Blaze Your Own Trail - S3:E7- Becoming Money Honey Rachel with Rachel Richards

Episode Date: March 2, 2021

At the age of 27, Rachel quit her job and retired, living off over $15,000 per month in passive income. Rachel has made a name for herself in the personal finance realm. She is the bestselling author of Money Honey and Passive Income, Aggressive Retirement. She has been featured on the Penny Hoarder and the New York Times and contracted to speak at colleges. She is a former financial advisor, and a real estate investor with almost 40 rental units. Her valuable lessons have helped thousands of female millennials work their way out of financial despair. She has successfully done what no one has done before: made the topic of money management fun, entertaining, and simple. ​Rachel has a Bachelor of Science in Financial Economics from Centre College. She has held roles as a financial advisor, a real estate analyst, and a senior finance analyst. Rachel is based in Colorado with her husband and dog. In this episode we discuss: Rachel's upbringing What she was into as a kid What shifted her mindset on Money? How she paid for College What she learned from her first corporate job What her books are about And much more! Connect with Rachel: https://www.moneyhoneyrachel.com/ Connect with Jordan: https://linktr.ee/byotconsulting Want to connect further? TEXT ME! 404.737.0651 Installing strategic sales systems & processes will stop the constant revenue rollercoaster you might be facing which is attainable through our 6 Week Blazing Business Revenue Coaching ProgramBook a discovery call with Jordan now to learn more! Are you an entrepreneur?Join my FREE Group Coaching Community where we have live calls, Q&A and more! Our Trailblazer Ecosystem also enables you to network with other entrepreneurs and creator hub eliminates multiple subscriptions and logins creating a one stop shop to take action!Use code: FOUNDING100 for 12 months access FREE and Founding pricing for life! (While Supplies Last)Join now! Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Hey, everybody. I hope you all are doing well. Super pumped to just be wrapping up my seventh week of full-time entrepreneurship. It's been amazing. And, you know, I've been getting a lot of feedback from the audience that they want more access. And so I've actually created a text community. And I would love it. If you have any questions or if there's any way that I can resource it via assistance, feel free to text me. The number is. 404 737-0651 that's 404 7370651 looking forward to hearing her from you and have an amazing day are you ready to find out how to blaze your own trail welcome to the blaze her own trail podcast with your host jordan mendoza in this podcast jordan interviews people from around the world to find out about their journey to success if you're looking for valuable content with actionable advice. You've come to the right place. And now your host, Jordan Mendoza. Hello, everyone, and welcome to the Blaze Your Own Trail podcast. I'm your host, Jordan Mendoza, and I've got a very special guest today. Her name is Rachel Richards. And if you can, Rachel,

just tell everybody a little bit about who you are and what you do today. Yeah, thanks, Jordan. I'm a lot of things. I'm a former financial advisor. I'm the best-selling author of two books on finance. I'm a real estate investor with almost 40 doors. And what people probably find most intriguing about me is that last year at the age of 27, I quit my job and I'm now living off over $15,000 per month in passive income. And that is a lot to take in, folks. So just let that sink in just for a second. Wow. So we're going to get into all that a little bit later in the show. But one of my favorite things, Rachel, is to really rewind. So if you can share with the audience, you know, where were you born and raised. And let's give context on, you know, where you grew up from being born up until

like the high school years. Yeah, I was raised in North Carolina. That's where I spent my childhood. But then when I was eight, we moved to Louisville, Kentucky. And that's where I had lived for the past 20 years of my life. One of my earliest memories of becoming a finance nerd, because I totally am, was in sixth grade. And I had picked up this book called Motley Fool's Guide for Teens, How to Have More money than your parents ever dreamed of, something like that. And I was like, well, that sounds amazing. I remember going to this summer camp and all my friends were going down the water slides and having a good time. And I, little sixth grade, Rachel, was sitting at the edge of the pool, reading this book, just drinking it up. That is where my passion was sparked for learning about finance. I read everything I

could. And then later on in middle school and high school, we grew up in a really wealthy county in Kentucky. and it was a very unrealistic bubble to grow up in. Just to give you some context, there were people in my high school that would get brand new BMWs for their 16th birthday. And my family was not operating that way. We were always on a strict budget. We weren't going out on trips,

let alone even going out to eat at restaurants. We were on this strict budget, and really from a young age, I felt like I didn't fit in because of that. That is not the way you want to feel in middle school and in high school. I remember thinking that I did, I didn't want to end up like everyone else in the world struggling with money. I didn't want to have to operate on a strict budget for the rest of my life or have to

borrow money from family and friends to make it to my next paycheck. I wanted to be different. And I realized that what I did then would either set me up for wealth or for poverty. And that's when I really began to take things seriously, reading everything I could, you know, the millionaire next door, rich dad, poor dad, all of the classics. and learning as much as I could about stock market investing, real estate investing, so I could set myself up to become financially independent. That's super cool that at the age that you are in sixth grade, what, 11, 12 years old,

that you had that self-awareness, right, to understand and know like what you didn't want to be, right? You got to see the environment around you. You got to see, you know, these kids driving BMWs and Mercedes and all these different things. looked at your environment and said, these things aren't matching up. There's something, right, there's a disconnect here. What do you think gave you that? Was it just being, maybe coming from North Carolina? Was the situation in North Carolina different than what you moved to in Kentucky where it was like a big culture shock from like a monetary sense? So not so much a culture shock or like anything that had to do with the move, but more so the

struggles that my parents went through. So they just happened to experience. a lot of financial hardships all within like 12 months. Like it was just the worst luck ever. I wouldn't say that they were irresponsible with their money. It's just that they didn't have enough in savings to get through those few years. So that had some pretty significant consequences for them. And it really changed how we lived and budgeted as a family. That makes sense.

Right. So you're in it, right? You're part of it where, you know, maybe you want something, but you can't, but you can't have it. And it's not because they don't want to. provide it, but it's because they were stuck, right? They were in that situation where, you know, maybe a paycheck to paycheck, you know, I can't tuck away money in savings and things like that. Okay, so that makes a lot of sense of you've seen it, you were in it,

and then you go and you get to see this other side of things where the money is kind of flowing for some people and you're realizing that it's not for you. So you just start diving in on the education path, which is, which is really, really great. Because if I'm being honest, I just recently started reading probably like eight years ago. You know, I started diving into books and getting educated. And I was told myself, I'm like, I just don't enjoy reading. And then when I actually looked at reading differently, and I looked at it to see what I could learn and then what I can apply and then what results I could see, reading was different for me. So is that the way that you actually went about reading in general?

I always love to read. I was such a weird little kid. I would like find the weirdest places in my house and I would hide and read books. And my parents would find me and take pictures of me. Super strange. But so I had this innate love for reading at a young age. And when I was young, I was reading fiction books. But as I grew older and got that first book on finance, then I began to read a lot more

nonfiction. So I've always had the love. There's definitely been times in my life where I was totally stressed and overwhelmed and I didn't make time for it. but I found that when I do make time for reading, even if it's only a few times per week, I'm just learning so much more as a person. And I truly would credit my reading as to how I've picked up knowledge in so many different areas. Like I think that's the number one differentiator for me. Absolutely. And so do you read more, you know, physical books? I see you've got a bunch behind you.

So I'm going to, I'm going to already answer that for it. That'd be a guess. But have you gotten into, Have you gotten into like audiobooks as of late as they're becoming more prevalent? I've tried. And when I was working, I would listen to audio like podcasts and stuff in the car on the commute. But now that I'm, you know, financially independent and retired, I'm just better with visual. So I've really realized over time that having a physical book is the best for me. Awesome. So let's talk about after high school.

You know, what was the step there? Because if you were studying as early as sixth grade, right? And then you finished high school. I'm going to assume you've learned a lot, right? You learned a lot about a few different areas, investing, you know, trading time for money versus money for time. You probably learned a lot of these principles. So what did you do after high school?

Did you go to college or did you start working? What was the route that you ended up taking? So you're right. I learned a lot. And one of the fears that I had by that time was how I was going to pay for college. Because, again, I lived in this wealth bubble. All my friends' parents were paying for their college tuition. questions asked. I on the other hand knew I was going to have to put myself through school.

My parents just, they weren't able to help me. So I had these fears of man, how am I going to do this without graduating with tens of thousands of dollars in student loans? Because I had seen how crippling that could be. I went in for a couple of interviews. I've been working at American Eagle in high school and I was making $200 per paycheck. So clearly that wasn't going to cut it to pay for college. So I was like, okay, what else can I do? So how has that? Have you heard of Cutco, Cutlery, Cutco knives? I sure have. I sure have. I may or may have sold those at some point.

Oh, really? My day. That's so funny. That's what I did. I sold Cutco and I paid my way through school. I was super excited because it was the first time I had been exposed to something where the harder you work, the more money you make. And I knew I could outwork anybody.

So I got super motivated. I set sales records, sold a bunch of knives, and I graduated from college without debt. that is one of my proudest achievements to this day. No, I love it. I love it. And you use something like sales that commission based, which is performance based like you said. And so, you know,

I like what you said. I knew I could outwork anybody. Right. And if you outwork anybody in sales, what happens? Revenue goes up, right? You get those little kicker bonuses. You get the other bonus.

You know, you start adding that up. And wow, you use that money to pay your way through college. That's incredible, you know, because I don't know where you want. went, but most colleges, it is a little bit of money, right? So, so, um, so kudos to you for, you know, for doing that. But I would love for you to share with the audience. Um, and I don't know,

besides American Eagle, was this kind of your first sales position? Is this the first time? It was. And I wouldn't even consider it in person. Sales. Yeah, this was my first commission based sales position. And you're right, Jordan, and that I learned how to be paid for output rather than time. And it didn't click with me then, but later on when I, you know, when I got a salaried position, there were some things that I just didn't like about it. And I was like, well, this doesn't make sense, you know? So I did.

I learned a lot from that kind of early exposure to the sales position. Yeah. So I would love for you to share what are some of the skills that you learn in that role? because there's, I've done that type of sales. I've had several outside sales jobs, door to door sales. I've kind of done it all. So what would you say are the top three skills that you learn that you still are using today, right? That apply to every.

I love this question. Yeah, I love this question. I could go on and on. I would say definitely learning how to ask for the clothes confidently and then shutting up after because there has to come a time where you sit, where you, you know, give the sales pitch. you go ahead and you ask for the clothes, would you like to go ahead and purchase this today? And a lot of us can be nervous. And that makes us want to just keep talking to fill that silent void.

But what I learned with Cutco is be confident, ask, and then be quiet and just let them respond. So that's a good skill that I learned. I learned about rejection, of course, because you're getting rejected all the time in sales, whether it's somebody who's rude to you on the phone. I mean, I was a college student and you'd be surprised how rude people could be. and they'd, you know, hang up on me on the phone, or I would set an appointment and they just would forget about me and not show up at all. And it was a total waste of time. Or, of course, I'd get there, do the whole presentation and they wouldn't buy anything. So all different types

of rejection and just learning how to not take that personally. And then I would say the third thing is having multiple offers. You know, we learned the kind of the step down process where you start with the biggest offer. And if they say no to that, then you step down to the next one. And I think in the Cutco sales presentation, there's like 12 step downs. So chances are if you do it right and you don't skip the steps, that can increase your sale, your average order. And I think that's very true of any business owner. If you want to have multiple levels of different offerings that you can sell to people essentially. 100%. Yeah. So what I took away from there, Rachel, is that you learned one of my favorite things to teach salespeople is the power of pause, right? It's the power of shutting up.

because the first person that talks loses, right? That's kind of how you think about it in sales. You also learned, you know, really how to build up tough skin, right? Learning that no, it doesn't mean no, it just stands for an acronym I like to use that says next opportunity, right? Because in sales, especially the type of sales that you did with Cutgo, you've got to get through a bunch, a bunch, a bunch, a bunch of nose before you get to that, yes. So if you actually start to hunt for nose versus look for yeses, so kind of play that mindset. trick on yourself. For me, it's always worked out that way. And the third thing is you literally learn how to build a sales funnel. That's exactly what you learned, right? Having in stacking

different offers is what a sales funnel is designed to do. So I would say that you learned three really valuable skills that have probably added a lot of value to and attributed to you being able to retire. Would you say that's fair? For sure. Everything I learned in Cutco has translated into my journey to create passive income, especially with marketing and selling my books and building out my business offerings 100%. That's awesome. I love that. And all right, so you sell a bunch of knives, right? You pay your way through college. And I'm going to assume that this is where the financial advisor journey begins. So can you share with the audience a little bit about what happened after you finished up school? Yes. So I majored in financial economics. And my immediate thought was I should

be a financial advisor because it's a combination of sales and helping people. And I really liked to help people with finances even back then. The problem, though, is that although I could be really, really good at sales, I didn't love it. I'm an introvert. And so a long day of cold calling and setting appointments was the most mentally draining thing for me. And I just couldn't see myself doing it for a year. So I learned in that process that although the fear of graduating with student loans was a big motivator for me and caused me to sell a lot of Cutco, I didn't necessarily want to do sales the rest of my life. So I became a financial advisor for about a year. It was a tough year. I mean, just picture a 21-year-old woman trying to sell, you know, 70 and 80-year-old couples with how to invest their life savings. That's a hard sell. So I did that for about a year. And then I ended up taking a couple of stints in real estate because I wanted to learn. By then, I was interested in real estate investing, so I figured at least I can learn in these roles. I may be, I might be overqualified, but I think I can still get something out of it. And then I ended up working as a finance analyst for the past

three years up until I quit my job last year and retired. Tell me a little bit about that role in as a finance analyst. So was that, did you, because it doesn't sound like just the way that you said it. It doesn't sound like you enjoyed the three years at all. I don't know. I did. That's kind of the vibe I got. So I, so you liked it, but like it just didn't kind of light your fire, if you will, right? It didn't, you weren't able to kind of live in your gifts and your passion. Is that, is that? Right. So I, I loved my job as a finance analyst, actually. It was my first real career job where I loved the team. I was challenged. I was learning, I was engaged, I was paid well. Like, I literally have no complaints about that job.

But at the same time, I don't think I was ever going to be happy working for somebody else. I'm just, I am a rebel and I'm independent and I want to be able to set my own hours and work on my own time and from wherever I wanted. I didn't want to be stuck in Louisville, Kentucky or wherever it would have been. I didn't want to be stuck there for the rest of my life. And there were things throughout several different jobs that kind of were red flags to me that I didn't Like, for example, when I was a finance analyst, I had one manager and I would go in at 7.30 a.m. and leave at 4.30 p.m. because I kind of just, I just like to leave early and get in early. But my manager pulled me aside one day and she was like, Rachel, I really think you're not setting the right perceptions by leaving

early every day. And for her, it wasn't about, like, I still got my full nine hours in. So it wasn't about anything except for the perception of leaving before five. I was doing all my. work and then some. So it just rubbed me the wrong way and it made me not feel very valued as an employee. So there was that, you know, there was the not liking to go into the office and working in a cubicle nine to five aspect. There was the we want to move out west. We want to move to Colorado. So how am I going to do that if I'm stuck here in this job? Lots of little things that made me realize I got to find a way out and become financially independent some other way so that I can live life on my own terms. Yeah, and I think, you know, for everybody listening, I think we've all been there, right?

We've all probably had a supervisor that was like that. I know I personally have because I like that schedule. I mean, who doesn't want to come at at 730 and leave at 430 or 630 to 3.30? What a brilliant schedule. You get the best of traffic on both ends. You don't have to be there super late and deal with all the crazy traffic. Like, I don't know what the big deal is, right? Because, and you've got a happy employee that's working and doing their job like you said above and beyond so i've never i think it's a control thing you know in my opinion it's someone that wants to have the last say or you know and again i get the perception thing but like if your role doesn't have you in front of people all the time then why what does it matter you know so i'm i'm on team rachel for this one that that sucks you know

That sucks to deal with that. And I can see why you were like, you know what? I don't feel valued. And I want to start figuring out like how I can generate income on a residual basis to not have to be here anymore. So I'd love to find out like what was the first step that you took? Was it kind of like, let me try to start a side hustle. Let me start on one of my books.

You know, what was the steps that you took? The first step was real estate investing because I just didn't have the awareness or knowledge at that time that there was any other way to achieve financial. I was like, okay, real estate investing is my answer. I'm going to make it happen. So in 2017, my husband and I purchased our first duplex in Louisville, Kentucky. It was listed for $100,000. That's what we bought it for. So we had to get our 20% down payment, which was 20 grand. Now, a lot of people ask me, how did you come up with the money for that first down payment? And I like to clarify, because I'm not a trust fund baby. I get that question a lot. And I never made six figures in my

career or in my job. I never made 60 years. We simply had a couple things going for us. We both graduated without student loan debt and we didn't have any other debt. We purchased crappy used cars in cash. So we were, even with lower salaries, we were able to save more aggressively than most people. So it didn't take very long for us to each have $10,000 that we could invest into a duplex. That's how we bought the first one. It also helps that we were in Louisville, Kentucky, which is a the reasonable housing market, low cost of living, housing prices are not insane. So it's more attainable. And then the other thing that actually helped us scale quickly because I also get, you know, a lot of questions, how'd you go from one unit to almost 40 doors in under three years is the

fact that I had my real estate license. I had it from those couple stints that I did in real estate, but it was never for having clients or helping people buy and sell. It was only for my own purposes as an investor. So every time we bought a property, we would totally deplete our savings, but then I was representing myself as the buyer's agent on our deals. So I would immediately get a commission check back for thousands of dollars. And that would kickstart the savings for the next down payment. So that's kind of how the real estate stuff began. And it really took off and went a lot faster than we thought. Awesome. Awesome. And I like that strategy. You know, you really weren't, and you didn't really have to incur debt to, you know, to purchase these, the investment properties.

And so with each of these properties, did you try to buy places like when you were starting that you guys could kind of do work on your own? Or did you try to buy places that were ready enough that it was just turnkey where you could buy it? You could get a renter in there and you could just start generating that income, you know, have a portion of it, pay the mortgage and then a portion of it comes to you guys' income? Like, what was the strategy there? Yeah, so early on, I think we were open to doing bigger projects that did require renovations because we had more time then. And then later on, when things started to get crazy with our businesses, we decided we wanted more like move-in ready. But that first duplex, it did require an extensive renovation in one unit. The other unit,

some was already rented. We had income coming in and we had to then totally gut the other one. So it was a little bit of both. But the great news is that after we did that renovation, it was already cash flowing $500 a month in profit. And it's only gotten better since then. To this day, it now brings in something like $8 or $900 in profit per month. I love that. Okay. And so over that three years, so you've got 40, around 40 units now.

So how many of those are duplexes, townhomes? Do you have single family homes in your port? portfolio now or? We have two single family homes just because they were our previous primary residences. And when we moved out, we just kept them and rented them out. Otherwise, all the investment properties we purchased as rentals were multifamily. So we had the first duplex. And then we have three other buildings that are bigger like apartment style buildings.

And they each have 10 to 12 units each. Love it. Yeah. In property management, that side of things, especially when you're on the owner end of it, it can definitely be very lucrative, right? And you've made that happen and seen the results over the last three years. So when did you know it was time, right? When did you know you're building this thing on the side? So how long into the career, into that analyst role, did you get the first property? Was it like immediately or not long after? It was maybe a year, one year in, something like that. So I bought the property. So a year and you get the first one.

Okay. Yeah. Yeah. So basically, My initial goal, after we started generating revenue and I was like, okay, this is a possibility. I see how we can make this happen. I decided I wanted to at least replace my full-time income before I quit. I was pretty ambitious. I wanted to not have any drop in income. Yeah. So in 2017, we purchased that first duplex. And then later that year, I wrote and launched my first best-selling book, Money, Honey. And I did not do it as an intentional income stream. It really for me was a passion project, something I felt compelled to do and I just wanted to help people. So I was pleasantly surprised when it ended up taking off doing really, really well. I've sold thousands of copies now and I have over 700

reviews on my first book. And my books now bring in about $5,000 a month on average in profit. My rentals at this point bring in about $8 to $10 grand a month in profit. But in 2019, that was when we kind of surpassed my full-time income. But it was really hard, Jordan, because I knew it was going to be hard when it came time to quit because I did love my career and I was paid well. But it was a lot harder than I saw. And it actually took me months and months to actually go through with it. By the time I actually quit, we were making more like 10 grand a month and passive income. So it wasn't a financial thing that held me back. It was my own fears and worries about what people would think and me thinking, am I crazy to walk away from this? But now that I've done

it. There's no looking back. I'm very happy with my decision and to live with the kind of freedom that we have now. That's awesome. Yeah. What a great journey. Being able to do that with your husband as well, beyond his journey with him. And so does he have other ventures in addition to, you know, the real estate and investing that he does as well? So my husband has chosen to continue to work for an employer, which I think it makes a big difference being financially independent because he, he knows he could walk away at any time. It's really about him working because he wants to, not because he has to. And he enjoys his career a lot more than I ever did.

He works in cybersecurity. So he and he has work remote, full-time flexibility. His schedule is flexible. So we're still able to live the life we want even with him still working. But I do think he's getting to the point where I think, you know, in the next couple of years he'll be ready to quit. That's good. Well, and, you know, you can get the benefits from his, you know, this organization. as well. Like if they offer benefits, then that's nice to not have to pay that out, right?

Yeah, the health care. I mean, we're paying a lot more money in health care. So I'm like, you know what? If you want to stay, that's fine. You don't have to quit for us to achieve the things he want to achieve. So, yeah, it's whatever he wants. That's good. Yeah. And then he has tons of flexibility and can kind of just make his own decision when he wants, which is really cool. So you talked a little bit about money honey and i'm going to make the assumption this is for anybody that wants to learn how to you know grow invest and save money manage their money is that you know some of the principles that they're going to learn in that one yes so i wrote money honey because all my family and friends were coming to me for financial advice and which was great because i love to

help them i began to wonder though well why aren't they reading books you know like i did or learning on their own and then i had this epiphany of oh yeah personal finance is boring it's overwhelming. It's intimidating. It's complex. No wonder people don't like to learn about it. So I thought to myself, how can I make this topic fun, entertaining, and simple? And that's where the idea for money, honey came from. It goes over the basics of finance, like you said, budgeting, savings, debt payoff, investing. The subtitle is how to get your financial bleep together. So it's a lot of fun. That's a great place for beginners to start. Love it. Love it. And can you share a little bit about

The second book and what it entails. Yes. My second book is called Passive Income Aggressive Retirement. I started writing it in 2019 leading up to quitting my job. So of course, when I started telling my readers and people that I was quitting and retiring at age 27, they were like, how the heck are you doing that? So I was like, okay, well, I'm pretty much obsessed with passive income at this point. I wanted to learn everything I could about different passive income streams.

So that's why I decided to write that book. And in passive income aggressive retirement, I outlined 28 different passive income models. So trust me when I say there is definitely something out there for everybody. Awesome. Awesome. Well, I'm going to make sure that we'll link both of the books and the show notes. Folks, you can purchase these on Amazon, probably get them Barnes & Noble. You can get them everywhere, right?

Rachel, they are for sale everywhere. And I love what you said earlier is you wanted to help people. And I think that's really where it's at is. as an entrepreneur when your goal is to add value to people and give people the information that maybe you wish you would have had in a simpler way, right? And to not have to go through all the things that you went through, but they can get all the value from the book, right? Yeah, exactly. And I mean, you're right. I think if I had been out to make some quick money grab, it just wouldn't have done as well. I was super scared to publish the book in the first place

because that's a very vulnerable thing. But in the end, I told myself, if I can just help one person, that's all I want to do. And I think that's the reason it's done so well is just because to approach it from really trying to help and add value, that's what entrepreneurs should be trying to do. Awesome, awesome. Well, this has been awesome learning about your journey and your story. Congrats on all the success. You are a trailblazer for sure. Thank you. I would love for you to share with the audience, where's the best place that they can reach out to you? You know, there's going to be people that listen to this that say, man, I'm 37 and I'm still not retired yet.

You know, I want to make some passive income or I need to get my bleep in order, right? So where can they find Rachel Richards to reach out, connect, and just learn a little bit more about you and your business. Yeah, for sure. And thank you. People can find me on Instagram if you just search Money, Honey, Rachel. And also, Jordan, what I'd love to do for your audience is I would love to give anyone listening my passive income starter kit for free.

So if anyone wants to download that, you can go to moneyhoneyrachel.com slash bonus. Perfect. And that will be in the show notes, folks. We'll make it easy for you. We'll link it in there. You can go download that and get some really great information. Rachel, I appreciate you coming on the Blaze Your Own Trail podcast. Keep blazing your trail, my friend.

Thank you so much, Jordan.