High Income, New Cars, Profitable Businesses, and $190k in Debt
Brad Finn was raised with a strong work ethic that follows him to this day. He always knew he should be working hard, and that’s exactly what he did. Brad worked throughout high school, college, and started multiple businesses in adulthood. While his work ethic was strong, his financial skills were lacking. When Brad went to college, he remembers using almost a third of his student loans on partying alone.
Fast forward to his mid-thirties, Brad is waking up in a beautiful house, with two nice cars in the driveway, a great income, a new business, and a negative net worth. It wasn’t until Brad allowed himself to look at the true number behind his net worth that he realized something needed to change. Fortunately, his wife had been slowly, but surely, trying to tell Brad that they had to make that change.
The day Brad’s first child was born, he and his wife were debt-free. This didn’t come easy, especially since they were facing close to $190,000 in debt. They tracked their spending and realized they spent close to $20,000 in two months, solely on eating out. They dialed it in, worked side jobs to boost their savings rates, and rewarded themselves when they hit milestones. Now their net worth is growing fast, and they’re locked in on investing.
Mindy: Welcome to the BiggerPockets Money Podcast show number 245, where we interviewed Brad Finn and talk about paying off massive debt, communication, and how people who do have money, still struggle with lifestyle creep.
Brad: We’re not bad people if we’re bad with money, if we’re uneducated on these things, you do take out car loan payments, and you do go into consumer debt and you do just take out student loans and you do go to college instead of maybe trying one of the trades or going to community college, or doing one of those particular things or just going into entrepreneurship. There’s so many things I just didn’t know.
Mindy: Hello. Hello. Hello. My name is Mindy Jensen and from time to time, Scott schedule as CEO makes it difficult for him to record, but I have a lot of friends and joining me today again, is Joe Saul-Sehy, host of the Stacking Benjamins Podcast and author or co-author of Stacked: Your Super-Serious Guide to Modern Money Management. Joe and I are here to make financial independence less scary, less just for somebody else to introduce you to every money story, because we truly believe that financial freedom is attainable for everyone, no matter when or where you’re starting.
Joe: And whether you want to retire early and travel the world, go on to make big time investments and assets like real estate, or start your own business. We’ll help you reach your financial goals and get money out of the way so you can launch yourself toward your dreams, like maybe buying a brewery.
Mindy: Yeah. Joe, thank you so much for taking time out of your busy day, messing around with your microphone on your show. So you can mess around with a microphone for my show.
Joe: Well, I’m so happy that I’m back and you’re right Mindy, you do have a lot of friends and I’m very happy that I get to be one. So I feel incredibly honored and I’m ready to see if I can mess this thing up again.
Mindy: Oh, I have every faith in you. Today, we are talking with Brad Finn, and we are talking about his whole money story and how he grew up. Not really talking about money. It wasn’t really a taboo subject. It just wasn’t discussed. And he knew that he needed to have it. He just didn’t know what to do with it. So what do you do when you don’t know what to do with your money? You spend it.
Joe: Man. And that’s like so many families and being intentional is a huge part of getting ahead, much more we’ll talk about this too much more than the math, right? A lot of people focused on the math and optimization, but being just intentional and communicating with people around you is super important. So they’re really excited to talk to them.
Mindy: Brad Finn welcome to the BiggerPockets Money Podcast. I’m so excited to talk to you today.
Brad: Oh, you’re excited. I like it. This is the greatest thing that’s really ever happened to me. And I have kids.
Joe: The bar is low Brad.
Mindy: Not from a different wife.
Joe: The bar is low.
Mindy: Yeah. Brad’s led a great life. I can’t wait to talk about it, but before I do Brad, I want to say you sent something that you shared this with me and you said, “I used to feel like my story isn’t unique or important.” Brad, I am going to level with you, your story isn’t unique, which is exactly why it is so important, as lovely as it is to talk to you today. We have a lot of other people who are listening in too, and the reason that we share this story with them is because they are listening and they’re in the same position you are, or you were, and they’re making the same mistakes. They’re having similar successes. And sometimes you just can’t, you just can’t. You’re like, “Oh, I’m alone in this dirty. I should quit. I’m never going to get ahead whatever.” And hearing these stories over and over again from other people really helps cement the fact that you are not alone in this journey. There are other people who have done it. They’ve had success and having other successes highlighting other successes, helps them continue on with their journey. And I know that community is a really big part of your journey and your experiences. So I just want you to know that no, you’re not unique. You’re unique, just like everybody else welcome to the world. And we’re very excited to have you here.
Brad: Thank you. And I’m glad that you do say that because throughout the course of my journey, I definitely went through my phases of imposter syndrome. Like, what am I doing with certain platforms? Or why are people listening to me? And what I found out really in kind of that reinforces, what you just said was that we all are trying to maybe get to the same finish line, but everyone’s journey is different. And as many people as we can have telling their stories, the more likely you are to relate to people. And as you just mentioned, there’s lots of people listening. And what I realized is that I may be like this one single person with all these different characteristics and traits, but maybe I have one characteristic or trait that can really latch on with somebody or really relate to somebody. And that’s definitely given me the confidence to keep going and keep telling the story in times where I feel like, I’m just a regular Joe on the block, like, yeah, I’m talking about personal finance and anybody can do that. But I am very proud of the story that I’ve told. And you mentioned my community, the community of friends and networks that I’ve built throughout that is just made this the most incredible thing ever for me.
Mindy: Well, there’s only room for one average Joe, on this show-
Joe: I know, standing right here, Brad.
Mindy: … and we’re joined by average Joe, money, Joe Saul-Sehy, thank you for coming back to help me tell Brad story before we… Well actually, no we’re going to jump right into it Brad, tell me where your journey with money begins?
Brad: It really begins early on even before I knew it, I was always taught from my parents work ethic. I was always taught we got to get a job. My mom had me caddying at the golf course when I was a kid to just make money. And it was more always about the work ethic and never about the money side. I think they were just instilling that work ethic, knowing that if I develop some work ethic, my parents were both blue collar workers and they knew that success would come with hard work. So they told me the hard work part. I always had a job. I always had money, but I didn’t know why I had money. And I definitely didn’t need to know. I didn’t know how to save it. And I didn’t know the importance of saving it. And that’s where my story began when I found out that, wow, I am so typical. I think when I finally figured it out, I was a guy that was 35 years old. I had a house on Long Island with all the high taxes, my wife and I both had teaching jobs, bringing in over $200,000 a year. I had a brewery on it’s way $2 million in gross revenue, two brand new cars in the house and found out that I had a negative net worth. And I was like, “Wow, my problem was lifestyle creep.” I always was taught that I needed to make money to spend money. And we always went on vacations. We always did good things. I never saw the other side, the struggles with money and the poverty. I don’t have the story of that I didn’t have money, but one thing my parents didn’t and it wasn’t till after they passed away, I realized that I never got that from them because maybe they didn’t really know about it. And when my mom passed away and my dad passed away with virtually nothing, it really shook me and said, “I can’t follow that same path.” And I was torn between only the good die young. I was like, I got all this money. I can’t take it to the grave. And everyone’s like, “Look at mom, look at dad.” And my brothers still, even to this day are a little bit like that with money. You can’t take this money to the grave. So I was struggling between that and knowing that that’s probably wasn’t the best thing. And I wasn’t trying to follow in those footsteps. And I wanted to live a legacy and one day have kids and things like that. And that’s really where it started, finding out that I, “had all these things on paper, but I really had nothing.” I was really literally worthless.
Joe: You talk about how that story’s not unique. It’s so funny how that just resonates with me so much, Brad, because growing up whenever my parents would talk about money and I also came from a middle-class family, whenever they were having a discussion about money, my brother, my sister, I were told to leave the room. We immediately had to leave the room. So like you, I grew up with a really great work ethic and taught to work hard, but it’s funny, not funny ha, ha, but funny sad that once I earned that money, I just blew it because I had no idea what to do with it. And I’m not blaming all my early money problems on my parents, but I think that this is something that resonates probably not just with me, but I think with a lot of the people listening.
Brad: Yeah, Joe, I think that I don’t even think my parents were doing me a disservice. I literally now in retrospect, don’t think that they really had a great idea with money. I remember my dad sitting at the table filling out bills for most of the day when he had to write out all the checks and this, that, and the other thing. And that’s really the only time I ever saw him have money or deal with any sort of money. And I don’t think he was not teaching me. I don’t even know if money was taboo in my house because people ask that, “Did you grow up in a taboo money where we didn’t talk about money?” I think my parents didn’t really know how to save. And I saw that upon death. My mother was a nurse. My father worked for the local railroad. They didn’t have retirement accounts. My dad had a pension, which was gone when he passed away. But no retirement, no Roth IRAs, no nothing. And I wish I could have them back for a lot of reasons. But that’s one question I would ask, “Did you know about retirement and opt not to do that because you couldn’t? Because you wanted to give us a certain life that we had? Or were you just ignorant to it?” And that’s the thing that really drives me forward for all the people that don’t know. Because we’re not bad people, if we’re bad with money sometimes we’re just uneducated about it.
Joe: I remember to your point asking my uncle, my dad’s brother he was maybe two years away from retiring and asking him if he was putting money in the 401(k), I’d just become a financial planner at the time. And I was really excited by, he goes, he says, “Well, I got the pension. I don’t have extra money to put in that.” And it was considered extra right. Extra money to put in it.
Mindy: There’s no such thing as the extra money, every dollar to quote Dave Ramsey, “Every dollar has a job.” And there’s no such thing as extra. Listen, if you have extra money, send it to Mindy Jensen at 3344 Walnut Street in Denver. There’s no such thing as extra money. Nobody has extra money. They have money that they spend on necessities. They have money they spend on frivolities, is that the rate of say that?
Brad: I never even heard that word before.
Mindy: Frivolousness and they have-
Joe: Maybe extra.
Mindy: … money that they invest. And I think those are three really great ways to categorize your money. You’re either investing it. You are spending it on stuff you need or spending it on stuff you want. So there’s no extra. It’s going to go in one of those places. There’s a lot of people that are spending a lot of money on the extras instead of putting it into investments. Now, my parents knew about investing. My dad did a very brilliant thing. In retrospect, he bought a savings bond. I’m old and he bought savings bonds. When I was a kid, every paycheck, he bought one for me in my name. He bought one for my sister in her name. And when we were in second grade, they came due and we signed them all this big stack. It was a huge stack of savings bonds. And that was the kind that kept growing and growing and growing until you cash them in, they didn’t stop like they do now. And then we put them into a bank account. And in the early ’80s, Joe, do you know what the interest rate was?
Joe: In the early ’80s it probably was, God say, nine-
Joe: Oh, I was going to say nine, 10, but you beat me.
Mindy: He put them in. I want to say 81 or 82, he locked in a five-year CD at 14% interest. And then when five years later, that was not the interest rate anymore and they wouldn’t give it to him again. He was shocked. But that was my college fund.
Brad: Oh, wow.
Mindy: And he was also contributing to his company’s 401(k). So he had some random pensions because he changed jobs a little bit, not like a job hopper. He just happened to change jobs. And they never really taught us about money. One day, my mom had me write out all the checks to pay the bills and then balance the checkbook. That’s the only talk about money that I can remember, except for when I was watching The Breakfast Club and the principal on the breakfast clubs, like, “I make $38,000 a year.” And I’m like 38,000. This was in 1987, by the way, like $38,000 a year, whatever. And my friend’s like, “That’s more than my dad makes.” I was like, “Oh, I have no idea how much my dad makes. I thought he made 100 because why wouldn’t he?” And I, mean I still have no idea how much he made ever, because we didn’t talk about money. It isn’t taboo, but it is because you don’t bring it up. So we can go off on our tangents, but this is Brad story today. So Brad, you jumped from a teenager working as a caddy, which is an amazing job. I love jobs where you get tips based on your performance, especially when you’re young. Because that teaches such a strong work ethic, but then you jumped to the be in ’30s and married and having a house on Long Island. I think there’s a little bit of something in between. Let’s go back to the teenage years.
Brad: There was a lot of work and it’s funny. I’m sitting in the house that I grew up in. When my father passed away, I downsized my house during the time I was learning about money and I purchased this house from his estate. So I’m actually sitting in what used to be my former bedroom. So I haven’t really gone anywhere. And my wife who grew up about 20 minutes away, still to this day, everywhere we go, she’s like, “Where didn’t you work? Or who do you not know in this town?” And it was a lot of job hopping because I also played a lot of high school sports. So I had to go around seasons and do this and do that. And I ended up just going to college and not really understanding it but always just working, always working and always doing these things. I went to a state school and at this time I graduated high school in 2000, high school, I in college wasn’t really held on the pedestal it is today. And I kind of just went to school because that’s kind of what people did. I didn’t know what I liked. I knew I liked science. I ended up majoring in physics and graduating and going into teaching, which I to this day. I’m so glad that I did. I started on the engineer path and it just wasn’t really for me. But if a teenager, I always had a couple bucks in my pocket. I really did. I always was driving a car that worked. It wasn’t always the newest car, but I always had the run of the mill kind of car and things like that. I was always able to go get a slice of pizza wherever I needed to, but I got so many of these odd jobs and back to the work ethic piece, I know your husband’s really handy. I’m super handy as well. My father would get me on crews doing roofing and he would get me with plumbers. And I remember coming home 17 and being like, “Dad, I can’t go on these summer roofs. I can’t do this job.” And the blue collar in him, he was like, “Brad, you’re this is not a job. It’s an education.” And then I had a contracting job and I’m like, “Dad, he’s just making me vacuum up nails.” And he’s like, “Brad, that’s not a job. That’s an education. Learn how to work with your hands, learn how to build things,” which threw me into the engineering side and the physics side of everything. And I’m so grateful for that because I love building stuff and using my hands, but very, very typical the teenage years. And I took out student loans. I was the first of four boys to go to school. And once again, I think that going to guidance counselors and going to meetings, I think my parents just like, that’s what they did. You went to the meeting about how to fill out your FAFSA and go to school. And I didn’t know the difference between a private school and a state school. When I graduated, I went to just a state school and I took out student loans, but I was the guy that probably shouldn’t have went to school. I was the guy now that was graduating now I probably would have been primed for community college. I didn’t know what I wanted to do. I was a big partier. I always had money in my pocket. I didn’t know what I wanted to be when I grew up, I was just going to college because that was the next step after high school. And I ended up getting out of there. But it took me six years, maybe seven years to get my undergraduate degree. And I came out with all this debt, but I didn’t really think of it as debt. I didn’t know what debt was. It was so regular. And I shake my head when I think about it, because there were so many things and there are so many things back to my point before I said, we’re not bad people if we’re bad with money, if we’re uneducated on these things, you do take out car loan payments, and you do go into consumer debt and you do just take out student loans and you do go to college instead of maybe trying one of the trades or going to community college, or doing one of those particular things or just going into entrepreneurship. There’s so many things I just didn’t know. There’s just so many-
Joe: There really was no student loan analysis Brad, that’s what you did.
Brad: And it wasn’t taboo either. It wasn’t like I heard my friends being like, “Oh man, you got the student loans.” When we came out, we all had it-
Joe: Everybody had it.
Brad: And luckily. Yeah. And even my youngest brother, who’s seven or eight years younger than me also went to state school, same thing. And just student loans was what we did. And this was one of the biggest regrets. And I’ve talked about this at length. Was I always… To use the money I didn’t need? So I would get my student loan amount and I needed this amount for school and books. And I’m like, “Wait, I’m allowed to take the rest of this money out and pay it back later and party.” And I would say probably a third of my student loans, which was probably supposed to go to room board and textbooks that I never bought, went to partying and drinking and things like that. And I thought of student loans as an income. And I had a job. I was still delivering pizzas and working in the college library, getting a couple of work hours. I didn’t even need the money, but it was just so easy. And nobody said, “Hey, just use the money for tuition and cap it there.” I could afford this house or I could get a mortgage for this house. That doesn’t mean that’s the house you should necessarily buy. That’s where I got this FAFSA amount. I got the student loan amount. And I said, “Well, even if I don’t need any of it, I’m still going to take all of it because I pay it back later.” Right. That’s what we do with student loans. We just pay it back later.
Mindy: Okay. So that is another part of your particular story that isn’t unique to you. I know lots of people from when I was in college, which is 10 years before you were in college that were doing the same thing. “Oh, well, they gave me $5,000, but I only need 2,500. So I’ll just take the rest of that. And now I have money. Now I have spending money.” And you said, they sat you down to show you how to fill out the FAFSA form. My parents, because of that big old stack of savings bonds, we didn’t take out student loans for me, that paid for my college. But that was the only thing I remember my guidance counselors talking about is, “Hey, let me show you how to fill out these forms.” Well, why don’t you tell people what that means to fill out these forms and take these loans out. Now Joe’s got kids who were in college. I’m assuming they went to college, Joe.
Mindy: They went to college more recently than you are I Brad? So Joe, did they tell you anything? Did they guide you about loans or did they just say, “Here’s how to fill out the FAFSA form.”
Joe: It was just for a lot of people you’re going to need loans. And if you do, you need to fill out the FAFSA form, just period. There’s no real loan analysis program. It’s still is not a thing. And to Brad’s point that conveyor belt really still just exists. Going to college is the next thing you do, student loans help you get there. And then, hey, if there’s money left over, then there’s some drinking going on.
Brad: There must be blood in the water when a guidance counselor comes to you and tells you why you need student loan debt. That’s like when my 403(b) advisor tells me how much I need to get with him in an actively managed fund. I’m like, “Oh, tell me more, sorry.” Nobody even has a teacher, now I teach seniors and I still see the same thing. I still see the same thing going on with 11th and 12th graders. And I just flat out ask them, like, “Why are you going to school?” And I teach in a place where a lot of my kids, I’m an upper middle class I teach. And a lot of them are being funded by their parents so they’re not so worried about debt, but I still get to the point of like, why, why are you going to go? And that’s hard.
Joe: Why are you even in higher education? Why do it? I remember with my kids, and once again, Brad, this is your story now not mine, but with my son, he could not tell me why he should go to Carnegie Mellon, which is incredibly expensive in Pittsburgh versus going to the University of Texas, which is still a great school, but a state school and much, much less expensive. And so we had this great discussion about, “If you can’t define, why, why the hell are we going to spend more money going to this school versus the one that costs us a lot less? If there is no perceived ROI or no true, if you can’t define the ROI, maybe it is there. Should you really be going there?”
Brad: Absolutely. I agree 100%. And there’s so many places in New York that there’s a state school, and there’s a private school right down the road. And for whatever reason, I call them sweatshirts schools to my students. I’m like, “Do you really need the sweatshirt?” You have the University of Albany, which is a state school in the capital region. And then Siena is five miles away, you see, five miles away. And they’re the same school, but yet one is triple three times the price. But because it’s a private school, it’s held on a higher standard at a larger pedestal, I guess.
Mindy: I know a secret-
Mindy: You can buy the sweatshirt without going to the school, yes you can.
Mindy: pro tip.
Joe: Pro tip [inaudible 00:22:18].
Mindy: I haven’t reached it. That says Harvard. Did I go, hmm, practically.
Joe: Maybe not-
Mindy: But not even close.
Brad: You might have.
Mindy: Okay. So Brad, let’s look at your financial position when you graduated from college, you had taken out all these student loans, spent them wisely. What was your grand total upon exiting after six years?
Brad: Yeah. I don’t know the day I graduated how much it was, but when I finally sat down my wife and said, “Hey, I got to tackle these student loans.” The two of us between us had 190, 190,000, and I had been paying loans off for about 10 years when this happened. So that was a number Mindy. I didn’t even want to go back and see. And my wife, luckily for me, Tara was an amazing saver. And it’s kind of like funny. She was living with me at my parents’ house and she was like, “Brad, I want to get out of here. I want to get a house.” And I’m like, “Listen, I pretty much support everything financially. Those are the roles we play. And we’re happy with that. How about you save a down payment for a house?” And in the back of my mind, I’m thinking to myself, “She has no idea how much money you need for that.” And then one day she was like, “Oh, Brad, I found a house that I think we should go look at it.” And I’m like, “Do you know how much money it’s going to take to put a down payment?” She’s like, “Got it.” And it just blew me away. Like, look at this woman, who’s an incredible saver. And that definitely was a catalyst to help us. But yeah, when we first brought down our net worth, the day I found out that I had a negative net worth when we were already had bought this house. And we’d found out that we were spending more money than we were making. We got to the end of summer. And I was like, “Tara, where’s our money?” It was right after our wedding. I was like, “We had like $30,000 in the bank at Christmas. Where’d that all go?” And she’s like, “I’ve been trying to tell you this.” So when we finally wrote down everything, it was $189,000 of student loans. It was a brand new 2016 Toyota Tacoma that I had just purchased among minimal credit card debts. I was never really a credit card person. Once again, because of that in common, that work ethic, I always had money. So I never really needed to rely on credit cards. It was just one of those things I had, I think when we first did, like, when I wrote down my first debt snowball, I think I had maybe had like $1,200 in credit card debt. And that was just whatever was on there from the last couple of statements. But yeah, that’s all state school tuition in the early 2000s. It was a lot of money.
Mindy: Well, that wasn’t all state school tuition. Remember you took some of that and partied.
Brad: Yeah. I partied at the state school. So I like to say, that [crosstalk 00:24:54] yeah, I kept it in the community at least. The community school benefited from.
Joe: Mindy it’s just like his dad said, it isn’t drinking. It’s in education.
Brad: It was in education. That leader lead to the brewery later on bread, it lead to the brewery later on. It was a lot of money. And, go ahead.
Joe: Well, I said, that was the same, Brad told themself that all the way through college. This is not partying. It’s education.
Brad: That’s right.
Mindy: It’s education.
Brad: I’m just doing my part for three years. And I know there it was a huge wake up call because like I said, I thought that I had it all figured out and on paper. I mean, I wasn’t like, I’m not a social media guy. I never really have been, but at least to my friends, I’m sure I looked like I was just killing it. I was just doing all the things right. And I never had anything to worry about. And at 35, and this was even before I had kids before, I really had to think about it. I was like, “I’m 35 and I really do have to work till I’m 60 as a teacher.” I had an okay pension, but I knew that pension and social security wasn’t going to come to my ’70s. And I’m like, “Man, I want to play golf at 50, I want to do certain things at 50.” And I had the feeling that a lot of people feel when they first write down their debts. I looked at that mountain. And I said to myself, “Wow, in my current position, I’m looking at nine years.” And I think that’s a critical point for people and what I try and tell is like, when you get to that point, you realize that you can go one of two ways. You can look at that amount of debt and say, “That’s unattainable and you can give up.” Or you can say, “I’m just going to try and take one bit at a time.” Like, how do we eat an elephant one bite at a time? And I was fortunate, especially with the push from my wife. I didn’t discouraged by how high that mountain was. And I used the resources on the internet that’s kind of why I started the YouTube channel to hold myself accountable and find like-minded people because I go from drinking Starbucks and going out to eat and do a happy hour Friday to tell my friends that I’m now beans and rice, and I’m going to try and get my debt together. And I started living on a spreadsheet and budgeting. That’s never a cool conversation at parties. I immediately became the wallflower and I was very, very fortunate to have a support system around me because when things came around, like my kids and $30,000 a year for childcare, I literally wouldn’t be able to put my kids in childcare if I would’ve continued on that same path. So if somebody is listening and you have that mountain of debt, that’s like first and foremost, don’t get discouraged. Get to the end. Even if it takes nine years, God willing, you’re going to live nine years. Let’s get to nine years later and be debt free as opposed to giving up, getting discouraged and living nine years. And then still being in the same position you were nine years ago.
Mindy: Yeah. You said a couple of things that I really want to highlight. You said, “I didn’t want to see that number. I added it all up and that was not a number that I wanted to see.” And here’s the thing. If you didn’t add up that number, it would still be that amount. If you don’t look at it, it’s still that amount. So just because you don’t want to know the answer to the question doesn’t mean you shouldn’t answer or ask the question. And you said, “I’m sure to my friends, I looked like I was killing it.” Of course, you looked like you were killing it. You had a house. That’s what successful people do. You had, is it Tacoma, a truck?
Brad: Yeah. It’s a fancy truck.
Joe: Well, a fancier than that.
Mindy: So you add a fancy truck. That’s what successful people do. You’re a teacher making a ridiculous sum. I mean, I shouldn’t say that you’re making a ridiculous sum compared to all the other teachers who don’t make anything, you are definitely still underpaid in my opinion. Because I was a teacher last year and it sucked. So you need to double your rate, your salary. And so do all the other teachers. But I’m sure to all of your friends, you looked like you were killing it. And that’s something that people who don’t see your checkbook and the $189,000 of debt, we’ll see, they’ll compare themselves to an, “Oh, I could never be like Brad.” Don’t compare yourself to your neighbor who just bought a new truck. And to the people down the street who have that big boat that you know cost $100,000, it might have. But that doesn’t mean that they had $100,000 to buy it. Compare yourself to yourself, look at your journey. And what’s the quote, “Don’t compare the beginning of your journey to the middle or end of mine.” I love that quote.
Brad: I love when you say that, because it is so true and it’s so easy to get caught up in other people’s journeys. One of the things that really hit me in the beginning was when I was trying to get out of debt and I was budgeting and I was food was like a thing. It was like, everyone was talking about how price per person in their house they could eat four. And my wife and I, we love to cook and we’re not as good as you mean to you are a fantastic cook, but we loved-
Brad: … fresh foods. We loved going to farmer’s markets and we just couldn’t get our budget down. And I felt so discouraged when I would read blogs and read people like I’m eating for $1.20 per meal. And I’m like, how are these? And it was really, really discouraging. And it wasn’t until I talked to somebody in the community. They were like, “Brad, if you’re going over on your meal budget every single month, and that’s frustrating, you raise your meal budget and cut something else out. That’s not as important to you as cooking with your wife and doing all these things.” And that’s going to be something for everybody. If you love to travel, you might get on the internet and see all these people. Like you’re not allowed to travel if you’re in debt, you need to live this deprive life. But then maybe you don’t like to cook. So maybe you can eat for $1.29 per meal. And you like to travel. It’s so important not to get caught up, you can use people as motivation and guidance, and you can use them to learn from their mistakes. But when you try and replicate, it’s only going to be a recipe for frustration, frankly, and a fear of failure. And that’s not a good place to be when you’re trying to get out of debt. And the deprivation sucks.
Joe: It sounds like…
Mindy: That’s a good quote.
Joe: It sounds like something that really helped you Brad was communication with you and your wife. You talk about not looking at it and then she’s got some numbers that you didn’t have. And I want it to, because I think that for a lot of people, communication may be even more important than a budget. Do you feel like that was the case for you?
Brad: Yeah, absolutely. I owe her so much of it and my wife always says she’s more of a consumer than a producer with the YouTube channel, podcast and all these other things I have going on. She never wants to really be a part of it. I think I got her to be in a YouTube video one time that when we actually paid off debt, I was like, “I need people to know that I need to give you proper credit publicly.” And it was that conversation piece. And not only just we’re going to budget, but being able to have conversations like, “Brad tonight, I’m just not in the mood to hear your spreadsheet and your presentation. We need to push it and then being like but we will push it till tomorrow.” And not letting it just pass, but being able to have good conversations as well as bad conversation, being able to not debate, but understand the true value. I remember knocking Tara, she’s like, “I want to get my nails done and we’re getting out of debt,” and I’m like, “$25, $30 to get your nails done?” And we’d fight about this and fight about this. And it wasn’t until she was like, “Brad, that’s really important to me. I find value in it. It makes me feel pretty. It gets me out of the house. It allows me to go see my girlfriends for 20 minutes and have a glass of champagne. It’s the same as you go into the bar and having two beers with your friends.” And it took so long for me to understand what’s valuable to her and what I need to compromise. And for her to understand what was valuable to me as well, that communication was key. I could not do it alone. And it wasn’t always cupcakes and butterflies and rainbows, but yeah, no, the numbers and paying off debt was secondary to the communication, both good and bad that we had. We actually learned a lot about each other. We learned about what’s valuable to each other. I can’t say it really made our marriage stronger. We always had a really strong marriage, but I understood her more as a person, things that I always pushed aside that girls found valuable, getting their hair done or getting their nails done, or just going for a walk. My wife loves to run. And I’m like, I didn’t realize these things. So paying off debt actually allowed us to strengthen our marriage through that communication that you talk about. I got to learn more about her.
Mindy: Yeah. And it isn’t about the money. It’s about the feeling pretty, I can understand that, but until you ask, until you have that conversation, it can be a source of contention. “We’re trying to pay off debt, why would you go spend 25 frivolous dollars?” “Well, because they’re not frivolous to me.” I love that. On episode 157, Scott and I sat down and listed out a lot of ways to have a money date with your spouse. And number one is, non-confrontational it isn’t Brad, you’re spending too much money, you need to stop .It’s hey, I think that we have started spending a little bit more than we should. I’d like to get our spending down. Let’s look at where it’s going and what we consider needs and what we consider things that we can cut. And it’s always a we, it’s never a you, because the person who is suggesting the money date is the one who wants to change the spending, the person who is not suggesting it doesn’t really have a problem with.
Brad: And that sorts of jump. That’s not even like in the middle because it’s also a terrible thing that I did was I’m one of those when I read something, I get fully engulfed and I’ve heard this time and time again. I said, all right, we’re going to get out of debt. We have problems with debt. I’ll take care of retire. And I’m up all night and I’m reading everything and I’m Googling everything. And the entire wakes up out of bed the next day. Like, ah, and like I said, I have a full presentation. I’ve listened to every single one of Dave Ramsey’s podcast. I have X, Y and things she can’t spend money on. You’re not going to Starbucks today. And like that was like overload for her. So it took us almost like two months to even get going where I could have been like, hey Tara, listen, you know that conversation about how we really worthless. And we have all this debt. Here’s a plan that I think might work. And I would love to get your feedback on it, which sounds all like, ah, and, but that would have been the right thing as opposed to like, I read every blog by Mr. Money Mustache, and this is what we’re going to do. And I don’t care if you want to change it. You’ve known me for 10 years and we’ve been getting Starbucks every day and going to happy hour, Friday, those days are gone, sweetheart. I’m sorry. And that’s kind of what I did her. So the sympathetic and the empathy for both sides needs to start right at the beginning.
Mindy: Meanwhile, she just woke up from a lovely sleep. “Ah, you can’t go to Starbucks anymore,” “Wait, what?”
Joe: Party’s over Tara. Party is over.
Brad: It’s time to get to you. This is not the only time I’ve done it. She’s woke up and I’m like, “We’re starting to a brewery. This is what we’re going to do. Or like, guess what? I’m a podcaster now.” She doesn’t get all of this totally. She’s she is a very patient woman has been putting up with my all night researcher thorns and but yeah, the debt one was a good one. And I feel like she wasn’t intimidated. She’s a very strong and powerful woman, but she didn’t know how to tell me to pump the brakes where she should have been like, “Brad, that’s great. But that was a lot.” Instead it was an eye roll and a, what are you talking about? Which led to confrontation, which was never a good thing. You got to go in, you got to go in with some sort of empathy. People asked me, “Well, how’d you get your wife on board?” I didn’t, I screwed that up royally. And she’s really the one that found ways. And it was like, “Let’s get into this slowly.” And the debt process and getting it going and writing a budget. I thought I was going to be able to write a perfect budget in a month. I think it took us like seven or eight months of cutting this and building this and working on food and figuring out, and then just when you get it, a kid comes and the budget totally changes. And that’s yeah, I thought it was going to be so easy. Like, oh, just make a budget. And you either on budget or you’re not. And you find the life gets in the way. [Grant Sombady 00:37:15] has said it best when he’s like, “I did this amazing thing. And I went from $2.63 cents to a millionaire, but I had the blinders on my life. Wasn’t fulfilled during that time, because I didn’t get to live my life and do the things I wanted to do. I was too focused on the end path and that’s not cool either.” And that’s what I was doing. I was like a 100 miles an hour where it’s okay to go 80 and get there a little bit later, right?
Mindy: Yes. Yes. Okay. I want to write that down as a quote because that’s awesome. But yeah, when you remove everything from your life and you go down to beans and rice and peanut butter and jelly, your life sucks. And you’re not going to get a lot of buy-in from your spouse, especially if they are not jumping in with both feet. Oh, you want to go down to beans and rice. Yes, that’ll be awesome. I don’t think there’s a spouse that’s ever said. That’s a great idea. So you need to take your time, start by looking at what you’re spending. Don’t try to make a budget if you don’t even know where your money’s going right now.
Brad: Yeah. And debt freedom is not the only end goal. We had $189,000 worth of debt. It wasn’t maybe till we were about halfway and feeling deprived that I talked to somebody and they’re like, “So you wait, you’re under 100? That’s a celebration, man. That’s a dinner or, wow. You’re almost at 75 or you paid your truck off.” I learned like, have these little wins along the way, debt freedom. If you have a ton of debt, yeah. You can go four or five years and not celebrate any wins. You need to write down these wins like, “Hey, when we break $100,000 and we’re under 100,000, we’re going to go out and spend money on a dinner that we probably shouldn’t or we’re going to take a vacation that we probably shouldn’t.” Yeah, I might go on vacation. I might set my debt freedom date back three more months. But the emotional toll of that release and that feeling of a small win is so, so important.
Joe: I don’t want to get too far away from the communication discussion that we were having before we pause, because there’s something here. I think Brad, that you said that was really powerful. Having talked to some communication experts and putting some velvet on your hammer, you’ve got this hammer, which is, things are going a certain way, but a great way to put velvet on that is to do what you did. And I thought this is a great technique is to ask feedback. And so instead of, I think we should do it this way. Say like you did later on once you figured it out instead of Mr. Money Mustache has all of this, “So this is what we’re going to do.” Instead saying, hey, I read this stuff. Would you like to read it too and give you some feedback? Maybe we can talk about it. Because I’m pretty excited. And when you ask people for feedback, it is so much less confrontational and the ball starts to roll. So I didn’t want to get too far into your story before we had to backtrack a ton for that.
Brad: No. And you’re so right. And she’s also very good. If we got to a point where we’d be in the car and I’d be like, “Do you want to listen to an episode of the Dave Ramsey podcast with me?” And she like, “Yeah, let’s give it a go.” And like 10 minutes. And she’d be like, “Brad, this is not for me.” She got to the point where once she realized how important it was to us, and that was another thing in bringing her into the conversation is, “Hey Tara, I don’t want to just pay off debt. Here’s the reasons why, here’s how I think our life can change.” At the time we figured out we were going to pay off debt. We were paying $3,100 a month in minimums to student loans and cars and everything else. We had $3,100 every month that we had no control over. And just the simple math. I said, “Tara, we’re looking at a $45,000 a year raise when we pay off debt, what can we do with $3,000 a month?” Little did we know it was going to be daycare, “But what can we do?” We love to travel. I went to school in Arizona for a little while, and we love to go to Phoenix in the winter. I’m like, we couldn’t even try and spend $3,000 going to Phoenix for a month. And if we get rid of this debt, we will be able to do that every six months and not feel guilty about it. We’ll be able to go on a proper anniversary dinner and not feel like, uh, and bringing that into perspective for her when I took it outside of and made it more about our potential lifestyle and things that we were going to be able to do. That was also a great way to get her on board and have her understand that I my main goal, even if I’m being harsh and even if I’m coming down, my main goal is to make a better life for us in the future and start to play that long game because with the things that I’ve been reading and the things that I see, I think that we can really make that happen.
Joe: You got super good intentions. You’re just being a jerk about it. That’s what you said.
Brad: Exactly. Exactly. I probably had a couple of beers to me, Joe, I’m not going to lie. What’d you get to know me pretty good chance that a couple of bears, even though was six in the morning, I’d been up all night.
Mindy: So what did your debt payoff journey look like? We’ve got all this debt. We’re going to pay it off. What did you cut or how did you handle this?
Brad: The biggest cut for us was definitely going out to eat. We did a lot of doing that and we both are social butterflies by nature. We love being around people. We love learning from people. So, like I said, we were the $100 bar tab, every single Friday at happy hour. We were definitely good for a dinner. We were good for brunch twice a week. And I think when we first looked at it, we were spending close to 2,000 to maybe $2,500 a month just going out and eating outside of our house. And that was on top of us already having a high food budget because during the week, we didn’t like to cook and then forget about it. We’re both school teachers, over the summer that Friday, Saturday became literally every single day. And that last summer I think we blew almost $20,000 in two months just doing the summer thing. So going out to eat and just setting mindful days, we didn’t cut happy hour out all the time, maybe for the first couple of months when we were scorched earth beans and rice, but we slowly started to bring it in and say, hey, listen, let’s go to happy hour, but maybe we’ll have a couple of bud lights at home and go out and not need to buy a bunch of expensive drinks at the bar, or maybe we’ll do more potlucks with friends as opposed to going out to dinner on Saturday. Maybe we’ll invite the family over for brunch and maybe go to brunch once a week. So food was definitely big for us. And as well as travel, we would try and travel once a month. And we definitely cut that back. I don’t think we really traveled in the first year or so that we were trying to really attack debt. And we ended up doing it in about three and a half years. During that time, we definitely had our income go up. When we first started this, I had just opened a brewery with a partner. And over that three years, the brewery fortunately did very, very well. So my income did really, really well. I also tried to pick up other things outside my W2. I knew that I could use teaching and I could do things like coach and I could do things like do a club, facilitate a club. I could tutor more, I was tutoring my butt off before I had kids almost like three, four hours a night. And all of that money had a goal and a purpose. And I said, “I’m not going to need to tutor like this forever. If I can tutor like this now and put all of that money aside, I don’t need to coach lacrosse forever. But if I do, I can just put.” So I really worked on raising my income. I think a lot of the times we worry about cutting the budget down so much and we don’t really think about the other side because making more money seems harder than cutting out expenses, but you can only cut so far. So the things we really did was focus on what we were eating and where we were going. And that was just simply just writing it down. Like, “Oh my God, we spent $2,500 at Talula’s last month? How the hell did we do that?” And then trying to find simple ways. And even if the jobs weren’t great, we knew that they were just a means to the end. And I think when we first started, we did the debt snowball method. That was just what we knew. And I’m a guy that likes to check things off. I know people argue like go higher interest first without the credit cards, we didn’t really have a high interest they were all about the same. And I’m a guy that liked to check boxes off. So we went that snowball. I think when we first started, it had a six year horizon. And then you find out over time, you get motivated, you start checking some boxes, you start to raise your income. And I think we ended up knocking it out in about three and a half years. We also did some cliche things like selling off stuff. I used to have six guitars and I only really played none of them. So I sold off a bunch of those. So there was cliché internet things that we did, but it wasn’t anything spectacular. And I’m not even saying we doubled or tripled our income, but you find out that even making an extra $100 a month for somebody is $1,200 a year off your debt. And that can significantly make a big deal. And I’ll remember it like it was yesterday. My son was born on September 18th, he just turned two and we were so close to pushing and getting there. And we said to like, “How cool would it be if Brody was born into a debt-free household?” And that really, really motivated us. And that really brought on one of the harder decisions that I’ve actually been criticized for that I don’t regret at all. Before by debt, I had doubled in some stocks I had. So I think I had like $15,000 in Vanguard in a brokerage account. And I said, “You know what Tara? From what I’ve learned and what I seen and what we just did. I think we average like $6,000 a month onto our debts, on my Tara, we can be debt-free today before we go to the hospital and have Brody.” And all I have to do is sell some stocks and make up $15,000, which was what we were doing. It should take like three months to get us back to where we were. And she’s like, “Can we sell off, is that the right thing to do?” And I’m like, “Oh no, I’m going to get crucified on the internet for doing this. But peace of mind, how cool would it be? We had this goal for six months. They get out of debt before Brody’s born. Let’s just do it.” And he was a scheduled c-section on a Wednesday. And on Monday I sold it off. And we went at 7:00 PM and I think the money had cleared from Vanguard Wednesday morning. And we paid off our last $15,000 of debt with sold stock. And we became debt free the day he was born.
Mindy: That’s so lovely and you know what? There are people. And I might say the same thing, oh, you shouldn’t sell off your stocks, but I’m not living your life. And my advice has no bearing on, like, I’m not going to pay off your debt for you. Sorry, Brad. You’re nice, but I’m not giving you $15,000. Although if anybody has any extra money laying around, you can send them to that.
Brad: Nobody has extra, Mindy. You said nobody has extra.
Brad: No, there’s so many, I mean, doing this now for four or five years there, you can debate anything. And I mean, some people like to pay off their mortgage. Some people like to take out 30 year, fixed mortgages, never pay them back. Some people like debt snowball, some people like debt avalanche. And you said it perfect personal finance is personal and that peace of mind. And we got right back there in three months, we were right where we were. And if I wouldn’t have done that, I probably would’ve had to pay off debt for a couple more months than that, because of interested in probably wouldn’t have been as motivated to do so. So one thing I don’t regret every once in a while, I show the personal capital graph because you can see the personal capital graph is there. And then it just drops right down 50. And I only had 15, so it went from 15 to zero.
Joe: To nothing.
Brad: But now five years later, you don’t even see that drop. It’s like the littlest thing. And I try and remind people that it’s not bad to sell off some, I’m not for taking out of retirements and things like that. But a taxable brokerage account that I had 15K in, to make me financially debt-free, that was something I’m very, very glad I did.
Joe: Well, we’d like to think that it’s all math. I mean, we like to think that everything is math. And yet I was talking to a guy recently at a conference who was talking about how a study they recently done to the happiest retirees, the happiest retirees. And these are people with a lot of money, are people that have paid off their mortgage. And if you look at all the debts that people tell you not to pay off, it’s the mortgage. And certainly if you need that mathematical equation to land the plane hot, because you’re barely going to make it, well then using that arbitrage between the interest rate you’re going to earn on your money versus the interest rate that you’re paying out on the mortgage makes a lot of sense. But if you have room, the ability to sleep at night and to be happy, I don’t know how you quantify happy. There’s just a bunch of… But you talk about the internet, Brad and people crucifying you, I’ve just learned over time. There’s a bunch of broke professors on the internet. People that haven’t saved a dime, but they know every little thing.
Brad: Yeah. And they don’t take into account my podcast partner, JJ Buckner, he has a very fickle income. He’s a YouTube creator. And he paid off his mortgage because he didn’t want that bill. He’s like, “I can lose YouTube tomorrow. And for me, it is kind of math. It’s not math on my returns. It’s math on if something were to happen with YouTube-”
Joe: Decreasing variability.
Brad: Exactly. So somebody like me that has a pretty consistent income with my W2. Maybe that part isn’t as crucial to me, but I can’t judge him for it. I just clapped for him that he’s sleeping better at night. That’s what we really want. We want people to be happy and feel free regardless of their journey and what they’re doing. And yeah, there’s a lot of people on the internet that are going to tell you exactly what’s best for you to get to financial independence and how fast you should get there. But we’re arguing in efficiencies. We’re not arguing like wins and losses. If you pay off your mortgage or you invest, you’re still probably going to win. If you’re at least thinking of that, your mindset is at least in the right direction. We’re talking efficiencies. It’s not like if you don’t pay off your mortgage, you’re going to end up screwed in the future. And if you do, these are like silly things. And I tell people, I will not debate efficiencies with you on the internet. If something’s going to hurt somebody else, we can talk about it. But if you’re talking about getting to a million dollars in net worth, in eight years versus 10, I don’t care. But people can wait two years if it means more to them to have their house paid off.
Mindy: Well. And ultimately the people on the internet aren’t saving you money. They’re not helping you with your bills. They’re not helping you pay off your house. They’re not helping you invest. They’re just telling you what to do with no skin in the game. So you should listen to me when I say personal finance is personal. And if you want to pay off your mortgage then pay off your mortgage, and if you don’t, then don’t. I’m in the don’t pay off your mortgage camp. And that’s okay. That works for me. But I’m the only one that, that has to work for well being my husband. But he’s on the same page too. So back to you, Brad, were you contributing to any retirement accounts while you were paying off your debt? I know as a teacher, you probably have some sort of pension that you’re obligated to pay to and you can’t really say no thank you. But were you contributing anything outside of that?
Brad: No, I will say, although I don’t 100% agree with it any more because I’ve evolved over time, which has also allowed, what you write down on day one does not have to be your journey forever, but I was pretty traditional. Dave Ramsey, baby steps. One through three. I did not go into retirement. And to be honest, I didn’t even justify not doing it because I have a pension. In New York State we have to put in 6% of our salary to our pension. So that’s forced, I do not get a choice, but I got to be honest. I never said to myself, I don’t need to put any money into my retirement because I have my pension. That wasn’t something I even, now in retrospect, I’m like, okay, that was kind of cool because I did have the pension, but for me it was all about, I have one goal right now and my goal is to become debt-free and I’ve always known how to make money. I’ll always know how to make money. I work hard. I treat people nice and I have a really positive mindset and I feel like those are the things that are really going to make me succeed in life. So my goal right now, and until that goal changes is to take all of my extra money and put it towards debt. And I figured with the money that I was putting towards debt, that if I extrapolate that out 10 years past my debt free date, I was like, I should be at least somewhat caught up and I’m not going to be screwed. So instead of trying to complicate my life with, oh, maybe I’ll put a little bit into retirement and a little bit here and a little bit there and a little bit towards debt. I just said, you know what? I want to go all in on this debt thing. It’s the only guaranteed way to raise your net worth is to pay off debts when you’re in that point. So I said, okay, well I can put that money into retirement. The markets could do something. I can lose some money. If I put it into debt, my net worth is guaranteed to go up. So that’s what I was focused on during that time, I did not contribute anything to retirement and I never really questioned that at all. And I still advise that to this day. I mean, if you’re going to pay off debt for like a decade, one I’m say to you probably, like I said, I spend mine as long as you get motivated. But I knew that three, four years I was 35 years old. I’m like, I have never contributed anything at 35. What’s 35 to 38. Is that really going to change the needle more than me getting out of debt and then having $3,100 of minimum debt payments that I can just crash onto my 403(b) and 457? That was the route that I wanted to take.
Mindy: So what does your retirement account look like now?
Brad: After getting out of debt, it’s funny and sometimes people don’t like when I say getting out of debt is almost easier than being debt free because when you get out of debt, you have that one goal of get out of debt. When you are debt free, do you invest in stocks, Bitcoin real estate, 401(k)s, Roth 401(k)s? So it’s actually stressful, but right now I max out my 457, which is an awesome, awesome teachers, a retirement account, very similar to the 403(b) and 401(k), but you don’t need to wait to 59 and a half to take that money out. So that’s awesome. That’s what I wanted to do first because I don’t see myself teaching maybe to 59 and a half. After I maxed that, I definitely try and go for the 403(b) and as I’m getting a little older, I got to be honest. I’m maybe thinking about contributing, I’ve already maxed my 403(b) but for 2022, I’m actually thinking about sticking with the max of the 457, which is actually going to go up this year and then maybe ducking down my 403(b) a little bit to have a little bit more liquidity of my money back to that 59 and a half. But we have a couple of months before I have to decide that. I backed to a Roth every single year on the first of the year, which did not happen automatically. I set my Roth IRA was in goals, like let’s try and get to six, let’s try and get to six by the end of the year. Let’s then slowly over the years I worked it back where I can now do it on the first of the year, but retirement is backdoor Roth IRA. Because I’m over the income limit. I maxed my 457 and 403(b), and then next year I probably will back some of that 403(b), be out to have more liquidity in my taxable brokerage accounts, because I do have that 457.
Mindy: Okay, Joe, I have a question for you since you are a former financial planner, you may actually know this. Brad just said that he’s over the income limit. The income limit is 208,000 MAGI, modified adjusted gross income. So if he makes more than 208,000 after contributing to his 457, after contributing to his 403(b), is that the case or is it?
Joe: Yeah. Because is the only income that’s going to show up in that tax calculation is going to be money that’s after those pre-taxes are taken out.
Mindy: Yeah. So that would be $38,000. So you guys have significantly increased your income then? If you will.
Brad: Yes. We have and my wife is doing the same as well. So yeah, we’re putting a little more than $60,000 as a couple into retirement every year. And yeah, our incomes, you mentioned before that we should be paid more as teachers. I will agree that the rest of the country probably, I would say that here in New York, especially in some districts, we’re good. Maybe not in the city or upstate, but if you teach on Long Island, you’re probably pretty good, but no, we definitely increased our income and that’s mostly due to growing businesses and platforms and things that we’re doing on the side.
Mindy: I forgot about the side stuff. Sorry. [crosstalk 00:58:25]. Well, I mean, hey, that’s a great problem to have when you can’t contribute to your Roth because you make too much money. That is not like, “Oh man, I’m so mad.” That’s a great problem to have, good for you.
Brad: And it’s hard to talk about with people because there becomes a fine line of like, I’m trying to educate and show you what I’m doing. And look at me, I make all this money. So that was actually a hard video for me to make when I started talking about the backdoor Roth and I almost didn’t make it. But then I realized, okay, once again, I’m going to get criticized for things. You can’t make people happy all the time. And I had heard so many people and I still to this day, add on the Roth because I make so much money. And actually with the news recently of them thinking about getting rid of that backdoor Roth, it’s actually come up in conversations a lot more like, “Hey, I heard something in the news about the backdoor Roth. Isn’t that something that you do?” And that’s kind of good that it’s brought up that conversation, but no, it’s definitely a good conversation to have, but once again, it becomes more complicated because you’re like, “All right, what’s the best thing that I can do with my money?” I all that in my head spins now with all the opportunities and yeah, granted, these are amazing problems to have and they still bring stress. But that’s a part of life. We’re always going to be stressed with things, but having the backdoor Roth is great right now. And I think that’s just something that everybody, I probably didn’t mention that that’s the first thing we do. And I think the Roth IRA is for most people, most Americans, it’s a great place to start.
Mindy: No, I was going to say, I really liked the Roth option. When we talked to Kyle mast on episode 200, he suggested that perhaps down the road, the Roth might go away to help fund all of the checks that the government has been writing recently for the stimulus and contributing. Now he doesn’t think that they would just say, “Hey, now you’ve got to pay taxes on all that.” He thinks it would just like be okay, now it stopped and going forward, nobody can do it anymore, but everybody who’s done it already is fine. So with that came up in the context of, should I contribute to a 401(k) or a Roth 401(k) or a 457 or a Roth 457. And if you have the opportunity to contribute to a Roth, I’m going to tag on with Kyle because he’s super smart and say, there’s no downside to contributing to the Roth and then it just continues on. I kind of hope it does. I like it. I maximize not every year, but I mean, when I can, sometimes I can’t.
Brad: I wasn’t that specific, but to eliminate that debate in my life, I have the option for the Roth 457 and the Roth, a regular traditional 457. I do both. I do half and half. So I just eliminated that debate in my mind. I said, okay, I’ll do half and half.
Joe: Oh, that was my next question Brad, was that you talked about more to the 457 and less to the 403(b). Is that because of the fact that you have the ability to do the Roth and the 457?
Brad: Yeah, no, actually, there was two primary reasons why I opted for the 457 before the 403(b). One major thing was that 59 and a half. The other one was the availability of the funds that I had. So in my 403(b) I have access to Vanguard, everything is a VTSX, I’m a VTSX fanboy. I love broad based index funds. That’s what my 403(b) is. And my 457 was a similar fund. It’s an S&P 500 through the New York State Deferred Compensation Board. And because I was able to get such a… I think I have a 0.01 expense ratio in there and they charged me like $60 a year regardless of how much is in my account. So when we start looking at 457 versus 403(b)’s, we definitely have to take in account fees. If there was a spot I’ve seen people that have just terrible 457s, and I’m going to say, you might want to go towards that 403(b) route. But for me, the main factor was I’m going to be 40 in March. I don’t see myself teaching for 19 years. I would like to have access to that money before and because I have the access to similar funds. So they’re pretty much going to perform the same for me. And the really, the only difference is going to be, one the company name and two that access, that’s really the primary reasons I want 457 before the 403(b).
Joe: Yeah, I definitely don’t worry about this for you, but I worry about it for some people. The issue that I have with the 457 is that you really want to make sure that you’re working for an institution or an entity that is going to be very solvent, viable on steady legs because the 457 is subject to creditors taking it if there’s a bankruptcy, in some cases where a 403(b) is not, the 403(b) is going to be your money, so…
Brad: Yeah. You’re absolutely correct. And I think, people ask me about that. A good way to think of it is whether you’re a profit or non-for-profit generally your state employees. So you’re farming, you’re police officers, and you’re teachers. Those are pretty much going to be good. And if you are a governmental worker and you’ll see this happen like for example, nurses and doctors and nurses and doctors might have access to a 457, but they’re non-governmental, and you’re absolutely correct if you work for a hospital and that hospital goes under and they owe debts, then that debtor can come and claim money out of your own 457. So I’m glad you made that point. You’re absolutely correct.
Joe: Yeah. I look at some of the cities, State of Illinois, it looks kind of ugly, so just look at look at where you are.
Mindy: It is.
Mindy: I’m from Illinois. What is it? I don’t remember the exact stat, that something like three of our last four governors are in jail, like prison, not jail prison.
Joe: Not a good trend, Mindy.
Brad: I was born there too. I was born there, but didn’t stay long. I wasn’t supposed to come, but I was born in Evanston Hospital in Evanston, Illinois, and spent about a month there and then came back to the good old state in New York.
Mindy: I spent a lot of time in Illinois.
Brad: It was a beautiful spring morning in March. I remember. Well, yeah. My mom just kept looking at me like, “What are you doing here?”
Joe: You were supposed to be here yet.
Mindy: So how long are you going to continue to work? You said you don’t think you’re going to work for the next 19 years and you’re able to put $60,000 away every year towards your retirement accounts. I mean, just what’s the math, Joe, 10 short years you’ll be a millionaire, right?
Brad: Yeah, Mindy. By the time this episode comes out, I might be done. It’s a question that I don’t ask myself every day because I am fully committed to my students and my school. So pretty much my retirement day, I tell my department chair every single year at the beginning of the year, this is my last year he did. And every year he said, “Are you sure?” And then I come back in September. He’s like, well, I would definitely do a full year unless something happened just because out of respect for all that. But I don’t know. I still, I still really, really love it. And even through COVID, I still continue to love it. And as I see the light at the end of the tunnel, it’s just coming back. I learned different ways to teach. I became a better teacher through COVID and I also built a better rapport with humanity through COVID and my student body. And I really do love it. And it doesn’t really limit my freedoms that much. I mean, I essentially, and this is what all the hatters for teachers will say. I work a part-time job, essentially. I mean, I work 40 weeks out of the year and I have plenty of time off weekends, summers, holidays. I get to do all the things that I want to do. And my wife is in the same boat as a teacher as well. I really think about it as, I really be pushed away. If it stopped me from being happy and it stopped me and limited things. Obviously I can’t go off and do whatever I want to do, but I can use personal days and I can go travel if I need to or go see somebody. But I really have one goal in mind. And it goes back to my dad, everything goes back to my father. He would work the night shifts and he was always like my T-ball coach. And he always walked us to school and where my house is, I’m by all the schools. And when he got really sick, he got to meet my daughter. And he was like, one of the biggest shames about being sick is I waited my whole life to be like a grandpa and walk the kids to school. And I’m really upset that there’s a really good chance that that’s not going to happen. And I remember kind of sitting there and being like dad, the YouTube channel was virtually nothing. There was no podcast or nothing. And I was just a regular old school teacher with a brewery. And I said, I think I remember saying to him something along the lines of like, “I’ll make sure somebody walks her to school every single day.” And we didn’t know about my son. And I think now my daughter will be in first grade in two years. And that’s almost something that I really think about every single day, fulfilling that legacy for him. And I don’t think I’ll ever be put in a position because sometimes when I think about retiring, I am financially independent. That’s no question I could leave today. And I could live off my investments, especially I could do a little WiFi like your husband does. Because my wife is 10 years younger than me. So I could do that probably no problem whatsoever, but I don’t want to do it just to make a YouTube video, or I don’t want to retire early just to be a part of that class. I’d really, I would hate to regret leaving and I don’t feel like I need to retire. So the FI police will tell me that I’m actually financially independent or financially free. You can come check out my bank statements if you want to see how financially free I am. But I think if I could cut this rant short, I think in two years, I’ll really be put in a position where my daughter goes to first grade. I think I’ll really see if I really want to do that. And I might get to the point where I say to my department chair, like, hey, I love teaching. You know that, can I get first and second period off so I can walk my daughter to school? And if he says no, then I might drop the F-you money card and say, all right, then I got to go. But I don’t feel limited. I don’t feel deprived in my current lifestyle, frankly. I like the 125 grand a year that I make. It’s pretty easy money, 15 years into my career, kind of everything’s set up and going. But I don’t know if the other thing is something comes along and I need to go, then I’ll go. But that’s the beauty of being financially independent. I get to make that choice every single day. And I get to think about it every single day. And I don’t know Mindy every day, I want to quit. But a lot of times when I say I’m out of here, I’m either frustrated or I want to make a YouTube video about it. And then I come back down to reality and I say, “You love teaching. You’re an educator at heart, and you love seeing the light bulb come on. That’s why you became a teacher.” Why would I take that light away from myself? I feel like I wouldn’t be free anymore if I did that.
Mindy: That’s beautiful. And I’m really frustrated with people who are like, “Oh, well, you’re still working even though you’re financially independent.” You don’t have to quit your job just because you have enough money in the bank. If you enjoy your job, it’s okay to like it. It’s okay to continue. It’s okay to keep working. I work, I am financially independent and I could quit. But look at this, I get to do a podcast. I get to talk about money. I get emails from people all the time that say, “Your show changed my life.” I don’t need to. And I have kids who are in school, seven hours a day, 40 weeks a year. I need to fill up that time. And I could, of course I could, I could clean, I could ride my bike. I could do a lot of things, but I also really get a lot of fulfillment out of this job. And frankly, this is one of the first times I have ever felt successful in my job. This is a career. I’ve had a lot of jobs. I’ve had a lot of places that I worked, but I haven’t had a career. I haven’t ever had this job where I feel like what I’m doing matters. I sold quilting supplies. Does it really matter that I sold 97 sets of needles today or 96? Whose life did they change?
Brad: Yeah. And then we have bad days too. I’m sure some days you hate this podcast. Like, are you’re allowed to also have bad days too. And I get that in teaching a lot. One bad parent phone call, can ruin my day and I storm out and then you cool off. And you’re like, man, I really do love it. And I’m blessed by that. I really am. I love teaching that much. It’s not cliche. I don’t say it because I need to, it’d be very easy to be like, I’m out of here. This COVID ruined teaching now. The challenges are great. They keep me young. They keep me energized. They keep me honest. And there’s nothing better than sitting down with kids and showing them from experience and being humble with them and learning from them. I’m also in a very cultural diverse school. And I’m learning things about students and different cultures. I just couldn’t see leaving that with the opportunity, like you said, to do these things. And when I record the podcast, it’s after my kids go to bed and I sit down with my buddy and we talk money and I drink beers. I don’t need to quit teaching to do that. So why would I quit teaching necessarily? So, yeah, hold it.
Mindy: Brad. I think that is a great place to end your story, but we’re not done yet. We still have our famous four questions. Are you ready?
Brad: Why not. Oh, I’m ready. Let’s go.
Mindy: Okay. Brad, what is your favorite finance book?
Brad: The Simple Path to Wealth is going to be number one, that’s going to always, yeah. The Simple Path to Wealth, no questions. I don’t even need to think about it.
Joe: What was your biggest money mistake?
Brad: My biggest money mistake was realizing that you can have too much income and that’s also a problem. And lifestyle creep is real. I think that’s my biggest money regret is not understanding how lifestyle creep. I always thought that only poor people struggled with money. And my biggest mistake was being naive to that and thinking I have money, so I’m good to go. And I never have to worry. And in retrospect now I realized that was not the case. The other one if I could, I will say this. My grandma gave me 12 grand when she passed away. And then I had a gut feeling that I should use it to pay off debt. And everybody around me was like, “Grandma loves to travel. She wouldn’t want you to use that for bills.” And that’s everyone around me because nobody knew. And I spend at 12 grand traveling, my wife and I had a great time, but that probably would have changed the needle by a year so definitely.
Joe: It’s an education Brad. It’s an education
Brad: Right on.
Mindy: What is your best piece of advice for people who are just starting out?
Brad: I’m going to quote you on this one and say don’t compare the middle of somebody else’s journey to the beginning of yours. And it is so true. I tend to word it as personal finance is personal, and we all have the same goal, but we have a different path through the woods to get there. And the beautiful thing about that journey that each person has is when we finally meet up at that finish line, we each have our own stories to tell. And that makes for some of the greatest conversations ever. And there’s nothing like being in a community of like-minded people. Get fine, find like-minded people. Don’t worry about it so much. And just take it one day at a time, carve your own path, use others to inspire you and others to learn from, but do not compare yourself to others. And I still do to this day. I wish I could use my own advice, but sometimes I still, I the same thing.
Joe: All right. And of course your favorite joke to tell at parties.
Brad: So a proton, a neutron and electron walk into a bar and the bartender says, “What are you have in proton?” Proton says, “I’m going to have myself a Heineken.” And he says, “That’s awesome, $3 and 50 cents please.” And he says, “All right, electron, what are you having?” And he goes, “Oh, that sounds awesome. I’ll have myself a Heineken as well.” “And it’s $3 and 50 cents for you as well.” And then the neutrons over there he’s like, “Damn it, I guess if everyone’s drinking Heinekens I guess I’ll have Heineken too.” And the bartender was like, “Yeah, with the good news for you, neutron, no charge.”
Mindy: Who did that drum roll?
Joe: I did, or I could’ve done this Mindy? I could have done this one.
Brad: Either way, either way. I’m good for a dad joke or two. I am good for a dad joke or two.
Mindy: I love that.
Brad: And they always have to do with drinking too. It’s always signs and drinking. My other favorite one is gold walks into a bar and the bartender says, “Hey, you get out of here.”
Mindy: I like these kinds of jokes. These are way better than Scott’s dumb, old puns.
Joe: A horse walks into a bar and the bartender says, “Why the long face?”
Mindy: Is awful. Okay, Brad, where can people find out more about you?
Brad: I am actually a pretty big Slacker when it comes to, I guess, having an internet presence for five years, there’s really no website. I’m on YouTube, Brad Finn, you should be able to find me there. I should come up I hope. You can find me on Twitter, bradfinnfinance, small little showing there. And Instagram don’t even worry about, bradfinnfinance on there. But I think my main way to get in touch with me to find me is you can find me on YouTube, Brad Finn. That’s where I tell my stories, show my journey as well as the Average Money Podcast with my good buddy, JJ Buckner. We released shows every single Monday and it’s kind of been nice having that podcast because we can go back to the early stages and have conversations like this, about money, where we don’t have to worry about the YouTube algorithm and how many views and subscribers we have. We can just be ourselves. So either YouTube, Brad Finn or the Average Money Podcast, wherever you listen to your podcasts, that’s where you’ll find me.
Mindy: What about the brewery?
Brad: Oh, you can find me at the brewery Destination Unknown Beer Company here in Bay Shore, New York. I’m always good for a drink. If you’re ever in the New York area. I’m pretty good at drinking beer. I am pretty good and-
Mindy: And it’s pretty good beer.
Brad: Yeah, the brewery, yeah, it doesn’t suck.
Mindy: It doesn’t suck.
Brad: We had a catch phrase early on where we’d go to festivals and nobody would hear about us. And one of the greatest compliments you can get at a beer festival is people walk away. They take a sip, they stop, they turn around and look back like, “Ooh.” [crosstalk 01:17:21].
Brad: [inaudible 01:17:22]. Yeah. And you get that. And then people like, they take a sip with a 100% doubt in mind because they’ve never heard of you. And they’re the best beer drinker in the world. And they’d come out and say, “Well, this is actually, it’s actually pretty good.” We’ll be like, “That’s what we’re going for. So thank you so much.”
Mindy: Well, Brad, thank you so much for joining us today. This was a lot of fun and we will talk to you soon.
Brad: Many. Thanks so much. This is completely an honor. And I appreciate all of your time and Joe, thanks for coming on as well. I appreciate you. And I’m a huge fan of your show as well, bud.
Mindy: Check that box off your list.
Brad: Yeah. And I got two duplexes this week, so-
Brad: So I checked two, I checked the real estate and I checked the podcast.
Brad: It’s been a pretty good year. I’m very, very blessed.
Mindy: Holly cow. We didn’t get into that. Okay. I guess we’ll just have to have you back so we can talk about that.
Brad: That’d be great. I can literally do this every night. I’m free every night, but Friday. Because that’s happy hour. And you do, even if you’ve listened to the Average Money Podcast, you do not want to get me when I’m drinking.
Joe: And the point is, he is free. He just has made life choices.
Brad: Yes. Well, I’m getting an education.
Joe: That’s right. I’ll get educated.
Mindy: [inaudible 01:18:39] title of this one. Getting an education with Brad Finn.
Brad: Yeah. We’re drinking for science. That’s what we say. Should we put coconut in the beer? Man, I don’t know. Let’s do it for science.
Mindy: Yes, you should. It’s very delicious. Okay, Brad, thanks a lot. And we’ll talk to you later. Okay. Joe, that was Brad Finn and his super fun story. What’d you think?
Joe: Wow. I get so excited when I hear somebody who has made some big mistakes along the way, like we all do and realize that none of those mistakes are fatal and what doesn’t kill us makes us stronger. And he’s definitely not just in a strong financial position, but I think he’s in a strong mental position. It’s not always, it’s often about the math, but it’s not always about the math when it came to him and paying off his debt, that, that was most important. And I think he also saw, and we didn’t talk about this a lot, but I think it’s really an important point that you know that pivot, once he got done with paying off debt, the pivot to now growing your wealth is a whole different beast. And he just mentioned this, that when he got done paying off the debt, that that was such a big goal that now, “What do I invest in? What do I do?” I feel like there’s two separate journeys, Mindy. Journey one is getting out of the hole and journey two is what do I want my life to be? And I think often the more we can kind of put those two together. So that getting out of debt is just a hurdle and not a goal. Maybe that’s a great way. But man, between that and the communication with his spouse, putting some velvet on the hammer, like we talked about, if people listen to Money Podcast, we’re all hammers. We’re so excited. We’re so geeked. We listened to show after show, we listened to all the BiggerPockets Money shows and then we go to our spouse and we’re so geeked. It’s almost like we’re in an MLM. And we’re just, hey why don’t we just sit down and let’s get in a circle. Let’s talk about better money management is going to be so great. And your spouse is like, “Whoa, whoa, big guy, calm down there.” And I think we have to kind of, like he said, I love his word empathy. Have some empathy for the people around you. And just powerful.
Mindy: Yeah. Well, and he said that he had spent overnight, he had an all night planning and research session while his wife was sleeping. She wasn’t having a planning and research session and he didn’t say, “This is what we’re going to do.” He said, “This is what we’re going to do.” And that’s so different. She didn’t hear him say, “Together, we’re going to work on making our finances better.” She heard him say, “Everything we’ve been doing is wrong and we’re going to change it. And that’s it.” And that’s not the right way to phrase it. I was trying to think back, who was it that said that she and her husband, they both discovered this together and went whole hog together. And it was Liz from Frugalwoods. And they both decided they discovered this. And they’re like, “I’m so excited. We’re going to cut out everything together.” They cut out everything. And for that month, they’re like, “Wow, this kind of sucks. I want this back. And I want this back.” But they cut out all of this. And they brought back two things. Those two things compared to all the other things, great have those two things, because all the other things don’t matter. You have decided that you don’t need these things. They’re not that important. And there’s a lot of things like Starbucks every day is not going to break your budget no matter what all of those personal finance bloggers say, it’s not going to break your budget, but Starbucks every day and going out to lunch every day. And when you’re at Starbucks, you might as well grab a scone, too. They have pumpkin scones right now. And they are so precious. Have you ha done? If you haven’t, you should, because they will make your lips sing. Anyway-
Joe: Starbucks. Do you want to sponsor the show? Get a ahold of Mindy? At biggerockets.com.
Mindy: Yes. Thank you. But I don’t go to Starbucks except once in the fall, I want to go have a pumpkin spice latte, but that’s kind of indicative of my whole spending mindset. As we heard last week, when Rameet made me cry near the end where I don’t spend a lot of money and having your Starbucks every day is indicative of like, “Oh, well, I already spent five bucks at Starbucks.” I really want lunch out today. And lunch out today becomes lunch out every day. And then I’m going to go to happy hour like Brad did. And he spent, what did he say? $20,000 in two months at the?
Joe: Yeah. What a great two months he had.
Mindy: Yeah. What a great two months that bar had. That’s a lot of money. I mean, $20,000. My first job paid $24,000 that’s for a whole year. And I lived off of that for a whole year. And it was a different time. It was a long time ago, but still $20,000 is a lot of money to spend in two months. It’s more of this lifestyle. And when he saying, “You can’t go to Starbucks today,” she’s hearing you can’t spend money anywhere today or ever.
Joe: Yeah. I think you’ve got to lead people those scone crumbs, where you’ve got the crumbs along the whole journey. And certainly they don’t need to eat every piece of the scone with you. I’m just ruining this analogy. But to give people some idea, if he’s been up thinking about it all night, she doesn’t need to go the Domino by Domino through every single thought. But to take her from where we were the day before to today, maybe in 100 words, is going to go a long way. And I do love, I love, love, love talking to communication experts about the idea of asking your opinion about saying, “Hey, Mindy, I had this great thing that I was thinking about all night. I wanted to ask your opinion and maybe you can help me shoot holes in this because I’m really excited about it. And I’m sure I’m maybe too excited about it. So do you mind if over lunch or dinner tonight that we chat about this?” Far, far, far better to ask somebody’s opinion than to shove it down their throat.
Mindy: Yeah. And that, like you said, they could provide a different perspective and “Hey, you didn’t think of this or you haven’t addressed this item yet.” “Oh, oh, you’re right. I forgot that we have $3,000 in childcare. I guess our goal of living on $1,000 a month, isn’t going to work.” Or-
Joe: There’s a psychological thing that happens there too. If I ask you for help on this. And then you hear the idea and then you start opining on the idea. It goes from being mine to ours. The second that you start adding in your flavor to the idea, now we’re catching up and we’re sharing it instead of yeah.
Mindy: Yeah. Instead of it being yours now it’s ours. And now you’re getting buy-in from me because I want to help improve your idea. But I have no interest in helping you improve your idea. When I wake up from a peaceful slumber and you’re like, “No more Starbucks.” I just dreamed about my pumpkin scone. I didn’t have one yet this year. What do you mean no Starbucks? It’s only $3.
Joe: I know this is off topic, but I went to Starbucks to get my one annual pumpkin spice latte. You get this? I go in, I’m all excited. I finally get to the counter. I tell the nice lady at the counter, “I’d like a grenade, pumpkin spice latte, non-fat please.” And she looks at me and she goes, “We’re all out of pumpkin spice.”
Joe: I’m like-
Mindy: It got over.
Joe: “…. do you know what season it is? How are you out of pumpkin spice?” So then they had like this apple machiatto thing, I’m like, Hmm, apples in fall. And somebody told me that this is actually a really good drink. So I’m like, “All right. I pointed at the sign.” I said, “I’ll have that apple thing.” She goes, “Yeah, we’re out of that too.”
Mindy: Ah, they must have got, there are supply chain issues, but yeah, you should have pumpkin spice latte in the store at the beginning of August. So that when pumpkin spice latte season starts, it’s there.
Joe: Come at Starbucks.
Mindy: I was very disappointed last year when they got rid of the gingerbread latte, which is second best.
Joe: Is it good?
Mindy: It’s like heaven, but better.
Joe: Heaven plus? Have you heard of an Apple TV, but there’s Apple TV+? Disney+?
Mindy: You can just go into Starbucks and say, “I would like heaven, plus, please.” And they’ll know that you want to gingerbread latte.
Joe: Not exactly what it is.
Mindy: Okay. This episode was not sponsored by Starbucks, but if Starbucks wants to send me a case of scones, I would love it.
Joe: Happy to try it out. And also if Brad wants to say thank you to me with some beers from the brewery, I’m happy to blow.
Mindy: What if you ever find yourself in Long Island, you should stop by because it is a delicious beer. They make a really good beer. Okay. Joe, I have had a very fun time with you today. Thank you so much for stepping in and filling Scott shoes while he’s off gallivanting and running the company. I appreciate you.
Joe: As always, Mrs. Jensen. I appreciate you so much. And I love the fact that you called me and I was very honored. So thank you very much for thinking of me.
Mindy: I will think of you again in the future when I would like you to jump back because I think you’re fun. Should we get out of here?
Joe: Okay. Fine.
Mindy: From episode 245 of the BiggerPockets Money Podcast, he is Joe Saul-Sehy, I am Mindy Jensen and huge thanks to Joe for coming back. I hope my admiration for Joe comes shining through my snarky remarks to him. He really is among the smartest people that I know. So from episode 245, we’re saying goodbye or tutu loo.
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