BiggerPockets Money Podcast - 222: Finance Friday: Are You Too Over-Diversified In Your Investments?

Episode Date: August 13, 2021

Investments galore! This week, we talk to Jeana and Scott, a couple with a hefty amount of investments under their belt. We know what you’re thinking, “what type of stocks and real estate are they investing in?” This is where you might be surprised. Jeana and Scott are investing in three gyms, a gas and oil investment, a documentary, a 24-unit apartment building, a 52-unit apartment building, a senior care business, and...a $20,000 dog! Seriously! This is one of the most diversified couples we have ever had on the show! While it’s great to have investments spread out over multiple different asset classes, Scott and Mindy want to help the couple come up with a more systematized and formulaic approach to wealth building. Since they both have well-paying jobs, once they set up a “set it and forget it” type investment strategy, they won’t be too far away from reaching FI. If you’ve ever had an interest in running a memory care facility, dog breeding, or investment clubs, this will be a great episode to listen in on! In This Episode We Cover Diversifying your investments into multiple different asset classes Knowing which investments are likely to make a return and planning for those that won't Setting up a system for wealth creation so you can develop an early retirement plan Investing in multifamily real estate like apartment buildings and senior living homes Using government benefits to maximize wealth as quickly as possible Investing in an Airbnb property and which markets make the most sense for it And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, show number 22, Finance Friday edition, where we interviewed Gina and talk about creative investments. The only thing I've learned from him financially, he never taught me about money, but he was very frugal. And it's something I can't really like go of to this day. It's just being super frugal. Yeah. The only thing I really want to spend money towards is investments.

Like, I do want the truck, but I don't know. I'd rather buy another investment. Hello, hello, hello. My name is Mindy Jensen. And with me, as always, is my definitely surviving a zombie apocalypse co-hosts, Scott Trench. It wasn't too hard, Mindy. They were all vegan zombies in search of grains. Not the other thing.

So I was in good shape. Mind you liked that one. That was hilarious. Okay. Scott and I are here to make financial independence less scary, less just for somebody else. To introduce you to everybody's story because we truly believe that financial freedom is attainable for everyone, no matter when or where you're starting. That's right. Whether you want to retire early in travel the world, go on to make big time investments in assets like real estate, start your own business or invest in 30 venture capital type things one by one over the course of years. We'll help you reach your financial goals and get money out of the way so you can launch yourself towards your dream.

You know, Scott, that's interesting that you say that. 30 venture capital programs. I think that they're not quite at 30, but they're getting pretty close. Scott and Gina, not Scott Trench, Gina and her husband, Scott, join us today to talk about creative investments. And boy, oh boy, do they have some very creative investments, some that I have never heard of, some that I didn't even know you could invest in. So it's a lot of fun talking to Scott and Gina today. Yeah, I mean, just unpacking their financial position took us like, what, 25 minutes with this. And it's fascinating. What a unique set of circumstances, I think, something that we have never encountered here on the Bigger Pockets Money show. And I think it's really interesting. When they go through, it's at least five to ten different, completely different types of investments that they've made, all non-traditional. There's basically no stock investments going on here. and no traditional real estate investments. There's syndications and things like that with this.

So it's really difficult to assess their net worth. It's really difficult to assess the return profile of these investments. And so you're going to hear me in this episode as my biggest piece of advice to them recommend developing the skill set of financial modeling, right? This is probably overkill for many folks that are not trying to do this kind of stuff. But if you're interested, we will link to a free, Excel course. It's from a guy called Excel is Fun. We have no affiliation with Excel is fun. I just took this course when I started as a financial analyst seven, eight years ago.

And I think it's a super, it's one of several ways to develop this skill set. But if you're interested in doing lots of analysis on small businesses or different types of investments and like that, I think that would be a really good hard skill to practice for a little bit. So you're capable of budgeting and making assumptions and getting to the meat of of what is going to actually drive the needle in terms of these things, valuing how much time you're going to spend and what the dollar per hour value of that time will be. You know, hey, if I'm going to spend 600 hours on a project and it's going to pay me $4 an hour, maybe I don't want to do that.

And I should factor that into the return profile of the venture investment that I'm considering with this. So that would be the biggest piece of advice there. And we will link to that in the show notes here at biggerpockets.com slash money show 2-2-2. Yeah, one thing I want to say before we bring in Gina and Scott is that they are, investing in these alternative investments from a position of no debt and a fairly guaranteed income. So the advice that we give on these, or I'm sorry, these suggestions that we give on these Finance Fridays are always geared towards that one person or that couple and their specific

set of circumstances. They have no debt. Outside of their mortgage, they have no debt. And that's a hugely powerful position to be in. So if you're thinking that some of these alternative investments sound really great, but you yourself have a little bit of debt or a lot of debt, this may not be the best choice for you at this time. So just keep in mind that they are investing from a position of no debt. So yeah. Yeah. Again, like we got 10, 12, however many different types of businesses, all material investments, $25,000, $50,000. $50,000. invested in these things. And so because they're all alternative assets and not traditionally valued, many of which are illiquid, like investment in an apartment complex, investment in a

documentary with these types of things. These completely alternative investments in a dog, right, as an investment. Like when you have those types of investments, it's impossible to determine your net worth unless you have the skill set to be able to do that on a regular basis, a lot of financial modeling. And I want to point out that I was, I was wondering about this after we recorded if, you know, we should have just, you know, and maybe advised, hey, go, go begin liquidating or disbanding this portfolio and go to something more traditional like real estate or stocks. But I think that would be irresponsible advice as well, because they're not doing this irresponsibly. They bring in much more income than they

spend and have a great emergency reserve. And they're not levered against these assets. When you invest an alternative like this, you can lose everything you invest. but you're probably not going to lose more than you invest. Like you can in real estate, for example, if your property goes underwater and the mortgage is more than the property's value. So I don't think that they're doing anything wrong with this, but I just think it's impossible for you, me, or them

to determine if this is more effective than a traditional stock or real estate investment portfolio because we can't model out and evaluate each asset from that position of having the skill to do that. And so that's, I think, the biggest takeaway. So that's a big long intro for this, but hopefully that's helpful. And before we bring in Gina and Scott, let's remind our listeners that the contents of this podcast are informational in nature and are not legal or tax advice.

And neither Scott nor I nor Bigger Pockets is engaged in the provision of legal, tax, or any other advice. You should seek your own advice from professional advisors, including lawyers and accountants regarding the legal, tax, and financial implications of any financial decision you contemplate. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your taxed refund

can make the biggest impact. Because the goal isn't just to look backward, it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code Pockets. What I personally like is that Monarch keeps you focused on achieving,

not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves an needle. Achieve your financial goals for good with Monarch, the all in one tool that makes money management simple. Use the code Pockets at Monarch.com for half off your first year. That's 50% off at Monarch.com code pockets.

I love Matt, said no one ever. Nobody starts a business thinking, you know what would make this more fun? Calculating quarterly estimated taxes. But somehow every small business owner ends up doing it. Your dreams of creating, selling, and growing, get replaced by late nights chasing receipts, juggling invoices, and wondering if that bad sushi lunch with Scott counts as a write-off. Change all that with Found. Found is a business banking platform built to take the pain out of managing money. It automatically tracks expenses, organizes invoices, and even preps you for tax season without you doing the heavy lifting. You can set aside money for business goals, Control spending with virtual cards and find tax write-offs you didn't even know existed. It saves time, money, and probably a few years of life expectancy. Found has over 30,000 five-star reviews from owners who say, Sound makes everything easier, expenses, income, profits, taxes, invoices even. So reclaim your time and your sanity. Open a found account for free at found.com. That's fow-u-undi.com.

Found is a financial technology company, not a bank. Banking services are provided by lead bank, member FDIC. Don't put this one off. Join thousands of small business owners who have streamlined their finances with Found. Audible has been a core part of my routine for more than a decade. I started listening years ago to make better use of drive time and workouts, and it stuck. At this point, I've logged over 229 audiobook completions on Audible alone, and I still regularly re-listen to the highest impact titles. Lately, I've been listening to Bigger Leen or Stronger for Fitness, the Anxious Generation for Parenting Perspective, and several Arthur Brooks' audiobooks that have been excellent for mental well-being. What makes Audible so powerful as its breadth. Beyond audiobooks, you're you also get Audible originals, podcasts, and a massive back catalog across business, health, parenting, and more, all accessible in one app. If you're looking to turn everyday moments into real progress, Audible has been indispensable for me over over 10 years. Kickstart your well-being journey with your first audiobook free when you sign up for a free 30-day trial at audible.com slash BP money.

Gina and her husband make a great income, but they've been having a little bit of trouble raining in their spending. They're in the middle of a live-in flip, which is my favorite, and looking for ways to cut expenses to enable them to save more for even more real estate investing. Gina and Scott, welcome to the Bigger Pockets Money podcast. Thank you so much for having us. We're so excited to be here. Thank you for big fans. So Gina and Scott are our guests, and Mindy and Scott are the host. So this isn't going to be confusing at all.

Let's jump right into it. Gina and Scott, not trench. What is your income and expenses, debts, and investments? Okay, so collectively, we do make a little bit over $100,000 a year, and that includes my salary and Scott's disability. He was in the Marine Corps for over nine years, and also that also includes our investment. And that, so that equates to about $8,300 a month. And right now, Scott just got back from a nursing COVID deployment.

and so he's looking for a purdium nursing gig here. And also when Scott was deployed, he did make a crazy amount of money. He made more than what I made in a year and a month. And he was there for six and a half months. Yeah. Wow. What did you do with that? Pretty much he had to bribe me to stay longer because we wanted him to only stay for like a month or two.

But he has to bribe me to stay longer because he's more long-term. and I'm more like, I'm a millennial, so I'm like, I want you home now, you know? Well, they don't pay you a lot to sit around on the beach and sit my tides. That's kind of, I'm assuming you were in a slightly more dangerous area than, you know, just sitting around. It was, yeah, on the COVID units. And it's usually the understaffed. Oh, this was the COVID unit.

Yes. Oh, yeah, I went you home too. Yeah. I mean, thank you for doing that. But also, we want you home. because you don't get COVID nearly as high risk as if you're actually working there when in the middle of COVID.

Okay, so what is the disability income? Is that included in the 8300? Yes. Okay. Okay. Then I will just. And does that continue if you find full-time employment with the next gig?

Yes. Okay, great. Oh, then can we pull that out and specifically note what that disability income is? Okay. It's 3,500 a month. Oh. Yeah. I'm sorry that you're hurt. I guess I shouldn't be all excited. But that's a nice amount of money that's just coming in every month forever.

It just started. Okay. Recently. So it's just a combination of disabilities that occurred. Okay. And that's why I'm not going back full time necessarily because it's pretty much rough it. I hurt myself my back, especially a couple times on that deployment. And you can only take one day off. So I literally had to work through everything.

Okay. So well, $3,500, I think is a significant amount of money that we should pull out of the $8,300. And that continues in perpetuity. Does it go up? with inflation over time? Or how does that? It does go up. They'll reevaluate every year.

So it can go up. Usually it goes up like one or two percent per year. It just depends on what Congress passes because through the VA. Okay, great. But that will continue for forever. Is that right? It can. So they'll do like re-evaluations every five years and see if things have gotten worse,

gotten better. But I'm assuming it's going to go on. on. Okay. Well, I think that that's, you know, very unfortunate to be in a situation where you're earning that, but at the same time, it's a important part of the financial story that we have to acknowledge with the, with this discussion. So you mentioned VA, do you have VA health benefits for the family forever? So it's mainly just me. So I'm 100% covered medical, now dental, but I need to apply for that. prescriptions. Now, they do have a program where I'm still finding out about it, but they'll be covered, but to a less extent, and we'll have to pay out of pocket for some of it.

Okay. That's an important part of it, because I'm assuming that you have health insurance then, Gina, through your employer. Yeah, I do work for an e-commerce company. So, yeah, I have, I actually pay it for my kids. We have two boys. So my insurance is, free, which is amazing. However, I do have to pay for my kids for their insurance. Okay. That is, in this context, I think that's very helpful. Okay. So is there any other income besides the salary and the disability income? You said that there's. Yeah, we do have investments. So right now we do have, we did, we put in $25,000 for a gym investment. And that's a 12% ROI. So we used to get actually 250 a week, or not a week, a month.

We used to get 250 a month, but because of COVID, you know how everything shut down. Our gyms shut down. So we invested in, how many gyms was it? Three? Well, it was three. Specifically ours was into three of them, but they have, they're trying to take over. They're mostly in California. And California was one of the biggest shutdown areas in the U.S.

So they're acquiring gyms all along Southern California. They even went into Mexico now, but they're expecting the payments to start up towards the end of the year. Okay. So you're not investing in a gym. You're investing in a conglomerate, a business that owns many, many gyms and is expanding. Yeah. So we're part of this investment club, and they find deals, and they've been pretty successful with, I think, think just about all of their investments up to this point. And they bring us deals and you get to

decide if you want to go in or not. Yeah, that's awesome. I would be, I would love to be learn more about this investment club. Also, we have a gas and oil investment that we invested in. This was two years ago, we took a risk and invested our whole savings, which was 25,000. And we put that towards the gas and oil. And so that is collectively, they're collectively drilling in Texas. And because of COVID, of course, things slowed down. So we haven't seen a return yet. We did get one check. However, because of COVID, it did slow things down, but they are actively drilling and finding gas and oil. So we're excited to see the return on that. And also, we put in 25,000 on a documentary. We did sign an NBA, so we can't talk about too much.

about the deeds. But the film broker did shop it to Netflix, and Netflix loved it so much that they said that they wanted more episodes. So that's where our investment club came back to us and said, oh, we're going to do a round of funding so we could create more episodes. So that's where we decided, oh, yeah, we want to go in on this. This is exciting, you know. So we did that.

We also have a 24 unit that we put 50,000 in for 18%. ownership and we also have a 52 unit that we put in 50,000 for 4% ownership. And this is with Alex Felice. I know you guys know him. I think everybody knows Alex. I know. We're so grateful for your guys to show because we met him through Bigger Pocket. Oh, you didn't know him before. Okay. Yeah. We love Alex. He's a great friend and an awesome guy. Have we had him on the money show yet, Mindy? We haven't. You would remember that. I've been on his podcast, but I don't think we've had him on. We'll have to invite him at some point. We should invite him. How much collectively do you have invested in these alternative investments?

Probably it was like 230, $230,000. And everything? Yeah. Yeah, because we also have, Scott, you want to talk about our memory care home? that we have as well. We're a mess. As you can see, we have, we dabbled into so many things that we're just like,

you know. We never focused on one thing in the tactic. We kind of just went everywhere. Well, it seems like you guys are doing your fundamentals perfectly. You're saving up a ton of cash.

You're deploying it one after another in the next investment with that. And now you've got a unique portfolio as well. with a lot of this stuff, which I think is really interesting. But let's hear about this other one. Yeah. Okay. So for this memory care home, we started about two years ago here in Las Vegas.

It's a residential assisted living. So just a six-bedroom house. We can have eight residents. And we kind of just jumped in. We should have did more research, but we were newer. We didn't know. We have a business partner that we know. through church. We think pretty similar, me and him, Nick and I. We just jumped into everything.

We didn't really assess the location and all this. We just wanted to, we know we wanted to be in business. We had similar interests. So we kind of just jumped in. And then with his nursing background and him losing his dad, we both of us, we've lost our parents. So it was kind of like a natural instinct to want to open a care home so we could be able to care for others. We wanted to own a business that actually you're giving back to the elder community, but also making money at the same time. Awesome.

And so what I'm hearing lots of good intent, but what sounds like maybe things are not going so well with this investment or are they going very well? Decent. we're not putting money into it anymore. Those days, it kind of hurt. We're constantly paying for payroll or we're there ourselves being the caregivers. It's a difficult job.

It is a difficult job. And it's difficult to do well. It's really easy to do poorly, which is unfortunate. I think that there's a lot of issues surrounding the whole thing. So I think there's some opportunity to discuss that a little bit. But let's jump back into the debts and expenses really quick.

And let's see, income and investments. Yeah. Since we just went through the investments, I've got gym ownership, gas and oil investment, documentary, 24 unit, 52 unit, residential assisted living. and a very difficult time evaluating the value of these investments at any moment in time, but you can tell how much you put in. Is that correct? Yeah. And also, do you want to talk about your crypto? Are we allowed to talk about crypto in this? Sure. And I'd love to know your cash position and your other investments, maybe in retirement accounts, if you have any like that. Oh, yeah. We have a question about her retirement account. We'll get that soon.

But, so I've been into crypto since like 2017. I know you guys aren't the biggest fans of crypto, but I'm not, but Scott does. I watch to go up and I watched a crash down to 2017, and I was mad at myself for not taking any profits. So this time I said to myself, you know, I'm going to end up pulling out, which I haven't yet. So right now, I only put $21,000 in total. last I checked last night, it was at 66,000. As much as I don't want to pull it out right now, I have a feeling it's going to go up again, even if it doesn't.

I'm not mad. I just don't want to take a tax hit on it. If you sell, you'll take a tax hit. Yes. Uncle Sam. Now, Scott, do you take a tax hit? Does Uncle Sam take a preliminary tax hit based on the gain throughout the year.

I was talking to David Daly about this. And I didn't really understand what he was talking about. The only time you don't get taxed is when you buy. But if you trade within different cryptos, if you sell any of your assets, it's a taxable event. Okay. But they're not taking taxes like, oh, you bought it here and now it's worth this.

So you have to pay taxes on this even though you haven't sold. That was, yeah, because that was confusing when I was talking to David. Maybe I misunderstood. What you're thinking, Mindy, is if you get paid for something in crypto instead of dollars, like someone hands you Bitcoin instead of dollars for something, you have to pay tax on the then present value of the Bitcoin or the cryptocurrency in exchange for the goods or services that you barter with it. So it's much more complicated.

There's a conversion factor from that to the dollar. I think that's maybe what you're thinking of, but you don't pay tax on gains until you realize the gains. Okay. That makes a lot more sense. And just yet another reason why I am not personally going to invest in crypto, but we are. Let's keep going through the asset. This is the most interesting asset list we have come across on the money podcast in all this time. So our memory care home, we average about 20,000 in, income. Our overhead is around 9,000 and our bills are 5,000. We do have a savings that includes $15,000, but we are saving up because we do want to extend because right now we're only licensed

for eight residents. So in order for us in Nevada, we could be up to 10 residents. So we're going to save and extend out and do renovations for and add additional two rooms. So you're saying that there's 15,000 savings in that business. Yeah, in the business account. Okay. Yeah. And there's another. Yeah.

I don't know. We're going to show. This is our puppy. Oh, my daughter's going to love that. All right. Yeah. He's a fluffy Frenchie. and they're a rare breed.

And Spadi, do you want to tell them how much you spent on that dog? It was 20,000. All right. I've said to get there's an investment case here as well. Yeah. So our intention was to use him as a stud service. And so his stud service fee can be anywhere when you first start out, it could start at 1,500 all the way up.

I would say 3,000. So 3,000, we would start out at 3,000. And then it could go all the way up to 15,000. And that just depends on the DNA match with him and the female. So, yeah. All right. Wow. Let's keep rolling.

But what else? I know it's so crazy and random, but yeah, that's one of the investments that we love Frenchies. We have two Frenchies. So like we're like Frenchie freaks. So it's like naturally, we just wanted to get into that business. Have you guys listened to the episode? Who do we have Mindy that talked about the alternative investment list? Oh, that was Kirk, uh, Kirk Chisholm. And that was on you guys are going through his entire list here. This is phenomenal. He talked about dogs or horses, that kind of stuff and, you know, do what you're doing with this. Yeah. That was episode 144. Okay. Well, definitely. I don't know if I've heard of that one, but.

But yeah. Let's keep roll it. So we got, we got the, we got the crypto, we got the dog. We got the, we finished out the assisted living business. Yeah. So that is pretty much what we have, It's for investments. And now for liquid, we have 40,000 liquids. And that includes $2,500 savings. And we are saving up for a Haiti water well. So a few years ago, Scotty and I went to Haiti. And we went to an orphanage that had 60 kids. And we just felt lead and drawn to go back. So we're going to save up for a water well. And this is where it's about $10,000 to build out a water well. And for they could, once they build out the water well at the orphanage, they could sell the water locally. So it's a business for them. So that's our main goal is to be able to build that business for them. So it could keep income coming in. And then also our emergency fund is about 20,000. We do have a fund for Scotch truck because he does want to get a truck really bad. I can wait. But in that, in that fund, it's $12,500. We do have a fund.

have a family trip fund and that's 2,500 in there. And then we also have, this is one of our biggest goals as well is to write a children's book course on finances. So we have $2,500 in that account and that's going to pay for illustrations. So yeah. You've got two kids. I would take that $2,500 and put it in another fund and say, hey guys, start drawing. I know, right? Do you guys have any traditional retirement? accounts like Roth or 401K? Okay, so I did have a 401k, but at the time during the pandemic, I took out all of the 21,000 that I had in there and took the 10% penalty. And that was to fund our 52 unit. So that was one of our questions was, should I pay back the 21,000 since we have

40,000 liquid? Or should we just move on and use it? or just, yeah. Which direction to go? Which direction to go? I don't know the answer to that quite yet, but we'll keep that in mind as we get going, as we get rolling with all this. So anything else, any other businesses that you haven't funded, but you've started or things going on like that?

I forgot. So before the pandemic, we actually, our kids, we put our kids into a three, 3D printing class and we invested in a 3D printer, a really expensive one. They did generate around $700 for that year and they were making 3D printed items for my friends, family and their friends and they would hustle. Our boys are 10 and 12 years old. So they have a little bit of their entrepreneurs from us, I guess you can say. We try to push them in that direction. Yeah, we try to push them in that direction. So every year we ask them.

I'm not saying any entrepreneurial. Every year we ask them what they want to be. So it changes every year. As it should. You don't need to know when you're 10, what you want to do. But starting to make money is really awesome. Yeah. Okay.

Let's keep, let's, do we have we, do we have any more on the list of investments or businesses? I think that's it. I think that's it. Yeah, that's it. Okay. So we've got our cash, our investments, 401Ks, Roth IRAs, there we go. Yeah. I have absolutely no idea how to pay your net worth.

I know. I don't either. I was going to ask you guys, but I couldn't figure it out. There's just too much going on. Yeah. You're going to have a crazy time attempting to value the long list of assets you have here with this. Let's call it 500K, making that up in assets here outside of the home and all that kind of stuff. You guys have a house as well? Yeah, we're doing a live and flip.

And because of Scotty being able to go on that nurse deployment, we were able to save and hire that out, which is amazing because we were going to attempt to do most of the work ourselves, which would have took three years. I wasn't looking forward to doing all that by myself. It'll take three years, but you've got to live there for at least two anyway. But yeah, living in a construction zone can be

less than ideal. Yeah. Okay, so in addition to all of this, you're doing a flip. Yeah. Oh, good. I wouldn't want you to be bored. Yes.

Okay. And what do you expect? Yeah, well, how much do you think it's will be worth when it's completed and how much will you've bought it for and put in? We bought the house for 280, $280,000. We did put in around 50,000 of renovations. There is comps in the area that's going for $375-ish, but that's like not even fully renovated. The way we renovated it was we kind of spent more because we were kind of bougie, you know. And we and because of how the market is, we don't want to buy right now. So we decided to live in it for a few more years.

Yeah. Okay. Okay. So we, you guys think that 375 is a really conservative estimate for the after repair value for the property since it's, it's really nice. Yeah. Okay. Yeah. We have a gold sink and everything. And let's go through your, so that's the last asset then, I guess. So what are your debts? Well, we have no debt, actually. Just the mortgage.

Just our mortgage. So can we tell just a little bit of a backstory about me and Scott? Of course. Before. Okay. So with me, I came from a single parent home. My mom raised me and my two boys. My mom raised me, my two brothers.

And we were on welfare, food stamps, Section 8. And so I didn't come from a financial educated background, you know. And also we came from similar backgrounds. With mine, my mother passed when I was four. And so it was just my dad raising myself and my two brothers. But he was always working. He was retired Navy and then went to the post office. So the only thing I've learned from him financially,

he never taught me about money, but he was very frugal. And it's something I can't really like go of to this day, just being super frugal. Yeah. The only thing I really want to spend money towards is investments. Like, I do want the truck, but I don't know. I'd rather buy another investment.

He knows delayed satisfaction more than anybody that I know. So I'm the spender of the relationship and he's the saver. And so both of us together, we were like, always like bickering. Well, something's going really right in your financial position. If you have all these assets and no debt outside of the mortgage with all this kind of stuff. A really solid emergency reserve. All your fundamentals are in place. with this, you just have a unique investing approach.

I don't even know if it's bad. I'm really interested to dive into that in a second year. Well, also, I wanted to share that we did, so we did get married after knowing each other for two months, and we've been married for 16 years now. When we first got married, we slept on an air mattress for four months, and we got used furniture for $100 that furnished our whole apartment. We were pretty much broke.

He was in the Marine Corps. I was working odd in jobs. And then we got into $104,000 in debt. And that included two car payments, my school loan, which is $60,000. I went to school for my MBA and also television production. And we used the Dave Ramsey method to get out of debt. And that took us four years.

So yeah, that's where we're at right now. We're... Okay, well, I think it's fantastic that you've paid off this debt. You've got a great income. And from where your backgrounds started from, it's completely understandable and frankly, normal to have this, to have gone through a period of collecting debt. And then, frankly, a lot of people don't pay it off. So you're already ahead of the game.

I want to look at your expenses because I think you can get those down. Las Vegas isn't that expensive. You have a, what's your mortgage payment? Our mortgage is a little bit over 1450. Okay. So we did use a VA loan on that. And so our bills is around 5,600 a month. And that includes tithing and that's 10%.

so it varies. Our electric is 200. Our gas is 50. Our water bill is 50. And then GEICO or for our car insurance is 600 every six months. But we do pay that in a one lump sum fee. So we could save the $5 service fee a month. You're only saving $30, but that's like a little hack that we do.

And then for T-Mobile, we have four lines for all four of us. and we pay 102. That's another military hat that we have. Just ask for the military discount. And then our internet is 112. We have property insurance, which is $5.66. And then we work out at a bougie gym,

which is Lifetime Fitness. And we only pay $55 a month for the family, and that's another military hack. And normally it's $150 per person a month. Yes, I know. We save a lot. And then trash and sewer, if we break it down because that's every quarter, it's about $10 a month. And then our pool, we have to clean our pools.

We get a pool cleaner. That's 135. And then YouTube premium, because he likes to listen to all his motivational stuff, all your guys' podcast. So that's 2299. We have True Pannon, which is really expensive. It's $322.22. and that includes insurance for both of our Frenches.

And our car gas is $100 a month. I do work from home, so that saves us a lot of money. And groceries is probably one of our biggest expenses besides our mortgage because it's $1,200 a month. It's because I have two boys and they eat more than I do. So, yeah. And then restaurants, we budget around $250 a month. So we eat out once a week as a family.

and then we have our Amazon miscellaneous budget, which is 400 a month. So it comes out to an average around 5,600 a month that we spend. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact.

Because the goal isn't just to look backward. it's to actually make progress. Simplify your finances with Monarch. Monarch is the all-in-one personal finance tool designed to make your life easier. It brings your entire financial life, including budgeting, accounts and investments, net worth, and future planning together in one dashboard on your phone or your laptop. Feel aware and in control of your finances this tax season and get 50% off your Monarch subscription with the code pockets. What I personally like is that Monarch keeps you focused on achieving, not just tracking. You can see your budgets, debt payoff, savings goals, and net worth all in one place. So every decision actually moves in needle.

Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management simple. Use the code pockets at Monarch.com for half off your first year. That's 50% off at monarch.com code pockets. You just realized your business needed to hire someone yesterday. How can you find amazing candidates fast? Easy. Just use Indeed. When it comes to hiring, Indeed is all you need. That means you can stop struggling to get your job notice on other job sites.

Indeed's sponsor jobs helps you stand out and hire the right people quickly. Your job post jumps straight to the top of the page where your ideal candidates are looking. And it works. Sponsored jobs on Indeed get 45% more applications than non-sponsored posts. The best part? No monthly subscriptions or long-term contracts. You only pay for results. And speaking of results, in the minute I've been talking to you,

23 people just got hired through Indeed worldwide. There's no need to wait any longer. Speed up your hiring right now with Indeed. And listeners of this show will get a $75 sponsored job credit to get your jobs more visibility at Indeed. com slash bigger pockets. Just go to Indeed.com slash bigger pockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash bigger pockets. Terms and conditions apply. Hiring, Indeed is all you need. When you want more, start your business with Northwest Registered Agent and get access to thousands of free guides, tools, and legal forms to help you launch and protect your business all in one place. Build your complete business identity with Northwest today. Northwest Registered Agent has been helping small business owners and entrepreneurs launch and grow businesses. for nearly 30 years. They're the largest registered agent and LLC service in the U.S.

with over 1,500 corporate guides who are real people who know your local laws and can help you and your business every step of the way. Northwest makes life easy for business owners. They don't just help you form your business. They give you the free tools you need after you form it, like operating agreements, meeting minutes, and thousands of how-to guides that explain the complicated ins and outs of running a business. And with Northwest, privacy is automatic. They never sell your data, and all services are handled in-house because privacy by default is their pledge to all customers. Visit northwest registeredagent.com slash money-free and start building something amazing. Get more with Northwest Registered Agent at Northwest Registeredagent.com slash money-free.

Getting ready for a game means being ready for anything. Like packing a spare stick. I like to be prepared. That's why I remember 9-88, Canada's suicide crisis helpline. It's good to know just in case. Anyone can call or text for free confidential support from a train responder anytime. 988 suicide crisis helpline is funded by the government in Canada. My first reaction is that there's maybe there's a little bit on the groceries, restaurants, and miscellaneous category to cut.

But it doesn't seem like there's a ton here. It's and it seems like a lot of your expenses that are there are conscious choices or like, you know, things that are unique to your situation. like if you're going to, you know, invest $20,000 in a dog, then you need to have the insurance on that given what you described there. So that makes a lot of sense with those types of things. So I don't know, Mindy, what is your reaction? My reaction is those boys are not going to stop eating. They're going to get even bigger. They're only 10 and 12 right now. They're going to get even bigger and they're going to start consuming. I have two girls and they eat me out of house and home. So I would, I would, I would,

want you to look at the grocery budget, but I mean, you might be able to squeeze $400 out of that by doing some meal planning and shopping around the sales. We had Aaron Chase from $5 dinners on episode three to talk about how to reduce your grocery budget. So definitely throw that back on the podcast playlist and listen to that again. Because there are some tips and it's really easy to go to the grocery store and oh, this looks interesting and oh, this looks good. And no, make a list and, you know, shop from the list. And also, you know, what are some big, bulky items that the boys can eat? Like broccoli will fill them up and, you know, throw some protein at them. And, but yeah, I don't see a ton of things to remove unless you wanted to go bare bones.

But I think with your income, you don't really need to. When I first, you're going to, you're read your application, I thought, oh, well, this is going to be real easy. Let's just cut your expenses. But I think that my recommendations would be back in the investment categories. Scott, what do you think about the investments? Well, I think here's, and we talked about this on a recent episode. Actually, it will be released after we're recording this, but before we release this episode. But with another couple and they what I think I think what I'm struggling with here is to become wealthy you know you need to do two things that are seemingly in conflict with one another I think one is formulaically build

wealth save this much and invest according to a formula that will get you from X to Y over a set period of time with those types of things and seize opportunity um that is unique to your circumstance in a creative and proactive way And what I see from your situation is a complete dive down the ladder of those two things, that creative opportunistic front. And what I think you've created here is a financial position that is strong. You are clearly bringing in more money than you spend on a regular basis, month after month after month after month, with no question about that continuing.

But all of your investments are in things that are really highly illiquid, that you don't have control over. You can't decide to sell or realize portions of your investment at any time. Right. I mean, your investments are in a dog. They're in an apartment complex that somebody else is operating and makes all of the decisions around capital, you know, distributions and allocations with it. In the gym, you don't have those decision making, I would imagine, with the way that that's structured. with the retirement, what's the word, it's just a living facility? Yeah.

With that one, you do have control over that one, but that sounds like it can be a job in and of itself sometimes rather than a true kind of more of an investment property with that, same thing with the house. And so that, I think, is where my instinct comes to come down to, I love it, keep doing that stuff, but maybe bring a consider bringing in a formulaic approach to investing in something

that is maybe not more traditional but more, you have more control over. It could be real estate. It could be stocks. It could be you know one of doubling down in one of these businesses and automating it or something like that. But if you can get into that

situation, I think you'll find you'll have a lot more flexibility because you're at this point where like, you could be worth between $500 and $1.5 million. With this, right? I don't know with that. But I think you'll feel a lot better if you can say, hey, my passive income that I can controllably predict is above that $5,600 mark on average.

You know, that seems like a good moving target from your formulaic approach. And then a couple of these ventures may pay off big and accelerate you over that tipping point or produce that passive cash flow. But that's where my instinct comes back to is thinking like, hey, let's, let's continue doing a lot of the cool creative stuff you're doing, but maybe also layer in, pull back a little bit and layer in some sort of formula that can move you towards something more predictable, I guess, with some of this stuff.

Because your finances are very exciting. And I think that might not be, I don't know, is that something that you're trying to move towards? And that's what I wanted to do. That's why I was thinking real estate more so over other things. But I wanted to ask you guys what you thought about like, you know, everybody says, I want to get started, but they never get started. And then my biggest thing now is like I'm worried about inflation and all this. What do you guys think about that? I do want to mention that the 24 unit is currently for sale. And since we did put in 50 grand,

we will make a little bit. If we would... I'm guessing around 75,000. So if everything goes well, we will have another 75,000 liquid. So that's another thing we want to ask you guys. Scott does want to get into Airbnb. Short-term rentals.

And we don't know if we should... I want to stick in Vegas just because we live here and it just be easier, but then I know he wants to go to another market. The only thing with Vegas is it's very restrictive. It's one of the heaviest restrictive short-term rental markets in the U.S. because we do have the strip and the casinos and all that. Oh, okay. I was going to say that's a huge destination. But yeah, the hotels is where everybody wants to stay and they want to exercise their lobby muscle. Okay. So what I am seeing, what Scott the guest said was we never focused on one thing. And I think, think that that could be a bit of a hindrance. You've got all these really exciting investments. And it's super cool to invest in a documentary. And you have an NDA and we can't discuss what it is about. But what is that going to get you? I don't see that as a ton of upside unless it's like, you know,

the Game of Thrones documentary or, you know, like something really pop culture, you know, that would be very popular, but those are really easy to have Netflix say, you know what, never mind. And then what happens to your investment? So that one I think is, I would classify that as risky or speculative. And I personally don't like risky and speculative. I think that real estate is risky and speculative. It's definitely as risky and speculative as I want to go. I shouldn't say I think it's risky and speculative. I think it's a great investment, but that is as risky and speculative as I want to go. So I don't really like the documentary investment personally, and I don't know if there's any way for you to get out of it. No. I don't know that I, if I was in your position, I wouldn't put any more money into it.

And I would hope that whatever happens happens well. I wish you luck. But I would, I would stop looking at these creative and exciting investments and more focus on the boring ones. I just want to give a slight disagreement to that with this. You can disagree with me even though you're wrong. How long you've been doing this? How many years have contributed to the current situation with this? Just investing in the random things? The shotgun style, I would imagine.

Probably what, like three years. Yeah, three years now. Have you learned a lot? Yeah. I would say, well, because we do go to the investment club, they have once a month meetings. So we go and we're like the youngest ones there. And there's about 50 people that go.

So we're around like older people who are much more into the game. So we are learning from them. So that's what another hack that we do is hang out with older people that know what they're doing and then you learn from them. It's definitely a big learning curve because when I first went there, I didn't understand anything they were saying. And we didn't invest for a good, I don't know, before we jumped into the gyms, the first one. Here's what your story is going to be if you keep doing this.

You're going to get hosed and flushed on a couple of these investments. You're going to have unpredictable payouts at random, future dates and large amounts of money on a couple of them, most, you know, hopefully with that. And you're going to get an education in a unique type of investing here, which could be fun and exciting for a lifetime with this. You have no ability to plan around when you will achieve certain financial hurdles with this type of approach to investing, but you could end up very wealthy over a 10-year period with very surprising puts and takes across the portfolio with these kinds of things. So if you're okay with that, I don't, you're not, it doesn't look irresponsible to

me. I mean, you have all these different investments. You're not levered against very many of them in any unsustainable way. All right. The one, the things you're levered against are real estate investments, right? It sounds like the real estate in the assisted living place and your primary with that, right? You bring in much more income than you spend. I just, I just think you're, what I imagine your sense of your feeling about this is like what what do I have here I have a random collection of investments am I doing something right am I doing something wrong no one else is doing this what am I crazy I guess that's what that would maybe that's what's going through your head to a certain extent I was thinking yes yeah but I read it as like hey you're gonna you're gonna

have that outcome most likely and even if you get flushed on all of the investments which is very unlikely it seems like you're still in a strong financial position because you save more than you bring in and you've got 80, you know, 65% of your expenses covered by the disability, which you think will continue for a long time. And you have flexible and creative options for work, including in your business and with high dollar per hour opportunities that come up, Scott. And Gina, you sounds like you have stable employment that it brings in plenty for the, to cover things, even if that doesn't come, even if Scott temporarily has no opportunity, opportunity in the short run, that's super good.

And he then has a base salary job that you can go after. Right. So I think it's an interesting and creative situation. And frankly, I have no idea how to proceed from here. I think it's going to be about what you want, right? If you want a stable formulaic approach to FI, you're going to have to stop contributing to more of these investments. And as some of them cash out, like the apartment complex, begin diverting that to a formula. that may or may not go faster.

But you are also, we have to acknowledge getting an education that it's going to be very unique in these types of investments through your investment club and maybe continuing that is unpredictably going to generate some sort of return. So I'm having trouble knowing what to make of this. Mindy, you're hand raised. Go ahead.

So I think what is giving me the hebi-jeebies about these investments is there isn't any traditional retirement funds in here. You took the money out of your 401k. I didn't hear you say anything about a Roth IRA or anything in the stock market. And that is where a lot of my investments are. We have divested of some of our real estate just because this market is so hot. It was great to sell, take advantage of what we thought was the top and now isn't even close to the top. And put that money into the stock market, where it continues to grow because the stock market is also on a tear. Do you have any interest in the stock market?

I guess I should ask that because that's what I would do, but I'm not you. There's a lot of different things. You called it the shotgun approach, which is really quite accurate here. And I'm trying not to sound condescending. I'm not meaning to be, but I think a little bit of focus would help. a lot. It sounds like you like real estate. How much money is in the gyms again? Most of those investments were 25,000 to get in. Each. Okay, each. So you have 25,000 and three gyms, so that's 75,000. Well, that particular gym deal was for those three. So three for 25,000.

So you're getting $250,000 or you were. And okay, so that is, I didn't write down how much was initially in there for that one. So that, like, we've got a gym, we've got oil and gas, we've got a documentary, some real estate. The residential assisting livid, I want to talk about whatever that is. It's your most meaningful asset, it sounds like. Yeah, we do own the house. So we put in $70,000 in that. That included the startup funds and also furnishing the house. buying the beds. We got medical beds for our residents and also just to furnish it fully, make it comfortable for a house. So that was the 70,000 encompassed all of that. Crypto I know nothing about. The dog, I don't really know anything about. How old is the dog now

and how old does it have to be before it can start making money? He's six months old now and he could start. He's our moneymaker at 11 months old. So okay. Yeah. And is there an easy way to connect to get him started working? Because

we go on these Facebook groups and they have like, they're called like fluffy French bulldog groups or whatever they call them. But people just post stuff and people reply if they're interested or. So there's a way to connect into

a group that would be interested in the services that he provides. Okay. Yes. Yes. It's a huge demand. There's a lot of interest when we see people post. You'll see just messages saying interested DM or whatever they point. Does that cost you any money? Like are you flying someplace or traveling or do they come to you? We would go through the vet and he'd do the polling. He would do all the stuff. Okay, great. We can ship it. Oh, well, there you go.

That's even better. Okay. So it's not an in-person transaction. Okay. What do you guys want from this? Maybe that's like the thing. I was like, what's the goal that you're trying to move towards? The goal is, are you talking about for the French bulldog?

No, no. For your overall financial condition. So overall for me is that I want to just to be able to inspire, travel with purpose, create a legacy for my boys, and write out and finish that children's finance book course as a family. So it's something that could also be passive income as well. And just, yeah, I mean, I love where I work. I love my team.

So I will stick out with my W-2 job for a while because it's amazing, you know. I feel really grateful. Scott, what do you want? Okay, so I just wanted to, I want to be able to work from home, which technically I can't. I'm still a nurse after all, but I have an opportunity to continue school for free to get a nurse practitioner degree. The only thing, my long-term goal, even though there's a certain subspecialty in that field that I would love to do, I don't want to be stuck in the mindset of, oh, I have to work for money. I want to be able to, like, manage investments, properties and just more freedom so we can

travel around and spend family time, things like that. Okay. So let me kind of try to boil that what I heard there into a financial goal here. So, Gina, it sounds like you just want more. little bit more free time to work on some of these side projects and and travel and and those kinds of things and Scott you want the option to not have to work sooner rather than later it sounds like yes and I don't think you're that far away from that reality with this kind of stuff and I think the first and most important thing I would look at from a strategic level is your biggest asset

by far is your disability yes that that that's That is a million dollar, perhaps plus asset if you think that is likely to continue. Unfortunately, that is your biggest asset with that. And so that's 65% of your spending with that. All you need after that is 2,000 more in passive income. And you cover your expenses, right, for the most part, or maybe a little bit more than that. And you're done, right? And you may or may not have that with your current portfolio.

across these things, but you can't, you have no way of telling that based on what you've, what you've invested in with that. And I just think you've done something a little tiny bit out of order if you're going for the optimal approach here, which is you have done, you've gotten this interesting and unique investment profile before you've gotten that foundational level of stable, predictable, passive cash flow. And I think that there's no reason to like go and blow up your formula with these types of things and all that kind of stuff. But if you can find a way to stably generate that additional $2,000 a month and work towards that for a year or two, and slowly perhaps redeploy the winnings that you get or the returns that you get from some of

these things like the apartment complex into that, along with your savings rate, over a one-two-to-three-year period, you'll cross that finish line. And then you can begin deploying everything, you want into this type of stuff probably guilt and you know like not guilt free but like without having to worry that you've got a unique portfolio with that because the whole game is to get the other side of the the rat race with this and cross that finance that that passive income bridge you know and get over that point where you spend you're bringing in more passive income than your lifestyle costs and then all of this stuff makes perfect sense from from that position so i think that would be how I would zoom out and think about the position is, I don't think you're doing anything

wrong with this. I just think that you're not going to feel free the way that you could if you just, you know, put the head down for one, probably not that long, one, two, three years and think about how to creatively get that last 2000 a month very predictably. And then you're good to go. All these things, you could make it, you could make it big on the on the Netflix investment. Crypto could do great. You could do great on these apartment complexes. You've got to stabilize and automate your assisted living place with those types of things. But I don't think you're very far away if you kind of just focus in and say, I'm going to make sure that I get a couple of core assets over that threshold. And then it becomes about this diversification. And you're building

a venture capital business here, in effect, with this bit by bit by bit. I think that just the time and in place for that is after you've crossed the cash flow threshold with that. That would be my high level 30,000 foot view advice. And perhaps a good starting point to doing that would be doing the dirty work of attempting to value your assets one by one, predict the timing of those returns. If it's a, if it's in a documentary, just dismiss it from your net worth, right? You can watch it and root for it with those types of things, but you have absolutely no control over whether Netflix buys that or whatever, you may get a ton back. It may be a great investment, but I wouldn't think about it as part of your financial position in the short run here. And I might do that the same thing

with a couple of these other investments like the dog, you know, with it. I can't imagine sell the family dog, even if, yeah, with some of those things. But that would, so I would, I would exclude a bunch of them to get a really conservative picture, but one by one value those assets, figure out the timing of those cash flows and that kind of stuff. And I think from there, think about cutting a couple of them and doubling down and saying, hey, if I just put my heads, I don't want to do it. But if I finish out this residential assisted living, which is your most meaningful asset, where I would suspect this exercise would lead and point first is you've got the most control and the most value locked up in that residential assisted living.

property, whatever completing that play looks like so you don't have to go in and work at it on a regular basis and it's generating enough income is where my gut would tell me in this long list is the place to start looking and then keep marching down the list with it, with that. But if you can get $2,000 a month in passive cash flow, you're done with that. And the rest of your career and life can be... Play money. Having more fun with what you're doing, with what you like to do and build out this, this venture, this alternative investment portfolio.

And you're probably win great with it. If you keep, your fundamentals are fine. You obviously analyze these deals. You look at a lot of them and you pounce when opportunity and cash coincide, it seems to me. I'm, I'm getting growing on a rant here. I probably said many things that weren't true. How is that? Is that helpful?

Yes. There's one thing, though, with our memory care home is that. we haven't paid ourselves yet from it. So we've been in it for about three, two years. Two years. And so all of that, we're just putting into a savings fund for the business. So that's another thing too is that eventually we do want to start paying ourselves, but we haven't yet just because our overhead costs is pretty high.

And also things come up, things break, and so we have to get that fixed. So that's one of our main goals. We do, before, though, Scott was there a lot working. He would sleep there, be a caregiver, then go to his nursing job during the day. You know, so we were all tired. How do you guys feel about your skills with respect to financial modeling? What do you? Not great.

I think that would be a really valuable skill to invest in developing. You can take a YouTube course or something free on it. But if you can begin building out basic financial modeling skills, you know, or maybe there's someone in your investment club will be good with that. I think that will really help you because I imagine, you know, when you talk about that rental, that assisted living property, which we can, I think we can get into because that's your biggest investment. You've invested 75K.

It sounds like you've poured more money into that over time. You have to buy the property. You've invested money. You've spent the night there. You've invested large, your time is valuable. So you've invested probably hundreds of hours or thousands of hours. A lot of hours. So maybe your investment in there is $200,000 or $250,000 with that, right?

And what I'm hearing is things break with that kind of stuff. And here's the income and expenses. A good budget, a good financial model for these businesses will include things like, here's how much the salary and payroll and bonuses and benefits will be per employee. and here's my CAPEX office supplies, repair budget, those types of things, and it just like you would for a rental property with those types of things. And I think that a good, a set of, if you can develop and hone your financial modeling skills, it will give you a much clearer picture into the prospects of this business over the next

couple of years and what you'd need to do there. Because I suspect you're just missing things in your forecast because you're doing it back of the napkin that are like, hey, the roof's going to need to get replaced on this business or, you know, the beds are going to need to be replaced every couple, every couple of months because they're going to get more, I have no idea what the CAPEX expenses are in this business. But I imagine some of those things are getting missed because perhaps is not a good budgeting architecture in there. And if you're interested in doing this type of stuff over a long career, I suspect that

being able to look at financial models and immediately know when there's crap in there will be very advantageous to you as you make more investments in things like gyms and those types of things. So I think that would be a skill that I'm noticing is it might dramatically change your ROI, your decision making on many of these things over time. Yeah. And I think that's one reason, too, why we do want to extend out and renovate the memory care home and add two rooms is so we could get to the cap of having 10 residents. Because right now we're only licensed for 8.

So if we get to 10, then that means more income. So that's our main goal as well. It would help a lot if we had that 10. Even for like the location was an idea. I mean, it's like a old Summerlin area. The people that live there, they own the houses since 1980. Most of them are original owners. But if I were to do it over, I'd probably go on a little bit higher scale neighborhood than that.

and you could demand more income from the residents. What do you expect to generate from this business over the next year? After everything, probably roughly like 5,000, maybe 5 to 10,000. That's a year. Yes. And that's without you working in it. That's with you hiring everything out. So we have a good manager now.

She's amazing. she's taking a lot of responsibilities off our plates. We still do the financial stuff and planning, but I don't have to, we don't have to go in anymore. Well, it's been a while since we went in. And that's after you move the property to the full capacity, the 10, the 10 units?

Oh, after it would more. Oh, after. Oh, after. Oh, yeah. I'd imagine about anywhere from 20 to 40,000, just depending on if we can stay full. But we do pretty good. How much would it be worth just to sell everything today? If you sold that entire business today, how much would you realize?

Well, right now, per bed, it goes for $15,000. So since we're licensed for $8,000, what is that? 15. I'm not good with math. So. 30, 60. What, 90? So you could tell it for 90,000. That's just the business. And then the house, we bought it for 275. And the house is worth around 320, 325.

So the thing with the house is I don't think it'd go for the regular price because of, I mean, as a constant area, because it does have. have like a all the things we had to do to set up for the home like a fire sprinkler system fire system all these things add up handicapped all our bathrooms are handicapped accessible so yeah based on what i just heard let's say that let's say you sell it for 300 and you and you would collect 30 000 from the sale right after the mortgage and then you have another 90 000 for the business that's 120 000 right now you're you would be selling that business, you collect 120,000 or the after-tax amount, instead of collecting the 5 to 10,000

in profit from that, which sounds like, and it sounds like a lot of your time is going towards collecting that 5 to 10,000. To me, that's a sell sign for this business in its current state. If the future state of the business is different, then, and dramatically different, then that says, I got some work to do to transform the business to that, just because that's a 5% or 10% or 5% to to 10% or less ROI in a business that is probably not growing a ton with a lot of these things with that, right? And it's a private business and it's doing a lot of those. It's not generating a huge cash and cash return relative to its value with it and it's not likely to appreciate unless you perform a lot of activity, right, with it. So if you complete the activity, you have 10 units,

you're making 40 grand a year. How much is that business worth? another 30,000. Yeah, I would say, yeah. $130,000. So $130,000 business spitting out $40,000 a year in cash is a great business. $130,000 business spitting out $20,000 is in that middle zone, I think, with a lot of this kind of stuff, right? Because you could take that money and buy two, three Airbnbs, for example, and potentially make a different ROI on that. And so I think that's again where that skill of financial modeling, that hard skill being able to put this into a spreadsheet and say, best case scenario this happens, best case scenario this happens, you know, I think we'll, you'll have to play around and make some tax moves. I think that that will result in you making moves. I don't know with particular, this particular business. I think it will result in you making moves that are hard and big and getting out of and into investments. But it might clean up your position dramatically when you're like, oh, I

I'm making this much per hour in this business, and I'm making this much per hour in this business, right? You know, I have this option here and I don't have it here. My best possible state for this one is this. That doesn't make any sense. I have to completely change up my formula with that. But I think that's where I'm kind of sensing opportunity lies with a lot of this stuff. And I think that you have to start with that business because that's where you've invested

the most and have the most value. Don't worry about what you've put in. That's called sunk cost, right? That's, but what is it worth today? If I'm looking at this as an objective outsider, where is it going to go? And is that good value or should I sell and restart? And if the worst case scenario is you get out of this for 100K and then you restart and the higher end one that you just said, because you know that now and that's what the market is going, maybe that's the start of a huge business for you.

That works really well. And this is not wasted. It's a huge, it's just an educational experience with it. But again, I think that that's where I would begin my search with by modeling out every one of your assets in detail, starting with the biggest and most important and the ones you have most control over and going down the list, thinking through what are their prospects today, where are they going to go in the future? How, you know, am I budgeting correctly? Because, you know, if you're going to own assets and be a venture investor, you will want your

CEOs of your businesses to, as they will all go, many of them will grow into big businesses to present you with an annual budget that you will beat up and believe or not. I know this from personal experience. So, but that would be my biggest piece of advice for this, not that you should change up fundamentally what you're doing with this, just that that's a tool that I think is necessary if you're going to go down this approach or it would be immensely helpful to you. Yeah, I definitely agree with what Scott said. When you started talking about the residential assisted living and that Scott, the guest, was working in there, it started to, the numbers started to be a little bit more, a little bit less exciting. So I love the finance. What did you call that? Scott? Financial

modeling. Can you find a YouTube video that we can? Yeah, I took one with a guy named Excel is Fun or the channel is Excel as Fun. It was very nerdy. I took it a few years ago. It was a two-week thing. And I took it right before I started my job and found it immensely helpful. You don't need to be the pro at this. But if you can feel very comfortable inside that spreadsheet and making basic assumptions, or at least the key assumptions in these unique businesses. And you've got to be able to just do it from scratch. You can't use templates if you're going to be doing creative stuff like this. Because you'll need to figure out, like,

what is the actual key driver of the value at expense in an assistive living place or a dog in-person visit company or whatever it is? So those are, you know, again, I think that will just take two weeks to study there, might give you a lot of value. Yeah. Yes, that sounds like something we need. Yeah, I'm interested. I'm very interested.

Yeah, I think that would be super helpful. Any other areas that you want us to dive into here? This is, again, unique. So we haven't had a chance to think through this. And I'm very grateful for you guys for bringing this to us because it's made us think in a new way. It's me. Yeah, if we do sell the 24 unit, we'll probably get around 70 to 75,000.

So that's liquid. and we do want to invest in. Originally, we were going to do get a female fluffy Frenchie so we could just be set, you know, and just make the babies there that way. But then we decided that we wanted to do Airbnb. Short-term rentals. I'm just thinking real estate because to me, that's, I see that is the biggest wealth builder. depreciation, things like that, right off on taxes and being able just to travel,

because I want to do a little bit distance between from wherever we get the property. It doesn't worry me, though. If you're doing Airbnb, if that is your plan to purchase a property and do an Airbnb, I would say listen to episode 364 of the Bigger Pockets Real Estate podcast where we interviewed Avery Carl who does Airbnb. She has more like general information about the concept of Airbnb. Like she does it in the Smoky Mountains area. And she said going into a place where you have already existing Airbnb laws is the best

place. If you're already going to do it outside of where you live, do it where they've already discovered or decided on the Airbnb laws in the short. rental laws and because then you don't have to worry about, oh, well, it penciled out as an Airbnb, but it doesn't really work as a long-term rental. And now my city just changed all the laws. So she's got a lot of great information on that episode. Yes, I just listened to that one recently. Oh, good, good. I like Airbnb. I like Airbnb as an asset class because there's a big shortage.

You think that the travel is going to come roaring back with a lot of this stuff. I think it's local and depends on a lot of those things. And I think it will be yet another one of these little areas that you guys are exploring with this and another business line. So I would be cautious of just kind of like saying, how do I focus for some time on this and maybe replicate it a few times with it? But yeah, like I think that's where you're like a little bit of more modeling and thinking about everything and a little bit more cold numbers. What is the ROI on this? this going to be, what's the upside? Am I being realistic? Does my model show that? Am I making the right tradeoffs with these types of things? So you can allocate your cash as you come into it in these

intervals into the highest and best use rather than kind of whatever happens to show up when you have the cash available and the inclination with that. So I think that's the biggest thing is Airbnb might well be it. And I think Airbnb is a phenomenal is the move across the country in many eight markets for ROI right now and in the future. There's a lot of really good tailwinds behind it. But I just think that it comes back down to like, I have no idea. It's impossible to tell whether that's a better investment than what you've currently got here,

unless we can get more detail into the numbers and the prospects of each of one of your individual investments and whether there's capability to play more money there and that kind of stuff. The reason why, too, I want to get into Airbnb is because I want to make it an experience as well. I was looking into Airbnb glamping also yurts and even mini houses. Because people like those weird, crazy Airbnbs, you know, they want the full experience. So that's what I want to be able to do is get either land or property, but also in the backyard, have a yurt or a mini house. And then have a room where there is a flower.

wall with, you know, a big lighted backdrop that says, dream big, you know? People like stuff like that. They want, uh, when you look at Airbnb's, people want that Instagram mobile type of house, you know, or your experience to be able to share, I guess. Yeah. Yeah. Look, I think you guys are not shorten ideas and all that kind of stuff. I think you guys have and like I think it's great. I think you got all this, um, There's so many good options here and you guys are just doing the right things fundamentally generate liquidity to sustain this. But again, I think it comes just all back down to what does your model say and maybe using that to drive a big part of the decision making with a lot of these

things because they're all good ideas. At some point, though, you're missing opportunities and taking risk and diversifying unnecessarily with the spread across all of these things. So that would be the biggest, I think, fundamental with a lot of this. I just had a question about as far as like mortgages. Our mortgage is at 4.5%, and at the time that was good. Do you recommend like a cash out refinance? I could do the IRRL, which is a VA refinance, just a lower the rate. Any, what do you guys think?

Should we try to get some of that capital in case we can use it, deploy it? somewhere or? I think, yeah, a refinance makes a lot of sense to me. Either you're going to lower your payment or you're going to pull out cash and probably keep your payment pretty close. So the refinance makes a lot of sense to me at the strategic level with one of those options. I would, I think, yeah, like, if you have plans for it, maybe consider pulling some cash out. That's what I did across my portfolios over the last year

is pull out a bunch of cash with a couple of those. What do you think, Mindy? I would say if you have a place to put the money, then refinance, as long as it's going to make sense to refinance. You don't want to go from 3.3 to 3.2 and spend a lot of money doing it. and I don't know.

4.5 to like 3.3.5 or something lower with that on their primary with this. No, their primary is 3.3. Oh, oh, oh, this is on the rent. 4.5. Oh, it's 4.5. Oh, okay, I have the wrong information here.

4.5. Oh, yeah. If it's a, you go ahead, Scott. I think we started late, and that's how I lost track of this. Usually we have plenty of time with this. I am so sorry, guys. I really enjoyed this.

Really enjoyed meet Nia. I think one of your sons sent us a keychain. Yeah. Yeah, they, I went to their meet-up. That's awesome. I'm so sorry I have to run here. No, it's all good. We appreciate your guys' time.

Thank you. I don't have to run. And I'd be happy to chat again some time with this. But thank you for coming on the show, listening, and all that kind of good stuff. Yeah. Thank you. Appreciate it. Appreciate it.

Okay. So with a 4.5% mortgage rate, yes, I would almost. assuredly, you would almost assuredly be able to find a lower rate. And I would refinance out of that. Of course, run the numbers and make sure that it's not going to cost you $10,000 to save $1.50 on your mortgage. But I think you're going to find some pretty great rates. I have a lender who is an amazing VA lender, but I don't know if he does VA refis. So I am sending him a note right now asking him if he does. Do you know John Lelon to buy any chance? No.

And you said that's I-R-R-L? Yes. Or they'd call it a streamline as well, VA, VA Streamline as well, VA streamlined loan. Yay, I spelled that wrong. Because all that would do is, that would just lower our interest rate. But I was wondering, should we try to take out like a HELOC or just to have some funds available if we need it? Yeah, so the HELOC is going to have, um, variable rate. And if you could get a refinance that brings down your mortgage, your mortgage rate

that isn't going to cost a lot, I would go that route instead because that's fixed. I don't know if you've got a 15 or 30 year, but I would go with a 30 year because that's a lower price point than, or a lower payment than the 15. And you could always increase your payment, your payoff time. But why would you refi into a 15 year again when you need that money to, deploy someplace else. So, yeah, I would definitely, when I get, when I hear from him, I'll let you know. I'll send you an email. Thank you.

Yeah. But yeah, I think this is, there's a lot to think about here. But I also think that, I mean, you guys have the income covered. It's a great position to be in. I would personally like to see more traditional investing. You've got the creative investing. down pat, but the more traditional investing is kind of like your, you know, your baseline, your safety zone. It's not safe. Past performance is not indicative of future gains, but,

you know, it's kind of like the set it and forget it. I'll just keep putting money into the 401k and it'll just grow by itself or whatever it does. And then you can focus on these, these other things. It doesn't like take up any mental bandwidth to throw it in a 401K. And regarding the 401K loan, if, so did you? take out a loan or did you cash it out? I cashed it out. And 21,000. Did you do this within the COVID window? Because you said you paid, you took the 10% hit. It was supposed to be penalty free. It was actually supposed to be 20% penalty. But because it was during COVID, it was only 10%. A 20% penalty? Yeah, when you cash out. I thought it was a 10% penalty in addition to

taxes. But if you took it out, if you'd make the withdrawal because you suffered a COVID hardship, you shouldn't have to take, you shouldn't pay the penalty. And then you have three years to pay it back or pay taxes on it. So I would, do you have a CPA? We just found one. Okay. I would ask them about that in a specific detail because I don't think you were supposed to pay 10% as long as you have a COVID hardship and can prove the COVID hardship, I don't think you pay the 10% penalty and you have three years to pay it back or pay taxes on it. So you can do that over the course of three years. You can do it all in the third year or the first year, whatever. So yeah, definitely talk to your CPA about what is the best course of action and what are your options

there. But yeah, I think we've kind of covered a lot today. And I would love to check back in with you in like six or 12 months and see where you have decided, you know, what financial modeling you've done and what you've decided on, you know, the different options that you have available to you. But you have a lot of things to look into and lots of time to have these money dates and sit down and talk about, you know, each individual thing. And I'm excited for your prospects. Thank you. Thank you. Yeah, we're so excited to be here. this is a privilege and an honor and we're so grateful.

I'm so grateful that you shared your story today. Thank you so much. Thank you. Okay. And we will talk to you soon. Okay. Bye. Bye.

Boy, Scott, that was Gina and Scott and they have a fun, fun story. What did you think of their investments? I loved it. You know, clearly I do something different with my, money, right? I invest in real estate stocks in a company called Bigger Pockets. And I have a pretty simple, you know, formulaic approach to that kind of stuff. But I honestly, you know, when I hear stuff like this, I get excited and I wonder like maybe they're going to do really, really well with this approach over the long run with this. If they can kind of keep taking shots like this

on creative things opportunistically and develop a big skill set, you think it's going to be much riskier at first and you're going to have some big losses, maybe a couple big wins. But over the long run, you think this is a pretty interesting skill set that's giving you exposure to something that's a little different. And so it's impossible. I have absolutely no framework to be able to tell what the return profile of the variety of asset classes that they are participating in. I have no idea what the return profile is going to be over a long period of time with those types of things. I don't think, I think it would be extremely difficult to calculate that. But I'm excited for them, interested. And I think that, like I mentioned in the show and in the intro, I think that if they

learn how to model and more appropriately evaluate these assets from a financial perspective, it'll just guide their decision making and give them that much better odds. Yeah, as I said at the very end of the show, I'm really excited to talk to them again in six or 12 months and see where they've gone, see where they've, you know, how did it go with the dog? And did they, you know, did anything ever come out of the documentary and a lot of different things? So I'm super excited to talk to them. I can't wait to check in with them again. And I just put a note on my calendar so that I bring them back in in about a year to catch up.

Because I think this is a fun way to think about investing. But I also want to remind our listeners that they are investing from a position of no debt. And they aren't leveraging their investments. They are taking the $25,000 and putting all of that in there. They're not borrowing against that. Yeah. If they had credit card debt. or they had student loan debt or other types of situations like that, I'm completely aligned

with Mindy on that. This would be irresponsible because you're putting money into assets that may never pay off or you'll have a completely unpredictable. Like when you invest in a documentary, God only knows when they're going to finish the documentary, even if they present you to the schedule, and if someone's going to buy it, like Netflix, right? So like you just, it's like, there's like, there's like a huge, you know, prey and weight component to that. Doesn't mean it's a bet. Maybe you invest in a hundred of those and your ROI is 15. 20% across the 100 investments. It could be a great asset class.

Can't say anything about that. But you can't do that when you have debt or cash flow problems that are fundamentally not being addressed in your personal financial position. They don't have that. In addition to that, they have almost guaranteed income for at least five years and probably, unfortunately, probably for the rest of his life with his disability. So there's really specific levers that they have pulled that contributed to our conversation today. But yeah, I'm excited for them and I can't wait to catch up with them.

Scott, this episode did run a little long. We should we should get out of here. Are you ready? Let's do it. From episode 222 of the Bigger Pockets Money podcast, he is Scott Trench and I am Indy Jensen saying catch you later, future dudes.