BiggerPockets Money Podcast - 85: From Financial Disaster to Financially Free with Jacob Wade from I Heart Budgets

Episode Date: August 12, 2019

Jacob Wade knew nothing about money growing up. Any money he made at his mall jobs was instantly blown on mall food and silly teenage expenses. His father passed away when he was 4, leaving him an inheritance of $100,000 when he turned 18. Jacob quickly spent it on a truck, customized to the hilt. He soon had nothing to show for it, and at his lowest point, had to move in with his girlfriend’s mother, because he had no money to pay rent. Enter Dave Ramsey’s Total Money Makeover. Jacob devoured this book and of course, lightbulb! Jacob did what most new-to-FI people do, he cut out everything! He started tracking his spending and preaching to everyone who would listen. Finally fed up with his constant preaching, his wife said “I don’t want to hear about this anymore - go start a website!” And I Heart Budgets was born, where Jacob could preach to his heart’s content. Jacob and his family are now on a year long road trip around America, a mini-retirement to spend time with their young children before school starts, taking advantage of their financial position. Later in the episode, Jacob drops a knowledge bomb on Mindy & Scott, sharing the existence of the “Spousal IRA,” a way for non-working spouses to contribute to an IRA. Thinking you made such a big mess of your finances that you won’t ever recover? Jacob’s story shows that it’s never too late to start, and that poor financial choices don’t have to define you. In This Episode We Cover: Jacob's money story Inherited $100k at age 18 and blew it very quickly The moment he realised to get serious about money On tracking his spending His lifestyle before and after he read Dave Ramsey's book The power of getting on a budget How he perform against his plan after tracking his spending On his first three months of budgeting How to set goals that you can actually achieve What they did after wedding and honeymoon What their lifestyle looks like living in Washington On purchasing their house Talking about their payment and savings after buying their house On being a tax professional The power of DIY How he learn DIY Made a choice to quit his job, buy an rv and hit the road What a spousal IRA is Their formal budget and money dates The importance of having a wife that is in the same page as yours Reshaping mindset and habits And SO much more! Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money Podcasts show number 85 with Jacob Wade from iHeartBudgets.net. I don't care what you tell me is important to you. I don't care what you tell me your financial situation is. Your wallet doesn't lie. Actually, what's important to you by where your money's going. And the only way to see that is to write it down. What I tell people do is just go to your credit card statements and print them all out and then just categorize each line and just make a little total. And it's like, okay, that's actually what's important to me. 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 going, everybody? I'm Scott Trench here with my co-host, Miss Minnie Jensen. How are you doing today? Scott, I'm having a great day. How are you doing today? I am doing fantastic.

Virginia, my girlfriend, has started listening to The Money Show and wanted to give you a compliment, Mindy, that she thinks that you're fantastic. Oh, that's very sweet. Thank you, Virginia. I think you're fantastic, too. She says that you're way funnier than me. Oh, she's right. I really like Virginia a lot.

All right, well, we have a great episode today. Moving on from me making fun of myself, or at least you two making fun of me. Me making fun of you. Yeah, we have a great episode today. today with Jacob from IHeart Budgets, just how budgeting kind of allowed him to, on, you know, a dollar, an hourly wage, kind of begin building a pretty sizable net worth and now travel the country and kind of live with the ultimate level of flexibility and freedom. Yeah, you know, I send a little questionnaire to people who want to be on the show to get just a

basic overview of their story. And in his answers, he said, what's remarkable about my story is that it's not remarkable. It's not, I don't have some superpower. I don't have anything like wild and crazy that happened. I just did these common sense things. And throughout the whole episode today, that's what you hear. Jacob spending less than he earns, doing what it takes to bring in more income when his day job wasn't cutting it, budgeting and keeping track of his spending and, you know, all the things that we just continually tell people to do. And over again, if you do these things, you will succeed. You know, and I will say that he made a big bet, right,

with major portion of his net worth on his home, for example. And then he saw that bet all the way through, right? You know, that put him in a position where you need to work three jobs and all that kind of stuff, but ultimately paid off in a really handsome way where he was able to leverage that to that decision to kind of help him get into the current situation of freedom that he's got right today. Yeah. Yeah. He made intentional choices that allows him to lead the life that he wants. 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

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Jacob Wade from IHeart Budgets. Welcome to the Bigger Pockets Money podcast. I'm super excited to have you today because you were one of the first people I ever met at FinCon. Mindy it was, what was that? 10 years ago, 15 years ago. I feel like it's been 40. Yeah. It seems like I've known you forever.

And you're always, I don't know what it is. we get there at the same time. You're always one of the first people I see at FinCon, except for the last six years when you haven't been there. Well, yeah, besides that. It's probably the hair. I get that hair thing going on. So, no, it's great to see you again.

I am so excited to be chatting today. I'm so excited to be back after all these years as well. So thanks for inviting me to the podcast. I want to hear your money story. I want to hear because I don't know that I've ever actually heard your money story. So tell me. Yeah. So money is a funny thing.

So I grew up not really knowing much about it. I learned how to earn it, getting a job, and just kind of went through my teens, just getting money and blowing through it. And we'll go into detail about how much money I blew through in my teens because I had some inheritance that disappeared real quickly. But money didn't become a focus for me until I got engaged. So I was 21, I think,

got engaged to my now wife of over 10 years, but got engaged and realized very quickly, in eight months, I had to figure out this budget thing because I had no idea where any of my money was going. So I decided to track it, first time ever. I'm like, okay, where am I spending my money? And I used to work at the mall. I, after my first month of tracking,

I realized I spent $600 a month on mall food by myself, somehow. Well, it is expensive, but wow, yeah, you should be making healthier choices. No. Yeah. So besides my cholesterol and everything else, I realized the money was disappearing, getting blown up. And then, and I'm sure many people have this story, if they're into money, somebody dropped a Dave Ramsey book on my lap. I read it cover to cover. I listed the audiobook and realized I had no idea what I was doing,

and I needed a plan, I needed a budget, I needed to figure it out. So fast forward, got married, and I was living on 14 bucks an hour, and my wife was able to finish out her last year of college at home, and we just lived crazy, crazy, frugal, cheap, and saved money at the same time. And then everybody started asking, so how do you do that? I know you don't make any money.

Then I started helping people at work. And then I started helping family and friends. And then I started making budgets for everybody. And then eventually my wife said, I literally do not want to hear about this ever again. Please just go write a website. So you can go talk out the whole internet and not at me anymore about my... That was it.

I love your wife. So that's what started on our budgets.net. 2012 is when you kicked it off and we just had a kid and I wanted to continue writing and learning and growing in that area. And so I've been doing that ever since. Let's go back to the inheritance event because it seems like that might have been an influential or it seems like a totally different dynamic

with money that you had maybe in your teens than you did with during this time period when you were heavily budgeting. Very much so. So yeah, when I. turned 18. So my dad passed on us four and there was just some unfortunate stuff around that and we had inheritance coming. But when I turned just before I turned 18, I also broke my neck. I got into car wreck. The car flipped six times. And every single time that car landed, it hit me on the head. And it actually like crushed my spine. So the fact that I can move my neck is kind of insane. The fact that I can walk is a miracle. But as part of that, there was a settlement. So settlement combined with some inheritance, I had 100,000, in my bank account the day I turned 18, which is not a good idea to give to any 18-year-old that

has zero money training and no clue like what that actually means. So week by week over the next two years, I unloaded $100,000 and I have pretty much nothing to show for it, which was right before I got engaged and they realized my money's all gone and I blew through it this quickly. I have no idea what to do. So yeah, I, uh, that money, did not last. It was slippery. It just disappeared. What was it spent on? Was it a portion of that medical or related? It was not medical related. Luckily, all that was covered with all the other insurance stuff. So mall food, obviously, it was the top priority. I ended up getting a truck that was about

$9,000, and then I put $4,500 into the stereo, then included a PlayStation and Xbox. I had underglow, I had subwoofers. I had black lights in the cab because that's what you do when you're 18. And then I actually bought my mom a car. So here's the one thing I did do. I paid for half my college. I could have paid for all of it, but I'm like, well, no,

normal people get student loans. So I'm going to take half of these loans out so I can quote unquote build my credit and then paid the other half off. And then about $35,000, literally have no idea. I've done in accounting for all this. And about $35,000 of it,

I have zero clue where any of that money went. So once you blow through that, maybe graduated college, when, when did you kind of feel like, hey, I got to get serious about this. And how did your lifestyle change? I think the wake-up moment is when I had to, like, move out of my apartment and back in with my girlfriend's mom because I had no money. And then at the same time, we had just gotten engaged. And so, you know, her mom was generous enough to say,

hey, live here and save money for the wedding and save money for your future. And then that was this trigger of, but I don't know how to. I don't know what to do. And so it was at that time, it was all kind of like the same month that I got the Dave Ramsey book to. And so it was just all three of those things together, moving home, needing to save, getting engaged, and then reading the Dave Ramsey book. Okay, so let's dive into that month, right? So before that month, where were you living? What was your job?

What was your situation like from a lifestyle perspective? I lived in an apartment with some buddies that were not super great influences. and I worked at Radio Shack, which was awesome. And I was selling people, batteries, and cell phones. And yeah, but I blew every penny I made. I mean, I made, I don't know, 11 bucks an hour. I mean, averaged out. There was commission if I sold, you know, a track phone to somebody.

But I basically made, made that and spent it all on rents and spent it all on food and partying and clothes and whatever. And then it was gone. And so as soon as I moved back, it was, I need to save. hundreds and hundreds a month to pay for a wedding and then everything else and the honeymoon and everything else. So that's when the budget started. That's when the Ong moment, I can't believe mall food doesn't actually taste that good. I should spend it moment happened. And then I just started tucking in a way into a savings account. And then the Dave Ramsey thing just, I just listened to

his book and it was just all common sense stuff that I probably could have articulated, but he's very motivational. And it was in a way that just struck a court and was off to the races. I didn't want to spend any more money. What year was that? It was 2007. So in 2007, you go through this moment. You read Dave Ramsey's book. Does that lead to a budget and accounting of your spend? Is that one of your first steps there that forced this? That's exactly it. So it was funny enough, my girlfriend at the time, now wife or fiancee, I guess, had just finished an accounting class and just gave me a budget template. And so I was just using Excel, popped on there and started typing in all the numbers, and then I would just go through my credit card. I had a single credit card at the time. And I would

just go through the statement. And so, okay, let me look at everything here. Let me categorize each of those things. Let me just pop them into a spreadsheet. What does that actually look like? And that's when it was like, wow, that's why money disappears because I have no discretion. So that was the first time. It was just a crude accounting spreadsheet. It's funny because I can go back to 2008, 2009, and look at some of those spreadsheets and kind of see where those dollars were going. But even though it was crude, it wasn't sophisticated in any way, it worked. It was a mirror, right? It's a financial mirror. You hold it up and say, oh, that's what I actually look like on paper. And it's sobering. Well, you know, that's a really good point. It doesn't have

to be perfect. It doesn't have to be this elaborate thing. It doesn't have to be super formal. It just has to be something that you can look at and understand. So I am not a computer person, despite working at bigger pockets, which I think is maybe not so much classified as an internet startup anymore. It's still like everything's on computers. And I don't want to do it on computers. I want to do it on a piece of paper. I literally have a spiral notebook that I get for 10 cents back to school sales.

And I have lines on it. And it just says, here's the date. Here's how much I spent. or here's where I spent it and a rough accounting of what it is, how much I've spent for the month. Actually, okay, so that's how we used to do it. I'm going to say that's how I do it now, even though I use the waffles on Wednesday. My husband used the waffles on Wednesday instructions to do like a Google questionnaire that goes into a spreadsheet and that's how he keeps track of it now. But when we started for years, we did it just on a notebook paper. All you need to do is write it

down somewhere in some way that makes sense to you. I don't have 27 years of spread. though like you do and like so many people do but that's just tracking it is so important that's the key and I think what happens is is people think they have stuff figured out in their head but your head doesn't work like a spreadsheet and your brain lies to you all the time and you spend on emotion and you you don't actually always give yourself a buffer and an excuse and this and that I mean the paper is unforgiving and it tells the truth no matter what you write that down you're going to hold that up and that's your truth. I always tell people,

I don't care what you tell me is important to you. I don't care what you tell me your financial situation is. Your wallet doesn't lie. Actually, what's important to you by where your money's going. And the only way to see that is to write it down.

What I tell people do is just go to your credit card statements and print them all out and then just categorize each line and just make a little total. And it's like, okay, that's actually what's important to me. So let me actually, if I say something else is important,

let's adjust from there. Right? Let's take the priorities. and let's take my goals and then let's cut all the other crap out. But the only way to see it is to write it down. And I like the paper and pen. I tell people to start there, period, and then put it on to digital format. Yeah, I like, you know what, I kept it right where I walked in.

I always, you know, you park your car in the same place at home every day and you walk in the same door every day. I had it right there. I couldn't not see it. I would have to willfully ignore it. And, you know, when you want to fix it, you get all excited. Like you, what did your first month look like? You read the Dave Ramsey book.

You wrote out all your stuff. You analyzed it. And then what did you do? Like you were excited to fix it, right? It became like a game to me. It was a goal. It was like, oh, okay. So from 600 bucks, maybe if I cut that down to like 200 a month and like, yeah,

that Japanese food is awesome, but it's really not that good. So let me adjust here. And then maybe you blow it or whatever. something comes up, but it doesn't matter because you've got a game plan. And all of a sudden, you're in the game, right? You're not just kind of sitting there, I'm sure a quarterback in your life. You actually get in the game and you do something about it and you get motivated to continue to do something about it. It's like this upward spiral effect of just making better decisions. So for me, yeah, it was exciting because what I find, because I've done a lot of financial

coaching with people too is it's mostly their life is just financial chaos because they've never written it down. Once you put it on paper, there's this thing that clicks that, oh, I can actually, like there's a clear path here. Like it's not all unknown. It's not all throw my hands up in the air and blame somebody else. It's, I can do this now, and then I can take this next step here, and then I can go here. So once you write it down, all of a sudden you have a place to go. You have the roadmap, right?

So it is very motivating. Okay. So I'm assuming you cut out the mall food once you figured out that $600 for not so tasty cholesterol laden. Most of it out. Yeah. I think we probably cut that. down to under under 100 bucks a month at that point. I packed some lunches. I figured out peanut butter and jelly and went from there. What are some other things you cut out are significantly reduced

or changed to help figure out? And were you, did you say you had any actual debt at this time? Just the student loan debt. So I didn't start tackling that yet. Everything was, I need to pay for this wedding and honeymoon. And so I'm saving toward that goal first. Even though like I knew that Dave Ramsey, like, get out of debt. I'm like, I'm already on this path toward honeymoon. So let me just do that. I'm going to jump in here and say, you didn't have to go on a honeymoon. Right. What I'm saying is my mindset was not, I hadn't completely changed my mindset yet. So it was still, oh, I'm on this path. I'm going to at least start saving toward that. Okay. But I think that I, I had already had a work cell phone plan and I lived at home. There wasn't a ton of other expenses. Food was just really

killing me. And I think what I did is I became more mindful about going out to parties or what that looked like and just got more conscious of just driving around for no reason like, oh, I'll meet you there, I meet you here. I got more coordinated with that. And it wasn't this huge conscious like, okay, I'm going to like become the biggest pain in the butt, you know, friend and make sure that everybody only drives to me and we never party or whatever. But it was just my day to day decisions started to flow from this place of, okay, well, is there a frugal way to do this? Is there a better way to do this? And we can keep it simple, but it's, not necessarily this huge, like I would say if I was later on my life and I had a kid and a

mortgage and a house and stuff, there would have been probably a lot of other stuff to cut. For me, it was just being more intentional with my dollars. So it's just a mindset change thing. That's something I hear over and over again, too, is being intentional with your dollars, because when you're not paying attention, they just slip through your fingers. Oh, it's only a dollar. It's only $3. It's only $10. And then those add up. If it was only $1 a month, it wouldn't be a big deal, but it's $1 a day or $1,3 times a day or whatever. Death by a thousand needles is what I call it. It's just those little breaks and all of a sudden, hey, there goes $1,000 a month.

Where did that go? So you start tracking your spending and you have all of these changes that you make. How do you perform against your plan over the next 6, 12, whatever the timeline is between then and your honeymoon? That's a great question. The first three months, you just absolutely fall on your face. You fail. And you need to expect that.

So having done this myself, and we've had life. And what happens is when you have life changes, you've got to reassess your plan and rebuild your stuff, and then you're still going to kind of fail. But if you've never done it before, the first three months are just awful. Like you feel like you can't kick the field goal. You're never going to get it in. But that's okay because what you're doing is you're actually doing something about it.

You're being intentional. So, yeah, I spent less on mall food because I was really easy because it's really hard to spend as much as I did. It took a lot of effort. I have no idea how I did that. But there were places where, like, yeah, I blew my regular grocery budget, or I drove more than an anticipated, or I didn't estimate the numbers correctly because I had no gauge for any of this stuff, right?

So I always tell people, you give it three months to even feel kind of settled. And then even then, you just got to know that life happens, and you just throw a roll with the punches. So I would say, yeah, the first three months are rough. I would say I got in a super savings mode, started selling more cell phones at Radio Shack, got motivated to actually make a little more money too, got a little more aggressive on the sales side. So the next three months after that, it was pretty good.

So we got married eight months after that whole thing. So that was like December, January, and then August we got married, and I was able to put away, it wasn't a lot, maybe five grand or whatever, but it was enough to hit the goals that I had in front of me. When before, literally it would have been, I woke up in August, oh, I still have zero dollars

in the savings account, you know. But I did something. And it didn't feel good. The first three months just doesn't feel good. Getting on that planet budget doesn't feel good because you're setting these goalposts and you're failing. And when you don't have goals, you never have to fail. So that's why people just sort of float through and never want to pay attention to it

because they don't want to realize, oh, I'm doing something wrong. But if there's never a goal post there, you're never going to fail. But if you don't fail, you're never going to learn, right? So you have to be willing to slog through those first three months. And then it just turns in a clockwork after that. And it's awesome. After the honeymoon and wedding, what did you do with your money after that? Like, I assume you continued to budget and try to increase this spread between income and expenses.

What was your kind of philosophy? Did you ever have a moment where you've changed your thought around, hey, I'm not going to save for an expense. I'm going to save to invest or build assets. Yeah, it took a while because we were college broke, man. I was making 14 an hour. My wife was still finishing her last year of college. And we moved out to where she was for college. And so we just got by. I still had to pay a little bit, but we cash flowed her last semester of college. For example, a couple grand. Since we're so broke, we got some grants and stuff. But we were able to cash flow that. And then we were able to put away three to

500 bucks a month because we wanted to make sure we had money to move back home because we knew We were moving back home. But, yeah, we were making very little and still saving money. What happened was we actually got a side job doing some babysitting. I actually did some telecommuting like an hour or two hours a week for my old job. I was almost side hustling in a way. When I look back, I guess I could call it that because we were like, okay, we can only get so far with this little income. And I want to make sure I'm investing in my 401K, for example, up to the match.

Let me just put a little away here. at least I need to see some growth because otherwise you're not super motivated if there's not a little bit of growth going on. And then we're like, okay, well, what else can we do? Well, well, there's this family needs babysitist. My wife did some babysitting. And oh, well, my job is allowing me to do a little remote research for their products or whatever. Cool. So then we would just stack all that into a savings account for our move back. And then moved back, got a better job. She got a job. And then it was, we want to get a house. So actually, this might dovetail into real estate a little more.

It was 2009 when we moved back to Washington State and, you know, the market was there. And we said, okay, well, we're both employed. We don't make great money, but we can save her whole paycheck and some of mine. And we can live very frugally and we can try to take advantage of this opportunity. The market's, you know, crashed. So what should we do here? And so we started saving. When you say very little, like I assume it was dollar hourly wages in Washington State.

that you were living off, right? Yeah, so when I came back, I went from 14 an hour when I was in Oregon. I moved up to $17 an hour back in Washington State. So it was a decent raise, but the cost of rent almost went up equivalent to what I got my raise. But she was able to go get a job out of college making 14 an hour as well, and we could put all of that away. So we lived on my 17 and we put all, I think it's what, 29K-ish gross for the year.

And we were able to, you know, after taxes put every paycheck of hers. away. Okay, so that, you know, people are going to say impossible, right? Impossible. It can't be done in Washington, not in a Pacific Northwest, right? Like, oh, man. Can you walk us through what, what was your lifestyle like? What was your budget like when you made that, that transition? Yeah. That you were able to do that. Yeah. So this is 2009. We lived in Redmond, Washington. One of the most expensive places there is, because I was contracted in Microsoft, one of the worst contracts ever because I was making 17 bucks an hour. But we lived in an apartment for $8.50 a month is a two-bedroom. We would spend about $300 a month

on food, extremely intentional meal planning cooking from scratch. We weren't like full organic at that point, but we were just keeping it simple, did what worked. We got a puppy. And so we had a dog too, but any kids? We would, no kids at that point, no. So we wanted, one of our goals is to get the house before we had kids. We just kind of had this plan in our head. So no kids and it was just us do a date night once a week but date nights were okay what's on groupon let's go grab half off appetizers do the happy hour thing bring the coupon in and we'll spend 30 bucks out the door we'll still get our apps and a couple of drinks and be happy enjoy it get back and you know Netflix or whatever so it was simple but it worked and there was I don't know I look back and I don't feel like

I was missing out on anything it was just because we were we had this huge goal in front of us of getting a house. We were so excited for that. And that goal meant more than any blowing money on really anything else. And, you know, our friends weren't, you know, they respected that, which was nice. I know a lot of times that that won't happen. And, oh, you know, why can't you come out every day for lunch and this and that? But I don't know, you get into a good routine of like, okay, we always packed her lunch. We commuted together. I'd drop her off at work and go to mine and come back and get her or I'd ride the bus. I mean, we kept it so simple. But we, We didn't feel like we missed out on any life at that point.

And if we just sort of relaxed and did what maybe our default would be, we would have spent another, we would basically probably spend her whole paycheck on just, you know, eating out more, driving two different cars, getting a better car, this or that. And if you don't mind me making this point, I think the cars is one of the biggest things that allowed us to get our house. I drove a 94 Honda Civic. She drove a 94 Honda Accord.

Both of them had 250,000 miles on them. Small oil leak and a little rattle in the tailpipe, but got us to working back. We paid cash for them less than two grand a piece, and they were insured for pennies, and it was so inexpensive. And knowing that today, the average person spends $900 a month on their car, which includes the car payment, the higher insurance, because you have to have the premium insurance when somebody else holds the note, the fuel and the maintenance. You add all this together, it's $900 a month, on average, per person.

not know that number. I'll go to the Bureau of Labor Statistics website. You will love the data there. But it blew my mind when I added all the pieces together and it hurt my soul a little bit. But if you have a goal, own your car. That's all I have to say. If you have a financial goal or you want to invest, you want anything to grow, you need to own your car. I'll say, if you have a goal, you want to own your five plus years old economy car.

Right? Because when you buy a new car, right, let's, even that's without the insurance and all that kind of stuff, even if you buy a new car cash, right? At least in Denver, the emissions and the registration with the state costs exponentially more the first year in the first couple of years of a car's life than in the out years, at least in my experience too. So I mean, all of these things expand like our exponential weighted towards the new car at the cost of a new car. And that it's a huge anchor in your journey to financial freedom and building. any wealthier. It is mind-blowing how much money disappears on cars, and they're all soft costs, depreciation and a bunch of other stuff. And people like lighten the load saying, how much can I afford per month? And they're asking the wrong question. Like, how much can I afford to lose? Because it's insane the amount of money lost. If you go to my website, I've probably written 10 articles on all the different angles of ways cars rob you of wealth, right? I tell people that car payments are keeping the middle class, middle class forever, because they are marketed at. you and they steal your dollars and you feel good about it because you're in a shiny car but it's awful.

I mean, first five years of a brand new car's life, you're going to lose, I think, about 60% of the car's value. 60%. That's a real figure. And nobody knows that because it's a silent killer. It's depreciation. You don't feel it until you go to sell, but you know, you're probably not going to sell. You're just going to trade it in and get the newer model. And then it's just this, like, if you think about investing in compounding interest, like just turn that in reverse. and like stick a 100,000 pound anchor on it and watch it fall, because that's what that's what car payments do. If I could buy any car right now, I would buy it the exact one I drive,

which is 2014 Toyota Corolla. The problem is I bought it new in 2014, so I paid the price of that depreciation rather than the next guy when I could have easily buy any of hundreds or thousands of these 2014, 2013 models that are right on the market already 60% depreciated. It's true. And it's just the facts and figures of life. Luckily, you got one of the best models ever.

I always tell people Honda, Toyota, they're going to hold their value and they're going to last longer. So you can hang on it, I think, 15 years and at least feel a little better about it. But you can hang onto it for 15 years, sir. Oh, you can hang on to it a lot longer than that, Scott. Yeah, my first car carol was a 1994 Toyota Corolla. Yes. So I briefly drove a Ford Explorer for about eight months of 2000, whatever, and then it's back to Toyota Corolla. So it might be a lifetime of Corolla's for me.

It is a lifetime of Hondas and Toyota's for us too. It just, I mean, we're doing something different. But if I had a regular commuting car, for me, it would be probably just a 10-year-old Prius, because I've seen ones that roll over 300,000 miles. If I could pick up one at 150,000 miles for like 4 grand, 50 miles of the gallon commuting, I mean, done. What are you doing different there, Jacob? What am I doing different?

So as you notice, I'm in a house right now. It's not my house. I know. I noticed you were in a house. I was very surprised to see you in a house. But my actual house is parked in the driveway of this house. We are traveling the country, living in a travel trailer. And so that's why I don't have a Honda Toyota. I have a big, huge Ford diesel truck that tows my house around the country. I will say that the diesel truck, no matter what make or model, is the truck of choice,

the fuel of choice for RVers. My parents live in an RV and my dad, when they went and bought their RV. Oh, did you buy your RV new? We bought our RV used and we bought the truck used and we own them both. Okay. My parents, because they were going to, like they were going to live there, they've been in this trailer for 12 years, 13 years. Wow. 12 years. I don't know. A long time. And they went and bought their truck new and they bought their RV new and they're going to drive it into the ground, both of them, but still. Like you can get a one year old used RV. The same depreciation on vehicles also applies to RVs even more so.

Uh-huh. Yes. Because RVs are recreational vehicles and they're not built as quality or reliable as a regular vehicle even. And so they go down real quickly. So we were able to get a 2011 model last year and we picked it up I think for 15 grand and knew out the door it was like 45 or 50. And so you're just

what, six, seven years in, and there's that 60% or more, right? It's just dropped like a tank. And then same with our truck. We got a classic truck. It's a 2004-F250, but it has a very popular, rare kind of combo model of six-speed, and it's a 7.3 power-strict diesel. I know that doesn't matter to most people, but if anybody knows what that motor is, they know what that motor is. So we pick that out for 14K, but it's one of those cars that it's actually appreciating, which is funny. Wait, you're all in on your housing and driving costs for 30,000? Yeah. Scott, what did you pay for your Honda Accord brand new?

My Carolla, yeah. Corolla? 17, 18. Oh, okay. I thought it was more expensive. I haven't bought a new car in a long time, but the two cars that I drive right now are both purchased new. The only two cars I've ever bought new.

This is a really, so in the famous four, we ask, what's your biggest money mistake? I would say, what, 40% of answers is I bought a new car. car? Yeah, a good chunk of the answers seem to be that. It's true. And I've never bought a new car, obviously very passionate about not buying new vehicles. And obviously my biggest money mistake is blowing through $100,000. And then looking back at the opportunity cost every couple of years, do a little calculator on investments or whatever, and it makes my soul hurt. But yeah, the car thing, it makes sense. It follows the data. Because again, if you look at the Bureau of Labor

statistics that how many people have car loans and how many people are upside down on those car loans and everything else, that totally makes sense. Okay, well, we just spoiled the fact that you sold your house. Let's talk about buying your house. You bought it at the bottom of the market? It was the bottom-ish, yeah. So we bought in 2010. So we saved, and we wanted to get in real quick.

So we just did the FHA. We saved the bare minimum, three and a half percent. I love that this is bigger pockets. And I won't get berated for that if this was Dave Ramsey's podcast, you know, the fish shaking and all that stuff would happen. But yeah, we just saved a bare minimum. I think it was 15 grand or something real cheap. And since we're in the Seattle market, we got three bedroom, two bathroom house,

but it was still $329,000 because Seattle area. But that was inexpensive because it had just dropped. And so we got that one. For us, it was a turnkey house, meaning it wasn't a fixer-up. It actually wasn't initially like a big investment thing for us. It was just we really want to get into this house. And we just feel like the market's at a good place for us to do that. and I just kind of started looking at the cycles.

I'm like, okay, let's, if we can get in, let's make this work. Now, this is with me, I think at that point, I was only making like 20 bucks an hour. Michelle was still at 14 or 15. So it required our combined income. I didn't make enough standalone to get that house, but we just felt very passionately about getting in. And so we picked that up.

How big a down payment were you able to make based because of your savings? Yeah, so we only saved for a year. So we had 15K put away. and we just put that in. So in that year when you were saving up with all this, were you also taking the match in your 401k and otherwise investing?

Or was that the total of all of your... Yeah, I never pass up free money. I would sell people more than anything else don't ever miss that free money match. So we did the match. I think it was like 50% match on 6% of your income or something like that. So we were both taking that.

And then once she ended up leaving that job, you know, we rolled them over and all that stuff. But yes, we were still doing the match. And then we saved about, I guess it was about $1,500 a month after taxes and everything else on hers for about, I think it was only 10 months. I mean, we went quick. So it was. That's great. I think it was even less than a year.

But we saved $1,500 a month for 10 months, had $15K. And then we had our offer real quick after that. So what's next? So were you still able to, after you bought the house, what was your payment? and then how was your ability to save influence after that purchase? Yeah, so we made ourselves house poor. It was a conscious choice, but our payment was like $2,200 a month PITI, all of it in. But since it was FHA, less than 20% down, we had mortgage insurance, which killed me.

But I'm like, we got to get in. It was a 3.25% rate. It was really good back then. And so we got in. And then our savings was very slow. at that point. I mean, we were maybe popping away 500 a month after our 401K investments. It was not much at all. I mean, we knew what we were getting into. I think that the big kind of killer happened when one of our huge plans is always, you know, we get the house.

And then if we get pregnant, like, we knew we wanted her at home and we were really excited about that. But I thought I would have like a little more time to like build my career up. And we didn't. So I got pregnant and she was at home and I was still at, 20 bucks an hour. So we were in a tough spot. I had to dial up some income really quick. Hence, starting a website and then I also became a tax professional on the side. So I had three jobs at one point to make it work. Can we walk through, let's walk through the tax professional one first. How did you go about setting that as a side hustle for yourself? Totally. Yeah. It was not on my Raider at all. We were just in a small group of church and the guy owned a CPA firm and all three of

his daughters were CPAs, which was amazing. And then another guy in the group. So it seemed like everybody worked for him and he's like, hey, if you go get your enrolled agent license, you don't have to go through the whole CPA thing, but the enroll agent thing is still recognized by the IRS as a full on tax professional, you know, license to practice in all 50 states. You go get that. You can come work for me. So it took me a year, but I studied and passed the huge three government exams, and I became what's called an enrolled agent, a little known tax professional, but on the exact same level as a CPA or a tax attorney. And is this a lucrative option? Is this full, full time year round? Was it seasonal? It was a seasonal only. And I, you know, just get a percentage

of the clients that I picked up. And he said, here you go. Here's 30 or 40 clients. Go for it. And I just dove in, to be honest, probably was way in over my head. But the thing that was crazy is I did that. I was running the website on the side. So I had 40 hours a week at my regular job, running the website. And then I was putting in sometimes in tax season from February to April, I was putting in another 20 to 30 hours. It's taxes.

So I was doing about 80-hour weeks, which was a little much. And so between these things, were you able to stay afloat? Or was that, were you able to actually begin saving again an aggressive way? mostly barely stay afloat until I got a few promotions at work. But it was just like do or die time. It was like, okay, we knew what we got into. Our house was already starting to appreciate very quickly because the market was recovering, you know, 12, 13, 14.

It was start and we were like, okay, we know that long term, this is the right decision, but I've got to just grind through this thing. So then I was able to get a promotion at work getting up to about 60K. And then I made a couple more moves and just started to jump that up like every year. I would apply for a different job and just kind of move around. I ended up getting, I think, six promotions and two raises over eight years, something like that, or six years. So I was just super, super aggressive because I knew what I needed to do.

And I just, I really wanted to not have to work 80 hours a week. So it was a long, hard road. But then we came out, you know, the other side looking at it like, okay. And we refied in there. And our payment was down to about 1,800 a month. And so we had a little breathing room there. And then once I started making more than we needed, and then all of a sudden, our house had appreciated over 100K at that point.

And it was just, you know, but it was three years of just grind. A couple of things. First of all, I want to note that in a lot of these stories that we hear, the most successful people are the ones who do whatever it takes to get their bills paid. They take the second job. They take the unglamorous job. Patrice Washington's husband worked at top. They went from owning their own real estate company. Do you remember that, Scott? Real estate company

where they were selling like millions of dollars a year. And when you sell millions of dollars as a real estate agent, you're making a lot of money, like three to five percent, depending on, man, let's call it three percent. But still, like three percent of a million dollars, I'll take that. And then when, you know, the market crashed, she actually went and, or he went and took a job as a Taco Bell manager. I'm not knocking Taco Bell managers, but they make slightly less than the real estate agent who's selling millions of dollars in real estate every year. And instead of just saying, oh, that's beneath me, all the people that are successful don't have that attitude. They're like, I'm going to do whatever it takes. If I have to do this, I'm going to do this. You went and got a CPA job. Do you have a registered agent? Do you have a CPA background or a finance background? Nothing. Zero. Zip. I just like talking about money. And then eventually I kind of did a little research online about taxes. And then I just went and studied. I got the huge book and I just like read through the tax book. And like, I'm like, all right, let's do this. And so I zero experience, zero knowledge, no background whatsoever. But I was passionate about it. It was another way I could help people with money because I like doing that. And I needed a job. So I just did it. Yeah. That's awesome. Now you said your house appreciated. And you refied once.

Did you pull money out of that? No, we didn't pull any money out, but we did extend the term. So we didn't like, say we were, I think we were three years in at that point. We didn't refite as a 27 year. We went back to a 30. I just needed a little breathing room that was just at that crunch time where I think at that point, number two was on the way, number two, kiddo. And it was just like, I need to breathe a little bit.

So we were at like 22, 50 a month for the mortgage me went down to about 1798 a month. And so I was like, okay, I can breathe just a little bit. Even though I know I extended this loan, I had always planned on paying it off early or what eventually happened, selling. But, yeah, so we were refied and we got our rate to, I want to call it 4%, but we not only lowered our payment, but we got rid of that mortgage insurance because it had appreciated. And so I hated paying mortgage insurance because I knew it was going absolutely nowhere. It was still right offable, but because I was a tax pro, there was a rumor that the mortgage insurance right on. was going away, so I freaked out. And I just wanted forward progress only. So I got rid of that.

You said this was a three-year slog, basically. And you came out the other side and then back into a position to be able to significantly positively cash flow, I imagine. What are some of the next steps there? When did you kind of begin building up an asset base with investments in those types of things? Is that the next part of the journey here? Yeah. So through the entire thing, I did not stop investing in my 401k. I was never, ever going to pass up that free cash. So even if we couldn't breathe that month, I'm still putting my 6%

away. I don't care, I need that. And so long term, especially as the market was recovering, that money like grew pretty quickly, which was nice. And 6% of what I was making wasn't a ton, but it was just something. So I never stopped doing that. I would say, yeah, after the, I think I did

a total of three years of taxes and then I got a promotion to where I could more than cover our bills. I think I'd still stayed on for one more year, but I only did a couple of clients. So it kind of like offloaded at that point. But it was pretty quickly after that. So it was, there was a couple of things. I started making more money than we needed. And we had positive cash flow. And so the first thing we did was actually start to remodels and stuff because it was just, it was an 1989 home and it looked like a 1989 home. And they'd never done anything with it. So the first thing we did is remout of the whole kitchen ourselves.

And this is a big deal for me is that DIY. not only, you know, don't buy your cars, but then learn some skills, being able to do stuff yourself, whether it's home improvements or car maintenance or whatever, just being able to do something and not pay a professional labor can make you more confident in owning something like properties or a car or whatever, but it can also save you a ridiculous amount of money. I mean, thousands of thousands of thousands a year. So we remodel our kitchen for $5,000. Granite countertops, brandy stainless fridge that we picked up for $14. And I just replaced a, I know, picked it for free and I replaced a $14 part and fixed it and it's $2,000 fridge.

We had cabinets that were left over in our garage that we just measured out and were able to rehang. And my wife's brother came and he made this beautiful kitchen also. This is his house. But he helped us hang our cabinets because he was a cabinet guy, you know, Amazon for all the appliances, parts and things. We got free, free stainless microwave. I mean, we just scrapped it together and it turned out really, really, really nice. And our real estate agent said it looked like a 25K upgrade. And we did it for $5,000 just because we didn't want to, you know, just improve it to improve it.

We wanted equity. We wanted sweat equity out of the thing. Okay. This is my area of expertise here is the DIY remodel. You got all of these free appliances and you lived in Redmond, Washington, which is a very nice neighborhood. Microsoft is there. Isn't Kirkland there? Costco there? Like, there's a bunch of stuff there. I realized I wasn't clear. We bought just north of Kirkland in Botha, Washington. But still, same thing. It's right at the top of the 405, which is where all the Microsoft's people hang out.

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I think it was one of those things where, and this is how all our DIY stuff goes, something broke. And my wife's like, well, let's just get a new fridge. Maybe the fridge water thing didn't work. Something small or kind of fixed apart. She's like, well, we'll just get a different fridge. So then we found this really cheap fridge. And they were like, well, if we go pick up this thing for free,

my wife's like, well, we might as well just get new counters while we're at. And then all of a sudden, it just so well, we're not only in the whole kitchen. And so, no, it was piece. by piece and we just, you know, Craig's list and there's, there's, I don't know if anybody's heard of the Buy Nothing groups on Facebook, but they are pure magic. If you look up Buy Nothing and then just your city area, there are people literally just giving away stuff all the time. Like, I just need to get rid of this. And so we've clothed our kids. We've gotten almost

all of our furniture. We've gotten appliances. We've gotten all their toys. I mean, tens of thousands of dollars of free stuff on there just because people don't need it anymore. And then we've gotten rid of most of our stuff too through it. So we used Facebook groups for that. But no, it was not a pre-planned thing until the fridge. And then we're like, well, we have these old cabinets. We got tape measure out. And we're like, well, maybe if we stain that. And it just started to come together.

Yeah, we planned hours out. But also when we bought our house, it had a dishwasher. And that was it. There was no refrigerator, no stove, no microwave, no. Because all that stuff worked. And it was a foreclosure. So when something works, they take it with them, allegedly. Or I guess that's kind of a broad comment.

But when you buy a foreclosure, you don't really. expect to find a lot of appliances in there. The only thing that was left was this crappy old dishwasher that didn't really work. It sounded like it was powered by a jet engine. So that was really nice. Okay, so you did your DIY. How did you learn how to do stuff in your kitchen? You didn't come from a rehabbing background.

No, I've never like, I mean, same thing with working on cars or anything else. Just go to YouTube.com. You search what you need and you just copy what they do on video. I mean, absolutely everything in my entire life, DIY, I did that. And now I will say, like, my wife's brother also hung cabinets on the side. So he knew, he kind of showed me that part. But everything else, you know, installing dishwasher. I mean, all the maintenance I've ever done in my house for the eight years we owned it was all YouTube.com.

It is, there is an unlimited wealth of knowledge online. Obviously, bigger pockets is one of those places. but you can do anything. Just like use a little discretion. If it's Cletus with his bud light and he's rewiring the house, like maybe not watch that video. But like if you got somebody that's like, here's a step by step.

And usually it's, you know, one of those first hits up there. Just Google it. Just hop on YouTube and go take care of business. You do not need to spend 300 bucks an hour on somebody to fix stuff. I fix my air conditioner. I replace my water heater. I've swapped toilets out. We did the floor.

and the doors and everything else. We did the whole kitchen. We hung cabinets and I repaired the dishwasher. And I mean, everything from YouTube.com. I'm not a craft and by trade or any of that stuff. Yep. I learned everything from YouTube or before YouTube. I learned from books.

You just go to the library and there's a ton of books. But yeah, no, that's a really great tip because YouTube when you, I mean, just even like little things like how to paint your wall. You watch a couple of different videos and you're like, oh, that makes so much sense. or, oh, that looks dumb, I'm not going to do that. But, you know, just watch a few videos and you will see some amazing tips. Like, you don't have to reinvent the wheel.

Don't, like, figure it out. Just watch a video. We actually got our, we have a stackable washer and dryer, and they're really, really nice. They're LG and they're the red ones. And I'm not paying two or $3,000 for a washer and dryer. That's ridiculous. I already have one that works, but it's a long story. Anyway, I had to get new ones.

And we asked them, does it work? Yeah, the last time we used it, it worked. That is code for no, it doesn't work. Just FYI. If anybody ever asks somebody, oh, the last time we used it, it worked fine. That means no, one of them is broken. In our case, it was the dryer. And my husband is a DIY guy.

He's like, I'm going to figure this out myself. He called somebody and they're like, oh, it sounds like it's the thermister. You know, I can come out there and check it out for $200. And I love my husband, but he does not want to spend $200 on anything. So he is certainly not going to spend it on some guy to come out and replace the thermister when he can just rip the whole thing apart. So he looked on YouTube, the exact make and model number figured out, watch the videos on how to take it apart. Like there's a thousand screws in a dryer, just FYI. Put them all on a piece of tape so you don't lose them.

But he's like, oh, now I know how to take apart a dryer. So it's kind of fun to figure out all these different things. And here's the thing about DIY. You're doing multiple things. It's not just saving labor from a professional coming out. It's making you a more competent owner of whatever that thing is. Because now you know exactly how it works. And so if you do need a professional come out, you can speak intelligently about that thing.

You're educating yourself. So now you just add another tool to your belt, right? Your skill set, especially as somebody that, you know, if you're talking about rehabbing a home or something like that, the more and more you do yourself, the more you can feel confident hiring out a contractor, knowing what needs to be done and what it's worth. and you just become more in control, right? And so now all of a sudden you can build a business around something that you're very competent about.

So DIY, I say just do it, even if you don't want to, just for the learning experience and the tool on your tool belt and then hire it out from now on, that's fine. But it is such a huge deal. I didn't know anything. I didn't know how to check my oil when I first met my wife. Like she knew way more about cars than I did. And then I got to the point where I swapped out a whole engine

and I can troubleshoot whatever it is, and I've saved us a ridiculous amount of money, and I feel confident in driving around, because if we get, I live on the road now, if we get stuck, I'm very confident in knowing how cars work inside and out, so I don't freak out and spend $10,000 when I need to type of thing. So it is multiple layers of value doing something yourself.

Yeah, I second that wholeheartedly. And, you know, it's not just DIY stuff on your house that you can figure out on YouTube. You can figure out how to fix any part. I mean, that's how. My husband is the one that gets under the car and does all that stuff because I don't want to. And I don't know how. I shouldn't say that because you're here encouraging everybody to learn.

I did change the brakes. I was very pleased with it myself for changing the brakes on my car once. And now you know how to. And now I know how to. And if you hear a squeak, you're like, okay, well, I know it needs to be done. Well, I wouldn't go that. You wouldn't. But it's confidence building.

right? I would say the more you do yourself, the more confident you become as an owner of any asset, period. Yeah, I definitely felt awesome after changing those brakes. But, you know, we had to change the light, like the light bulb in the car. And it was, it's this weird thing. You can't just look at it and figure it out. Cars today, you're not going to be able to be like, oh, I just pull this out and put it back in. No, there's like clips and weird screws and, you know, but you Google it. You look it up on YouTube. How do I change the light in a 1997 Ford Explorer? Oh, here's step by step because it's really, really awesome. And if that doesn't work, you can go to the, get the, is it Chilton? The Chilton books at the library. I mean, there's a lot of opportunity to learn how to fix anything.

Well, and let's just talk about education, period, right? I mean, that's why bigger pockets exists because there was not a great education tool telling the truth about real estate, right? And that's why I always recommend everybody. I'm like, I want to get a real estate. I'm like, so go here and read for a while and then come back and let's chat about it. But education is such a powerful tool and books used to be the way to go because you get somebody's 20 years of experience boiled down into a book. They want the best to come out. Now, you can just pop online and hear from somebody that's been doing this for 30 years really quickly, right? So there's, education is at our fingertips and we shouldn't skip over that. I don't know how. I don't,

I think I heard a quote recently that was like ignorance is a choice now because of the internet. I love that. I mean, it is, period. So I'm okay if you make an excuse, just admit that it's an excuse because ignorance is a choice. Wow. Yeah, ignorance is a choice. You are, I just heard that the other day, you're walking around with this computer in your pocket all the time. I mean, who leaves their house without their phone?

Nobody, right? My kids who are very angry that they don't have a phone yet. But they are like the only people on the planet who don't. According to them, they are the only people on the planet who don't have the phone. And that'll stay that way. Sorry, girls. But you have this device where you can literally look up anything. You don't have to be connected to, you know, a Wi-Fi system.

You could do it over the air. You can still get to Google all the time. You have no excuse for not knowing something. Yeah, period. It's right there. Every now and then, like, we'll be trying to figure something out as a group. And then I'm like, oh, man, I'll pull my phone. I'll be like, there's no way to find out the answer to this, huh?

I'll just shake my phone in their face. I wish we had a way to access unlimited information. Oh, wait a minute. There it is. I say that same thing. Oh, if only there was a way to look up this answer. There's powerful. There's a website called, like, let me Google that for you, which is a pretty funny

free website. So I've gone to my, if there's a few, I think there's some posts on my blog that I actually use that. I use the let me Google that for you and it sends it like, man, I wish I knew how to. Okay, well, here, here's the link, click the link and it'll literally just tell them exactly how to search the thing they're searching for. So how did you parlay this cash flow and DIY construction, all that kind of stuff into the position that you're in now? Are you able to travel the country and live on the road and that sort of thing? Absolutely. Yeah. So we, again, we bought in 2010. We ended up selling in 2018. So we had, we started

putting cash away. I continued to apply for promotions. And we made much more than enough. And we would just start to put that money away. We were putting away a good 30 to 40% of her income toward the end the last couple of years. But we also, oh, go ahead. When you say putting away, do you mean stock buying in a bank account, paying down the mortgage? What does that look like? Yeah, so I ended up opening Roth IRAs as well. So we just did the 401Ks to the match. And then my wife wasn't home, so it was just mine. And then we had rolled over a few, because I got promoted a few times to different companies,

I rolled over a few 401Ks into a traditional IRA. And then we opened Roth IRAs as well. So I started putting some away from me, some under my wife's name, as they call it a spousal IRA. So if your spouse doesn't work, you can still open an IRA for them. Whoa, whoa. Just cash. Wait, I didn't work for eight years as a stay-at-home mom, and I didn't contribute to my Roth IRA for eight years because I was a stay-at-home mom with no income. Tell me about this spousal thing.

Yeah, so it's basically if you're a stay-at-home mom, there's an allowance in the IRA tax code that says you can contribute to a spouse's IRA, and it's called a spousal IRA. Whether it's Roth or traditional, you can put away because of that exact reason, right? Stay-at-home mom, no earned income, but they still want to be saying. saving for retirement. So you're allowed to contribute that, you know, I think this year it's going to be $6,000 into theirs, $6,000 into yours and effectively double your tax advantage investment. Oh my, where were you 12 years ago? I needed you 12 years ago. And so this is why it's important. You can't go back. That's a killer. I'm sorry. I know. I know that really stinks. So, okay, well, that's good though. Anybody who is in a situation where your spouse doesn't work,

you can still contribute. And the $6,000 that you're talking about is the max contribution that you can make to your IRA. So it's not like there's a discount for the spouse IRA. Wow. I love these episodes where I learned something like this. And then I get a lot of emails after it airs. People will send me a note. I didn't know that I'm going to max it out. My husband actually is retired, but he has income. So it doesn't count. But once he doesn't have any income, we can contribute to his. Oh, this is awesome. Okay. I'm sorry. Continue. Yes. So as long as there is earned income from one spouse, then you can contribute that amount. So I don't have the tax code in front of me right now, and it's been a little bit. But that's how we, so we opened one for my wife, one for me. We just

started to contribute to that. And again, the great thing about the Roth IRA is anything you put in, you can take out because it's post-tax. It's not one of those like comes out of your paycheck things. It's after tax. So it's almost like a double savings account or emergency fund as well. And then we just started stacking like a money market account as well, because we knew our goal originally was to just buy a bigger, better, more house. We were just going to go into a larger space because, oh, well, now we, you know, we have three kids and we've only got three bedrooms. And I started working from home.

So, like, the office situation was a little tough. And so we started looking for bigger, better, more. And we actually looked for about a year and a half. And nothing fit the bill. And we realized we had some, we needed to do something different. I think the big part for me was I was on a plane every week. I traveled a ton. wasn't home.

And we'd actually read this blog about just a family. Their daughters were almost teenagers. And he's like, I want to go on a year road trip before they became teenagers and disappear. Right? So we would actually, our date nights instead of Netflix, we'd sit down with a glass of of wine and we would read through these people's adventures. Every week they'd do a post.

Hey, we're on an RV and we went here. And they just bought a little classy motorhome and traveled the country for 52 weeks. And he did his graphic design work on the side. and then his wife would just run half marathons all over the country, and then they would just explore. It was just cool. And we got really excited about it, and we're like, that would be cool someday.

And then we just forgot about it. And then during this chaos of 26, 17, when I was traveling a lot, and we had a bunch of other stuff going on, it kind of came to a head. And one day, I don't think my wife minds if I tell this, because I've already written it on my blog, but she was in the shower,

and I just kicked open the door to the bathroom, and I said, we're doing it. one year, we're out of here. We're going to hit the road. And then I shut the door and walked away. And she was like, what? Sorry, what? And so that was late December of 2017.

And then we just, we chatted about it. And I said, what if we just sold everything and hit the road? And all she said was, okay. And that was it. And then if you go back to the story of our house growing and everything else, we had grown up, I think we were out about 200K equity at that point. because the market had recovered so aggressively in the Seattle area, the Amazon effect and Google and Microsoft and all the tech companies,

just the prices were driven through the roof. And we said, let's strike now. Our kids are young enough, right? So we've got a 7, 5, and 2 year old right now. When we left, they were 6, 4, and 2, or 1, actually. And we had the equity. They were already homeschooling. We were like, let's just do this thing.

And I was like, well, you know, we're going to blow through savings. And I won't have any income. And she's like, we need this. Like that doesn't matter because we just need, you know, to get away. And so I ran all the numbers and I was okay, blowing it. We're going to go through about 40% of our equity, maybe about 45% by the time we're done, including the truck and everything else. And so we'll still have a chunk of savings when we get back.

But it has been the most incredibly freeing thing we've ever done. Yeah, we're never going to go back to normal again. So it'll be, we'll see what happens. But to answer your question about walking through the process, is we, the DIY we did was the kitchen and then the whole upstairs. We did all the floors, the trim, the doors. We painted the entire house, the whole thing, like two weeks before we listed it. And then we did a bunch of DIY in the backyard.

We hand laid a brick patio, a couple of brick patios and a pergola, and we did a new fence and all this stuff. But that was just all over the years. And we made sure that any time we put money into the house, we knew it was an equity building thing. I would always go online and just say, okay, is this something that actually makes its money back if we're going to make this improvement? We didn't do the bathrooms because the time and stuff that we would need to do those things,

we wouldn't get enough back for it to matter because we just need to get the thing listed at that point. But yeah, and we were able to grow the thing to about, like I said, about 200K in equity. It was all said and done, minus some fees, of course. Yeah. Well, that's awesome. Okay, number one, let's go back to you kicking in the door on your wife. You are so lucky to have such a wonderful wife. who is on the same page as you.

And that's, you know, as a wonderful wife who was on the same page as her husband, who should count himself lucky, that's huge. Like money is the number one thing that people fight, the couples fight about. And to have somebody on the same page is just amazing. And you should go tell her how wonderful I think she is and how wonderful you think she is. Oh, well, thank you. I will. That is huge.

And if anybody's listening right now and they have, they're dating and they're not on the same page, take a step back and really, really, really look at your relationship. because this is presumably the person you are going to be spending the rest of your life with. How many fights do you want to have? Scott, you are not married. If you in Virginia fought every minute of every day, I would tell you, stop dating her. Do you guys fight every minute of every day? No. No. Because you have somebody that you get along with. I never understood these people who date these, just continue to date people that they fight with all the time.

Yeah, you're right. And it's, and it's, well, I'm going to just, jump on that train because money affects everything. Period. Money is a tool. Money's not this thing that's inherently good or evil, but it is a tool that reveals your priorities and you put it where it's important to you. And if you can't be on the same page as far as priorities, goals and those core things, you're going to make 10 to 15 decisions a day that is going to great at that other person because underlying it is, why did you spend money on that?

Because you know this is important to me. Why would you do that? And it's just, it will never go away. And like you said, is the number one reason all those fights continue to come up and get worse and worse. So I always tell people, I actually just wrote about this about getting your spouse on board with a budget. But even before they're a spouse, just kind of figuring out priorities and goals in life is sit back, like I say, crack a bottle of wine, make it a good wine, get a peanut noir from Oregon, something like that. And sit down and just talk about, look, those big, huge, impossible dreams and say, hey, what gets you up in the morning?

Like, what's awesome about life that you want to go for? And then you start to align those things and all of a sudden you guys are on the same trajectory. You're heading toward the same destination. And then the roadmap is just, okay, how do we get there? Right? You know, your budget is kind of like your GPS. It tells you how to get to the place you're trying to go to.

But if you don't know, if you're both going to different directions, you know, you're going to end up in Boston. They're going to end up in Florida. That's not going to work, right? Because the whole time you're going to be pulling at each other. No, come to Boston. No, go to Florida. I'll stop with the metaphor now. But basically, you know what I mean, right? You've got to kind of make

sure you're heading in the same direction first. And then the budget just kind of reveals, okay, here's how we get there. So budgets can be fun and empowering. And for my wife and I, it was a huge bonding thing because it was, okay, now it's settled. It's on paper. Now every decision we make about money throughout the day, we're both on the exact same page. So I don't have to question her. She doesn't have to question me. We don't have to fight about it. It just is. And so then when we talk about money, it's, okay, well, we both know a bulk of where we're going, what we want to do. Can we pivot here?

Can we pivot there? Can we adjust here? Cool. Let's compromise. Let's work that out. But yeah, if you're not on the same page about money, it's going to be a huge burden. Yeah. Yeah.

Everyone's going to have disagreements. But it's important to have to be like on the same page about there's exactly this, the big things that matter to you guys. And then, yes, like you just mentioned, all those little decisions. Like, that's it. me and Virginia, all of the little decisions that we make tend to be in the same area and overlap with the values that we share around life. Exactly. That's it. Yeah. And so, yeah, my wife was on board. I'll say

she's way more adventurous than me. She's got the gypsy spirit, the heart of a hippie. She just loves the open road. And so to this, this was sort of her like, she probably would have said yes, five years earlier. She was ready to go, but it just kind of came to this head. And then again, the equity and the fact that we were already homeschooling and everything else just kind of lined up. I think the biggest thing for me, I was worried about career suicide. I was just like, I'm going to plummet everything I've built over the last 15 years.

And so that was, I think, the scariest part for me was actually quitting my job. Okay, so what did that look like? Because my husband also had a very difficult time quitting his job. And we actually had hit our financial independence number. Then we doubled it. And then he still, oh, wait, did we double it before he? It's been so long. I don't even remember.

I think we doubled it. And then he still couldn't quit. It was so difficult for him. How did you overcome that hump? Yeah. It was kind of weird because for me, yeah, we're not like long-term FI in any way. And so we, you know, I've got to earn some income. And I'll be building the business to do that.

but it was one of those things where I knew that we had the equity, we already had savings so that we could transition out. It's hard to say. I think it was just I psyched myself into it. Basically, it was like, I'm doing this thing. And mentally, I've already lined up all the boxes in a row to get there, and I just got to say the words. And so I think I mentally quit my job, you know,

maybe a week before I actually did it. And so I was almost, I was trying to live as if I, I had already done it. Not that I like stopped working, but it just, I had already like, okay, I'm already, this is my life. There's no ifs, ands, or buts. I've already, like, bought the RV. I've already, like, we sold everything we owned and we're getting the house on the market. So I had already, I did all the pre-work of literally the only thing is left that's left is to put in my notice. So that probably made it easier. The fact that, like, I was sitting in a house that was on the market and our house was basically empty.

I think that helped a lot. So then it was like, there's no going back. I'm not going to rebuy my stuff back from everybody on Craigslist, you know, and my house is listed and we've got an agent involved. They were under, you know, under obligation to that. So that pushed me over the edge. It probably would have been harder if I did not have those things in place. But I gave three weeks notice and they were like, please don't.

And I was like, okay, this is already decided. Let me know how I can help. And then I just did a kickbut job of helping them transition as much as possible. I wrote in everything I know, put every client in a spreadsheet and said, here's all the details about every deal, that kind of thing. So it wasn't that hard. I think it was because I forced myself into it. I shoved myself over the edge by getting all those other things in place.

And how long is your road trip? Do you have a set about a time? That's a fun question. It's a question we get a lot now that we're on the road. and when we come back to places where people we know, the original plan was to leave on August 17th, or I leave on August 2nd, which was our 10-year anniversary. We missed it by two weeks.

We ended up leaving on the 17th. But then we wanted to get back on August 17th to a full year. I wanted to hit the reset button. I wanted to just hang out with my kids way more, right? I just wanted to be present 24-7 for a full year with my family while we explore the country in this crazy road trip. And so we are 10 months in, and August 17th is our end dates.

My wife signed up for a trathlon that date as part of her personal growth. She's running in a triathlon because she's amazing like that. So that'll be our like culmination. And then we're probably just going to keep going because it's changed everything about our perspective on life. It's hard to explain. But we're probably not going to stop after the one year mark. Do you have any income coming in right now?

No. No. I have some. So my website is, I'm obviously again, I'm passionate about helping people with money. So I started doing a little bit of coaching, paid for financial coaching and getting people on a plan. As the website grows, right, there's ad revenue and some other opportunities there and, you know, how websites work. But I want to build that into a full-time business. So I'm probably going to do some freelance work as well.

So I used to do writing for other websites. And again, just I could talk about money forever and ever and ever and ever. So I'll probably start by ramping up that and then hopefully grow the coaching business and then everything that goes with that. I'm still passionate about it. I mean, I quit doing it for three years and I jumped right back in a couple months ago and I still love it. So the income is we're kind of moving around so much now. It's hard to really focus.

We moved on average every four to eight. for a whole year. So it has been kind of insane. But yes, starting on August 18th, the day after our one year, I'm 50 hours a week into the business. And we'll see if we can float it from there. If it all goes to crap, I'll get a job later, but I really don't want to. Okay. Well, Jacob, this has been super awesome. Thank you so much for sharing your story with us. We've been running pretty late because it's just a really fascinating story. But we have one more section left over. We have the famous four. Are you ready? These are the same four questions and one command that we ask of all of our guests.

Number one, what is your favorite finance book? I'm going to get hate for it. I don't care. I still love the total money makeover by Dave Ramsey. It's just effective. The dude's funny. Common sense. It's simple and it's really easy to understand. So I do like that book. You're not going to get hate for it. That's a great book. Yeah, no hate at all for that book. All right. It's fantastic. What's your biggest, well, we already went over this.

What is the biggest money mistake you see people make when they're starting out in budgeting? Well, I think that the problem is, is people, it's twofold. They think that a budget just means they can't have fun anymore. So they just revile it. They hate the word budget. It's like a swear word. When budgets actually equal freedom, right?

All of a sudden, you get to tell your money where to go instead. of just blowing it on stuff that doesn't matter. And then the other thing is, is they don't stick with it because they fail. But like I said, you're going to fail for the first three to four months anyway. So embrace the failure, I think is going to be your key to that. I love that. The act of re-shaping your life and spending, for me also, as you know, you guys mentioned this earlier, but for me also, it was just like a several-month, maybe almost a year-long,

intentional grind to get to that. to get that end output of the savings level that I wanted. So certainly not an overnight thing. Like you can just turn the switch and it's gone. No, I mean, you're reshaping your mindset and your habits and that takes time. Growth hurts, right? You've got to prune off the old dead stuff and let the new stuff grow. So, yeah, give it time.

What is your best piece of advice for people who are just starting out? And that's the next question, but that kind of morphs, the answer to the other one kind of morphs into this one. Yeah, don't get a car payment. If you have a car payment, get out of it as fast as possible. Sell the car. I don't care what you have to do. Run from it. It is the number one like wealth killer.

So don't stay away from car payments forever. Yeah, cannot agree more. Any means possible. Love it. All right. What is your favorite joke to tell at parties? So today my son asked, can I have a bookmark? And I burst into tears.

eight years old and he still doesn't know my name is Jacob. Ah, nice. I love it. That is horrible. That's awful. That I know, I can, I'm going to use my crystal ball and look and see, oh, Scott's going to use that joke on his kids. I am definitely going to use that joke. Future kids.

He doesn't have any kids right now. Okay. Jacob, tell me where people can find out more about you. Yeah. So I'm still rocking and rolling over. at iHeartbudgets.net, personal finance websites about budgeting, saving, and all things, money. You could find me on Twitter and on Instagram and Facebook, all the same thing, all at IHeartBudgets. And we will put all of those links in the show notes, which can be found at biggerpockets.com slash

money show 85. Jacob, this was awesome. I am a little jealous of your RV trip, although when I do take road trips with my kids, they fight. I don't know if you ever saw, you guys are both way too young to remember the Itchy and Scratchie show on Renan Stimpy. Oh, yeah. But, okay, their song, their theme song was, they fight, they fight, they fight, they fight, they fight. I'm like, oh, that was written about my children, just well in advance. You mean from The Simpsons? Is Itchy and Scratchy from The Simpsons? Yeah, isn't it?

I thought that was from Renan Stimpy. I don't watch the Simpsons or Renan, I don't watch any of that anymore. When Itchy and Scratchie came on, my dad would cover my eyes so that I wouldn't be able to see the violence. And I love to watch every part of the Simpsons except for itching scratchy. I love the things that parents cover your eyes for. Then you're like, yeah, but I'm at my friend's house and their parents aren't home. And I'm watching all this stuff. So, or hearing it or whatever.

So, yeah, that's funny. You couldn't see them fighting. Did you fight with your brother, Scott? Yep. Yep, all the time. All the time. So I am mostly jealous of your trip around the world. I guess it's just the country. You can't really drive to.

Currently, we haven't gone in Canada, Mexico yet, but there are plans. Can't drive to Europe. Not very far. Okay. Jacob, thank you so much for your time today. I really appreciate it. And we will send people to iHeartBudgets.net. And you'll have to tell us how it goes year two. Absolutely. Well, fantastic talking with you guys. Thank you for having me on. Great. We'll talk to you soon. All right, that was Jacob Wade from iHeartBudgets.net. Mindy, what do you think? I am so excited to have Jacob on. He was one of the first people I met when I went to FinCon my very first time.

And he's always the first person I see when I get there. And it's just really nice to hear his story and learn his background. What a great story. And what an easy, repeatable, here's steps to make it happen example of how you two can get to financial independence. Yep. Again, I think that the key word there's, like the key thing for me is repeatability. This is something that a lot of people can do. I mean, again, this is two hourly incomes for most of the story that are getting them in there. It doesn't sound like he was making a salary above $50,000 until maybe eight or nine, ten years into his career, right? And through all of that, he was able to save, invest, and build net worth, enabling this freedom, right when he has three, children to rear as well. That's the point at which he has the most freedom here. So I think

it's just a great story of discipline and how that discipline and budgetary constraints, like he mentioned, enabled him to be free rather than or a cage or constraint around him. Yeah, I just absolutely love that. This episode went really, really long today, Scott, so we should say goodbye. Okay. Well, let's get out here, Mindy. From episode 85 of the Bigger Pockets Money podcast, he is Scott Trench and I am Indy Jensen, and we are saying, Asta manana, iguana. I hope that's like proper Spanish because that would be, I don't know, I said over and out forever and I still get people telling me how bad that is to say.

We get mixed results from the over and out. Some people don't like it. Some people love it. Yeah, and that's the thing. They're like, oh, I don't care. I want to be, like, I don't want to be disrespectful. It's clearly I was not in the military. That's all that that's not.

Nobody accuses me of pretending that. Okay, this was great. Goodbye.