BiggerPockets Money Podcast - 387: Finance Friday: Is Staying At Your Job Costing You More Than You Think?

Starting point is 00:00:00 Welcome to the Bigger Pockets Money podcast, Finance Friday edition, where we interview Tiffany and talk about increasing your income and rental real estate. Hello, hello, hello. My name is Mindy Jensen. And with me as always is my disappointed Eagles fan co-host, Scott Trench. That's right, Mindy. The Eagles could not hold on to that Super Bowl win, huh? They couldn't. That was a little sad, Scott. I'm very sorry for your loss. They couldn't hold on. All right, let's move on. Oh, is that a comment about that garbage holding call at the very end of the... I didn't say anything.

Starting point is 00:00:39 Scott 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. That's right. Whether you want to retire early and travel the world, we want to make big-time investments in assets like real estate, start your own business, or consider changing careers and marching on with your real estate portfolio with the next live-in flip will help you reach your financial goals and get money out of the way so you can launch yourself towards your dreams

Starting point is 00:01:07 Scott I am super excited to talk with Tiffany today she has a great financial picture she is younger than I thought she was when we first started talking to her so that makes her financial picture even better and she has no debt which is I think her biggest strength having absolutely no debt and pursuing financial independence from a position of financial strength. Before we bring her in, we have a new segment called Money Moment, where we share a money hack, tip, or trick to help you on your financial journey. Today's money moment is, do you need a vacation? Consider a cruise. Unlike air travel, cruises actually decrease in price the closer to the launch date,

Starting point is 00:01:50 which makes them great for last-minute travel. Cruises also include meals and entertainment, which makes it eat. easier to stay on budget. You know what the entire cost is going to be up front. Do you have a tip for us? Email us at MoneyMoment at BiggerPockets.com. And as a reminder, we're always looking for guests to come on the show to share their money story or be coached on one of these Finance Friday episodes. So if you're interested, please apply at biggerpockets.com slash guest or for the Finance Fridays, BiggerPockes.com slash finance review. All right, before we bring in Tiffany, let's take a quick break. Tax season is one of the only times all year when most people actually look at their

Starting point is 00:02:27 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

Starting point is 00:03:00 subscription with the code Pock. 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 the needle. Achieve your financial goals for good with Monarch, the all-in-one tool that makes money management and 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

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Starting point is 00:05:26 She'd like to be financially independent and has a great start by tracking her expenses and investing for her future. Tiffany, welcome to the Bigger Pockets Money podcast. Hi, Scott. Hi, hi, Mindy. Thank you for having me. I'm super excited to talk to you today. So let's run through your numbers really quickly.

Starting point is 00:05:42 We have a monthly income of $2,424 with additional income of $1,000 a month for the house hack, and music royalties that vary. So far this month is $115. So, woo-hoo. Expenses, we have $1,200 for a mortgage, $125 for an HOA, $180 for utilities, $205 for gasoline, $200 for groceries, $30 for restaurants. have N-A for household, so I'm going to want to talk to you about that. $10 for subscriptions, $10 for a gym, $50 for clothing, $50 for charity, no car payment, hooray, but you set aside $50 every month for maintenance for the car just in case, which is a fantastic idea, $50 for

Starting point is 00:06:31 gifts, nothing for entertainment, so we're going to talk about that too, and you set aside $50 a month for travel. That looks like a fairly good set of expenses. I have miscellaneous expenses for self-education, $50, $5,000, cell phone plan, $35, savings you contribute $50 a month, and your Roth IRA contributions are $100 a month. So since you included those in your expenses, I included them when I added this all up, which gives me $2,300 approximately. So on a salary of $2,400, it leaves $11. Now, that's not taking into account the $1,000 a month for the house hack. So you're still spending less than you earn, which is a key point, but that salary is not doing you any favors. So guess what we're going to talk about later? Investments? I have

Starting point is 00:07:27 nothing in a 401k, so that should indicate to you that we're going to talk about that too. $10,000 in a Roth IRA. That is fantastic. Good for you. Cash savings, another $10,000. That's amazing. $3,000 in an emergency fund on top of cash savings. So that's great.

Starting point is 00:07:49 And $135 in an HSA balance. This is a great picture. Tiffany, how old are you? I'm 23. 23. Oh, my goodness. Okay, this is a fabulous picture for a 23-year-old. This is really awesome.

Starting point is 00:08:04 What do you do for a living? Yes, so I am a social media specialist. That's the title for a college. Social media. Okay, I know social media pays more than what you're making, but you're at a college, which can be less upfront salary and more benefits on the back end, but I know that there aren't a lot of benefits on the back end with your specific position. So I hopped on over to Glassdoor and I peaked at what social media managers are making right now.

Starting point is 00:08:34 You have five years of experience. I'm showing a median salary for social media managers at $51,000 a year. So my first comment is, have you thought of starting your own social media business? This is something that can be done out of your house. You can test the waters and discover that you make oodles and oodles of money and then you can leave your job. Or you can discover that it's not something you want to do and you want to just go and get your own job. Your take-home pay is 2,400, 2,400 a month, right? Correct. What is your pre-tax salary? So pre-tax, it's about $41,000 a year.

Starting point is 00:09:17 Okay, yeah, I would tend to agree with everything Mindyso said. I just wanted to double-check that because, yeah, I think that there's a, there's at least a $10,000 spread between this opportunity and the market for a role of your type. Is there a particular reason you're at this job or? would be hesitant to look for a new role? I am not hesitant. I actually went to this college right after high school. And I think a good quality I have, but could also be faulty as I'm very loyal. So, and also this college did change in my life. So I, and also I'm getting to learn a lot of skills there. I learn not only social media, but sales and marketing there. So I, I see it as a great

Starting point is 00:10:01 opportunity just to deploy those skills, learn while I'm there. So that's the only reason why I'm there because I'm a loyal little little girl. Well, that's wonderful. And you have paid them tuition, presumably, and now you're donating $10,000 a year in services to the college. Well, you put it like that. So you're, that's, that's, yeah, you, you've done a very good job being, being very loyal there. And I also don't think you have any, uh, you owe anything here, given the, the contributions you've made with that. I don't know. What, what, do you like that way to, to, phrase it or put it. I like that. Okay, so you have learned a lot from your job and created a great first job for your resume by having five years of experience. That shows that you are

Starting point is 00:10:42 loyal, which is a great characteristic to have employers want to see. Job hopping isn't such a big issue anymore, but hey, there's this girl who has five years at the same company. That's awesome. And now we're going to look out for what's best for Tiffany. So Tiffany needs to make more money. Have you considered striking out on your own, opening up your own shop and working nights and weekends for somebody else? No, but something that does intrigue me is content creation, like these online content creators, just because they do, when they do come out with, like, their own product or their own service and they sell it to their audience, they're generating this extra amount of money. So yes, that's a great opportunity, but then also adding value to an

Starting point is 00:11:27 audience and having your own audience that intrigues me a lot. Okay, so I've got your first homework assignment. Let's take your five years of social media experience and start building the Tiffany brand. So come up with a name, get all the social media handles for that name, and start providing value. Content creation is all about giving with no expectation of return. So it isn't, hi, my name's Tiffany, you should sign up for my email list. It's, hi, my name's Tiffany, here's some information. the end. Hi, my name's Tiffany. Here's some information, information. And then after a while, by the way, if you want more, here's sign up for my email list. It's giving with no expectation of return gives you so much more back. And let's hop on over to Fiverr and see what people are

Starting point is 00:12:18 looking for with regards to social media help. Sometimes it's a one-off job. Sometimes people are looking to test you out in order to hire you for a permanent long-term position. See if you like working with other people. See if you like running your own shop. I see posts all the time in the FinCon community, in the local Facebook communities for real estate, where people are looking for part-time social media help. And you can make a lot of money in social media just by doing small. Like maybe Scott needs somebody to run his social media for five posts a week or six hours a week or whatever it is.

Starting point is 00:13:02 You decide what your time is worth and you decide what a post is worth, what a campaign is worth and pitch that. And start with one client and see if you like working with them. Start. I mean, I think there's so much opportunity for social media managers going forward. That's awesome. I would also start with, you know, you know, well, a couple of, in addition to the great points many made, I would say, dust off the resume and kind of go out there and maybe stick it out and apply for a couple of jobs

Starting point is 00:13:31 and see what comes back. You may find that you can get into that 50, 51, $55,000 range. That's an incremental $7 or $8,000 a year after taxes that you're going to be able to start saving. And they may come with much better benefits than your current job, like a 401k match and those types of things. So that could be a $15,000, $20,000 annual boost to your wealth accumulation by just shopping around and doing the old-fashioned changing jobs. In preparation for that, I would, you know, look back over the last five years and say, okay, especially recently, what have I done that has won at the company? Like, have I been able to produce posts that have gotten more engagement?

Starting point is 00:14:11 Have certain trend lines moving in the right direction? What are some things that the next hiring manager is going to care about that I can do? and, you know, can I have some idea? Can I look at the company I'm applying to and say, oh, there's some obvious things here. Have you tried this? Have you thought about this? I would love to start with in the first three to one to three months. I would go with this, this, this, and this in this experiment.

Starting point is 00:14:32 And I can run them all myself because I'm skilled at image creation, at writing the copy, at posting, at tracking, the reporting, all that kind of stuff. So just kind of getting ready there. That might be a $10,000 or $15,000 endeavor. And that does not preclude you from also doing the, the great suggestions Mindy had there and potentially also having a side hustle or two where you're running social for a couple other folks and building up a personal business in the social media space.

Starting point is 00:15:03 It's awesome. Thank you. Yeah, that's a great suggestion too, Scott. Yeah, do both. And now you're making $300,000 a year and you can't stop buy in real estate. That might take a while, but yes. Okay, so fine. she's not going to make $300,000 this year. Let's talk about your real estate plans.

Starting point is 00:15:21 How many properties do you eventually want to own? Great question. So prior to learning about bigger pockets, I thought I wanted to own like 300, 400, 400 units, but now I'm learning about that small and mighty investor. So 10, 20. And when did you buy your current house? August of 2021. Okay. So you are well past the one year where you have to own our own. occupy it per the rules of your loan. So you could technically move out if you found a new property. Yep. Did you buy with a conventional loan or with an FHA loan? Conventional. Ooh, so you could use an FHA loan for the next one. Lots of options. Just so you know, FHA loans are assumable. So that's something, but you have to live in it. So something to think about in the

Starting point is 00:16:16 area where you live, there's a lot of people moving in and out. It's a more, I don't want to say transient area. It's a more fluid population than most. So there could be the opportunity to assume an FHA loan that still has the lower down payment, or I'm sorry, the lower interest rate like you had. You would have to bring cash to closing to cover the difference. Okay. I think you might be able to get a loan for the difference, but that would be in a second position. And it's a lot of monkey business. Let's just say you'll have to bring cash to closing for the difference. So if you find a house that's for sale for $300,000, but they only have $200,000 on the mortgage, you're bringing $100,000 to closing. So you're assuming a great loan, but then you have to bring the difference

Starting point is 00:17:09 in cash. It's something to put in your back pocket and think about. Fed her. But you have $10,000 saved up for another potential house hack. Would you house hack the second one? Yes, I would house hack it. And you did bring up for FHA loan. An option that I'm thinking about is the FHA 203K product. It's like a flip with training wheels.

Starting point is 00:17:36 Of course, I'd live in it for one year. But I'm thinking of using the FHA 203K, living in a year, and then burying it, using the strategy with it. I'm curious what your thoughts on that. If you had experience with it, heard of people who used doing that. And Tiffany, you're in the Colorado front range area with relatively more affordable, not quite as expensive as like Denver, Boulder, one of those areas, right? Is that correct? Correct. And where I'm looking to do it is in Pueblo, because the cost of that tree is lower. Okay. Awesome. So you're thinking about investing in. Now, your current house hack, What happens when you move out? What's what? What are our financials? So it brings in a thousand dollars each month from my other, my tenant who lives here. When I move out, I'd rent out the master for a thousand or a thousand and more. I'll keep it furnished just in case I want to turn into a short term or midterm. Okay. And great. And so you would think there will be rent for $2,000. And what's your payment on this place? It is just over $1,100. Awesome. So $1,100 for the payment. And then you, you'd think that will be rent for $2,000. And then you,

Starting point is 00:18:41 have any other expenses associated with it? Yes, I do keep reserves for CAPEX and repairs, vacancy. The percentage is low just because I still live here, but I'll increase that percentage when I move out. Okay. And so what do you estimate the cash flow would be fully burdened after you have an allegation for CAPEX, vacancy, maintenance, repairs, and perhaps property management? I'd say conservatively to $300. Awesome. And how much did you put into it? How much did you put into it? How are a down payment? I put in 3%, so that would be, I think I put in 9,000. Awesome.

Starting point is 00:19:18 So this is a great, you really did a good job with this. This is a solid single double house hack. It's not going to make you a rich overnight, but it is a great start for someone in your position with this. And you really ran your numbers, I think, in my opinion, fairly reasonably here with allocations for CAPX and all those kinds of things. And you will have a very reasonable shot at a cash flow. and rental after making those allocations for for reserves there. So not, you know, I think that's fantastic. And walk me through what, what a deal would look like in Pueblo where you, where you'd move to. Yes, absolutely. So why, first of all, why did I pick Pueblo? So, I don't

Starting point is 00:19:59 know, UC Health came out with an article saying that they're going to invest about like 52, some huge amount of millions of dollars into a current hospital there, into building it out and also. investing in the nurses education-wise. So I do see an opportunity there for those homes to grow in value as they're building out and extending those hospitals. The homes I'm looking at are definitely need a rehab in horrible condition, and those are about 140, 130. And I'm looking at homes that have sold, like in December, November, past couple of months, and those have sold for 240, 260. I'm not a pro analyzing, but if I'm just looking in it from a dummy perspective, it can make sense. Yeah. Awesome. So you're thinking I want to do a live-in flip next in Pueblo. And I'm starting to get a pretty good idea of what

Starting point is 00:20:56 the comps are for those types of projects. And I love the fact that you're analyzing sold deals, not active listings and those types of things. When I think about the market, it's a big mistake. a lot of folks make as they look at something that, you know, I guess you have to pull the sold ones to look at the comp for HRV. But love the analysis there. And yeah, so how can we help you with in kind of thinking through the next phase of your investment journey here? Yes, absolutely. So with looking at the Pueblo market, I just thinking about the FHA 203K loan. What are like the stipulations there? What can I cannot do? Of course. I've been all over the bigger pockets, forums, just asking people, have you ever, like, bird with the 203K loan?

Starting point is 00:21:45 You can refinance an FHA loan, just these general questions there, first and foremost. So the 203K loan, you can't do any of the work yourself. Okay. You would have to hire it out. If you are a DIY person like I am, then the 203K loan really makes you mad. If you are a hire it out person, the 203K, that stipulation is like no big deal. The FHA lender is going to send people out to make sure that the work has been done before they release the check. Can you clarify what you mean by no work? You can't do any work. Mindy, can you not do any work that you use the 203K loan for? Or can you not do any work?

Starting point is 00:22:28 I believe it's that you use the 203K funds for. So you could, you could, for example, paint and clean and install even flooring and. and stuff with your own personal funds and then use the 203K loan to fund plumbing or electrical work that you would never consider doing on your own, for example, or that would require a certain level of skill. So when does your timeline for this next purchase, Tiffany? So I'm thinking to do it to get pre-approved within this month, but then start looking and buy this year. And how much do you expect to accumulate this year with your current job? Assuming we don't can change jobs and we don't get a side hustle going.

Starting point is 00:23:09 How much cash? You have $10,000 now for this purpose. How much what do you have by the time you purchase? I could say if I really put in the work like an extra three or four, but then that comes to play. It's on that the same score and I just can't increase my income anymore. So my instinct here is you've got a stable situation. But I think that, you know, trying to pull off a flip, even a flip in that lower

Starting point is 00:23:36 priced market, for example, would be a little risky given your current cash position. I'd love to see, you know, and how much what the down payment would be on this property, at least 3%. Yeah, 3.5. Okay, great. So on a $140,000 purchase, that means you're going to bring at least kind of $4,500 to $5,000 probably to purchase the place. Plus then you're going to have a big remodel, which you can finance here. And I like the instincts to go with the 203K loan where you can. There's research, to figure out. But for a flip, I'd also really like to see a little bit more in the context of reserves. A rule of thumb might be 10 or 15,000 for property one and add another five or 10 in reserves for property two before the expected repairs. That might be a little bit of a

Starting point is 00:24:24 stretch. You might feel a little comfortable being a little bit more aggressive with that at this point in time and taking a little bit more risk. But that would be where I'd feel, I'd be very uncomfortable until I got there. I'm not saying don't do it before that. I'd just say be very uncomfortable if you don't have that level of cash reserves because you're going to flip a property and that's going to involve a lot of a lot of work and and nasty surprises for sure. But I think the instincts are great. What would it take to get you to 10, let's go from 10 to $25,000 to savings by the end of this year? It will probably take me staying in the same position I'm in, probably a year and a half. So this year and to

Starting point is 00:25:05 next half to save an extra 10. Okay. And we could change that overnight with a new job and then potentially accelerate that with a couple of side gigs on this one. Is that right? Then her. Does that seem realistic to you to get to $25,000 if you were to change jobs in April or May and then also be pursuing some of those side hustles?

Starting point is 00:25:30 Yeah, that definitely seems realistic. Awesome. But that would be my advice, would be to attempt. to just crush that, crush the income side here. Keep doing what you're doing on the expense side. You're very responsible with your spending. Your budget's really great. And you've got a house hack going. So love that. But I don't see any reason why by the end of this year, you can be very close to that position and be in a reasonable position to take on your goal of that next house hack. Okay. Awesome.

Starting point is 00:25:59 Or I guess live and flip. To be more precise. 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

Starting point is 00:26:32 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 Edle. 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. 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

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Starting point is 00:29:28 Many promotions are available both in store and online, though some may vary. Divini, I understand that you're also looking into another level of higher education. Could you walk us through what's going on there? Yeah, absolutely. So currently I have my associates. I paid for all with cash. Didn't take out any loans. So with just where we are with YouTube, these books, different courses,

Starting point is 00:29:49 people are coming out with certifications coming out too. I'm wondering if it's something still worth. pursuing just because of the high cost. I did listen to y'all's episode with the gentleman who had made his own database where you plug in the college and the major that you're looking to go into. And of course, there was a higher return on investment with the major that I'm looking at and the college that I'm looking at. So I'm looking at what to do there.

Starting point is 00:30:19 Yeah. Okay. Well, great. I think that, I think this is a little bit of a twist in that something that some of the salary ranges that I think Mindy looked up before the episode for a social media manager with five years of experience may apply to someone with a bachelor's degree, a college degree. I'm not sure if that's the case, but that would be homework for you to kind of research and say, hmm, what's the deal there? And then when we think about ROI of college for you, as someone who's

Starting point is 00:30:48 already got an associate's degree, you'd have to compare what is the ROI of the degree I'd go into versus the salary I could make in this social media role right now. And there may be a spread with some degrees at some colleges, and there may not be and some other colleges and some other colleges and professions. So I think that's the right way to think about it. The biggest conclusions we got from Mr. Preston Cooper. Preston Cooper joined us on episode 251 of the Bigger Pockets of Money podcast, and he did exhaustive research both on undergrad,

Starting point is 00:31:23 degrees and then came back and joined us again to talk about graduate degrees and discuss the ROI on a college degree. And in many cases, it's not worth it. And in many cases, it is worth it. It just depends on what you're studying. So if you're studying business administration, yes, it can be worth it. What do you want to do with business administration that you can't do now? And by business administration, are you talking about an MBA? Or are you just talking about an undergrad four-year degree for business management? Undergrad. Okay. So you already have five years of work experience, and I think that kind of makes up for the fact that you don't have a four-year degree. I think, especially in social media management, what you've done is more important than your college

Starting point is 00:32:21 degree to a lot of companies. It's same with computer programming. They just care that you can do the work, not that you sat in a classroom. So if you enjoy your classes, if you have plans for using your business degree after you graduate, then maybe it's worth continuing to pursue it. If you don't really have any plans and you're just going to college because you want a four-year degree, I would look into why you want a four-year degree and what you think you can do with that degree once you graduate because it is expensive and if you don't have like rock solid plants I wasted my college years it was I have I have degrees to put on my resume but they're kind of silly and I never used them so for me if I would have been thinking ahead if I would have been 23 and asking intelligent

Starting point is 00:33:17 questions instead of doing stupid things I would have I would have had a much more successful way. So I'm very impressed that you're asking these questions. I think it's something that you're going to need to dive into yourself and think, you know, what am I going to do with this degree once I get it? Yeah, I would have a hard time believing. I would be willing to bet. And you should go and confirm this.

Starting point is 00:33:40 But I'd bet that if you went out and market yourself, you could get very close to 50,000 plus job as a social media manager in your local market or in a remote job, especially if you kind of worked on that pitch and showed off your accomplishments and came with a plan and some ideas and had a high energy about it. I also think you could get some side gigs there. I think that the first job out of after graduating with a business administration degree from an undergraduate program would likely be very comparable to that. So that would be something to research. I could be very wrong on that.

Starting point is 00:34:22 And so you should do that research on your own. But I think that would be my instincts talking there. I do want to commend you, though, on self-funding your undergraduate degree, graduating debt-free, your Bible college, your associate's degree here, graduating debt-free, and then being in a position to explore this seriously, self-funded as well, I presume. So you're really crushing it. You're pretty remarkable in the way that you've set yourself up. up here to be debt free at 23 and aside from the house hack mortgage. And I really think you're

Starting point is 00:34:55 set up for your prime to get going here on the wealth building journey. Thank you. Thank you so much. Yeah. With college and like all of that and just wanting to do it debt free, Dave Ramsey, of all people, he actually came out with a documentary called Borrowed Future. And I was still in my associate's studio when that came out. And I was watching the documentary. And it was just showing how. how many people don't know what they're signing when they sign their signature on the dog line with these loans, if they can't afford it. So then they're chained to paying it back. And that really changed my mindset. If I'm going to do it, I'm going to do it debt-free.

Starting point is 00:35:34 If it comes to a place where I can't pay for it in cash, I can pause and just keep working and pursuing these other side-hustles and things like that. So that's where that mindset came from. Yeah, I think you're, I think you're blowing out of the water. You're going to be, you're in great shape. look, the deal is income. That's going to be very common for everyone who's 21 to 25 for the most part and getting started in their career. And it's just making the most of that. That is a high stakes decision right now from a strategy perspective because you've got to,

Starting point is 00:36:08 you know, if you can negotiate those raises and fine positions right now, that will carry through for the next to 10 years. And you don't want to be sitting in a place three years from now. where you're making $44,000 at the same company, because then it's going to be really hard to make the next jump in there. It'll be much easier if you're able to kind of maximize your income potential now. And that will compound later. That's the big strategy point. But that's really the only major kind of area for improvement that I'm seeing right now in your financial position.

Starting point is 00:36:44 You're really responsible with your debt. That mentality and how you funded your cost. college and learning from that, having that concept top of mind. That's not common. And I think a lot of people don't think that through and graduate with a big problem. There's a lot of people out there making $40,000 a year and similar work to you after graduating with their undergrad, who are $40, $50,000, $60,000 in student loan debt. So you've got a massive head start here. You've already got a property. You're thinking about the next thing. You've clearly invested in your education in financial literacy to a large extent, and you're on fire. This is fantastic. Thank you.

Starting point is 00:37:23 Yeah, absolutely everything that Scott said is true. You're doing fantastically. And the fact that you're even thinking about this at age 23 without all of these investments that you have would be amazing. But the fact that you're debt-free, you have a $10,000 Roth IRA balance. You have cash reserves saved up for your next down payment. You have emergency funds. You have emergency funds. you have, well, I said I was going to talk about the lack of a 401K. If you decide to look for new employment, I would weigh that heavily in the job search. Do they have a 401K? Do they have a match? But you can make your own 401k too if you decide to strike out on your own. You can self-fund. If you have self-employment income, you can have a self-directed solo 401K, which also allows you to

Starting point is 00:38:17 invest in real estate, which is we should do a whole show, Scott, on the self-directed solo 401k and the self-directed IRA. But you can contribute up to $54,000 a year to your 401K balance every year with partial of your contributions, your company's contributions. So it's a, once you start knocking it out of the park and making $300,000 a year as the Tiffany's social media company, then you'll have to come in. We'll talk about that self-directed solo 401K. Sounds good. Absolutely. What is your, what is, how passionate are you about social media? And I ask this because you're, it sounds like you're going to college to get a different degree in a business administration. Are you thinking about a career change at this point? No, I, so you said how passionate I am about

Starting point is 00:39:07 social media. I love the idea of being able to, you know, own your, your own income, have that from online and I don't know if y'all are into the Super Bowl or anything. I'm not, but what caught my intention was these two. Oh man, but Logan Paul and KSI, they're online, they're YouTubers, and they built a massive audience online and they struck on their own and built a hydration company like a drink and they had their own ad on the Super Bowl. So when I saw that, that just showed me the potential of what can happen with just adding so much value to your audience and then, again, coming up for the product. So that's where the passion comes from, really. With the business admin, I think those are just skills that can help me with real estate long term because I do want

Starting point is 00:39:57 to, again, own property. I love the idea of short-term rentals and even having a fund in the future when I know what I'm doing and all of this. So just investing in those skills now. Okay. So social media and marketing and those types of things are really where you want to kind of focus on over the next couple of years, but it's all in the context of moving towards a real estate portfolio that achieves financial independence at an early age. Is that a way to summarize that? Well said.

Starting point is 00:40:29 Perfect. Okay. So in that case, yeah, I think that pursuing the maximum income in that space, becoming a master of your craft, I think that I would encourage you, if you were to go to undergraduate degree, go into marketing or consider marketing instead of business administration if you do decide to go down that path and broaden that skill set. Because if, you know, that that's the next logical progression in a career like that is, yes,

Starting point is 00:40:54 master social media, but then also master email marketing and then also master paid marketing and also master, you know, analytics and those types of things. Those are all skills that would help round out that career that can't hurt from social media perspective. But those would be areas I encourage you to study either at an undergraduate degree or go read, say, I'm going to read 25 books this year, something ridiculous, something very intense like that, that will round out my skill set. Your future employer would respect that tremendously if you said, look, I don't have an undergrad degree marketing, but I've been doing this for five years. And I read all of these books and implemented these practices and look at what's,

Starting point is 00:41:31 look at the numbers move at my current gig with that. That would be, that would be similarly impressive, I think, or maybe even more so, than an undergrad degree in that. And couple that with the work you're doing in your side hustle and your real estate business, right? So there's always, there's always room for more people to talk about the success that they're having in real estate. And especially folks who are getting started and a very, repeatable, your situation is wonderful in real estate investing because you're not doing, there's nothing unreasonable. repeatable about the situation that you've got it, right? I cash flowed my way through my associate's degree. I make 40 grand, and I bought a house hack, and I'm going to do another flip

Starting point is 00:42:17 using a 203K and FHA loan. That is something, that's inspiring. That's something that folks, you know, should look up to you for an attempt to repeat a lot of folks out there. And you're doing it on a low income and controlling your expenses and hitting the fundamentals bit by bit, making one move every year or two. So I think those are all good things to think about and building up your social media, personal presence. Yeah, I would say given this new information, I would lean towards not continuing with the business degree and instead going to YouTube University or even reaching out and not reaching out, checking out masterclass.com. You are learning from people who are a master of their craft. There's a lot of different classes on masterclass that

Starting point is 00:43:11 are great to learn from, and that's a lot less expensive than another two years at university. Yeah, this is great information. All right. Well, Tiffany, did you have any other questions for us before we let you go? No. Thank you all so much. This has been great. I have lots to think about, and thank you all for the homework. I'm definitely going to do that. And yeah, it's very good. Great. Well, I want to hear back from you in the next six months and hear what direction you went and get some updates from you. I think that you have a very bright future. And I'm super excited for you. I agree. Thank you. Thank you so much. Okay, Tiffany. We'll talk to you soon. All right, Scott, that was a super fun episode with Tiffany. I love all the possibilities that she has before her. It is, she's in the beginning of the slog where she's now like which one of these fantastic options. do I choose and I just have to wait until I become financially independent. But I think she has a lot of really great options in front of her. Yeah.

Starting point is 00:44:11 And her biggest strength is, you know, Tiffany has a remarkable backstory that got her to the situation and putting herself through college and getting into this position where she's debt free and has a house hack. So kudos to her. She's starting well into the race here to build wealth as opposed to having to dig herself out of a whole with student loan debt or other types of things. So she's crushing it. I think that she's going to have, like you said, a ton of really great options in front of her. And it's really about that she decides and that she goes all in with that decision and optimizes for it, which I'm

Starting point is 00:44:47 sure she'll do. So I cannot wait. You know, there's no way in three years from now that Tiffany has not built a couple hundred thousand dollars in incremental net worth and not got that next investment unless she gets very, very unlucky and something. So because she's, her discipline, the formula is all there, and it's only going to accelerate if she keeps making good decisions. I see big things on her horizon, and I really hope that she checks in with us again in about six months. In fact, I'm going to go put that on my calendar right now and preemptively check in with her

Starting point is 00:45:17 at about five and a half just to see what she's done, because I bet she'll have a great story in six months. One thing I do want to ask for help on maybe in the Facebook group is, you know, we talked about how maybe, you know, we're kind of skeptical about the benefits of college or had some debate points on that. I'd love to hear what other people think because I think that, you know, that's unsettling to say, no, don't finish your degree or at least be really thoughtful before you make that decision. It feels like that's the correct thing, but I would love to get some pushback or feedback from some listeners and tell me what you think. You can do that in the

Starting point is 00:45:52 Bigger Pockets Money Facebook group at Facebook.com slash groups slash BP money. That would be a great conversation. So I look forward to jumping into that Facebook thread and seeing what people are saying. I'll see you over there. All right, Scott, should we get out of here? Let's do it. That wraps up this episode of the Bigger Pockets Money podcast. He is Scott Trench and I am Mindy Jensen in honor of Girl Scout cookie selling season.

Starting point is 00:46:18 Peace out, Girl Scouts. Bigger Pockets Money was created by Mindy Jensen and Scott Trench. Produced by Kaelin Bennett. Editing by Exodus Media. Copywriting by Nate Weintraub. Lastly, a big thank you to the Bigger Pockets team for making this show possible.

BiggerPockets Money Podcast - 387: Finance Friday: Is Staying At Your Job Costing You More Than You Think?

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