seen moms and dads who write about that and share their information and that somehow made some money too. So it's not like we have so many opportunities out here that whatever your hobby is, whatever the thing you do post-financial independence, that could turn into a little business, a little side hustle business as well. So it's just, I'm just blown away by the opportunities and like the stories I hear of how many people are enjoying their lives and living their life and doing it because they created this space of time. And that's, that's what I didn't do at first. And I think a lot of people are stuck in. You're working, working, working. You don't have time. And that time is like, that's where, that's where we want

to invest our life. And that's where all the cool stuff starts happening. Love it. Well, should we get moving on to our famous four here? Or is there anything else that you wanted to add before we make that transition? Well, I think you guys have covered it. Great questions. And thanks for I appreciate this being able to be here and talk about it. I'm so glad you came on. I love talking to Chad.

I only get to see them once a year and it's never enough. Yes, I agree. Okay, so now we move on to our famous four questions. These are the same four questions. We can't count. They're actually five. Then we ask every person that comes on to the show. The first one is, what is your favorite finance book?

Yeah, I mean, the classic for me that sort of shifted my mindset was your money or your life. So Vicki Robin. And so I think the main concept in that book was this concept of enough. They had this curve they put in there where you make more money, you buy more things. There's sort of this peak of the curve where you might not even realize that. That's where you have the highest ratio of satisfaction and life happiness for money made or time spent. And you start getting over that. you start buying the extra big house, the extra car, the extra vacation, and you start to get

more cluttered. And so that concept just like blew me away. And so that's sort of led to me thinking about, you know, these different currencies are money and life and mobility. And I think four-hour work week was another one that kind of talked about that. But yeah, Vicki Robin and Joe Dominguez, that was an awesome book to read. Yeah. The concept of enough needs to be more understood in our consumerist lifestyle today or life.

Lifestyle? Consumer society. Consumerous society. Yes. Sorry. All right. You may have answered the second question already. You touched on a couple mistakes that you made, but what was your biggest money mistake? What do you think was the biggest mishap you had? Yeah, I'll zoom in on that mistake a little bit more. It was getting careless on the numbers in my case. You know, I'm pretty nerdy about running numbers in real estate, But I just, I got careless on some of the negotiate. You get in a negotiation. I think this maybe is the tip is that it's difficult to have like your numbers brain

and your negotiation brain on. There must be something like deep down in the roots of our brain somewhere because it's really difficult for me at least to think about objectively the numbers. When I'm sitting face to face with the seller or I'm looking at this house or this multi-unit property that's exciting and you get excited about it. You get emotional about it. And so I think both of those can be useful when you're negotiating. because I think when you're connected with a person sit in front of you, when you're authentic and when you're a real person, that really helps you as a negotiator.

But that's not the place to make the best decisions I've found. So I kind of just separate those two where you think the numbers are the numbers. It's just like a cold, hard fact whether those numbers work or not. And then the negotiation is another thing. And so for me, separating those two and not making the mistake of getting too into the deal, too emotional, to attach to it, and letting the numbers speak to themselves. and that was a learning lesson for me. Awesome. What is your best piece of advice for people who are just starting out?

Yeah, I think go back to the culture we were talking about. Like, if you're just starting out, it's going to be easy to get wrapped up and borrowing other people's goals and borrowing other people's ideas of success. Particularly, it's going to be like a family thing. Some of your family, some of your things you just hadn't thought about are going to tell you what you should do, buy that big house, do this next thing. And I would just challenge you to sort of pick your own role models. Like pick them not only based on whether they look like they're doing well financially or something like that,

but look at like how they're living their life. Like is that the kind of lifestyle or those are the kind of values you also want to aspire to? And then model some of the values, model some of the habits they have, and then build your own path around that. Because it's so easy to get caught up in a lot of the things that don't serve you. and then they're going to help you are going to lead to bad decisions financially. And so if you can get it right in your 20s, I mean, if you can house hack once or twice,

you can save some money. I mean, you are set for life. Somebody wrote a book about that, doesn't mean? I've heard good things about that book. You can retire on real estate. Someone wrote a book about that one, too. So, yeah, if I could talk to every single college kid

and just like evangelized house hacking and some of those kind of core things in Scott's book, I mean, it would be like change the country. right? So that's that's the message. Don't get caught up in it. Read Scott's book and you'll be good to go. Yeah. Yeah. I like what you said. I like what you said a few, well, like almost an hour ago about how as soon as you graduated from a college, you just continue to live like a college student. Some of the most successful people I know, some of the most financially independent people I know, did that very same thing. I mean, when you're out of college, what does it matter if you're still living like a college student?

And that's what you're used to. That's what all your friends are doing, except the one guy that got the really great job and now has the super cool apartment in downtown and, you know, is driving the seven series. But then, you know, he's not all that happy. Yeah, have roommates. I mean, why not, why wouldn't your house sack? I mean, you just went from a dorm room where you were stacked on top of each other to now you're in your 20s.

I mean, just go go buy the house and bring the roommates on. I mean, that's that one move. if you didn't have to do any other real estate moved your whole life, if you just did a house hacker too, I mean, it just, it would change. Millions of dollars difference. Yeah, it's a huge, huge difference. So, I mean, I can't emphasize that enough. And that, you know, your housing, all the statistics show your housing is about a third

of your total expenses. So if you don't want to cut lattes, but you do want to save a bunch of money, I mean, housing would be the number one thing you do. And you could, particularly during a high price market, it's even more, it might even be like just a survival mechanism to do house hacking. If you're living on the West Coast or Denver, days or other kind of hot markets. You just might need to do that just to make sure you can save some money.

So, yeah, that's a big one. I house hacked back when it was called having a roommate. Yeah, bigger pockets have made a name. So it works even better. All right. This is the most difficult joke of the famous for. This is the most difficult question of the famous for. What is your favorite joke to tell at parties?

Oh, man, that is tough. That is, gosh. Yeah, sometimes there's like physical jokes. I'll just dance or something. The people laugh. Look at this tall, you know, I'm in Ecuador and Latin America now. And so there's just something about a tall gringo dancing and kind of just getting out there that just makes everybody laugh anyway. So maybe that's it.

I go to a Ecuadorian party and I just, they play some good music and look at the big tall greengo dancing. That's funny. So, yeah. I don't think I don't think I'm very witty otherwise, but I can go, I can go break it down. down on the dance floor. That works. Fair enough. Well, in that case, I'm going to read off a joke that Danny sent us here. And it's very complex. Let me see if you get this, right? Two men are on opposite sides of a river. The first man shouts the second, how do I get to the other

side of the river? And the second one says back, you are on the other side of the river. Oh, man. Sorry, I'd do it. I love that joke. Thank you, Danny. Somebody posted in the ChoosefI group that listening to Scott's jokes must be the most difficult part of Mindy's job. And I said it is. That's why I laughed for you, Mindy.

Then you didn't have to do it, right? Thank you. Thank you. Thank you. Chad, where can people find out more about you? I've got a couple homes online. One, I write at Bigger Pockets. So you can find me on the Bigger Pockets blog.

And I have Clemson Investors, my username at Bigger Pockets. So reach out to me, say hello. And then Coachcarsen.com is my personal website. And I write every week. I have articles on this kind of stuff, early retirement, using real estate to retire early. I wrote on stoicism last week. I get into all sorts of kind of stuff related. For anything I can roughly relate to financial independence and real estate and how they cross over,

that's my little niche. So welcome to come over and check me out there as well. Awesome. We will link to all of that in the show notes at biggerpockets.com slash money show 19. Chad, do you have anything else you'd like to add before we say goodbye and let you get back on to your very busy day of doing nothing in Ecuador? Oh, thank you all for having me on the show. It's been a pleasure. And I just, this community and what you guys are doing and the people are listening to this, you're doing the right thing. You're climbing. You're looking to achieve. And you're probably going to have people in your life

who are telling you that this is not the kind of right step to focus on. But I think my overarching message that I want to take away today is just that money, it's okay to focus on money as long as you kind of associate that with the rest of your, what's your goal in life? What are you trying to accomplish? And that's an awesome ambition. You're taking care of one thing that's taking time away from everybody else. And that's an awesome ambition to have.

So keep going for it. Awesome. And then everyone should know that Chad has finished his latest book. for Bigger Pockets. We're going to give a little tea. I think we tease it out a little bit today, but we're going to be interviewing you again, I think, in a month or two for the Bigger Pockets Real Estate podcast, where we'll go into that in depth, I believe. Is that right? That's right. Yeah, I can't wait. So it was a process that I think you both told me this about that it was going to be, I think you didn't tell me the details on purpose, but like the last

two weeks of finishing that manuscript. It's like, oh, my God, I've had my wisdom teeth out. I've had other things, but it was awesome, but it was painful. I think I have in writing evidence that I had told you exactly how difficult it was going to be, particularly in the last few weeks. Yeah. I think my response is, oh, it's going great. I've got plenty of words already written. This is awesome, you know.

And then I got feedback from other people saying, wait a minute, that chapter, that chapter, that chapter are no good. You need to, like, throw those out and rewrite them. I'm like, oh, God, all right, let's do it. I can't imagine anything you wrote would be not good. Yeah, just, you know, high standards. It's got the bigger pockets mark on there. So I got to live up to all these other ones that have come before me. So when does your book come out?

Do you have an approximate? Yeah, we're tentatively August 23rd. So that's the rough date. And so about a month before FinCon, so that'll be fun. And then, you know, the topic roughly is financial independence, early retirement, and real estate, how those two kind of intersect and how to use real estate as a tool, both to grow your wealth. And then also, once you get there, how do you turn it into income? and how to you sustain it.

A lot of the stuff, some of the stuff we touched on today, that's what I really dug into and tried to show some best practices around. So I can't wait to share it with everybody. Perfect. Yeah, this is going to be an awesome book. Very excited for it to come out. All right. Well, Chad, thank you so much for your time today.

We really appreciate you coming on and sharing your story and your experience with real estate, the ultimate retirement plan. Thank you. I appreciate it. Great to be here with you guys. Okay. Thanks, Chad. We'll talk to you later.

Talk to you later. Bye. All right. That was Chad Carson from Coach Carson.com. Really great interview. What did you think, Mindy? I just, I can't even. Like, he just gives such great information all the time.

And, you know, the thing that I really, really, really want to point out just one more time is that investing from a position of large reserves to cover anything that life brings up for you and, you know, setting a goal, having an end result. And once you get there, figure out, is this really where I want to be? Sometimes that is exactly where you want to be. And then, you know, look to where else you want to go. Look to the things that you want to do in your personal life. It's not always about just how much can I acquire.

Yeah, I thought it was fantastic that he over-extended in 2007. He did. He over-extended. He bought too many properties. The fundamentals wore down. But he was able to make it through and rebuild from position of strength because of his lifestyle choices and the fact that he ran a lien operation, both personally and professionally, from an expenses standpoint. And that was able to tie him through even a couple of weak decisions in that.

I mean, it all comes back to the foundation of this all, the first pillar of FI, whatever we want to call it, is this lifestyle expense category. And if you keep that low relative to your earned income, it sounds like you can weather a lot of these different storms, even if you make a couple of bad decisions on the other areas of personal finance. Yeah, it sounds like he's really figured out like Louis, he needs to live on less, make more and live on less and just be happy with that. And he really is. It's a great, great story and so many lessons to be learned from this episode. Yeah, and really looking forward to reading his book. I know he just finished it and it's going to go through the editing process. So you and I will probably have the exclusive privilege to getting a pre-read on it before it goes live.

we will put a link to where that book is going to be launched in the show notes, but we do not have it as of this time of this recording because it's still several months out. It hasn't even gone through editing yet. But we'll have all of that information for you in the show notes by the time this goes live. So check it out at biggerpockus.com slash money show 19. Yes. So at the end of the show, we would like to ask you to help us out. We need more bad jokes so that Scott doesn't hog all of the bad jokes.

here. We need yours. You can send your jokes to Mindy at biggerpockets.com or Scott at biggerpockets.com. Yeah, and tell me, when you do send those along, make sure that you give me permission to use your name when you do them. Otherwise, like Danny today, I'll just have to give you the first name, shout out, because I can't identify you without your permission. So you do want your name read on the show. Let me just give me a quick little, hey, you have my permission to use my name on the show if you use this joke or whatever. Perfect. Okay. Scott, shall we? get out of here and let our listeners get back to whatever it was they were doing. I'm sure

they're getting to work right now. Yeah, let's do it. Okay. For the Bigger Pockets Money show number 19, this is Mindy Jensen over and out.