BiggerPockets Money Podcast - 253: 7-Figure Net Worth on a Middle-Class Salary w/ Adam Zaleski

Episode Date: November 29, 2021

On the last day of a semester in college, Adam Zaleski’s geology professor dropped a bomb on his class: the professor was worth a staggering $10,000,000! The reason for telling the students about his net worth wasn’t to impress but to make the case that exponential growth is more likely than most people think. This taught Adam that he needed to choose a profession he enjoyed so he could continue to work, invest, and grow his wealth exponentially, just like his professor.  Adam did just that, and now, he’s a millionaire professor, working a casual thirty hours per week, doing what he loves! Adam knew from the beginning it was more important to make long-lasting, intelligent financial decisions, instead of chasing after a bigger salary. He did this right out of college, taking a serious pay cut to live in a state with far cheaper housing, allowing him to house hack, build wealth, and reach financial freedom. Now, Adam is looking to expand his real estate empire a little further, without having to sacrifice a large amount of time to do so. If you’re interested in partnering up with Adam or looking to chat about long-distance real estate investing, market analysis, or the best surf spots in Kauai, shoot Adam a message on BiggerPockets! In This Episode We Cover Why lifestyle choices are important when choosing your job, house, and investments  Understanding the value that comes with exponential wealth growth  House hacking and analyzing real estate markets with the most growth opportunity  Buying rentals in places you love, so you can write off the trip! Scheduling your rent raises so you keep up with market cash flow  The most important financial lessons of your 20s, 30s, and 40s And So Much More! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast show number 253, where we interview Adip Zeliski and talk about designing the life you want to live. And so for me, you know, there were a few people in my smaller circle that saw the value and that saw it's a good thing. But I would say nine out of ten people would say, don't do that. That's a bad idea. You need to take the more money. Go to D.C.

You know, don't go to Florida for 40 because it's horrible in Florida right now. The houses are selling for nothing. And you're like, yeah, that's the point. Hello, hello, hello, my name is Mindy Jensen. And from time to time, Scott's schedule is just too jam-packed to record with me. Rather than miss a week, I'm bringing in some of my friends to help me out. Today's guest host is Jay Scott. You know him from all over Bigger Pockets, from our fantastic episode 70,

where I predicted the stock market crash of 2020 almost to the day, and our epic episode 219, where he educated us for two solid hours, two of the fastest hours I have ever spent on real estate syndications, pretty much absolutely everything you need to know is in that show. So, Jay, thank you for picking up Scott Flack. Can we go back to the point where you called me your friend? Jay's my friend. I like that. You're bringing your friends on. Oh, that's so sweet. But they were all busy, so I called Jay. Oh, okay. Now we're back to where I expected to be. Jay, how you doing, Mindy? I'm good. Jay, how are you?

I am doing great. I'm excited to be here. I think it's the first time I've co-hosted this show. This is awesome. This was a lot of fun. Well, I'm sorry, this will be a lot of fun. We always record the intro after we record the show, so we know what we talked about. Jay and I are here to make financial independence less scary, less just for somebody else. To introduce you to every money story, because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. Yep. And whether you want to retire early, whether you want to travel the world, whether you want to go on to make big time investments and assets. it's like real estate or start your own business, we're going to help you reach your financial goals and get money out of the way

so you can launch yourself towards your dreams. Jay, I am super excited for today's episode. We are talking to Adam, who is a, I call him a teacher. He is actually a professor, but when you say professor, it makes it sound like he's making oodles and oodles and oodles of money. And he is basically doing all of the stuff

that you're about to hear on a teacher's salary. He's not making six figures. when he is doing all of this fantastic investing that he's really created a life that he wants to live. And I love his thought process and the way he thinks about money in terms of what it can get you as opposed to how much do you have. Yeah. I mean, he's a teacher or a professor by trade. But I like to think of him after this discussion.

He's really, he's a financial and lifestyle engineer. He's figured out how to make. really good decisions, both from his personal life and his financial life and bring them together to give him basically the last, I guess, 10 years since he's been out of school and 30 years since he's been an adult, to figure out how to live this life that everything he wants for him, for his wife, for his family, at the same time building a nest egg, inching closer, not inching, but like taking big, giant leaps closer to financial freedom. And so he's not sacrificing his lifestyle for money. And he's not sacrificing money for his lifestyle. He's really figured out how to

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Adam Zaleski, welcome to the Bigger Pockets Money podcast. I'm so excited to talk to you today. Thank you for having me. Thank you for giving the opportunity to share my story. I want to jump right into it because I know we have a lot to cover. Where does your journey with money begin? So I grew up in the Midwest, middle class, suburbs of Chicago, you know, pretty normal. The only thing that might have been a little bit different was my parents got divorced

when I was seven, and I kind of noticed that money got a little bit tight during that time because, you know, pretty normal stuff. Like, you know, you had one household, and then there was a split, and now there's two households. So my parents were kind of learning how to adjust on, same amount of income, but like higher expenses. And so there was kind of like a lot of money fights, you know, nothing like horrific, but it just wasn't fun. There was a lot of complaining. eventually they figured it out and they both got remarried when I was probably 12 and at that point then all the money conversations kind of went away again but but there was five years there was a lot of bickering about money and as a kid I just didn't think it was fun so I kind of made like an internal

pledge to myself you know when I was a kid I was like I don't want to be in that position where I'm constantly complaining about money because it's just simply not fun yeah I know when I went through my parents divorcing when I was very young as well and it was always that that weird thing to watch different money habits, different money discussions. One side of the family was no money discussions. The other side of the family was kind of more complaining about money. But I grew up very conflicted about how I should be viewing money because I never got a consistent message from my parents because they were kind of separated and remarried. How did that impact ultimately your take on money moving forward? I mean, I know that my childhood,

how I saw my parents dealing with money, had a huge impact on me moving forward. How did that impact you once you got to the age where you were independent and kind of on your own with money? That's a great question. That did have an impact on me because kind of what happened was is my mom, it's just cultural when she remarried, she kind of married into somebody who was kind of into the corporate lifestyle, climbing the corporate ladder. He was an engineer.

He was a part-owned. owner had equity in a small engineering firm. And then my dad's side was a pipe fitter, a construction worker. My whole dad's side of the family were construction workers. And it was kind of like the white collar versus blue collar. And one's not right or wrong, but it's just very different. And both sides have their own set of unique challenges. And what the conclusion that I came to is like, everyone's got problems. And I, um, I, I really didn't identify with either group, and that actually had a big impact on me in searching for something different. So the white collar side, face value, it looked pretty fancy, but there was long commutes.

My people in my hometown, they lived about an hour outside of Chicago, so very long commutes into the city, very long commutes out of the city. And then from my dad's side, when you worked overtime, that was a good thing. They were union construction workers. And, you know, they would brag about working 50, 60 hour weeks because that was good money. But as a kid, I'm like, I don't want to brag about working 60 hour weeks. I want to brag about working 30 hour weeks. Like the idea that you would brag about 60 hour weeks just didn't resonate with me. So I saw these two paths and I actually didn't like either one of them.

And so I decided I got to find out my own path and I have no idea what that is. I love that. So when you, I guess, got out of school when you were ready to go off on your own, what was your plan? Like you said, you want to find your own path. But what was that path when you were young when you first got out of school? And how did that evolve as you matured and got older? So I guess just skip ahead to then maybe like high school. Mostly bees didn't love high school, didn't hate it.

Wasn't super motivated for college. But I was decent at baseball. I got a small baseball scholarship to play Division 2 baseball. Wasn't great, but I was good. And really, baseball is what got me into college. Otherwise, I don't know if I would have been motivated enough to do it. And so, but when I got to college, I absolutely loved it because it wasn't like high school, at least my experience. And it just, there wasn't a lot of micromanaging.

They kind of like empowered you, you know, if you do the work, you do great. If you don't, you get an F. And so I love that. I love the challenge and I love being challenged. And so I ended up taking college a lot more seriously than I took high school. And I kind of gravitated towards education. And then, but baseball was still there. I played a couple years of college baseball.

Once I kind of wasn't getting better and I realized I wasn't going to be major leaguer, then baseball kind of faded out and then I got even more serious about my academics. And I do kind of consider myself to be a first-generation college student because nobody in my family had gone to college. However, my stepdad did, but he didn't really enter our lives until much later on. So my stepdad did technically graduate from college, but nobody else in my entire extended family had. So I was pretty much the first one, and everything was kind of new. I liked it.

I was a psych major. People would ask me, what do you want to do with it? I'm like, I have no idea. But I really liked the critical thinking aspect of psychology. There's a lot of problem solving in that major. and I know that it doesn't really guarantee you a job when you graduate, but you become a really good critical think that will stay with you your whole life as your jobs change. Yeah, I love the fact that you seem to really figure out all of these things early on. You figured out one, you didn't want to work the

60-hour weeks. You figured out early that you wanted to be financially free. You figured out early how important it was to have those critical thinking skills, regardless of what your ultimate job would be. I mean, I know these are a lot of lessons that I'm old right now. And I am barely learning at this age, let alone when I was a teenager. So that's really great. Mindy, you were about to ask something. I'm sorry, I cut you off. Oh, no, your opinion is just as valid as mine, Jay.

I was going to ask him what his financial position was leaving college. You had a small scholarship, but it sounds like you also had some. Right. So, yeah, I'll go over college costs. I think I did pretty well with that. So my very first year, I got a baseball scholarship and an academic scholarship. So tuition was basically free, but I did have to pay to be in the dorms. I did not pay that.

My parents did. So I did get some help in college. Then I actually went to community college. So I went from the, I did one year in the Midwest, and then I moved out to California. And I did two years of community college. The first year, it was $120 a unit because it was out of state. So it was about, you know, 1,800 bucks a semester. But then my next year, when I got in-state tuition, it went down to $12 a unit.

So it was like $150 a semester. And then, which was a lot cheaper. And then I transferred to San Diego State. And this was around year 2000. And it was $900 a semester. And the way that they do it there is technically the tuition is free, but it's $900 a semester in fees. I'm sure that fee is higher now.

I don't know what it is today, but it was essentially $900 fee a semester, and then I did that for two and a half years. And so when I graduated, I had about $7,000 worth of student loan debt, which is some, but not terribly, you know, but not terribly, you know, horrible, I don't think. Why was tuition free? Logistically, California originally when it was founded, tuition was free. and so when I was going there when you get your bill it says tuition zero and it says fee 900 and this could be a very much larger conversation about higher education but it's very difficult to get a tuition increase pass but it's very easy to get a fee increase pass so it gets really complicated now for parents when they look at the tuition and then they realize that there might

be $4,000 in fees you know added on to to that so that. So that part's a little bit tricky. Interesting. Yeah. We skipped over one thing that I always, I like to ask when I'm talking to people about their money journeys because I think this ultimately has a big role in how they think about money later in life. What was your first job?

Oh, yeah. So I was a caddy at 13 years old. I worked a lot as a kid. So 13, 14, 15, I carried bags for rich people, you know, on the golf course. And that was a good experience. I love being outside. Then I worked at a California Pizza Kitchen. I worked at Blockbuster, you know, and then I also did in the summers a lot of my dad's side of the family was in construction.

So it would help a lot with, you know, I did plumbing, roofing, excavating, you know, whenever they were busy needed help, I would kind of fill in and do a lot of that stuff. And again, working those summers was fine doing construction on like a small time, but like once a it once it was 40 hours a week. I just, I just didn't, it was, I didn't like it. Okay. So, so, so it's interesting. You, you, you aspired to be lazy and only work 30 hours a week, but at the same time, you weren't scared to really work hard. I mean, in a caddy, working in a restaurant, those, the working construction. Okay, so let's fast forward. You get out of college. You've got a little bit of debt. You've got about 7,000, well, little a lot. I guess it's all relative. I had a lot more when I got out of college.

Take us back to right out of college. Like, what did you do next? And what were you thinking? So I guess two things. Right before I graduated college, my mom did give me a copy of Rich Dad, Poor Dad. And that was a life changer for me. It was a mindset thing. And it's so weird how many people say that on this show.

And I thought I was like, I know it's a best seller, but I'm like, man, people really reference that. So I felt immediately connected to this group and this podcast because I kind of went through the same experience, you know, 20 years ago. And then I also had a professor that went through the whole like exponential growth thing and he did a graph. And, you know, humans think in more linear terms and it's very difficult to think exponentially. And so he was a geology professor. He was in his late 60s. And basically in the last day of class, he kind of told the whole class like, hey, I'm not here to brag, but I'm worth about $10 million, you know, and I don't have to work,

but I work here because I like it. And he said, my biggest piece of advice to you is essentially, you know, find something that you enjoy, find something that you love. If you want more money, just figure out a way to invest and make more money that way. Don't make more money at your job. Make more money through investments. So pick your job on what you want to do. And then if you want more money, do it in other ways. But don't try to do it through your job because then you might end up having something that you like and then you ruin it for yourself because you put too many hours into it. I love that. I love that because what is it like,

The amount of money that you'll make over the course of your salaried life is nothing compared to the amount of money you can make if you just invest consistently, small amounts, medium amounts, large amounts in the stock market, in income generating assets like real estate. Yeah. So then to answer your question before I forget it, so then come out of college, I was like, okay, I want to be a professor. I know I'm not going to make a lot of money, but I read rich dad, poor dad. I could do rental houses. And basically, I want a job as a professor. I want four rental houses. And they're going to be worth $250,000 a piece.

And I'm going to have a million dollars of real estate, which won't make me rich, but it'll give me enough money to do the travel that I want to do. So like with the teachers, you know, they have the time to do the travel, but they don't have the money. Right. And then the corporate people have the money to do the travel, but then they don't have the time. So how do you get both? And so my recipe was get a job as a professor and then have a few rental houses to pay for the travel that I wouldn't otherwise be able to do. Okay. So coming out of college, you have $7,000 in debt. You have a job.

We didn't talk about your job. What you graduate college? What's next? So basically, I took a year and a half off. I studied for the GREs. I had to score well enough to get into graduate school. I did a year in Breckenridge. I was a snowboard bum. I got 123 days of snowboarding in. I was a snowboard instructor. That was a lot of fun. And then I'm, so now I'm 24, and I get accepted to a master's program in general experimental psychology in California. And I did that for two years.

And then after that, I did a PhD at Colorado State, Fort Collins. And I did that for another five years. So then basically, I did seven years of graduate school after undergrad, which is not a short amount of time. So I basically lived on 15. Well, actually, no, I lived more like on 20. My salary was 15, and so I did the difference with loans. So on average, I was taken out $5,000 to $7,000 a year in loans. So then when I graduated for my PhD, I added on about 50.

So then I was totally done with college. I had about 57,000 student loan debt. And at that point, you're about 30 years old? 32. So you're 32. So most people get out of college with debt, and, well, they go one of two directions. either get a job and get further into debt because they don't handle money well, or they use that time at a school to kind of shore up their finances and make things better. You're about seven or

eight years out of undergrad. You're in your early 30s, and you're basically just getting started in your financial journey from about a negative $50,000 starting point. So kind of. So what I did was, is, you know, looking forward, so I kind of saw that as my future. and I said, I got to do something before I graduate. So part of the, because I was actually in California at the time when I was in my master's program, and I really did want to stay in California. But it just didn't make sense for me as a graduate student because the cost of housing was so high. So I made a conscious, luckily I had a choice of a few different programs.

But I chose Colorado State University Fort Collins because the housing was cheaper. And so I actually bought a four-bedroom house near campus. And then I had three roommates to pay for the mortgage. So basically, I house hacked through my PhD. So I was technically at zero when I did leave, but I had a house. And so I kind of called my wife and double checked. But basically when I left, I think I was about plus $20,000. And then she was about negative $20,000.

And so we were basically at zero when I left graduate school. And then we moved to Florida for my first job. See, I heard that a different way, Jay. I heard him say that he got through a master's program, a doctorate program with $60,000, $50,000 or $60,000 in debt because we hadn't talked about the house yet. And I'm like, people are leaving four years of college with $50,000 or $60,000 in debt. He did like 80 years of college for $50,000 or $60,000. So it's math.

I'm not going to do the right now. Sure. So you're like in my book, you're ahead. Yeah, you haven't started really saving much money, but you're so far ahead because you're already at the end of your, I mean, a doctorate program. I don't know if you know this, Adam, but that's a big deal. Yeah. So in my doctorate program, I got a PhD and applied social psychology and I studied social

influence. We also called social norms. And that probably has the most relevant piece of information for me going forward. And, you know, we're social animals. we're social creatures, we kind of do what everybody else does. And then a lot of times it makes a lot of sense. But I kind of, my air of expertise was using social norms to try to guide behavior for health behaviors and for environmental behaviors, try to get people to drink a little bit less,

try to get people to not smoke so much, try to get people to turn off their lights when they leave, try to do all these environmental and health things. But I kind of found interest in economics because it applies very much to supply and demand. You know, basically as humans, we're wired to buy. buy high and sell low. Because when everyone else is buying something, it makes it, you know, so the price goes up because everybody wants it. And so we, as humans, feel comfortable when we buy something that's like really,

really expensive, which is kind of the complete opposite of what you actually want to do. So then when I left Colorado, I moved to Florida, and this was 2011. Well, around that time, there was a housing crisis going on. and Florida, you know, took it on the chin. They really, the prices were extremely suppressed. And out of all the jobs that I could apply to, you know, this salary was probably one of the lowest salaries that there was. So it was, you know, $40,000.

I didn't quite have my PhD yet because I was leaving ABD, which is pretty normal. But basically it was, you know, I had a PhD training and I was expected to get it soon. but the problem that the reason I moved to Florida was because of the housing opportunity. And so I was willing to take a last salary to buy a house, you know, at a discount and get into a house right away versus go somewhere else that's, you know, a lot more expensive, you know, with a higher salary. I love the fact that you're now in your early 30s and, and you're just finishing up school. But as we talked about, you learned all these great lessons, money lessons as a teen.

And then in your 20s, even without like working a full-time job, starting your career, you learn probably the most important lesson of all, which is the value of investing and the value of building investments for the future, as opposed to what I'd like to refer to as just transactional money, trading your time for money. You realize that, yeah, you're going to go through your life trading your time for money. But then you need to also be investing your money to make more money, your passive income. And so it's a great lesson to learn in your time. 20s, especially given the fact that you weren't yet working a full-time job and you hadn't even left college. So I'm really excited to find out what you learned in your 30s and later. So then real quick, so then it was in November 2010, I interviewed for a job in Washington, D.C. at a nonprofit. And the goal was to get a job as an academic, but it was to be a researcher at a nonprofit. And the economy wasn't doing that great in 2010, 2011. So I was like trying to expand my options. You know, the goal was to be a job as a professor, but just in case it doesn't work out, I should probably, like, apply to other things. And so I went to D.C. They loved me. The offer of being the

job, and the job offer was $67,000, four weeks vacation immediately, and then like a 4% match or whatever. And but I went to D.C. and I was kind of talking to the guy, and I said, look at the housing prices. And, you know, there's a, there's a housing recession going on in America. I don't see it in D.C. He said, yeah, D.C. is fairly recession proof because our largest employer, the federal government, continues to hire even through recessions. And so I was kind of talking about it. I'm like, there's no housing discount here.

He's like, nope, you know, you pretty much got to pay full price, even though you can get a huge discount everybody else. So basically, it was kind of a little bit of a turnoff, even though it was a decent salary. I was kind of like trying to project my life out five as in the future. I didn't really see myself buying a house there. It was out of my price range. And I saw myself renting and I saw myself essentially five years not really having a lot of investments and not having a lot of show for it. So ultimately I turned it down.

And most of my friends and family thought I was totally nuts because there was kind of there weren't a lot of jobs and you just turned something down like very reasonable. But at the end of the day, it wasn't what I wanted. So I'm sorry. go back for a second. You moved to Florida instead of D.C. or you were in Florida and then looking for other options? So I just wanted to mention right before I moved to Florida, before I actually got the job offer in Florida, I was offered a job in D.C. for $67,000 and I turned it down. And then ultimately, I took a job in Florida for $40,000. And at the end of the day, that was a much better decision for me. So what were housing prices in D.C. ish? And what did you buy in Florida?

You know what? In D.C., I really didn't pay much attention because the numbers were just so high. I just was like, you know, I just can't do this. And when I moved to Florida, I remember what those numbers are because I was really excited about it. And so basically I bought a three-bedroom, two-bath home, you know, two-car garage, 1750 square feet, and I bought it for 95,000. And it did need some rehab, but it was mostly cosmetic. And there were tons of them that were available. and I could actually pick and choose on the one that I wanted. And so I assume that was going to be your personal residence? Correct. Correct. And did you, you had mentioned earlier that your plan was eventually to have a million dollars worth of investment property. Were you thinking that you were going to buy investment property in Florida as well? Had you already started thinking about it at that point? I think the plan was, yeah, to buy that as my primary residence.

And then I think live there for a couple years and then move out of it and then try to buy another one. as a primary residence. I think that was kind of the plan moving there. And so then for my job, it was 40,000, but as far as the fringe benefits go, it was an 8% match on the salary. Florida doesn't have any state income tax. My health insurance was only 50 bucks a month. And then I could, my commute was 10 minutes. And so with all those things, you know, I know that the number 67 is higher than 40, but based on my commute, it was 10 minutes. And so with all those things, you know, I know that the number 67 is higher than 40, but based on my situation, you know, 40 was way better than 67. And I think in psychology, we talk about money being secondary. It's not primary. So it's not the actual dollar value of the

money. It's what it's associated with. That gives its value. So 40 in Florida was way more than 67 in DC for me. Interesting. And so that's a really interesting mind shift. And I think, again, something that I've started to realize later in life, but you don't necessarily think about when you're in your early 30s and right out of school, you started to recognize that not only were their lifestyle decisions that factored in or lifestyle factors that factored in, but also that your job provides other benefits besides your salary. And when you think about those benefits, a lot of times they can either overshadow the salary or at least compensate enough for the salary that makes it a better decision than some other job in some other location.

So talk to us about, you said you kind of moved to Florida and you didn't have a plan yet. Well, at some point, you must be putting together a plan because it sounds like you're thinking about these. So at what point did you say, okay, here's my plan to get down to that teenage goal of 30 hours a week and financial freedom? Yeah, so I think I was kind of headed in the right direction. It wasn't a rental house yet, but the goal was to buy it as a primary residence and then later turned it into a rental house. I only had to put 5% down.

So 5% down on 95,000 is not that much. And then the renovations were about 16,000. I lived there for four years. And basically the plan was to move on to the next job eventually. and then rent that out. And I guess maybe one thing I did forget to mention, when I was moving down to Florida, because the housing market was suppressed, and I was telling people my plan, you know, I'm going to take a job for $40,000.

I'm going to buy a house in Florida. They're just like, you're crazy. Like, that's not a good idea. And but again, I think that's how the humans think. And because the housing market is so bad, they're seeing all these things on TV. Oh, it's crashing. You know, it's horrible. well, yeah, but if you're a buyer, that's a good thing, right?

And it's very difficult for people to, you know, take that mental hurdle that it's actually a good thing and not a bad thing. And so for me, you know, there were a few people in my smaller circle that saw the value in that, saw it's a good thing. But I would say nine out of ten people would say, don't do that. That's a bad idea. You need to take the more money, go to D.C. You know, don't go to Florida for 40 because it's horrible in Florida right now. The houses are selling for nothing. And you're like, yeah, that's the point.

Well, and I can see somebody saying, oh, but the houses in D.C., let's call them 200,000. Let's just say they're twice as much as the Florida houses. They're going to be worth twice as much. Well, no, your $200,000 D.C. house is not necessarily going to appreciate at the same rate as your $95,000 Florida house. And like Jay said, to have this mindset when you're in your early 30s and just having gotten out of college is incredible. because I bet that house is worth more than 95,000 right now. Yeah, so today it's probably worth about 310. Yeah, and there's this idea of recency bias in financial economics,

where you look at something that's happened recently and you give it more weight than you otherwise might have. And people look at Florida after 2008, and Florida got decimated during the 2008 downturn. D.C. fared pretty well. So I imagine there were a whole lot of people who were thinking, DC is a much safer place to buy a house than Florida. But if you really think about it for just a couple minutes, it becomes obvious that because

Florida was hit so hard, prices were probably depressed and assuming you thought that the market was going to recover, Florida was an obvious choice. And so, again, you used your psychology background to really be able to make good financial decisions, whereas other people just kind of went with their gut. And we all know, like you said yourself, your gut always doesn't. always make the best decisions. Right. And so I would say the Florida house I am proud of, you know, you know, you got to celebrate your wins. But even in going to Florida, I just added a little bit more extra piece to it was in Florida near the university, there's lots of

gated communities and a lot of the gated communities have an HOA. So during the economic downturn, when the houses became vacant and they went in foreclosure, they still had the HOA to like mow the lawn. Well, where I bought, it was in a non-H-O-A community, and those are not as common. And in 2011, when I was looking at houses, it looked like a war zone. I mean, the grass was three, four feet tall in all these areas, and, you know, the houses were not kept, and it just looked horrible. So I went and looked at the data, though, the neighborhoods in a good location. And so traditionally, that neighborhood is about at or maybe five percent. above the median house price for the city or for the county.

And what happened is during the downturn, it ended up being about 22% below the median. And I think the reason was because there was no H2A to mow the lawns. It just looked awful. And so my prediction was, okay, if I buy now, when things do recover, I'm predicting that this neighborhood will recover faster than the other ones because it'll eventually go back up to the median. And that's what happened. So it took about eight years.

So not only did that recover, but it recovered back up to the median where it should be. And so when I ran some numbers, and so as far as appreciation, you know, from if you add 16 on a 95, so 1111, 111 to like 310, it's an increase of about 180%. Well, well, other people were buying, you know, where there's HOAs, the increase was about 100%. You know, they still made money and prices still went up, but net neighborhood basically did the best out of, out of all of them because of that thing. And again, when I was buying that neighborhood, people are like, what are you doing? Like, this is not a good idea, you know, so. Okay. So let's talk about you're in Florida for what? Was it six years, seven years? Four years. Oh, only four years. Okay. So you buy this house. When you bought the house,

it sounds like you were still several tens of thousands in debt. And so you were building equity in the house, but you had a job that had a relatively low salary. You did have some other benefits that were great. You were kind of putting away for your retirement. You had a big match. but you weren't generating a lot of, I presume, disposable income. So fast forward to four years later when you're like getting ready to take the next step in your life, where are you financially? Are you still largely in debt? If not, how did you get out of debt? Or what did things look like at that point? So we, you know, we started at zero. We moved to Florida. The housing market was pretty flat.

I kind of feel like 07 to 2014, and I was making steady. So now remember, I still have the house in Colorado, so that's getting rented out. And then now I'm in Florida, and then I'm teaching a university in Florida, but I ultimately want to teach community college. So I interview and I accept a job in Hawaii. So I got a job at a community college on the island of Hawaii. You can figure out which one of this. And I won't say the name. And what had happened was is basically during that four years, I made a decent, took a decent chunk out of my student loans, but I didn't pay it off by any means.

And then my wife paid off all of her kind of debt. She had student loans. And then we were able to save up some cash. We had about 30 grand in our checking account. So then when the opportunity came for us to move, we could do it. And a lot of people said, oh, you can't move to why it's too expensive. And it's like, well, we were kind of saving our pennies to give us more full. flexibility, so then we did move. And so basically we went from, you know, having the rental in

Colorado and then having the house in Florida. And when things really started to change, it was 2015. And I think that's kind of when the housing market really started to kind of like take off. You saw some positive movement 13 and 14, but 15 is kind of like, from my experience is when it kind of took off. And in moving to Hawaii, they didn't, it wasn't. It wasn't. wasn't as bad as Florida, but the housing in Hawaii, it took a lot longer to recover. So in 2015, Florida, I don't want to say it's like fully recovered, but it had a very strong comeback in 2015. 2015 in Hawaii, it's still kind of lagging.

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leaving your home. You'll find the same regular prices online as in store. Many promotions are available both in store and online, though some may vary. Okay, so you live in Kauai. Did you buy a house in Kauai? Did you sell your house in Florida or did you keep it? No, we kept it. We kept the house in Florida. We were a little bit unsure. We listed it for rent for 1,400. There was mandor, there was like pandemonium to try to get it. So the house ended up renting for 1,600. and I was trying to figure out what happened because I was looking at the rents and then it was just way more in demand than I thought it was. And then like six months later I was looking at some of the reports and apparently I

think Fort Myers Cape Coral was like number one in rental increases in the nation and it had gone up like 23% like in a year. And so like 2014, 2015 around there. So basically we got and then also for Colorado, I increased the rent. by 500, I increased the rent from 1450 to 1950. So basically, now we're getting like almost $1,000 a month in cash flow. You know, obviously there's expenses, but we got about $1,000 spread on the mortgage to the rent on two rentals now when we moved to Kauai.

So we kind of have enough of a financial, you know, buffer where we feel like, you know, we're going to do it. And it was more money and moving to Kauai is more money too. It sounds like you learned a very important lesson relatively young. It's funny, I like to teach my kids if there's only two things you ever have to know about money. Rule number one, buy good assets, and rule number two, don't sell them. And I found that if I talk to a hundred people who are wealthy today, 95 of them followed that formula. They bought good assets, cash flowing assets, or non-depreciating assets, and they held them for a long period of time.

And I talked to a lot of people who say, I learned way too late, and I'm one of those people. I was in my 40s before I learned that lesson. You learned that lesson early, and so it was great. And so it's a perfect example of how buying assets and just holding them can really set you up for financial freedom later in life. Yeah, thank you very much. I think I was born kind of patient. I think it's kind of my personality. I didn't know for sure that that's the way it was going to go. I was optimistic, and I was willing to wait to see what happens. So basically, we moved to Kauai.

We got a studio apartment for $1,100 a month. It was $332 square feet. The landlord told us it was $4.50, but I measured it, and I was like, yeah, it's smaller than that. But we were within a mile of the beach so we could walk to the beach every day. So it was a great life. we were there for three years and I bought a house. And we bought a house that had a basement rental unit like a mother-in-law suite. And so basically we bought the house for $603,000.

And what I did is I refinanced rental number one. I did a cash out refy. And so that gave me enough money to do the 20% down. And then it also needed about $50,000 worth of renovations. there was some water that was getting into the basement unit, and it was a foreclosure, and people didn't know why. So it was a little bit of a leap of faith when I bought the house, but I looked at enough houses where I was like, you know, nothing's risk-free. You know, it's severely discounted, so I'm willing to take the risk. And basically what we had found out was one of the gutters was filled with leaves and dirt, and the water wasn't draining from the gutter, so it was fauner.

So it was falling right next to the foundation, and it was just kind of slowly seeping into the basement. And so basically the bank probably discounted the house 100 grand because of water in the basement, and it was about a $3 to $400 fix. I bought that house too. And it took me a while to figure out where that issue was coming from. Mine wasn't clogged gutters. It was like massive, like the entire roof in one downspout. So don't go.

with cheap gutter guys. But anyway, yeah, that is $100,000 discount for a $400 fix. I'd say that's a good choice. Yep, very happy with it. And then, so the mortgage was like, so Kauai is expensive,

why is expensive, but they have the lowest property taxes in the country. And so on that house, the property taxes are only about $1,500 a year. You do get a little bit of a discount for it being a owner occupied. So yes, it is expensive, but the property taxes are so low. And when you combine that with all interest rates, your payment might be high, but a lot of it is going towards principal, you know. And where I grew in Midwest, I grew in Lake County, Illinois,

and the property taxes are like three, four, maybe sometimes five percent. And I'm paying, you know, 1,500, you know, on a house that's worth six. And so it's like a quarter of a percent. So it's way less. So our mortgage was like 2650. and then the rent that we got downstairs was $1,600 a month. And then so we're left paying about $10.50 a month for our house. Or if you remember that you're making $1,000 on the other two rental properties, you are essentially living for free with all these rental properties. And what did your salary look like in Hawaii?

So I got a $20,000. Well, so I went from $40 to $54,000. So my base salary is $54,000. but they paid overloads pretty well, and there was opportunities for overloads. What are overloads? Those above your regular load. My regular load was nine classes a semester. Got it.

And then if I teach a tenth, I get an extra five grand. And then if I teach an 11th, I get another five grand. So I was making $64,000, but teaching two extra classes. Fancy word for teacher overtime. Yeah. Professor overtime. Yeah. Okay. So you were making $40,000 in Florida with a $95,000 house. And now you're making $60,000 in Hawaii with a $600,000 house. Okay. How long were you in Hawaii for? So we were in Hawaii for four years, and when we moved there, we didn't have any children.

And right around about the time that we bought the house, that's when we were expecting kind of our, no, we had our, my son was born in May 2017. We bought the house in June 2018. So when my wife was pregnant, that we started looking at houses, it took us 18 months to find the house that worked for us. So, you know, yes, it did take a while, but, you know, be picky. It, you know, you can be, you know, and then we ended up with the house that we wanted. So, but when we did buy the house, we didn't, weren't super strong like that we're going to be here forever, which I know is kind of an odd thing to say, but we're just like, let's buy a house. We can get an owner-occupied rate, even though this probably won't be our forever.

Let's buy a house, rent it out, and then this will be kind of like, our retirement house, kind of a thing. So even though I bought the house, I was actively looking for other jobs because kind of like once we had had her child, we were kind of far away from home, and my wife was kind of wanting to move back to the mainland to be closer to her family. So we kind of bought the house about the same time that we kind of knew that we weren't going to be there forever, which is kind of an odd thing, but that's kind of what we did. So your 32-year-old self set a goal, or maybe a little bit before 32, set a goal of having four houses worth a million dollars. Here you are about, what is it, eight years later?

Yeah, sure. About eight years later, and you have three houses now worth how much? So at that time, so once we fix up the Kauai House, we put 50 into it. It was probably worth $7.50 to $8. And then the Florida house is probably worth probably 225, and then the Fort Collins house is probably worth 360. So you're close to 1.6 at that point in eight years as opposed to 10. It really, it goes back to one of my favorite quotes, which is we often overestimate how much we can accomplish in a year, but we highly underestimate how much we can accomplish in five or 10. And I think it's a good example of how if you had to go back and reset your goals, you probably

would have set them a whole lot higher. And it's a good reminder, I think, for our listeners, that when you're setting goals for the future, don't underestimate what you can accomplish in five or 10 years. You can probably do a whole lot more than you expect. And if you set those goals high, worst case, you fall a little short, but it's better than setting them low and just hitting them. Yeah, absolutely. I agree with that 100%. Okay. So you're ready to leave Hawaii now. For some reason that I don't think either Mindy or I will be able to comprehend. Kauai is my favorite island. You decide it's time to leave Hawaii. How did you come to that decision? And where did you go? We ended up moving back to Colorado, where my wife is originally from.

And I went to graduate school in Colorado. So I have a lot, I don't have any family there, but I still have a lot of friends. And she wanted to be closer to family. And we kind of had California as a number two. We had Arizona as like a number three. And then we had Michigan as a number four. I'm originally from Illinois. And so we were kind of looking at Western Michigan because it's within a couple hours of Chicago where my family's from. And we got lucky and we got her number one choice. And so we moved to Southern Colorado. I got a job there. And we are an hour and a half away from her parents. And she's actually having lunch with them right now on campus. We have a, we have a culinary program. And it's International Cuisine Week. And so it's fabulous food and

it's heavily discounted. And so they're having a poach salmon and French onion soup and creme brule. So, so she's, she's happy, you know, she's hanging out with her parents, you know, she's with her, you know, our son, who's four. And, and so I, Colorado's tricky, because the cost of living, if you're near Denver, it's kind of expensive. The way that I kind of get paid through the state is really doesn't matter where you live. Everybody kind of gets paid the same. So, you know, Denver might be a little bit more desirable, but my salary goes a lot farther if you can be outside of Denver. So we're about an hour and a half to two hours outside of Denver and the cost of living is about 30 to 35% lower. And so that way my salary goes a lot farther.

And so, sorry go. Do you still get the same amazing weather that we have up here in Denver? It's a little bit better if I want to, we don't get as much snow and it's about three to five degrees warmer. So the only the only time it might be worse is like August, it will be three to five degrees warmer. So if it's, you know, 96 in Denver, it'll be 100 in where I'm at. Yeah, what's three degrees when you're already that high? But yeah, so I love that you're still looking at how far your money goes. And, you know, there's something to be said for a high cost of living area. Like New York City is going to have a different nightlife than the city that you live in. San Francisco is going to have a different vibe than your city. But you're also, and I don't know how to say this about sounding bad, because I'm in

the same boat, but like, you're a parent. You're not going out, you know, party in every night. And like, your needs change when you have children that are depending on you for the most part. I mean, not everybody, but, you know, all of us here. And it's like, I know what city you live in. It's a nice city to live in. You get all of the amazingness of Colorado without the exorbitant cost of living on the front range that I have. I'm up in Longmont. And you know, you said your Fort Collins house is worth $300,000.

I think it's worth a lot more now. I don't know if you know that. There's been a run-up in prices lately. Yeah. Yeah. Yeah. So for where I live, honestly, you know, we're right at the base of, you know, some of the local mountains, they get up to about 12,000 feet.

I mean, looking off in the sunset, it looks a lot like Boulder, you know, with the flat irons and all that. Just, you know, probably a tenth of the price. And the school district is amazing where I live. And this happened by accident, but it's pretty common for college. I don't teach on Fridays. That's normal. But the K-12 system where I live, my son doesn't go to school on Fridays. It's a Monday through Thursday kind of curriculum that give the kids longer weekends.

So basically, I'm super happy because, you know, as a family, we have three-day weekends every single weekend. Unless school's not in session, then we just, you know, don't have to do anything. That is interesting. So last year, my kids went to two different schools and one of them had Fridays off and one of them didn't have Fridays off. So I was like, well, okay. Right. Where are you people sending your kids that they're just, off of school on Friday. I love this place. You should move to Colorado, Jay. I'll help you find a

house. I mean, my kids, I can put my kids to work three days a week. That'd be awesome. Yeah. Oh, I've got 47 projects. Carl's on the roof right now doing solar. So if you want to send him on over, he can teach them all sorts of things. And then send him down to Adam. Adam can teach him a bunch of stuff too. So how long have you been in Colorado now? So this is two and a half years. So we moved here in August, August 2019. We bought another house in November 2019. So we bought a primary, and we were going to rent for a year. We were renting, but the rental unit had, I think, some smoke, cigarette smoke in the floors,

and we didn't really notice it at first because they really piled on the cleaner. And after a while, we kind of smelled, you know, cigarette smoke coming from floors. So we kind of asked our landlord if they could fix it. they tried, they couldn't. So we said, hey, can you let us out of the lease because the house smells like smoke? And they're like, yeah. So they let us out of the lease.

So my wife said, I said, all right, let's look for another rental. And she says, how about this one? And I said, well, that has a for sale sign on it, not a for rent. She goes, I know, but I want to buy it. And I'm like, okay, well, how are we going to pay for it? She's like, well, let's refinance the Florida house. Because at the time, it was worth like $2.50, and we only owed like $70 on it.

And I was like, okay, if this is what you want to do, it's a, the guy flipped it. He did a great job. It looks like a Joanna Gaines, like, farm style house. And so we refinanced the Florida house. We bought the house there. I kind of feel like Colorado is very cyclical in the sense that prices kind of spike up during the summer because that's kind of when everybody wants to move. So part of the reason why I was able to get sold on it, I'm usually in the habit of I got to get a deal somehow.

You know, and I'm like, well, this house is fixed up and it's fancy. see, you know, where's the deal? Well, what had happened was, is the guy who was flipping it, it took him 11 months to finish everything. And so he put it on the market in like late September, early October. Well, the summer kind of demand was gone. And so normally he would have to list it for like, normally I think if he listed during the summer, probably listed for 300. But because he was late to the party, he listed it for 280. And so we got it for 280. We had to compete with a couple other people, but we kind of just paid asking price. And I kind of feel like if he would have got it done in the summer, he probably would have gotten more.

So I feel like I saved about 20 grand because, you know, we bought it in the fall. So you now have four rental properties in three different states. Is that correct? Four rental properties. Three properties, four doors because one of them is two units. The Hawaii ones, two units. Okay. And so I'm going to pry a little bit. So you've obviously have a good bit of money in your real estate investments. Do you have other investments outside of real estate that you consider to be long-term investments for your financial future? So I think about two years ago, I came to the realization that we were a little bit real estate heavy, and so I decided to start diversifying. And so we have about 200,000 in retirement accounts. And so for my current job, which

is like mid-50s. So for Colorado, the pay is probably anywhere from like 45 to 55 because I have so much experience and a PhD. I was on the higher end, you know, for 55. But 13 and a half percent comes from my employer and then 13 and a half percent comes from me. So 27 percent of my paycheck goes into a 401A, which is essentially the same thing as like a 401K. And then we, the last two years we've been fully funding our Roth, and so we've kind of been continuing to do that. So we have about 200 in retirement accounts plus the, you know, real estate equity. Which is pretty impressive, given that, relatively speaking, you haven't had the highest salary jobs. You've been living in relatively high cost of living areas, but you've made good decisions along the way. I love the fact

that there are a lot of people out there who kind of put their lifestyle first and don't think about money and then find themselves in bad money places. Then there are other people that put money first and don't think about their lifestyle and end up not happy because everything they do revolves around saving every penny. You've kind of done a good job of finding a compromise in between. You make lifestyle choices, but you allow money to inform those choices and you make lifestyle choices that will also allow you to maximize your lifestyle and your financial future. And so I think the lessons here are just so important to anybody out there that's either starting out or into their money journey that has that struggle between do I live the lifestyle I want or do I save money

so I can be financially free, your proof that people don't need to make that choice. There's a compromise where you can really optimize for both. Yeah, I really like that. I think that kind of nails my philosophy, you know, pretty close. I think there's a compromise in there. And the only thing that I would add is, you know, with real estate, I wouldn't consider to be totally passive. I would consider to be more of a side hustle. And there's so many different ways you can make money in real estate. So I think when you do dive into real estate, you just have to think of the lifestyle, what type of real estate do I want to buy that would fit into my life that I would like to live. And so then this would be kind of like a good transition then to talk about now I live in Colorado and now I got all these rentals all over the

place. So how does that work? Right. And so in Florida, I do have family that lives there. And so I go to Florida twice a year no matter what. So I have a rental house that's 30 minutes away. So that's pretty easy. My step sister is a real estate agent in the area. If I ever wanted to have her, you know, manage it or give it to one of her friends, it wouldn't be a big deal. But I self-manage, you know, just fine. And then for the Hawaii house, this is where it gets tricky. So for the Hawaii house, it is not passive. The house itself isn't really that difficult, but the yard is.

It's extremely beautiful. There's tons of foliage, and it needs to be trimmed often. So I basically fly there three times a year to do the major like landscaping, you know, cut things back. You know, the tenants mow the lawn, but I have to cut, you know, trees back, bushes back. Otherwise it'll just turn into a complete jungle. So it is true.

I do get on a plane. and I fly to Kauai, and it is work, but usually it's like a four or five day kind of trip. I do half the day at the house, and then half the day I go surfing with my friends. And to me, it's still pretty fun. You know, it's, you know, so you can categorize it however you want. You can say, no, that's work. It's not passive. It's like, yeah, but, you know, I like it.

I'm not a tax professional, but I believe you can probably write off those expenses. as well, since you're spending more than half your time over several days. And so now you basically have not a free vacation, but certainly a cheaper vacation because it's now tax deductible in Hawaii. Absolutely. So it's not free, but it's heavily subsidized. A great reason for buying rental property in places, not only where you go, but where you might want to go.

So that's a little trick. that my wife and I learned a number of years ago, that if you buy rental property, places you want to go, it's a little bit cheaper to visit. And then this past summer then, it was kind of our big trip. The timing was pretty good. We had tenants that moved out in May,

and I don't work in the summertime. And the last kind of piece that I wanted to do with the house is I wanted to paint it. So it hadn't been painted in probably about 20 years. So we occupied the home for six weeks over the summer. I painted the house blue. It took me about three, three and a half weeks to paint it. And it was work, but I took my time and, you know, did it when I wanted to do it.

You know, campfires on the beach, you know, surfing with my friends and doing a little bit of work, you know, on the house. And so, yes, it is work, but again, it fits in with what we want to do. And we have a minivan parked in the backyard. So when we fly there, I already have a, I don't have to rent a car. Okay. I am going to argue with you and say that it is the littlest type of work possible to fly out there. Three times a year you get to go to Hawaii.

I hope you're going in like the wintertime and not like August. But three times a year you get to go to Hawaii, you have to trim the yard. You know, if you need a break, I can hook you up. I can help you out. It'll be a sacrifice. But it's not like you're going there. cleaning out the sewer pipe, which is a way grosser job. You're cutting down bushes in outside in Hawaii where the weather is perfect every single day. So it's all the people who are like,

oh, I would never do work on my own house. Great, don't. But I would be with Adam 100% and going out there. And yeah, like Jay said, that's a free vacation or a tax deductible vacation. Yeah. If you're doing it to save money, that's probably not the right reason to be flying to to trim the grass. But you're not doing it for the money. So it's, yeah, it's a good thing. So, okay, let's fast forward. And we're already at today. So when I say fast forward, let's talk about the future. Sounds like you're doing really well. You're very happy. You've kind of engineered a life that you love with financial decisions that have put you in a really good place. What are your goals for the next 5, 10, 15, 20 years from here?

So, yeah, that's a really good question. I've really struggled with this because I kind of hit everything that I wanted to hit way earlier than I thought. So I'm having a hard time coming up with something to, you know, work towards. I've kind of designed the life that I wanted. The only thing that I could maybe want to, I don't know, this sounds excessive, But I do like to snowboard. And when I was young, I didn't really mind the drive. You know, it's about two, two and a half hours, depending on where I go. And I'm 42.

So as I've gotten older, the drive is getting a little bit not as fun. And so I have been toying around with the idea of doing like a short-term rental, you know, kind of south of Breckenridge. Breckenridge is a little bit too outside of my price range. But I've been looking at Alma and Fairplay. It's about 30 minutes south of Breckenridge. and I've been kick around on the idea of maybe trying to buy a short-term rental that we could use and sort of, you know, rent out. And I don't know. I'm not ready to commit yet, but it's something that I've been thinking about.

But I'm really kind of been struggling to come up with the next step. So I don't know. I'm trying to figure it out. I'm right there with you. I have been looking in Summit County just kind of randomly because I don't, I hate the drive. It's awful. If you get up on Saturday morning, it's, it's, if you leave your house at 5 o'clock in the morning, you'll get there at like seven. But if you leave your house at 5.30, you won't get there until noon. It's just the worst slog ever. So I'm right there with you. But then it's like, well,

when do I go up and houses up there are, I mean, for $400,000, you can get a studio apartment with an $800 a month A HOA fee. For $2 million, you can get like an amazing house, like ski and ski out, but I don't want to pay, like I want to pay a million

or, you know, $750,000 or $500,000. Well, I really like to pay $100,000, but that ship has sailed. So. Yeah, I actually, I had some land at 10 acres under contract in,

in Alma, and the deal fell through because the listing agent wasn't completely honest with the condition of the property. They said it was snow plowed by the HOA, but there was a 300 or 400-yard stretch right before it got to the driveway where it wasn't plowed. And so I had 10 acres under contract for 125. And I walked away

from the deal, and I don't regret that because, you know, if it was plowed, it would have been fine. But now when I try to go look, that was September of 2020. So just over a year later, now those lots are 250. So the lots have doubled in about 12 months. And so I was, I don't know. You know, that one got away, but whatever, something else will come up. Okay, so I am going to say this to you, like I say to my husband all the time. He's like, oh, because he's looking backwards.

Oh, I could have done this. I could have done that. You make the best decision with the information that you have at the time. So at the time, you didn't want it for 125, and that's fine. And now they're more and somebody else got a great deal. And that's okay. You're doing pretty good. You're a teacher and you have $1.8 million in real estate kind of all across the country.

He's a professor. I'm so sorry. I'm so sorry. Professor over time. That's his new nickname. Yeah. So I would say, you know, going forward, I would say the only thing is I kind of realized, I think I hit my limit as far as, you know, managing rentals myself, I could take on more.

that really would be more work for me. And I'm not, I want to, you know, I like my 30 hour weeks. I don't, I don't want to add more, more stress. So if I'm going to grow, I have to partner. And so I think I've come to the realization that I have to start, you know, reaching out and shaking hands and, you know, meeting other people to partner up. Because I am interested in growing, but I'm not super interested in adding a bunch of extra hours. I know there'll be some, but I'm not really looking to add on a lot of,

extra work. Okay, so I'm going to give you a research opportunity then, and I'm going to say with the Hawaii property, you enjoy that. It covers the mortgage. The rent covers the mortgage. And you get to fly out there three times a year. You had mentioned potentially retiring there. That's not the first property that I would look at. But Fort Collins market has gone insane. it's so hot right now. You can sell it for significantly more than you bought it for. Does it cash flow enough that you want to keep it? Or could you sell that 1031 into something a little closer,

which is a lot easier to do self-management when you're a lot closer to it? And at the same token, could the Florida property be 1031 into something closer to you as well? You are at the college, so you have access to a lot of students. Maybe you could have some student rentals. I think that probably is the next step is probably by more rentals, you know, closer to where I'm at. And, you know, for the Florida house, it is probably my least favorite. But every time I try to get rid of it, the price goes up.

You know, you can sell it at that higher price, too. So, like right now, it's right now. rented for 1950, and I kind of feel like I always try to be like $100 under market value. So I rented it in June. The people occupied the house in August. So the market rent looked about 2050, so I asked 1950. It wasn't enough money. So now Zillow in the market is saying it should be more like $2,400. So I'm locked in for the year so I can raise the rent after. But every time I try to get rid of it, something like that happens. And I'm like, well, I guess I got it for for another year.

Well, let me ask you a question. Let's say you were to sell it. What are you going to do with the money? See, that's, that's the, that's the million dollar question, right? Or at least a $310,000 question. Yeah. And what it was happening is up until that point,

my local market was so hot. I didn't want to compete with those people. So I told my wife it doesn't make any sense to sell the Florida house because I don't feel comfortable navigating these waters with it being so crazy. So once things calm down and I feel more comfortable, then I would feel more comfortable, you know, selling the Florida house.

Yeah, I often get the question, should I sell or should I hold? And my answer is typically, tell me what you're going to do with the money when you sell. And if you don't have a really good answer for that question, don't sell. That is a really good point. I like that, Jay. Okay, so I would, another research opportunity is to start looking in your local area. for properties that you want to buy. Yeah, more homework.

You thought you were the professor. I'm going to give you homework to do. Look in your area and see what you can get. Like, what could you sell your Fort Collins property for? What could you sell your Florida property for? Combine those two, let's call Fort Collins 500, let's call Florida 300. So now you have $800,000. What can you do in your area for $800,000?

Or less, you could take those and put them into a couple of properties. You could have a couple of really big apartment buildings if that's something that interests you. You don't have to do any of this if you decide that, hey, you know what? I don't want to do a 27-unit apartment building. Then don't. Maybe you want to do 16 single-family homes or three or whatever. I don't know what your market prices are right now. But can you make more money locally in a way that is not adding on top of your grueling 30-hour work week

and is still generating at least the same amount of money? money, it's a lot easier to find somebody to manage your 16 properties in one location than one here and one there and one there and one there. And you've got to kind of look all over the place. And I mean, finding a good management company is so hard. Doing three different ones is going to be even harder. So I would just, if you are looking to the future and wondering what's next and, you know, kind of figuring out where you want to go, look and see what you can get for your properties and look and see what you can get for that money in, I mean, and maybe Fort Collins makes sense to hold on to. You sell Florida and buy something else in Fort Collins. It's still a lot

closer than Florida, although it's probably like a four-hour drive for you. But you can find somebody to rent to manage two properties in Fort Collins a lot easier than one in Fort Collins and one in Florida. Yeah, I agree 100%. I think ultimately what's going to happen is I'll probably sell Florida at some point and then I will probably buy my local area or Fort Collins. That's probably what will happen. The only thing about the Fort Collins house, I'm a little bit less likely to sell it, and I don't know, maybe you guys can chime in,

but it's a double lot, but the house is in the middle. So I can build another house on the lot, but I would have to demolish the house that's on it. So labor is really expensive right now, but at some point, so it doesn't financially make sense. But, you know, thinking long term, it's about a half a mile away from the university, I think at some point, I might actually knock the house down and build two.

But that's more of like a distant kind of goal. Okay. We will talk about that after we're done recording because I'm going to look up the actual address and see, get a little more information on you, on that property for you. I think this has been a super fun episode. I'm really, really excited about your story and all of your potential. But we're not done yet, Adam. We still have the famous four.

Are you ready? Yes, I'm ready. Okay, Adam, what is your favorite finance book? So I think I have to kind of like represent psychology. So this is a good one if you force me to pick one. So thinking in bets. So he's holding up for those that aren't watching this on video. It's Thinking in Betts by Annie Duke.

And I'm actually friends with Annie Duke. I used to be friends with Annie Duke. And I love that book. So from a psychology perspective, for me personally, it was just a tiny bit disappointing because she does such a good, like, she does such a good job of like breaking it down into like simple concepts. So at the risk of sounding error,

like with somebody with a PhD, I was hoping there was a little bit more meat on the bone. But for somebody that is not a psych major, for people that started from zero, this is absolutely the best book, you know, in communicating with that type of audience. And I actually had a similar kind of experience as her

in the sense that I never really played poker, but when I was in my PhD program, I got invited to go to a bachelor party. It was in Laughlin, Nevada, and we played poker, and I got third in the tournament. So I won, like, three or $400. And all I was doing was using the principals on judgment decision-making that I had learned in graduate school.

And I actually asked a few people, I was like, hey, is there anything to this? Like, do you think I could, like, pursue this path? They're like, no, just all dumb luck. like you don't have any skill. And then this book came out and I was like, there is something to it. I knew there was something there. She's a very smart person and a very good poker player. But then I would like to talk about just a small progression.

So influence by Robert Chaldeenie. If you like the Annie Duke book. So I worked on some projects with Robert Chaldeany in graduate school. We had some of the same grant-funded projects. My advisor was at Cal State San Marcos. and we had some joint grants from Arizona State. So we were doing some of the same studies that he was doing in Arizona. We were doing in California.

So his stuff is really good. And then the third one is Daniel Conneman, thinking fast and slow. And I would do this in this order. This is an amazing book. It's really hard to read. There's a lot of technical psychology. But if you feel like you understood the first two and you want to make the leap, read the third one, This is written more like academic.

There's big words in here that a lot of people don't understand. And so it's still written for the non-academic, but it's probably the most technical. So if you can make it through, if you can make it through it, though, it's worth it. But it's not going to be easy. It's going to be work. Oh, I, those are. So I love Annie Duke's book, but the two you just held up are two of my favorite books of all time. Anybody that reads influence or even if you don't have time to read all of influence,

There's a chapter and influence called Reciprocity, and it is a chapter that is probably the most important chapter I've ever read in any book in my entire life. So if all you do is pick up the book influence and just read that one chapter, I think you'll find the book worth it. And then Thinking Fast and Slow is my all-time favorite book. Recommended to everybody. And I don't think you're right in that it's that academic. I think it's written for some of us mere mortals to understand as well. Yeah, it's a dense book, but I think a lot of people can get a lot out of that book. Change my whole view on psychology and marketing.

Okay, question number two. What was your biggest money mistake? I got busy in Florida, and I wasn't paying enough attention to the rents in Fort Collins, so I let a group of students re-rent with no rent increase. and that was a huge mistake. By the time I finally got to raising the rent, I raised it from 1450 to 1950, and it really wasn't enough. The next year, I raised it to 2200. So kind of what Mindy was saying, there was, you know, Fort Collins kind of took off, and I wasn't paying attention. So I eventually, I saw it, but I saw it a little bit too late. When I was in Florida, I was, I had my new job,

and I was kind of finishing up my dissertation at the same time, and that was probably the busiest part of my life, was like the first two years in Florida. And then after that, it kind of, I slowed up. But yeah, I wasn't paying attention to the rents. And I should have increased the rent a lot sooner than that. So I think it cost me about 10 grand, probably lost rents. So not horrible, but certainly not something you want to repeat ever. So I'm going to give a piece of advice for people who are listening here and say,

if you own rental properties, put it on your calendar two months before the renewal process. or the renewal time to look into what rents are, do some research, make sure that your $1,400 property isn't supposed to be renting at $1,900. There is a lot of debate and discussion back and forth on the bigger pockets forums about should I raise the rent on good tenants or should I just let it ride? And, you know, I think there's something to be said, especially long distance for not raising the rent $25 or $50 on the off chance that they might leave. and then you have to roll the dice on the next group of tenants.

But if it's the difference between 1,400 and 19, and 2,200, that is a time I would say roll the dice and see who you get if your current tenants don't like it. But 30 or 60 days is what you need to give notice for. Sometimes, actually, sometimes it's 60 days. So maybe if you're in a 60 day state, put it in 90 days ahead of time. But keep up with your rents. I think that's a really good point. Okay. Now, what is your best piece of advice for people who are just starting out?

So basically, everyone has different goals. I'm currently teaching personality psychology right now. Personality is mostly genetic. We're kind of born with our personality. And we just, everyone's a little bit different on like what motivates us and what makes us tick. So I would just say, come up with your own goals. Don't come up with goals like that other people tell you you should have. and basically if I was to add on to that, once you figure out your goal, then just reverse engineer it. You know, how do I get there? And then if each step seems too big, then you just break it down into smaller steps.

And then when you accomplish each step, you've got to celebrate your wins. And I kind of feel like that's what I've done over the last 10 years. Love that. Okay. Final question. I feel like, Mindy, you should be asking this. question, but I'm going to ask it because it's my turn. So what is your favorite joke to tell at parties? Mindy's the funny one. She's the one that should be asking the joke question.

So I don't know, I'm hoping this is funny. It's a joke that I love telling it parties, but you have to kind of know me and know my wife to kind of get the joke. I'm an optimist. I'm a glass hatful kind of guy. So we're in Florida and it's the summertime. And And my wife has to go to work in the morning, and I don't. Like, I'm just going to sit at home and, you know, work on a few things. And I drank a little bit too much wine the night before. And she's getting ready to go to work, and she's kind of just seeing me laying on the couch. And she's a little aggravated because, you know, she's got to go, you know, to her corporate job that she doesn't really like that much.

And she opens up the fridge and she's like, how much wine did you drink last night? And I was like, you know, not that much. is a total lie. And she's like, not that much. The bottle's half empty. And I look at it and I go, actually it looks more like it's half full to me. That would have been better if you wouldn't have given the punchline away in the

center. Yeah. Sorry about that. It's okay. I like it. I like it. What is a boat full of psychiatrists labeled as? I don't know.

Freudian ship. Get a little bit. bad one for Scott there. Adam, where can people find out more about you? So I do have an account on bigger pockets, Adam, Christopher Zaleski. So if you want to message me there, you know, I'm not really selling anything, but I kind of feel like I probably do have to partner with people if I, you know, want to grow. So I have to kind of go outside my comfort zone a little bit. I am looking for a loan officer that is licensed in three different states, Florida, Hawaii and Colorado. I've been doing this a little bit too long to be going with different people.

So I'm looking for one person that can kind of do everything for me. Oh, I got to. And then the other thing is if anyone's interested in partnering on a short-term rental in Park County, just south of Breckenridge, let me know. One of my ideas, I don't know how crazy this is, but if I was to do a successful short-term rental, I think I would still end up with about 100 days of vacancy. and what I want to do is still take advantage of those vacancy days by using it myself. There's no way I could do 100 days of vacancy.

Like I can't use that. So I was thinking as a partnership, my idea was to split the vacancy days. And then that way it gets used and it's not, there's less waste. Love it. Yeah. So reach out to me. If you're interested in real estate, I'm really interested in how psychology applies to real estate. So I can talk about that all day long.

Did you get Morgan Housel's Psychology of Money book yet? I have not. Oh, that I think you would love it. That is a really, really, really good book. When you said psychology and real estate, I'm like, ooh, psychology and money. I really like Morgan Housel. And this is just a fantastic book. It just came out in the last six months, I think.

Okay, Adam, this was fantastic. I really appreciate your time today. This was a super lot of fun. Jay, thanks for helping out. You were good, too. Thanks. I appreciate that. Jeez.

But the star of the show is Adam. So Adam, thank you so much. Adam was great talking to you. Thank you so much. Yeah. Thank you very much. Thanks for having me. We'll talk to you soon.

All right. Bye-bye. Okay. That was Adam Zelisky and his amazing story. Jay, what to think? I thought that was great. I mean, honestly, there were so many things that, like, he started with these insights as a teenager that a lot of us don't have until our 30s and 40s.

And he, every decade in his 20s, he realized that he should be buying rental properties. In his 30s, he realized that it's not necessarily taking the highest paying job. In his 40s, he realized that every time you buy a new house, don't sell the one you had, hold it as a rental. I mean, he's making these decisions each decade of his life that a lot of us are making 20, or 30, 40 years later because we just don't have the knowledge and wisdom to make these great choices. So I love the fact that he was so far ahead of so many of us. And I hope anybody that's listening to this that's in their teens or in their 20s or in their 30s is really taking heat of the things he said because if you follow his advice, by the time you're in your 30s or 40s or 50s, you're really going to find that you've achieved everything you've needed and wanted to achieve.

And you're so much closer to your financial goals than you would have been otherwise. Yeah. You know, the concept of running numbers as an investor is totally second nature. But the concept of running numbers as an employee or running numbers as just somebody living life is not so second nature. And the way that he thought about his DC property, or his, I'm sorry, his DC job at 67,000 versus his Florida job at 40,000. Honestly, I don't know that I would be able to make the same incredibly intelligent choices that he made back in my 30s. I mean, I say that nicely. I don't know that I'd be able to. I wouldn't have done that. I'd have been like, ooh,

60,000. Let's go there. That's more. I wouldn't make those same choices now. He was smarter at 30 than I am at, well, however old I have. More than 30. More than 30. Yeah, I love the way he thinks of things. And I hope that if you are listening to this, you are sharing this with your children, your late teens, your high schoolers. This is a great episode for them to listen to to start thinking about life in a

slightly different way. Okay, Jay, we have spent a lot of time. talking with Adam and talking about me, but we haven't talked about you. What are you up to? Nobody cares what I'm up to. I'm just somebody does. Like maybe. I am here hosting this awesome episode with somebody that almost calls me a friend. There is nothing more than I could ask for in life. I am living life in a beautiful place, not too far actually from where Adam bought his first house in Florida and yeah, engineering my life, hopefully following the lessons that Adam laid out for us on the show. Well, should Scott ever slack off again? I'd like to have you back, Jay.

Oh, I'd like to come back. Okay, Jay, should we get out of here? Let's do it. Everybody, thank you so much for joining us on this episode of The Money Show. From episode 251 of the Bigger Pockets Money podcast, he is Jay Scott, and I am Mindy Jensen saying, so long, farewell, a vinaezein, adieu.