BiggerPockets Money Podcast - 47: Big Money Wins—Unique Ways to Save & Use Cash Efficiently with Jim Wang

Episode Date: November 19, 2018

Jim Wang has been sharing his views on money for more than 14 years—more than enough to earn him the title of Great Uncle of Personal Finance Blogging. And he’s learned a LOT about money in those 14 years. Today, Jim shares his "big money... Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast show number 47 where we interview Jim Wang from Wallet Hacks, the great uncle of personal finance blogging. Before all the different tools, I think budgeting is hard because you have to constantly write down transactions. And then it's sort of a cognitive load and you're tired and you don't feel like doing it. And then you fall off the wagon. You know, like anything else, maybe you need a break. But with the tools now, it'll take care of it for you. Maybe you don't look at it every single day and you give yourself a break. But it's so powerful stuff just to maintain.

It's time for a new American dream, one that doesn't involve working in a cubicle for 40 years, barely scraping by. Whether you're looking to get your financial house in order, invest the money you already have, or discover new paths for wealth creation, you're in the right place. This show is for anyone who has money or wants more. This is the Bigger Pockets Money Podcast. How's it going, everybody? I'm Scott Trench. I'm here with my co-host, Miss Mindy Jensen. How you doing today, Mindy?

Scott, I'm having a really great day, and I'm so excited for this interview. because I've known Jim Wang forever. Like you said, he is the great uncle of personal finance blogging. And he's just an all-around really interesting person and a super nice guy, very knowledgeable. And I feel like we say this every single week. This episode runs really long because he had so much great things to say. So many great things to say. So many great things to say.

Yeah. And he has a great story as well where he has really built a great business. He's a pioneer, not just in personal finance. and understanding all that kind of stuff, but also the entrepreneurial side of that. He built a personal finance site called Bargeneering, which he then, he calls it, liquidated, sold at a big profit. So he was a very successful entrepreneur and has been, you know, made a large number of great decisions across his career and had a couple of big wins as well.

I mean, he's going to share that story with us and then I'll go into some of the tips that he's collected, his top tips for helping you move towards a better financial future across as many years of blogging in the personal finance space. Yeah, one of these tips really, really, really was amazing. I mean, they're all great, but one I've never heard before. And it makes perfect sense once you explain it. But it's, you know, it's like all of this finance stuff. If you don't think about it, you don't think about it.

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30-day trial at audible.com slash BP Money. All right, Jim Wang, welcome to the Bigger Pockets Money podcast. How's it going today? It's going great. How are you guys doing? We're doing good. I'm doing good. I shouldn't speak for Scott.

Scott, how are you doing today? I think we're all doing fantastic. So why don't we go ahead and start right from the beginning? And Jim, can you tell us a little about your background with money and what that was like? Growing up, my parents were always pretty frugal because they were immigrants to the U.S. coming over from Taiwan. And my dad came over with a education visa. And he came and then my mom was able to come a year later. And so we were always very frugal saving our money because he wasn't earning a lot. But then also every few years, we wanted to go back to Taiwan to visit family. And so life was a lot of frugality doing tradeoffs because we wanted to save up because flights back to Taiwan where even today they're expensive.

But back then, if you think about it, it's even more so. And so I just grew up in a very frugal family, even though we were probably middle class. My parents owned our home and we were living fairly comfortably. I think just psychologically we just had to keep it frugal in order to go back to Taiwan and buy four tickets every three or four years. So what sort of work did your parents do? My dad was a civil engineer and my mom was, she took on jobs that were, they gave her the ability to take care of us after we came home from school. So I remember when we were really young, she was a nanny, like when I was an infant, she was a nanny and she was able to take me with her whenever she was taking care of the other kids. And then as we got older, she worked in the lunchroom of my school.

Her day was done earlier than we were done because obviously lunch ends before the end of the school. school day and then she would be home by the time we were home. And so that's sort of what they did. My dad worked at Brookhaven National Labs, his entire career, first in civil engineering and then eventually when a lot of those jobs are sort of being phased out, he moved over to database administration and just did that until he retired a couple years ago. So what did college look like for you? I went to Carnegie Mellon, studied computer science. I was there for a few years. It was a fun experience. I mean, it's kind of a nerdy school. And, you know, we found ways, we still found ways to have fun. And actually, with a lot of people talking about side hustles today, like back then

college, or you have more time really than anything else. I mean, maybe the people who were smart studied more and worked harder in their classes, but I was up-law about side hustles, like finding things to resell on eBay and just different little things you could do to make, make some extra like beer money or video game money or things like that. And my money, journey of just about that creativity and tapping into that probably started around college. Do you have any specific big wins that you remember from the side hustles? Yeah, there was, this might sound a little weird, but before they outlawed the financial transactions supporting playing poker online, I actually gambled a lot online.

And by that, I mean, so I played poker a little bit and I realized I wasn't particularly good at that because I just didn't have the patience to wait for good hands. I knew what I was supposed to do and I would just get bored. But so alternatively, what we found out was that a lot of these like shady online gambling sites, what they would do is they would give you money if you deposited money and you just had to put into play like a multiple. And in the beginning, the multiple was like 4X. So you deposit 50 bucks.

They give you 50 bucks. It's 100. You have to put 400 into play and then you can withdraw all the money after you put enough into play. And eventually, I think smarter people over there realize the number of four times. wasn't enough. And I kept doing that. We were making thousands of dollars. Eventually, the number became 20x. And at 20x, it was no longer profitable to run these little sort of hacks or whatever. I was playing blackjack. You didn't have to play optimally.

Like, I knew a little bit. I had like the little cards because you're playing on the computer. You're not at, you know, the table. So you just had the little card that told you what to do. And your goal was to not lose money. Right. You just, whatever you put, in as long as you lost less than what they gave you, then you'd come out ahead. And you didn't need much. Like in college, if you got 50 bucks, like, that's a huge windfall. But we were getting to the point. I remember this one time.

This is horrible. But I put $1,000 on a hand of blackjack. My God. And I was sick. It didn't feel like, I had only put maybe 50 bucks, a hundred bucks into it. And it had just run up so much. I was like, oh, why not? I might have been drinking.

I don't know. It was not a very responsible decision. but I did it. This is horrible. I'm never doing it again until the next time it happened again. And that time I won and it was like, I'm done. I'm never doing that again.

And that time I stuck with it. And I did. I mean, it was not responsible. It was just taking advantage of the system being inefficient and just sort of having fun. And being in college, there were really no, I mean,

it's not like I graduated without student loan debt. Like keeping the thousand would have been way smarter and that's what I should have done. But you're in college and you make mistakes. And if that's the worst one I made, I feel like I made out pretty well. So what was your financial position coming out of college then? It was, I had a good job working for Northrop Grumman in the defense industry. And so I graduated 2003.

I was going to graduate 2002. And that with a computer science degree, you know, I'm thinking, oh, I'll be pretty good. That's right after the dot-com bubble burst. And so I stayed an extra year to do graduate school and then started working in defense industry. It was a good job. It was a stable job. I moved to the D.C. area. you know, got a rented apartment with a friend.

And I didn't have too much in savings. That's student loan debt. But like, what, 3% at the time, it didn't seem, it was, I think it was $30,000 in debt, which 30,000 student loans is, it feels like a lot, but it's not compared to, say, even 10,000 in credit card debt. And so, you know, I felt like my position was pretty strong. And I kind of tried to grow it from there. When did you kind of begin seriously pursuing the creation of wealth or accumulation

asset. When did that kind of happen in your career? What's interesting was, so I started my first personal finance blog around 2004, late 2004, 2005, and that started to earn a little bit of money. And that was the first time I got the sense that I wasn't forced to stay on a track for my career, for life in general. My parents were strict, but they were very open-minded. And very much like, you go to school, you get good grades, you go to good college, you get good grades. You go to good college. you get good grades, you get a good job, you live your life, support your family. That's sort of the mainline track. And I saw my parents do it and we had a very good life.

We still have a very good life. And I thought this is the track that I'm on and I'm totally fine with it. Then I start working and I'm working in this very large organization. The defense industry is enormous, like billions of dollars, hundreds of thousands of people. And I thought, oh, this is what I'm supposed to be doing. And I'm fine. Then I start writing this little blog. and my friends are laughing at me.

Like, how is your little journal diary going? I'm like, yeah, no, it's going great. Like, I'm learning a lot. Like I started because I wanted to understand like, all right, so this 401K, what are I supposed to do? And it started to earn money. I'm like, whoa, this is sort of like off schedule. So this is all extra money.

So that extra money went towards paying down student loans and all that. I'm like, oh, this is great. Then I started making more. And I realized that the track that I was on was like the safe track. I was just walking on a safety net. Now, granted, it's maybe not the right perfect analogy for it. But I realize, like, I can do this life and it'll be a very good life, a very stable career, you know, provide for my family, like, it's good.

But here's this other thing where as you're accumulating more income and assets and you start investing and starts to grow far faster than, well, you can earn at a job by just adding more hours and whatnot, I realize like the track is fine, but there's this whole other thing that you could pursue if you have the support structure. in place to do it. And so that's why I decided to go in that direction. And for the first few years, if anything went badly, I could have gone back, right? I'd gotten the right security clearances that are, you know, harder to get. And so I could go back and go do the job again, as long as I didn't get too far, far out of the industry. And I decided to go for it. So this other thing that

you're pursuing, you're talking about financial independence and not having traditional employment anymore. Yeah, just like the whole entrepreneurship route. Because I know financial independence, there are a bunch of different routes and entrepreneurship being one of them. I think I stumbled out to entrepreneurship and then discovered financial independence and the fact that you don't have to get all the things that they say you should get that marketing has taught you that you need to be happy. So how long were you working before you figured this out? It looks like you got your job in 2003. Did you go straight from college to Northrop Grumman? Yep. Okay. And then you started your blog in 0405. What was the name of that blog?

Bargeneering. Bargeneering, that's right. For some reason, I'm thinking it's wallet hacks, but that's the new one. This is the new one. Yeah, bargaining doesn't exist anymore. Bargeneering.com? Yep. Oh, well, it doesn't matter because it doesn't exist anymore.

I'm sorry. Scott, were you going to say something? Oh, I was just going to ask if you started in 2004, 2005, when did you leave your job? I left Northrop to go work at Booz Allen about three years in. For a lot of jobs, to get a big bump, you either have to get promoted or you move to another company. So I did the move to the other company. And I worked at Booz Allen for about a year and a half before I decided I was going to do the bargaining of the whole as my main gig. That was 2008. It was actually when we got married to, which was convenient because that meant I could go on my wife's health insurance, which is, you know, probably, you know, it's a big, big problem.

It's a big headache to sort of overcome. Yep. Working for yourself. So what did that look like? What did that entrepreneurship? Was the site producing revenue at the time? Were you feeling comfortable with that? what were the financial circumstances that allowed you to move into full-time entrepreneurship

besides the healthcare? So, you know, in your book, Scott, you wrote about the sort of the financial runway. I think that's the term they used. I had the same exact thought that this site was earning an income. It was building. It was essentially replacing income I would be earning to the future. And so I told myself, if I had a number of years saved up of income, then I would just try this.

And I bought. So this side income bought years of full-time work. Except now instead of doing that side income stuff from 7 to 11 at night, I could do it from the 9 to 5 during the day when I'm the freshest and been able to think the best and be creative. So at the time, I don't know the exact numbers, but it was I had probably seven or eight years of runway that I built. Like I needed that much. And I remember talking to my dad. I was like, hey, dad, I'm thinking about quitting my job to go do this blogging thing full time. And my dad was like, are you sure?

He said nothing. I was like, are you sure? And I was just like, I was until you asked me the simple, are you sure question? I was like, oh, so my plan was I bought myself a number of years. If it works out, that's great. If it doesn't work out, I can go back. Nothing prevents me from going back in like a couple of years. If it looks like it's not going to work out or if it's just like a one time thing,

because if you think about it, back then there weren't that many people earning a living entirely online. And they certainly weren't talked about. They weren't in like the newspapers or whatever. And so he didn't really have a model to say, oh, well, that guy did it or that girl did it. So it's easy. It's not easy, but it's possible. It's just sort of like a guess. And so, you know, it's worked out.

How did the, you know, you said it was 2008 when you made this transition. You got married and transitioned out. How did the market conditions affect this? Were you kind of riding high on years of gains that kind of helped support your financial runway? Or were you like, hey, the market's actually going down right now. And I'm still able to support it. And it's still conservative for me.

to go do this. Yeah, so I wasn't, I didn't have a lot invested by 2000 because I was saving it all. A lot of it was in cash because I thought I needed this as a runway. If it doesn't work out, then I need to get access to it. I don't want to put it into any sort of, I might have put it into some like one-year CDs just as like a holding pattern. And so when the market actually went down, I started accumulating a lot because, you know, I have this pile of, this emergency fund or career emergency fund, whatever, this pile of cash.

And the site was generating income. So if it's generating income, I need to find a place to put it. I started putting it into the market, which has turned out great because I managed to accidentally buy on the low when you're not supposed to, you're always constantly on schedule, dollar cost, average, whatever. But by luck, because I was comfortable with the cash cushion, I could then contribute more from the cash flow of the business. It wasn't financial independence in the sense that I'd had a pile of, you know, retirement

assets and I was drawing that down. It's like, I had a little bit. I had aggressively saved into a forward. 1K at work. And that felt good enough because that was my retirement. And I didn't put more because I felt as if I was ahead of schedule. And if I'm ahead of schedule, then I don't need to be probably more. I can wait. You don't really lose much by waiting a couple of years to see. I felt like this was sort of a turning point in my life, this decision. And I wanted to give myself as much flexibility as possible. So if things went bad, I didn't have to liquidate anything. I could just draw on a cash

reserve. So that's sort of how that's what the picture looked like. Well, I just like this kind of concept and you know when I comment on it that you saved up this money behaved financially responsibly for a period of years out of college in your career and accumulated a large amount of cash what weren't necessarily investing that like aggressively in the market you were building up a financial cushion for yourself and that turns out you know not to ruin all the future story we're going to get into but to give you a chance to take a chance and you know be an entrepreneur make an investment that has the potential of exponentially greater returns that what you could get by investing passively or continuing that work, that story in the

workforce. And I think a lot of people underestimate the power of having tons of cash saved up even without other investments there because it gives you those options, that flexibility. I think if you know what you're going to do for the next 20 years, then you want to invest that much. Like if you're following a track, if you need flexibility, it's kind of like buying a house. If you believe that you're going to be in an area for 20, 30 years and you want to set down roots, then yeah, maybe buying a house is for you. But if you're transient moving around every few years, then you should wait because there's no rush to do either thing. You just have to just make a decision on what you want to do.

Yep. I mean, there's so many people out there who are like big spreadsheet nerds who I'm going to like, here's my 20 year plan. I'm going to put this much in every year. This is going to be my annual raise. I'm going to follow it to the T. And that's great. That'll probably work. But you're locking yourself into a 20 year journey when you could.

After five years, take a huge lump sum of cash and a little bit of passive income and go ahead and take a big shot and maybe accelerate that journey by a decade or more if you're able to get lucky and maybe have a little bit more fun doing it. So anyways, how did your entrepreneurship journey go with bargaining? It was good. Just grew the site, kept growing it. Personal finance community like everybody else was growing their sites. And it got to the point where I was able to liquidate in 2010.

And it was good. I don't know if the large cash cushion is funny. Like anything else, you don't know what the different factors are that go into particular success. And there are going to be so many. But having a cash cut, it gives you, it's like insurance. It's like self-insuring. And you don't know how important it is until you need it.

And I never needed it. But it also gave me that confidence to be able to push harder for what I wanted. Yeah, I just kept growing it. And being able to work on a full time was great because a lot of, lot of creativity happens when you have downtime and you can like walk around and think and you're not trying to force yourself to find the solution. And in a business where the path forward isn't 100% clear, you need that creativity to find sort of the areas to go into. And I think going full time was extremely helpful. And having the support, whether it's that cash cushion or, you know,

family and friends, the ones that weren't making fun of me was good. What did your wife think of this? When you said, hey, I want to quit my job. Was she like, no? So I quit before she was my wife, technically. And then we got married. We actually, actually, my last day was the Friday before we got married. And when we talked about it, so she had seen the site like grow and grow. And originally I'd said, oh, it'd be fun if this paid for one vacation a year. And this was before kids and the vacations were not particularly expensive.

I was like, oh, it's just great if we just have a little extra money and we can play with and have fun and not have to be responsible with it. And we jokingly, to this day, we'll say, oh, it would be fun if this paid for one vacation a year. And now it would be like an absurd vacation, which is good. But, you know, it's just a funny phrase that we say she was supportive. I think she knew or she believed that I knew what I was doing. Like, I was looking. They're like, oh, man, it's awesome. You knew exactly what you're doing.

You just went out and you did it. And the reality is no one knows what they're doing. And after the fact, they try to, you know, frame a narrative that fits this, like, epic journey that she was along for the ride. She saw that it was doing well and that the income was there to support and buy those years. And I told her the same thing that I told my parents. It's going to buy me seven years. We'll figure. I won't use all seven.

If things go south, then we get, you know, three, four years in, I'll find something else. But I feel like we've bought this cushion and it's time to take the shot. And like Scott said, if it works out great, if it doesn't, you know, it works out. you accelerate by 10 years. If it doesn't work out, I can go back and go on that same safe track and it'll be fine. Everybody happy. I'll still be a couple years ahead and I'll at least won't look back with regret. That's amazing. Okay. So it's time for my favorite quote. Joel from F-I-180 was on our show, I think back on episode 11. And his quote is, the first of me said it, I was like, oh my God, that's brilliant. He said, what's the worst that can happen if I quit my job and go try this thing? The worst thing that can

happen is that I'll have to go back to work. So my worst case scenario is everybody else's everyday life. I like how you added to it now with, you know, oh, at least I tried. I'm not going to have regrets. And, you know, that's, I think that might be one thing that's missing from Joel's quote. But I use that quote almost every single episode because it's so inspiring. What's the worst that can happen? It's not like somebody's going to come and shoot you because you didn't, you know, you didn't do it right. You didn't, you know, oh, you made a mistake and it didn't work out. Well, here you go. Go get another job. It's not that big a deal. I never really thought about the worst that could happen.

I suppose I was. I was just thinking, what's the worst I could have when I go back and get a job? I'll have to remember that quote. It's fantastic. Joel from F.I.180, I always feel like I need to attribute him. I'm sure everybody listening has been hearing that and kind of sick of it. So you've been writing about finances kind of forever. You know, some people call J.D. Roth, the godfather of blogging.

But I would certainly say that you're at least the great uncle if J.D. Roth is going to be the godfather. He's not that much older than me, but just a little bit. Jim said that, not me. So let's look at some of the top tips you've learned about getting your finances in order that you've learned over the years of blogging. So in talking with a lot of people getting emails, there's always a lot of like angst and emotion tied into money and people feeling like they don't have enough or they're not

doing the right thing or whatever. And I always ask them, it sounds so simple, but are you budgeting? Like, are you just doing the simple task of recording everything you're spending? And you don't have to do it manually with tools like Mint and whoever. You can pull in all that data automatically. And then you know, I earn this much. I'm spending this much. I have this cushion.

If they have those numbers and they're still anxious about it, then that's a totally different issue. But so many people don't know. All they see is they don't see their income going because they get a direct deposit. They aren't entirely sure what their take home pay is. But what they see all the time are they. bills because it gets mailed to them. It gets emailed to them. They're constantly paying them manually or maybe automatically whatever it is, but they're getting notifications about their bills. They don't get about their income. And that causes stress because all you see is you spending money,

you're pulling your credit card, you go into the store or whatever. And you don't know. And without that knowing, the emotion comes in because psychologically you're like, well, I must not be doing well if I'm spending all the time and I'm not earning. So just say, just budget. So I have something simple where you track and you get that knowledge. And from there, you can start making decisions on whether or not you need to cut your Netflix subscription or do any of the other things you feel guilt about. Right?

So many people, they make decisions without that data. And it's because so much of our life, we make decisions without perfect information. Right? You have to decide, oh, should I try to merge into this lane now or wait till that car that seems to be going fast, goes by? Well, here's a case where you have data and it's telling you, if you want to save 20% of your income, you know what that number is,

you know how much you're spending in other areas. What do you need to adjust a little bit here or there to get you to that 20%? And people just don't because it feels like a lot of work and it causes so much angst. But number one thing is just get data. I think it was what Peter Drucker? This is the management guru guy said whatever gets measured gets managed. Like you need to do that. And so many people don't now with all the tools.

I can understand if you don't want to track down every penny, but now you should, everyone should be doing it. What's your favorite tool for doing that? So I think you should use whatever as simple. I know a lot of people like Mint because you can tie it all in, you can break up transactions, you can do all that. Personally, I use personal capital because it has an investing portion to it that I like a lot. And our finances are beyond the point where we need to track every transaction, but it has that. It doesn't have forecasting and planning. So if you want to do something like, so the first step is just to track all your expenses.

The second one is to sort of adjust your budget so that let's say you're not saving it up and you want to make these changes. Things like you need a budget are good for, you know, establishing. I want to spend X in these different categories. I want it all to fit, move it all in. I looked at every dollar the other day because Dave Ramsey is pretty popular. And it's an easy tool to get into, but it doesn't. It's free if you don't pull in transactions, if you want to do it manually, but then you have to pay.

I think a lot of them, you have to pay if you want to get the automated transactions, with the exception of mint. So you said a minute ago, people think that it's going to be a lot of work and that's why they don't do it. Let's go from starting from zero. I've never tracked anything before and now I'm going to start tracking it. How much time do you estimate it would take to start up and then how much time do you think it would take to just continue monitoring it once you're already set up? Let's use your favorite mint. I'm sorry, your personal capital. I mean, either one, they do they do the same thing.

In terms of tracking, if you're starting a budget, I would recommend Mint first because it has better budgeting tools. You just go in and you link up your credit cards and it starts pulling it in automatically. Then you know your total spend. It's pretty smart about categorization, but sometimes you have to adjust that too and play with that. But I don't know how long. It kind of depends on how many credit cards you use and how many bank accounts you need to link up. But it can't take more than 15, 20 minutes. I use Mint personally.

That's how I track my finances. And it's very easy. You just, you literally take your login, your, you know, your username and password for each of your credit cards and your bank accounts and any other investment things you want to put in. And then you're done. It just ports in all the transactions every month. And then you have to spend a little bit of time adjusting the, like what this expense here labeled, you know, my local liquor store is called sportsmen. So it's not athletic gear. It's bad. You know, I have to adjust these, these expenses to what they actually are.

But then after that, it'll pick up pretty quick and you're good to go. And so it maybe takes five minutes a month to literally have every transaction categorized appropriately. And then I'm a huge nerd. So one thing that Mint doesn't do is it doesn't give me like a month by month breakdown of spending across all my categories over time. So I have to download that into an Excel spreadsheet and play around with it more. But that's more than most people. But like Mint is perfect for all this. It just aggregates all that data into one really convenient place.

And I think it's just a fantastic starting point. And it's fast. Like Scott just explained minutes. and you have data that you didn't have before, that you had trapped in your head in bits and pieces and that you assign probably a lot of emotion if you feel that way about your spending. Yeah, one of the things that's powerful about this is like you see your spending and you can see what the lever in your financial model is, right? So you may not have that in your head. It may be, hey, you know, I know I went out to eat a few times this last month, but that ended up being

$300. Right. Oh, wow. I can cut that in half easily next month and come up with $150 more that's a lever I can pull on my finances next month. And you see it and you have it visually categorized. You know, it's a skill. It's not a skill. It's work to categorize that. And it's a little bit of a skill to present it in a way that you can make decisions easily from. But once you do that, man, it's so easy to see exactly what you need to do to make the next leap forward each month. And you can make dramatic progress within a month, month or two. So I've said this before and I'm to say it again. The first time that my husband and I started tracking our spending, I didn't even, they didn't even have mint. It was just a piece of paper that I left on the counter. And I drew a little

bit of lines like what date, where I spent the money, how much I spent, and a general category. And I was shocked to see that every single day I went to the grocery store because I went to the gym every day. And on the way home, there was the grocery store there. And oh, I just need one thing. And one thing turns into six things. And that's not a big deal if you're going once. But that's a huge deal if you're going every single day. Six times seven is that's a lot of extra things that I didn't need just because I was stopping at the store every single day. And once I started, I read this book from Steve and Annette, Economitas, though like we go grocery

shopping once a month or something like that. And that just blew my mind. How can you go grocery shopping once a month? And they gave a whole big story about how they did it. And I mean, I'm thinking of like milk and fresh fruits and vegetables. And they said, yeah, we do have fresh. fruits and vegetables, but I don't know what they did with milk. Maybe they froze it. I don't remember. It's not important. You can still go to the grocery store for milk. But like they would eat bananas

go rotten first and then oranges take a lot longer to go bad and carrots are good forever. And so they would like eat stuff based on when they were going to go bad and they always had fresh fruits and vegetables. And I can't go a whole month without going to the grocery store, but I've gone, I go significantly less just by keeping track. And that, you know, those six things might be, let's say, $20. And that's $20. And that's $20 every single. day. So, you know, tracking really gives you a good idea of what you're doing. And I mean, I didn't even have to wait the entire month the next week. I was like, wow, I go every single day, really? I wasn't even like considering that. Yeah, especially if you write it down sort of manually on a

piece of paper. I was doing it. When I first started doing it, my friend sent me her, she called it a budget Bible. And it was just spreadsheet. You just entered in the different. It was very basic. every month you just entered in all your, well, actually you entered in all the transactions and then had to do everything manually. It was not that much fun, but I was young. And so I had a lot of time. And I wasn't spending a lot. It was going to work and then going home. They go on to work. And then I realized how much I was spending going out to lunch and happy hours. I spent a lot on happy hours, just after work, just going. Sportsman. And you start adding it up and you're like, oh, you know, you go, you have a couple of beers. You're like, oh, you know, you go, you have a couple of beers.

You're like, oh, it doesn't seem like a lot. And then you realize how many times you go. And then you're like, oh, that's not a good idea. I should probably, I'll just cut one of them out. You slowly, like adjust your habits. And like, oh, let's go do something else. You can find other fun things to do. It's just easy.

I have to work to say, hey, you want to just go to the bar? I'm like, yeah, sure, go hang out. But there are other fun things you can find. But writing it down, it's hugely important. I don't think enough people do that because they're so busy and whatnot. But just getting a pen and a piece of paper, it's huge. Yeah. It's just eye-opening.

And I always thought I was good with money. And I am good with money, but I'm also really good at spending it when I'm not paying attention to what I'm doing with it. Well, let's go ahead and move on to the next tip here. What's your second tip? So it's actually related. It ties into nicely with the writing things down. I say keep like a time journal. So these are when you want to save money the best way if you want to not spend a ton of time, like you can browbag your lunch.

You have to remember to do that every single day. And then you forget a couple days and sort of fall off the wagon. But you're spending a ton on all these fixed. monthly cost, like the Netflix and the whatever your gym and things like that, that maybe you're not using as often as you are. And so we still have cable. And I realized we were spending 12 bucks a month on a cable box for TV that we weren't even using. Like the kids would watch every so often, but they were just watching, you know, random cartoons. They weren't, they didn't need the cable box. But what I did was I started keeping a journal of what I actually watched. And we watched a lot of

Netflix, a lot of Amazon Prime movies and videos. We didn't watch that much regular TV. And so we cut out that cable box, replaced it with a Roku that the kids know what I use. The Roku's like, I don't know, 30 bucks. So within three months, it paid for itself. And just that simple act of writing down, now I can make decisions that's data-driven.

Now I can decide, all right, I only watched live TV really for sports and nothing else. I should be able to cut this like $100 a month bill. And really, what am I giving up sports? I watch sports. Well, if I look at this log, I can find out the gym. Now, I go to the gym enough for it to be worth it, and our gym is cheap. But a lot of gyms, you can go a la carte. You pay like 10 bucks. I think our gyms, you can pay like 10 or 15 bucks to go whenever you want. And there's some gyms that are charging like 150 a month and people are going not at all. If you write it down,

it kind of hurts if you aren't going enough. But then you know, it's like, well, I can just pay a la carte. And then I don't have to be paying this monthly fixed fee all the time. And it happens with any bill you can think of. Every single gym owner right now is saying, shut up, Jim, shut up, Jim. Because that's how they make money is they know you're not going to come. You sign up in January for their ridiculously low price. Then it goes up because, you know, you get like the one month free

and then they're billing you every single month for you not going. There's something like 10% of all gym memberships are actually used and 90% of people never ever use it. So if everybody were to go to the gym, there would be not enough space because literally they have all these people that never, ever, ever come. And what's funny is so our local gyms run by the county and there are maybe four or five of them spread out across the county. One of them closed for renovations for like six months. All those people came here. First of all, the number of people in the gym didn't grow by that much.

It didn't, it wasn't like suddenly there were hundreds of people. No, it went from like 40 to 80. It was miserable. You have 40 people at that time. Because you know, people, you go on a habit, right? You go on like your Monday, Wednesday, Friday, or Tuesday, Thursday, Thursday, Friday, or whatever it is. And so you see the same people. And then suddenly there's a whole batch at that time.

And they're always way more athletic than you. And it's terrible. You know, you always have the handful of like enormous guys that take like all of the 45s. They stack them all on. The problem is when there's only one or two, it's fine. But when there's four or five, suddenly it becomes a big prize. And it's not that much more and more people. It's just, you added like a handful of more people and now everyone schedules off. Yeah, I totally have that problem. Tax season is one of the only times

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you're that you can do to kind of move toward financial freedom right and sometimes it's a surprise to see how much time is wasted and not that you could be just redeploying in a different way that could either make you happy or be profitable a profitable use of time versus time you're just like eh this is that was a complete waste that could have done something way better and what I felt better about it and then second I think you can see some things that may seem like large expenses that maybe aren't large expenses like my computer for example I spend eight hours a day on this thing, maybe more sometimes. Even though it's my most expensive item I'll ever own, or at least expensive item of this size, you know, car, that's a pretty low dollar per hour

item, I think. And I don't know if maybe I had a conversation with you at one point about this that gave me that kind of way of looking at things. Is that something that you've kind of use this to analyze your purchases? Yeah, a lot of it is, you know, there are a lot of items that are high dollar that you use all the time, like shoes or like your mattress or whatever. If you spend a little bit more, it'll last, hopefully a little longer, and your experience will be a lot better. The interesting things, I had a conversation with, I was on the train going somewhere and I was talking with this guy and he was telling me about suits. Like he made suits. And I asked them, because I still know very little about suits.

I'm like, why are some Italian suits, whatever, it's so expensive? It's like, oh, the difference is the material. It's just more comfortable. And so if you're spending an eight hour day or a 10 hour day wearing the same thing, you want it to be a little more breathable. you want it to be a little more comfortable. And then also they last longer through dry cleaning. And so this suit that is thousands of dollars, it fits you better, it makes you look better, it gives you more confidence, is all that, but it also will last longer.

And so it's hard for, say, a young person to invest because if you need to get, you know, three different suits, you're not going to be able to spend that much money. But as you get older and you can now put an investment. And this is sort of one of the other tips that I started thinking talking about it. I call it, I call it upgrade and save. and being able to spend a little bit more now and make an investment because this thing's going to last longer and you don't have to replace it as often and things like that. I think what you were saying about the high dollar and just like you feel maybe guilty for spending that much, if you keep a journal or just even if you just more intentionally think about it, you won't have that guilt because you're like, oh, yeah, the computer is expensive. It is expensive.

But I'm getting this much value out of it. It's what my dad actually says is I didn't use my first. first computer until I was a teenager, like much old. And it was a very old computer. It was like a, these numbers may not make sense to Scott, but Mindy'll get it. When Pentiums were out, my dad got me at 286. He got me 286. It's all a foreign language to me. And it had 80 bags on the on the hard drive. And I had to uninstall programs to install other programs. So like in order to use word perfect, another word that Scott has never heard before, I'd install like Lotus notes, because that was the spreadsheet. So you had to do these juggling acts. But then my dad jokes around. I was like,

yeah, but all you do today now is just play on the computer and you make a living from it. So it was an expensive purchase, certainly, because it was thousands of dollars back then. But it was worth it because you look down the road and you're like, oh, well, it is resulted in this. I had the 286. My boss upgraded to the 386 and I was so jealous because she had the fast computer. I felt I would load programs and then walk away for like five minutes. No, but going back to your tips, though, like budgeting and time usage, like these are, these are fundamentals of long-term success. And, you know, I love the second point, maybe even more than the first with the time usage versus budgeting. I have actually personally kept a log of, this is how nerdy I am. I have kept a log of daily activity and broken out by not, I'm not perfect. I don't have every day. But for the last four years, most days, the vast majority of them, I have a daily log that I've literally said, here's my, my accomplishments the day. Here's what I sit out to do. Here's what I did in the early morning, late morning, early afternoon, late afternoon, early evening, late evening, every single day for years.

I just have them all stacked in my thing. And I think it's been really, really productive and helpful for me in budgeting my time and making sure that I'm not, I'm using it either towards something that I just enjoy or that is a profitable use at that time. Can you think of one thing that you've learned from that, maybe recently or something that's... We asked the questions here. I want to learn too. One thing I've learned from that. Whenever I shy away from that, I tend towards really, like for me personally, like if I just don't have anything to do, if I take a vacation and don't do that, or it's a weekend and I don't do it, I will just binge on something unproductive the entire day, like video games. Or sometimes it's nice.

Like I'll read a book or whatever, but I'll always come out of a period without refocusing myself feeling like I didn't work out, ate unhealthy, all that kind of stuff. I think that's for me, I need to structure and coach myself in order to get things going along. It's like a time cheat day. Yeah. Yeah. I mean, before all the different tools, I think budgeting is hard because you have to constantly write down transactions. And then it's sort of a cognitive load and you're tired and you don't feel like doing it. And then you fall off the wagon, you know, like anything else, maybe you need a break.

But with the tools now, it'll take care of it for you. Maybe you don't look at it every single day and you give yourself a break. But it's so powerful stuff just to make. Yeah, when you're getting into the habit, I wouldn't recommend taking a day off because it's so easy to just like not do it the next day either. But this time usage journal, I think is brilliant. I have never heard this before. And I read a boatload of blogs and, you know, I'm kind of in this space. But that's really, really brilliant because I'm not using my gym membership either.

Although I just signed up for a half marathon. So I guess I'm going to be doing that. And it's getting cold. So I'm going to have to run inside. Are you laughing at me, Scott? No, it was a little bit, yes. I did not get my current body by working out. I will fully admit that.

I'm okay with that. But yeah, if I had kept a time use journal, I would have totally gotten rid of the gym membership. Before we move on, do you have any tips for which journals or how to actually practically go about starting a time use journal? Like, do you have a product that someone can use if you're listening to the show and want to you start doing that?

So there's the two things. If you want to track what you're doing, for a while I was doing that just to see like what my day looked like, because people always ask, oh, what's your day? It looked like, what have you done? And I would not know. I just go into Excel and just put rows for each hour and then just scribble in something.

And that was it. That's all I did. I didn't use any products. But actually, one thing you're talking about goofing around on the computer, if you put, is rescue time still around? A tool for like track. It basically, so you know the iPhone, the new iPhone will tell you where what you're doing. I forget what the name of the feature is.

You can turn it on and it'll tell you how much you spend. Yeah, it's like how many hours. hours you're spending on social media on your phone. But there are similar tools for the computer, and then they'll tell you which websites are going to, and they categorize them based on whether they're leisure, social news, et cetera. You can do that to just track and just figure out how many times you've checked Gmail unnecessarily during the day.

For the usage journal, I just keep a sheet of paper. It was just like a little throwaway notebook. So for the TV, it was just on like the table next to the remote. And then I would just write, I'll just put a little little. tick every time I used it and I realized I didn't use it at all. I'm just near whatever. The gym, like you know when you go to the, just think back. Everyone knows.

But I think that the act of writing it down and recording it will give you the sense like, hey, you know, you're spending a hundred bucks or whatever it is and you're going like twice. But then start thinking about. If you want to adjust your, this may be getting a little off topic, but like let's say you want to go more. Like you have to think about what are the roadblocks that you've now created for yourself. So you talked about not liking running. I didn't like, I could not run because now I know this, I was just running too fast.

And so I was just getting exhausted. Not my problem. I run better now. And part of the reason was I didn't like running because, one, I didn't know what I needed to wear. And so now based on the temperatures, I have a little sheet that's just a little piece of paper that says anything above 60 degrees, I can just put on shorts and whatever. where when it dropped down between 50 and whatever, I would just bring like a long, long sleeve shirt. It was under whatever, I needed to put, get gloves to cover my fingers.

And I needed to put like a little beanie on and whatever. And I was always running on like my neighborhood. So if I wanted to take something off, I could just throw it somewhere and I loop back and just pick it up on the way home. And I put that next to the clothes and they're all in bins in our little like four year area. And it just made everything simple. So I didn't have the excuse of like, oh, now I got to go fun. Where did I put that shirt?

I have like 20 shirts all in this. little bin, 20 shorts, like gloves, everything. Make it as simple as possible. And then you'll go more. Find the things that are roadblocking you. Oh, that's a good tip. There is, I'm going to get you the name. I forget the name of the guy.

He's in Stanford. It's about, he talks about creating habits, but like, there's the thing called the motivational wave. When you signed up for that race, your motivation was really high. As time goes on, your motivation is going to diminish, diminish, diminish. And so it becomes harder to overrequent. become those roadblocks. And so what happens is when your motivation is the highest, make the rest of the actions as simple as possible. So at that time, I wrote down the temperature is what to wear,

put it all in an area. So if I wanted to run, I just got up, take a shirt from this bin, shorts from this bin, if I need gloves, whatever from this bin, and then I'm out the door. And like months later, I'm just like, I don't feel like running. Of course, you do have to walk through the house in your underwear to get to that point? It's right outside of Petrie. No, I love it. If you are listening to this and want a time journal and those kinds of things, a couple of places to start is one, Excel spreadsheet, two, piece of paper. Three, make yourself a word document. This is what I do. I just have a word document. I created it for myself that's like, here's what I want to do it today. Here's the time zones.

I'm chunking out. And here's how I'm going to track my progress with I handwrite it with a pen and pencil. And then two, if you want to pay for some resources, two, that might be good to check out would be the 12 week year. I forget who that's by, but that's got a good breakdown so you can hit quarterly, goals. And then I also have used in the past a book called Living Your Best Year Ever by Darren Hardy, which might be a good resource as well if you're looking to start budgeting your time in pursuit of your goals and all that kind of stuff. And is the 12 week year an app or is that a book or a journal or what is that, Scott? It's a book. Okay. And we'll have links to all of this in the show notes. Scott, do you want to share your word document in the show notes as well

so people can download that and use that so they don't have to start from scratch. Yeah, absolutely. I mean, it's just a little piece of paper that I have like a couple of goals and all that. But yeah, I can share that for sure. Maybe that's a roadblock for somebody to not get started is that they don't have the document. So you're helping them out. Absolutely. Yeah, no, I'm fully aware that my motivation is going to wane.

I am writing about it on my blog and I am going with a friend and my daughter wants to do it too. So sure, it's going to be awesome. I keep track of my own work hours just for my own self so I know that I'm getting in 40 hours a week every week. And I keep track of that on my hours.com. And it's a free app if it's just you. And I think if you want your whole company to sign up, it costs money. But it's just me. So that's another way to keep tracking.

Just hit start when you're doing something and stop when you're done. And it's another great way to not have to write it down by hand, especially if you're on the computer. Okay. So I think we've covered this one. I've never heard Keep a Time Journal before, but that's just fantastic. That's the best tip you've ever said in your whole life, Jim. So top that. What's the next one?

Oh, tip number three. I think we're done. We're done. We're done. That's the end of the show. So this is less about data driven and more just about being smart with your time and how you're trying to save money. And it's any fixed contract that you have with anybody is negotiable. So any subscription, any service, anything.

And you should be aggressively negotiating them down as much as possible because chances are you don't need it as much as they need you as a customer. So we recently bought, not recently, I guess now it's been five or six years. We bought a new car. And it comes with serious XM radio. And you get it free for, I don't even know how long. And afterwards, if you want to subscribe, it's like $30 a month or something like that, which doesn't sound all that expensive until you realize if you don't subscribe the

will ask you, do you want it for five months for $25? All you have to do is you have to cancel because once it renews, it'll go up to the $30 or $40 a month. You just have to cancel and then pay again, it's $25 for five months over and over and over again. And like anything else, they have no marginal cost to deliver the product to you. You already have the receiver in your car as part of your radio. And you're being subsidized by all the people that are paying 30, 40, whatever much they're paying.

And the phone call doesn't take that long because the customer service reps are used to it. Anytime you cancel, you go to the retention department, retention. They want to retain you and they will give you a deal. And if you don't like the deal, just cancel it. You don't need cable TV. You don't need internet. You don't need serious. You don't need some of the ones you can't really negotiate are like your Netflix or those services where there's just no one to call.

And then they don't really care all that much. but yeah to cancel and try to get them to retain you. This seems like a good tip to implement after you've done the exercise earlier and budgeted your time and know exactly how much benefit, if you have an ability to quantify how much benefit you're getting from these services beforehand. Yeah, like we weren't using serious. Like we don't have it now. Even if it were $5 a month, we don't get serious in the car because we don't listen to it.

Most of the time we're listening to like these little kid science podcasts that the kids like to listen to. And so like podcast, well, you just download them at home or even just when you're out. And they just listen to that. And they're far happier. They don't need 90s on nine or 80s on eight or 20s on two. I had serious for, or XM for a while. And it was 80s on eight.

And I loved it very much. Heidi Selexa. I don't think she's still there. So I was listening to Clark Howard. And this guy called up and said, you know, you always say negotiate or shop around or whatever. And he said, I got a renewal notice. from my car insurance and it had gone up to like $400 or whatever. So I called them up and I said, this is ridiculous.

It was not this expensive before I'm going to go someplace else. And they dropped his insurance price by 40% just because he threatened to leave, to which I say, well, if they're going to raise you every month, go find somebody else who's cheaper anyway. But yeah, how many times does your insurance go up? And it doesn't go up dramatically. In this case, they raised it too much for this guy to be happy with it. But your insurance, oh, it was 600 last year and this year it's, you know, 610.

Oh, okay, whatever. I don't want to shop around. Shop around because maybe it's not that expensive. Kind of on the same lines as this comparison shop is specifically for insurance. Look at your deductible. My deductible when I was young and had no money was what is the lowest, like $250 a month or something like that. And now I can comfortably accept like a $2,000 deductible. So I have that.

And now my insurance is like nothing. I think on one car, it's like $60 a year or something like that because it's a low mileage vehicle and on and on and on. But there's a lot of different ways to get your costs down if you can accept a blow like that as well. You can ask the insurance agent, are there discounts that I can get that I don't already get? What do I need to do to get them?

I remember talking with someone at GEICO. So they have this thing where if you are part of an affiliated organization, they'll give you seven percent off, I think it was. And one of the organizations that you could join was the National Military Families Association, which you don't have to be in a military family. You just joined the organization. You pay the $40 annual fee at the time. That's what it was at the time. And I got 7% off my GEICO insurance. Which is more than $40. Yeah. Which is the 7% was more than the 40. Well, you get that for the as long as you're at GEICO. So you don't have to remain a member of the national the NMFA to get it.

But that organization got $40 that it wouldn't have otherwise gotten to support its mission. And then I get a discount so everybody wins. Everybody wins. I am a- Because the guy co-rep told me, he's like, oh, just look at this list of affiliated organizations. Are you in any of them? I was like, oh, I'm not yet. Let me go look at all those organizations.

Yeah. So a few minutes of your time and you saved. What's their thing? 15 minutes can save you 15% or more on Geico. I'm a Berkshire Hathaway stockholder, and they are a member of the Berkshire Hathaway family. So I get that discount. Well, so what are some of the biggest contracts that you think that, like,

your normal person, you're listening to the show, haven't reviewed your finances in a couple of months? What are some of these ones that you probably think stand out as like a checklist to kind of go after? Cell phone, cable and internet, insurance. I think people know their fixed costs each year. You can negotiate rent. You can negotiate any of these things.

It doesn't hurt to ask and you should just give it a shot. Well, yeah, what's the worst that they can say? No. And they're not going to shoot you. I mean, think about rent. Most people don't even consider the fact that they can negotiate rent. And if you're renting from a private individual and you want to say, and maybe people do know because this is the bigger pockets money podcast,

but it's like they don't turnover is a big pain. And so if someone says, oh, can I get a break on the rent? sign a two-year lease, a three-year lease. Maybe three years is a little too long, but like, maybe they can knock a little off the rent. You can say, oh, I can pay this way or that way or sooner or faster. You can always, there are different levers. And if you have a little bit of creativity, you can try to find it. And it never hurts to ask, is there anything I can do to make the cheaper? Like I did with the insurance agent, which I didn't even think about. Yeah, I love it. So what's your next, what's your next tip after that? So what had happened was I'd heard all

these things about like the latte factor and brown bagging your lunch and it sounded those are all great ways to save money but they don't get to the fact like it doesn't make your life too much easier and so the the thought that I had and this is what I actually did was I call it upgrade and save it's like making an investment early on to make your life a little easier and then potentially save money in the process and it goes back to kind of like with the running it's like the motivation wave you want to brown bag your lunch you want to stop buying coffee what can you do maybe that means investing in a cure egg and having coffee that's like instantly available when you wake up as opposed to a drip coffee maker, which is the most economical way to do it.

But you have to remember to fill it with water, make sure you have enough coffee grounds, make sure you have the filter and program it because it doesn't, it's not ready in 30 seconds. It's ready in like a minute and a half. And what sounds absurd, these are all the little hurdles that get in the way. So what happened was we tried like an espresso machine somewhere. And espresso is they're just pods. And each pot is like 40 or 50 cents. But they make great espresso coffee in what feels like literally like 30 to 40 seconds.

And there's no preparation. If what you need is that like caffeine in the morning and you just to get going and to skip the line at Starbucks, get one of those machines that costs money. I think it costs brand new. They're actually really cheap now. It's like $80, which is not zero. It's not as cheap as a drip coffee maker, but it's ready. And you will never have the excuse of like, oh, I forgot to program it. I'm just going to go stop by Starbucks instead of like fumbling and figuring out how much water do I need for the whatever scoops of coffee.

And it sounds silly, but if you make a lot of these investments up front, like if going to the gym is a pain because you don't have like the right shirts or you don't know, just buy a couple shirts, buy a couple shorts, buy more than you need. Throw them in so that you're never thinking, oh, I want to go right now. now, but I can't because the clothes that I would normally wear are in the wash. It'll save you money. It's counterintuitive because you have to spend a little bit more up front. But if you do the math with just coffee alone, it's really easy. Like you say it costs hundreds of dollars to get coffee every day. You're not going to save all of it, but you don't need to save all of it. You just need to save a little bit of it so that you have more than you did when you started. And you get probably better coffee.

And I'll say a great tip on this kind of stuff is to join one of the like social groups around the FI community. Like, I don't know. Like, I'm in a couple, I'm in the Chusafi Facebook group. I'm in the Mustachians and Practice Facebook group and a couple other. And like, when you post like one of these types of decisions there, for whatever reason, people love to give you their advice on how to make the best long-term decision around these somewhat, they seem almost like petty decisions, like which kind of coffee maker to get,

which kind of mattress to get. But like, you will get a huge amount of crowdsourced feedback to help you upgrade and say, if you just kind of post this to the right social media group or site or forum or anything like that. Quick tip there. Yeah. You know, you said something to me, Scott, once, that really kind of changed the way that I look at a lot of things. You said, make trivial decisions quickly. It's one of your leadership styles. If it's not going to make a big difference, if it's not like time wise, money wise, whatever, do it and move on. Don't waste a lot of time on this stuff. And I think that's something like Steve Jobs did that. I don't want to choose.

is what I have to wear. So I have a thousand pairs of jeans and a thousand black turtlenex and that's all I wear and I never have to worry about it. But make trivial decisions quickly. This is a fairly trivial decision. I like this espresso and I want an easy one. So I'm going to make this decision. I'm going to spend 80 bucks and now my life is better. Yeah. Well, I think I almost would disagree. I would say these are like the important decisions, right? Like this, like which express an espresso machine Jim has is a really important decision for him. Right. That's impacting your overall day. And so you made a very thoughtful choice. out like which one to get there so that every day can be trivial after that, right?

Is that kind of where you're getting that with this? Okay. That's, yeah, that's a better. Every day can be trivial after that. Now I got to go find it an espresso machine and convince my husband would let me have $80 to buy it. Okay. And Jim, you have a whole article on this, right? Yeah.

This upgraded save strategy. So we will include. And things. Because coffee is like, it's just a very hot. I don't know if it's really in real life. as much as it is, it's sort of what people write about being a topic. But it's something that's very easy to understand and easier to math out or calculate out the math and sort of the savings.

Like it's harder to do something that's more qualitative in nature, like say, spending a few thousand dollars on Italian suit or something like that. But it has other examples of things you can buy for life and things of that nature. That's something that Mr. Pop, Mr. Planting Our Pennies told me about the biffle. the buy it for life. And he showed me this pair of shoes that he has. He was a salesperson, so he needed to dress up and look nice. And he has a pair of shoes. He's like, yeah, they were $400. And I'm thinking to myself, I don't think I've ever spent $400 on a pair of shoes. But he wears them all the time. He wears them every single day. Every time I see him, I think he bought them like two years ago.

And they look beautiful. They always look brand new. And that's not something that I think a lot of people in the space, think about when they see, oh my God, $400, I would never spend that much on shoes. Well, hey, now he never has to buy another pair of shoes. Every once in a while, he'll have to get those resold. We will link to your article, the upgrade and save strategy on wallet hacks.com in the show notes for the show, which can be found at biggerpockets.com slash money show 47. I think it goes back to the point you're making up earlier, though, where just say, hey, that pair of shoes is an important decision.

That's like something he had to put a lot of time and energy and thought into. you got a beautiful pair of shoes, and now he doesn't have to make the decision ever again. Yes. And that's what you're talking about here with upgrade and save is make this quality decision because it's going to be something you're going to use a lot every day. It's going to have a huge impact in your day-to-day life.

But once it's done and it's quality, you don't have to worry about it anymore. Yeah. You can also have that decision is trivial. He doesn't even have to think about shoes. Yep. Yeah. You just, yeah.

I'm putting these on every day. And they go with everything. They're beautiful. What's funny is I either say you spend a lot on something or you spend as little. as possible. So like with like shoes, my shoes are either, and mine are not 400. They're either nice like 150 or they're not that nice into like 30 bucks. And I got them on sale. Like sneakers. Like I beat up sneakers all the time. And you don't want to spend a lot because they're going to get like

muddy and dirty and ripped and it'll be fine. But I don't want to spend like the, I'm going to spend $100 on a pair of sneakers because that's like in the middle and I could like rip them on something in like a week and get upset. Oh, so you know, I do spend $100 on sneakers. I. my last year's model on Amazon, but I do spend a lot because when I run and I don't have good sneakers on, it hurts my, I get shin splints or something. So that's a functional issue and not, yeah, you don't want to buy shoes that'll make your feet hurt. But, you know, there were $30 shoes that functionally perform the same.

They just didn't last as long. For me personally, I would go for those instead of just, you know, 100 that may last a little bit longer. All right. So let's move on to the last tip here. What's your, what's your, fifth and final tip? pair. The fifth of vital tip is sometimes you need to do things ahead of when you need them. And we're trying to think of, you know, as a big money win, a lot of folks, they only ever think

about looking at, say, their credit when they think I'm going to need my credit, like with a loan or anything like, that's something you should be doing on a regular basis. It's kind of like budgeting. Like, you're not thinking, oh, I'm going to retire now. How much did I save? It's like by then, it's probably a little too late. And the reason why I thought about this is because when I was younger, I wasn't really paying attention to my credit. I'd gotten a credit card and college by signing up and getting like a Frisbee or a t-shirt or something stupid. So I was like, I have a credit. I wasn't thinking about buying a house. I wasn't doing anything. And what happened was I was getting a background check for a security clearance. And they go and they naturally

pull your credit to find out if you're a financial risk and you can get bribes or whatever for state secrets. I had no state secrets. But I did have, they had somehow listed a cell phone in the wrong address because Jim Wang is a fairly common name. So they had that and they had my social security number wrong. So the credit file had two social security numbers. And one of them was obviously not mine. And that's what was associated with the bill, the cell phone bill and the address. And so I submitted, you know, where I lived, everything for the security thing. And they come back and go, Mr. Wang. And this guy was like trying to catch me in a lie. And I had no idea. I was like the perfect liar because I had no idea. And he's like, have you ever lived in Harrisburg,

PA? And I went to school in Pittsburgh. I was like, no, I've never, I've never lived in Harrisburg. is what is this. I'm like, I've also never had a cell phone with whatever company it was. And I had to go and fix it while they're trying to do the security clearance check. And it was the most stressful thing because unlike a loan for like a car, you don't get the loan for the car. That's fine. You wait a little bit until they fix it.

This was like job related. And I can't do anything until the clearance goes through. And so that was all stressed out. And so, you know, eventually maybe not everyone's going to get a background check, But eventually everyone's going to get a loan for something. You need to be on top of all this background stuff, all the credit, making sure that, one, it's correct. And two, if you're taking the right steps to improve it, because all that stuff takes a long time. But if you can get your credit score just a little bit higher, sometimes you can get yourself into sort of that excellent tier and now your interest rate is lower.

And so for the next 15 or 30 years for a house or for the next five years for a car loan, you're paying a lower interest rate just because you took these steps early. on to fix any mistakes or just to just give yourself a little boost. Love it. And even if you have a dramatically or even if you have a very bad score, you can make a dramatic improvement in like six months to a year. If you just take the right steps, get current on everything, start paying them off and are smart and do some research ahead of time about what's going to have consequences and what's not based on how you approach those bad debts and that kind of stuff. I think it's exactly right. Get this right before you go get a loan and are saddled with the consequences. And if you have to wait the six

months to buy a new car. You can probably try to figure out a way to do that if you're going to save money on your monthly payments for that car just by waiting a little bit longer. Yep. Yeah. And so I want to share now annual credit report.com. The government has decided that you have access to it once a year for free. The credit reporting agencies, the three big ones, have to give you this for free. Experian, Equifax and TransUnion will give you their credit report. And a company might report only to Equifax or only to experience. So your credit report is going to be different from each one. And each one only has to give it to you one time a year for free. Most of the big companies will report to all three or at least two of them. One thing that I have seen recommended

is that every four months, you get a different report. So instead of getting all three in January, you get Experian in January. And then four months later, you get Equifax and then four months after that. So you're still monitoring your credit all year long, but for free. Yeah. Another good tip is if you're looking to do this, go to credit karma.com and Mint. Mint, mint will give you, we talked about Mint earlier on the show. You also have a soft credit report, credit score on Mint, but Credit Karma is like a great resource that will kind of give you some information on the accounts outstanding, all that kind of stuff, and give you kind of some suggested ways to begin tackling that. So if you're worried about

credit or want to improve that, that's probably a really good place to start alongside getting these other reports. They'll give you a number. Sometimes they give you, most of the time they give you like a vantage score. They'll give you a credit score that isn't necessarily the official of FICO. But I view it sort of like a like your temperature. If it goes up or down and you don't know like drastically, it might be and you didn't open a new credit card, you didn't do anything, miss a payment.

That might be an indication that something's going on and you might want to dig a little deeper. Yeah. And I want to piggyback off of that. I was going to say they give you a number that isn't necessarily like the exact number. But, you know, let's say they give you a number of 715. It isn't like your real number is going to be 400. The 715 might actually be 695 or 725.

It'll be in a range. And, you know, one point doesn't make a big difference on your score. It's, you know, the big swings that really make a difference. Yeah. And they're just good resources for beginning to improve your situation. If you're starting out and maybe have a bad score, I want to improve it. Okay. Jim, this was fabulous.

This really exceeded all of my expectations. I knew you were awesome because you are the great uncle of blogging. Is that where we're going to officially call you the great uncle? Great uncle Jim. I'm not sure. Before we get to the famous four, is there anything else that you want to cover? No, I think we touched on it all. Yeah, I think it was a pretty good overview of all of this.

And I want to point out that while this was really awesome and I loved the keeping a time usage journal. That's a new tip I've never heard before. I hear a lot of the same tips over and over again because this is what works. Keeping track of your spending isn't necessarily fun. And, you know, like ripping off the band-aid, you have to really take a hard look at what you're doing. But if you want to make changes in your finances, you can't keep doing the same thing. So that is just a really, really awesome tip. The time usage journal blew my mind. That's fabulous. And now I'm going to go home and see how much time we're watching on TV. I do need the internet. I'm not going to be able to cut that, but I still did get a really good deal with that. So, okay, now it's time for the famous four.

These are the same five questions. We ask all of our guests. We don't have a little jingle. The last one is a command. It's not a question. I'm sorry. These are the same four questions and demand command that we ask everybody. Question number one, what is your favorite finance book? Favorite book is the millionaire next door. When I read it, it really opened my eyes. Because up until that point, I always thought millionaires were like rock stars and musicians. Like they were always famous. And I think that book told me that actually the world is much bigger. And just because it doesn't get much press or anything like doesn't mean that it doesn't exist, meaning the people that are diligently saving or they're smart about investing or just so many different ways to build wealth.

And it's not always something that you're going to be able to see. And it's totally possible just through very boring principles if you're willing to stick with them. And I really enjoyed that. But it's like not hard to read. It's like all a bunch of stories. And it just, it like unveiled a whole new world to me. It's a great perspective. And it's got a bunch of great anecdotes.

Like you just said, great stories. And it's also backed by real hard numbers that were really professionally and academically researched. So classic book there. Yeah. And it's an easy. read. You can put it, you know, next to your bedside table or put it in the bathroom if you want to talk about that. That's where you put your jokes, your book of a puns and jokes right there. Yeah. Got the book of really terrible jokes.

A millionaire next door. And a millionaire next door. All right. What was your biggest money mistake? Money mistake was buying our first house. And it wasn't the fact that we bought the house. It was that we listened to all the experts and just did whatever they said. it. And it wasn't until much later. And this is I bought it when I was 25. You're used to this idea of like you have teachers, you have bosses. They tell you this is how it works. And you go, okay, this is how it works. And there were just a lot of these little things that someone who was more in charge of the process would have pointed out and said, hey, wait a minute. I don't like this. And they're all like small things here, there. But when you add it all up, it was like there

was something with the roof. So the home inspector looked at it, the inside of the roof. And it has like this fire retardant chemical, whatever, coating. And it's supposed to protect you from it going up in flames. But it'll activate. When it activates, it deteriorates the plywood. And it can activate when it gets super hot, which indicates there isn't enough airflow in the attic. Well, these are all things that if someone were paying, if I were paying more attention, I would know that this roof is in a little bit of trouble. The home inspector said, oh, it'll be fine, meaning it won't collapse, not as in the fire retardant treatment has been activated and now the instructional integrity of the room is just a little bit weaker. Like no one's going to be walking on it. Like there's not going to be

hail. It won't be that type of issue. But it's going to need to be replaced. He didn't say the it's going to need to be replaced in the next X years. Just things like that. They added up, I don't know what the total dollar amount was. But there were like, all these fees that I could have negotiated away that in some places that are like, oh yeah, sure, we don't take away that. We can take away that document fee in this, whatever. But the broader lesson was. was I'm in charge of my life. I'm in charge of my money. I can take their expert advice in the consideration, but I shouldn't take it as gospel. And everyone learns that in life. And I just learned it maybe a little later than I would have hoped. Now, I think this is the case for every single

field in profession. Like one of the other ones that I think just go off of this is medical. Right. Like I hurt my foot and they misdiagnosed it in the ER. And then I looked it up. I had what I thought it was and they were like, nope, it's not, it's a different injury. And then finally, two months later, they finally correctly diagnosed it with the injury. It's called Liz Frank injury. It's a rare condition. But like even in every field, it's, here's the expert's opinion, do your own research and make sure that you agree with it. And if you're not self-educated, you're handing, you're abdicating control and you're at the mercy of someone else's opinion. And they, you know, not saying, you use a professional,

but then you make your own decision. I love that. I don't know that I would self-day. medical. Medical injuries. I'm not saying self-dagnosed medical injuries. I'm saying that it goes across like legal, accounting, all of this stuff. Like if you don't understand your situation, you cannot find the correct specialist that can go ahead and help it. Right.

And maybe this is not where I want this to go. The expert may not have all the information. Specifically, let's say your foot, like they may be able to visually see it, but if there's soft tissue and things like that that they didn't do, you know, did an x-ray. so they only see the bone. They're information that maybe you didn't convey. The things that they don't see in any expert field, it's not that they are negligent.

It's that they just didn't make the right pick based on the information they had. But in the end, you are responsible. You are the last line of defense for anything that involves you. And I just didn't know that. I just thought, oh, these people are in charge. They tell me what to do, and I do it.

And then I turn around and I'm like, oh, my car now needs like four new tires and a belt and a new engine and whatever, out of the mechanic. Like, oh, okay, maybe they don't have my best interest all of the time. Yeah. Yeah, definitely do your own research on that. To clarify, we're not saying self-diagnose your medical stuff.

I'm just saying that I always take the expert opinion. I go and find the best professional I can to help me out with these types of situations. And then I make my own decision, just like Jim is saying you should have done with the housing situation here. All right, Dr. Scott. Yeah. Okay, moving on from Dr. Scott. Jim, what is your best piece of advice for people who are just,

just starting out. Take risks and don't be afraid to mess up because like Mindy, what you said was what's the worst that could happen? You'll be working your job, whether it's for entrepreneurship or anything else. I think that one of the reasons why I was able to pursue sort of entrepreneurship when I was younger is because I took the risk when there wasn't a tremendous amount of stake. I think it'd be different if I were 38 right now, three kids and I had a job that was supporting. Everything was good. And I said, hey, I want to go quit and do it. this blogging thing, that would be a far harder choice to make with that much on the line. I think at 25, I mean, I was getting married.

We were fine. We're going to figure it out. There wasn't that much responsibility. So that's the time to take risks. So I would just say, go out, try to take risks when you can and don't, just don't be afraid. Just go for it. Yeah, that's excellent. Love it.

All right. What's your favorite joke to tell at parties? maybe for kid parties what's the difference between a crocodile and an alligator i don't know one you'll see later and one you'll see after a while nice you both laughed i saw it perfect we'll roll with it tell us where people can find out more about you that's that's the command tell us where people can find you i'd love it if they uh come check me out at wallet hacks.com strategies for getting ahead in life and financially. And just shoot me an email.

Say hello. Love to chat and meet new people. Awesome. Great site. You have some great grass contributors on there. So it's been fantastic. Wow, Scott. Did you contribute an article to Wallet Hacks?

Oh, no, no, maybe. Now he's set for life. Definitely go check out WalletHacks.com. Like we said, Jim is the great uncle of blogging and the personal finance space. So a lot of wisdom accumulated over a very long period of time. And thanks for all you do, Jim. Oh, thank you guys. This is a lot of fun.

Yes. Thank you for your time today. I know you've got a big busy day of doing nothing. I mean, being an entrepreneur. Yeah. I'm going to scribble down in my journal. Make sure you put down an hour and a half for today. An hour and a half very well spent.

Yeah, it was. Was that a good joke? That was a great joke. I don't normally laugh at them because they suck. Scott is the king of terrible jokes. I love alligator jokes, so I think that is perfect. You're bad of alligators. That one was fantastic.

Okay, Jim, thank you so much, and we will talk to you soon. All right, take care, guys. All right, that was Jim Wang from wallet hacks.com. What a great story. What great tips? What do you think of the show today, Mindy? Oh, my goodness. That whole thing about keeping a time journal, I said it in the show, and I'm going to say it again.

And that was, I've never done that before. I've never even heard that tip before. And you don't know what you don't know. And that didn't even occur to me to do, but I'm so doing it. And, you know, it didn't come up while we were discussing it. But I think the Waffles on Wednesday couple had an article about making your own spending journal. You could very easily make your own time journal using a Google document or a Google form where you just fill out, okay, this is what I did. And this is how much time I spent doing it.

And that puts it all into a spreadsheet. so you can look back at it over the month. And you can see, wow, I really do watch Netflix all the time. Or, hey, I could probably never, ever watch Netflix again and be okay. And that's just a really great way to get your finances even more fine-tuned. Yeah, I love it. And this is something that I practice regularly and have for years. And I found it to be to a great advantage for my pursuits that I've been going after

and just keeping a track of my time. Not exactly in the same format as Jim. I just list my accomplishments out and schedule out what I want to do in six periods. that I bucket throughout the day, early morning, late morning, early afternoon, late afternoon, early evening, late evening, then try to make progress or spend that time happily or help somebody else. And if I'm not doing one of those three things, I'm wasting time, which is just like wasting money, although worse. I will say, and I think that you and my husband both fall into this category a little bit, it's okay to take time for yourself. It's okay to read a book or play a video

game or, you know, whatever, take a few minutes for yourself. I don't necessarily think it's the best choice to play video games all day long, but if you've gone hardcore for a huge chunk of time, and now you're, you want to have a downtime and you choose a whole day to play video games, go nuts. It's not the best choice, you know, for your whole life. But it's okay to take time for yourself and accomplish nothing and do nothing. And that's not a waste of time. So mental downtime is definitely necessary. I love my video games. And I do not consider that a waste of time because I am happily engaged while I do that. What is a waste of time, for example, is scrolling the news for an hour while not getting out of bed in the morning or, you know, being on Facebook and getting lost for an

hour. Like those are the kinds of things that this will help cut back on. And you can deploy that to more productive and happier use. Yeah, that is true. Okay, Scott, shall we get out of here today? Let's get out of here. Okay, from episode 47 of the Bigger Pockets Money podcast. This is Mindy Jensen and Scott Trench. And we're leaving.