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Show 027

Let’s Talk Money, Honey with Rachel Richards

In Taste For Tenacity – Show 027, we hear from Rachel Richards, the author of Money Honey. Rachel talks through her pursuit of financial independence, her motivation, and some practical steps to taking control of our financial lives.

Transcription

0:14  

What is going on everybody? My name is Ben Trela. And this is taste for tenacity. This week on the show we hear from Rachel Richards. Rachel is a former financial adviser. She’s now a professional speaker and the best selling author of Money Honey, which is a fantastic name. Rachel was recently able to quit her full time job at age 27. She built multiple passive income streams which I’m excited to hear more about, and she now spends her time doing what she loves: traveling, writing and teaching young people about money management. She’s been featured on the Penny Hoarder in New York Times, and she has helped thousands of female millennials work their way out of financial distress. She’s made money management fun, entertaining and simple. Which I have to admit is an accomplishment in and of itself. And she currently lives in Louisville, Kentucky with her husband Andrew and her dog, Chloe. That is a mouthful. Rachel, welcome to the show.

1:12  

Thanks so much. I’m so excited to be on.

1:15  

So I’m going to start with the most important question. What kind of dog is Chloe?

1:19  

Yes, she’s a lab mix. She’s a white lab mix and she’s the love of my life. She’s here so hopefully she doesn’t bark at us today. But..

1:30  

If we do hear from her, we’ll give her a shout out.

1:34  

Alright, so let’s kind of dive into the content. Now. What was going on around the end of your high school career? Were you planning on going the college route? Walk us through where you were at when you’re around age 18?

1:48  

Yeah, so I wanted to go to college but I had already been pretty self educated on personal finance. So I had this big fear of how am I going to pay for college because I did not want to take on some student debt like I was afraid of it. I saw how many other people were struggling with it. So I was scared. I was like, how am I going to pay for college? You know, I don’t, I can’t find a job that’s going to be lucrative enough. I ended up going to center college and that is a private liberal arts school in Kentucky. And it cost over $40,000 a year. That’s how it is. And luckily, you know, I had done well in high school, I took AP classes. So I did get a lot of scholarships, about $30,000 in scholarships, so I knew I needed to make $10,000 a year. That summer after I graduated from high school, I did some interviews and I interviewed with Cutco Cutlery. So I don’t know if you’re familiar with Cutco knives. 

2:44  

Yeah.

2:46  

It’s a direct sales company. It’s not an MLM because, you know, hear that from people but it’s direct sales. So I sold Cutco knives. And it was one of those jobs where like, the harder you work, the more money you make. And so I was like, I can work my butt off, I can make this happen. So I did. And in that first summer I made $10,000. So I basically paid my way through school by selling Cutco.

3:08  

Wow! Now one quick question. So you said near the end of your high school career, you were already pretty well self educated on personal finance. Where in the world did that interest come from?

3:20  

Yeah. So the earliest memory I have of this and I’m like such a nerd. It’s so funny. But in middle school, I think this is like in sixth grade, I was in the summer camp with my friend and we were doing this waterpark thing. And I just remember like finding this book at the library or something and it was like the Motley Fool’s guide for for teenagers you know how to have more money than your parents ever dreamed of. Something like that. I was like, this sounds good. And I remember sitting at the waterpark like by the pool, reading my finance book instead of like playing with my friends. 

3:52  

Naturally, naturally.

3:53  

That was the  person I was. Yeah. And then some middle in high school, but that kind of sparked my passion in my head. Interest most kept learning and reading everything I could find about personal finance.

4:03  

Wow! So, that that took hold pretty early just from that one book. 

4:08  

Yeah, yeah, I did. 

4:09  

Wow! Okay, so now you’re in college, you’re earning enough in the summers to pay yourself through school by selling Cutco Cutlery, which to be honest, had to have been a marathon. What did you go to school for? And did you work throughout the school year? How did you balance that?

4:25  

Yeah, so I started in Engineering because I was  good at AP Physics, okay. I was like, Okay, I’ll try this out. Then I took my first intro to economics class and fell in love with it. And I was like, I love this. I want to learn more about it. So I eventually switched my major over to Financial Economics, and that’s what I majored in. I sold Cutco throughout the summers, but there was one summer I think it was my last summer. I didn’t make as much money as I needed to make. The summer just didn’t turn out  the was I was hoping. So I had to take out a $5,000 loan going into my senior year. And then I was like, I have to like, find a way to pay this back before I graduate, like I have to get my goal. So I did end up selling during the fall and during Christmas break, and I sold enough that I could pay that back. So I did meet. So I graduated in 2013. I was 20 years old, and I did finally meet my goal of graduating without debt. So that’s one of my proudest accomplishments.

5:23  

Okay, so you somehow maneuvered and you said now in in one of your notes, you said it only took you three years to get through school? So it seems like that helped a ton just in keeping that costs down. And you also touched on AP classes Did you find that those really helped set you up once you got into school to be a lot more efficient?

5:44  

Yeah, for sure. So not only did I get scholarship, academic scholarships just from having good grades doing well in AP classes, but the AP classes I got college credit for so when I went into college, I was already a second semester freshman and I was almost a junior And that got me really far ahead. And that’s the main reason I was able to graduate in only three years. You know, it was nice to do that quickly. But it also did save me an entire year of tuition. So that was a big help.

6:10  

Definitely. Okay, so you’re in school, you’re studying Financial Economics now? Whatdid things look like when you were starting to wrap up your college career in throughout your career? Did you know what you wanted to do once you graduated? Or was it something you had to figure out as time went by?

6:27  

So I knew what I wanted to do, then, of course, and now everything’s changed. But I heard about being a financial advisor, and I thought this would be perfect for me because it’s sales, which I know I’m good at. And it’s Finance, which is what I’m passionate about. So I was like, This is my dream career. That’s what I basically decided to do. I think around Christmas time in senior year, I started interviewing with companies, and I graduated with five job offers on hand from different financial advising firms. So I got to take my pick and a lot of that is because of the Cutco experience. I had a pretty impressive resume with sales and training and interviewing. So, that’s kind of what I credit for getting all those job offers. But that’s what I started doing when I graduated from college. I started out as a financial advisor.

7:16  

Gotcha. So for someone who is kind of navigating those waters and trying to find their job and land in those offers. What advice or guidance would you give them as they’re going through that process?

7:28  

Yeah, I would say it’s, you got to find a way to set yourself apart and that’s getting harder and harder to do because having a bachelor’s degree used to be like you were going to get a good paying job high paying job and but now everyone has a bachelor’s degree. So how else can you set yourself apart? You know, I did it with sales and having that impressive resume experience but you know, what internships or projects or like, things can you do that are above and beyond so that you can set yourself apart from your peers because you really have to be able to answer the question. You know, why would a company hire you instead of somebody else? And that can be difficult.

8:02  

So you have to be ready to say this is why me? Yep. Gotcha. So then you have five offers kind of sitting out laid out in front of you. How’d you pick?

8:12  

Oh, gosh, that’s a good question. I think there was one company I was turned off by because of the interview and the people. There was another company, I eliminated because I didn’t know there were all about selling people on products and getting paid on commission. Well, that’s nice, I didn’t want to be incentivized in that way. You know, I wanted to be a true fiduciary to my clients, I wanted to be a fee-based financial advisor. So, I kind of narrow things down that way and ended up in the end going with my gut and what I felt was going to be a really good environment for me.

8:48 

Gotcha. So two questions off that, first, you drop the word fiduciary. For anyone who may not be familiar with the Finance world, what does the term fiduciary mean? And how does that change what you do as a financial advisor.

9:03  

So, fiduciary means that you legally must act in your client’s best interest. And that can get you into like a fuzzy world in the financial advising world because if you have this product like a stock that you can or a mutual fund that you can try to sell to a client, like tell them they should invest in it, but you’re also getting paid if they do that, like what’s incentivizing you then. Are you really being a fiduciary? Are you really acting in your clients’ best interest, so I wanted to make sure there was no gray area for me, I didn’t want to be pressured into selling certain products. So, that’s why I wanted to be a fee-based financial advisor. And that means that I would be paid off like the amount of assets in somebody’s portfolio not off of products that somebody would buy. So, you know, for people listening if you are looking for a financial advisor, I highly recommend making sure you look for a fee-only financial advisor.

9:59  

Gotcha! So, another quick thing just to note about fee-based financial advisors, because they’re paid based on the amount of money you have under management, and they’re actually watching over, it sort of aligns their incentives and their goals with yours, because now instead of just saying, hey, this is going to give me the biggest commission, instead, that advisors now saying, how do we maximize your return? And how do we get you the most assets possible under management? So, in other words, how do we put you in the best position possible?

10:31  

Exactly. So that’s what it’s all about is aligning the interest. If you’re a fee based advisor, the more you grow your clients’ money, the more you get paid, and that’s what you want it to be. That’s how you want it to be set up.

10:43  

Gotcha! So, for those of you listening, fee-based, if you are going with financial advisor, go fee-based from what we’re hearing.

10:50  

Thank you.

10:51  

Okay. So, now you decide, all right, this is the firm for me, we’re going to work with them. What did what was going through your head as you sort of wrapped up your college career and were getting ready to make that change.

11:05  

Yeah, I was pretty excited. And then, it turned out that financial advising wasn’t actually the best fit for me. So, I started working in my career. And you know, what it comes down to is the sales part of it. I sold Cutco really well, because I had this big fear, I had this big goal, and then force myself to do it. But then I didn’t realize I didn’t actually like sales. You know, I wasn’t a natural, I kind of had to force myself a lot of the time to make those calls. I mean, it was really hard for me. So, it wasn’t something I just naturally enjoy doing. Like a lot of sales people do enjoy. And so I decided, like, I really can’t see myself doing this for the rest of my life because it is a very sales-based job. You have to make cold calls every single day. And that generally doesn’t dwindle down until you’re 20 years into your career. So, I was a financial advisor for about a year and then I ended up switching tracks. 

11:59  

Really! Okay.

12:00  

Yes, yes. So, I got into the real estate industry after that.

12:05  

Okay, you know what, go ahead.

12:07  

Well, at that point, this was kind of a point for me where I was like, Okay, what do I want to do with my life? So it’s kind of like I had this delayed thing. A lot of people feel that way in college. But for me, it was like, oh, I thought I knew what I wanted to do. And then after I tried that job, and you know, I didn’t like it, then I was like, well, what am I going to do? I kind of worked my way into this job, working with a real estate investor, because I was really interested in real estate investing. So I was like, I’m just gonna do this for now and see how that works. And then I took another real estate job. I learned a lot there as well. And then I finally landed in a corporate finance job and that’s where I feel like my career really took off. So I was working for a global manufacturing firm, as a finance analyst, and that’s what I had been doing for the past three years until I quit and retired this year.

12:56  

Wow! Okay, a lot of different stuff, kind of took… 

13:00  

Yeah, there’s a lot going on. 

13:02  

Let’s let’s unpack it. So, you started to realize you were super interested in real estate? Where did that interest come from? And what drew you further into real estate?

13:13  

The interest came from throughout high school and college when I was still reading my books about finance, and investing in the stock market and investing in real estate. So my interest kind of naturally grew. That’s where the interest came from. And then what was the other part of the question? 

13:29  

And then what really drew you to take action and actually get involved with real estate? 

13:34  

Yeah, so you know, it was just one of those things that I was like, I don’t know what else to do. So it wasn’t like I necessarily had this impressive goal or the strategy laid out. I was just at a point where I had quit the job, I needed to make money. And I was like, I have to find at least a short term solution until I figure things out. And maybe real estate would be the long-term solution for me. So, it was just kind of something I figured, I’m going to try this for now. If it works great. If not, like, all by myself more time to figure out what I really want to do. 

14:03  

Gotcha! And so something we just kind of glanced over there. But I do want to circle back to when you left financial advisory, did you have another job lined up?

14:12  

No. And I should have. That’s something that I feel strongly about now, anytime I’ve ever made, wanted to leave a job or kind of made a career change since then, I made sure I had a job lined up, because it was really scary for me. I always had, like, I could move back into my parents house if I wanted to, I was really lucky to have that safety net. But, you know, I really just wanted to be financially independent, not be a burden or you know, anything like that. So, when I quit my job without having a job lined up and didn’t know what to do, it was a really stressful time in my life. My savings is dwindling. And you know, looking back, I just wish that I had, I guess been a little more responsible about it, or just giving myself more time to find a job before I quit.

14:58  

Yeah, and there’s really two sides of it too. Because, you know, you definitely want to have something lined up if you can. But, it seems like you were also kind of grappling with the fact that you were in not necessarily a toxic environment, but the wrong environment for you, and you were willing to kind of take that leap and get out of a bad situation.

15:19  

Yeah, and it wasn’t that it was a toxic environment. It’s just that I knew it wasn’t it really wasn’t for me, and I was being paid, like a base salary. It’s not like I was making a ton of in commissions then. So I felt morally, I don’t know wrong about continuing to take the company’s money knowing that I wasn’t going to go anywhere with it. So, that was part of my decision to I didn’t want to take advantage of, you know, be paid this base salary if I really wasn’t doing anything.

15:47  

Gotcha! Okay. So now you’ve come to terms at that time with the fact that you need to leave, you pull the plug on a job that you know is wrong for you, and you’re kind of floating and then suddenly, real estate comes across your table. What did you start in real estate doing?

16:05  

I found a real estate investor that was hiring to bring somebody on to their team. And with him, I worked for him for about a year. And he was an investor in the area, who had some experience. So I learned all about, he’d mainly did flipping at that time, not really rental properties. But I learned all about you know, here’s how to find deals, here’s all these creative techniques and ways to buy distressed properties. And here’s how to flip them and hire contractors and then resell them and I got my license to as I was working with him, he paid for me to get my license so that I could kind of do more and do things without him having to be there. So, I learned a lot. I worked with him for about a year. And then I I took another real estate job.

16:52  

And it seems like part of what let you succeed in that role was the person you were working with kind of gave you the reins and said, here, let’s get you all the right tools so that you can do this as well as possible on your own. What do you think the impact of having a leader like that was?

17:07  

Yeah, it was great because he trusted me. And he gave me a lot of authority and autonomy. So, I was able to do a lot on my own. And, you know, having that trust was really, it was really good. And I was in a good environment where I could kind of make this my own, you know, find ways to add value. So I learned a lot because of that.

17:29  

Now, one other interesting note about giving that much trust to an employee, were there times when you might have screwed up or just like done something wrong and how did he as you know, your your boss, your supervisor, respond in those situations?

17:45  

Yeah, I definitely made a lot of mistakes. I can’t even remember them all, but I probably made a lot of mistakes. But he was always just really understanding. You know, I remember this one time I messed up, and we kind of both figured it out later. And we both just kind of like laughed, like laughed it off. Because it was kind of a funny mistake. It wasn’t like anything that was a big deal. But that’s how his personality was. He was really understanding and forgiving. And, you know, as an employee, when you have someone like that, then you really work to make sure you’re not going to keep making mistakes, because you don’t want to let them down. So that also fosters a really good environment. And then you’re willing to work with that boss, because you know how they’re going to treat you. And it’s with respect.

18:26  

Yeah, yeah. 

18:27  

Gotcha! So, you’re winding down your time with that that real estate investor? Were you ready to move on to a new thing? You know, you pivoted, what caused that move to a new real estate investor?

18:40  

The company was and my partner were, they were doing some things that I didn’t fully agree with, in terms of just being ethical, unfortunately, so that’s what I decided, you know, I want to be somewhere else. There was a position that open up working for a really big realtor In the area, and the realtor said, you know, I need somebody to come on and start like a real estate investing branch of my business. So, that’s what she told me. So, I got really excited. You know, I felt like she was a really awesome person to learn from. And so that’s when I made the move to working for her.

19:17  

Gotcha! So, now you’re starting with this new real estate investor, building an entirely new arm. Did you build that on your own? Did you wind up bringing in other people? What did it look like building something from the ground up like that?

19:31  

Unfortunately, that is actually not what the job ended up being.

19:37  

Really? 

19:38  

Yes. So, it was pretty misleading the way it was told to me. And I know we’ve talked about like three different jobs now that don’t keep working out. But you know, a lot of millennials they’ve looked down on for job hopping and taking a new job every year. And, sometimes there’s valid reasons to that and that’s exactly what I did. And sometimes you have to try things out. Figure out like, well, here’s what I don’t want to do. And you have to learn that about yourself until you really land on the thing that works. So,yeah, so this job, I felt like I was pretty misled on what I was going to be doing. I ended up being basically an administrative assistant. The woman who I was working for who I admired so much, did not treat me well, at all. She made some of her employees cry, like on a regular basis, she screamed at people. I mean, I had no idea what I was walking into. So, that was probably the toughest period of my early years working, working for her kind of feeling like, you know, what am I doing here? I am overqualified for this. And, I feel like I’m wasting my time working for this person. And so that was really difficult. So, at that point, I really kind of took a good look at myself and said, what am I want to be doing? Because here’s what hasn’t worked and like, I kind of dug deep and asked myself some questions and I was like, what is going to be the best option for me because I’m not going to keep jumping around at jobs anymore. So, that’s when I was like I need I want to work in corporate finance, I want to work for a big corporation where I’m not working just for one business owner, where I have the opportunity to advance and expand my career and grow and go up the corporate ladder. So, that’s when I started looking for a corporate finance job at one of the big companies in Louisville, Kentucky.

21:25  

Gotcha! Okay. And and we’ll take a look at that that switch in a sack. But, for anyone who might find themselves in for lack of a better way to put it a hospital situation like that, how did you kind of maneuver and get by when you were in such a frankly, a crappy situation?

21:43  

Yeah, it was so hard because when, I saw this early on, and I knew early on this is really, really bad and I need to get out of here. But also knowing that I’d only been up you know, each previous job for a year. I was like, I can’t move already. This is going to look horrible. my resume, so I wanted to try to stick it out, so it looked better on my resume. Now, in hindsight, I stayed at that job way too long, I should have just said, forget about it and just move straight on. I stayed for nine months, but there were nine brutal months where I was being treated like crap every single day. So, you know, in hindsight, I should have left earlier. But, I eventually got to the point where I was really sick of being treated like that. So, I looked for other jobs in the area, interviewed, I got really two really good offers there.

22:31  

So, how are we maneuvering through, frankly, a really crappy situation where you stayed at a job for way too long.

22:40  

Yeah, I finally got to that point, you know, I finally got to my breaking point. And I was like, Okay, I can’t be subjected to this anymore. So I started looking for corporate finance jobs. I got two really good offers. And then I was able to make a really good decision and kind of take my time and figure out what I really wanted to do.

22:58

 And it seemed like the one thing that that really sticks out there is you tried to stick it out because you know, you needed to make sure you had somewhere to land this time, right? Like, you needed your resume to be in a good enough shape to find that new job. But it came at a pretty steep cost.

23:18  

Yeah, it really did. And it’s just all about figuring out that balance. And what’s right for you, you know, I was held up because I was convinced it was going to look awful on my resume. I worked for her for four months and then quit. But then what’s the cost to that? It’s someone treating me like crap every day. And it’s my self-esteem and my confidence. So, yeah, I probably should have moved on earlier than I did.

23:41  

Yeah, it wasn’t worth the five more months of misery. 

23:45  

No, not at all. 

23:46  

So, now you’re looking for corporate finance jobs. You come across two, what were you looking for from those new companies? You said you were looking for larger corporations where you had a path for advancement. Now beyond that general rule, how did you distinguish between the two for the one you ultimately went with?

24:06  

Yeah, I got two great offers and it was the same amount of money and two really good companies that I had no qualms about. At that time, I had met my then boyfriend who’s now my husband, okay. And he was already working at one of the companies and I knew from his feedback that he loves the company, people were professional, people were smart, he was being challenged, he had a lot of room for growth. So, honestly, that company intimidated me more. I knew that if I went to that company, I was going to be challenged and it was my, I finally going to be able to dig in and really make the most of myself so it scared me more. And that’s how I knew I needed to say yes to it.

24:49  

That’s that’s kind of a really good smell test is what are you more intimidated by? Yeah, because that’s where more opportunity lies.

24:57  

Yeah, I knew if I didn’t take that job, it would just be because I was intimidated by it and that I was picking the safer option. And I was like, I can’t do that. I got it. I got to just say yes to the challenge.

25:08  

Hmm. Okay, so now you start. What were you doing and in that, you know, financial analyst role? What were you doing? How was it different to what you were compared to what you were doing before?

25:20  

Yeah, it was great. It is the best company I worked for the best team I’ve ever been on. So I’m so glad I found it. I was doing financial analysis for new product introductions. So anytime we were launching a new product, I was kind of looking to see whether it was going to be profitable. You know, when were we going to break even what are all the revenues and the cost? It was a really, really fun job.

25:43  

So what are some of the things you learned working in quote unquote Corporate America in the real world.

25:50  

You know, I learned a lot about being proactive and not just taking direction, you know, from my boss. You know, there’s a lot you can do as an employee of the company. You can take your direction you can do your job. But you know, I quickly learned if I really wanted to stand out and make a good impression I need to find ways to go above and beyond and really sit back and look at the financials and say, what are we not looking at? What should we be thinking about more and kind of doing analysis on my own and prove and presenting some of my findings to my team, and that’s where I really got good at my job, and they really started appreciating me. So, throughout your story, one thing we’ve consistently heard is you go above and beyond what’s you know, written on paper is your tasks. Where do you think that comes from?

26:36  

 I don’t know. I’ve been I’m like one of those really annoying type A control freak personalities. Okay. And, you know, my dad has said before that he never has seen anybody that prepares for something as much as I do. And I don’t know what it is. I’ve always been a really ambitious person. I have this fear of being like broke and financially dependent. So, a lot of it is just driven by like, I have to make enough money so that I’m financially independent and secure. But yeah, that’s how I’ve been my whole life. 

27:06  

Wow! Okay, so you just have that that natural fire. 

27:09  

Yeah.

27:11  

So, now you’re working as a financial analyst at a larger, more stable corporation from the sound of it. What were you doing during that time kind of outside of your traditional work?

27:24  

Yeah. So, it was at this time that I came up with the idea for my first book, Money Honey. And you know, at this point in my life, I was kind of the go-to financial expert for all my family and friends. Because I knew a lot about Finance. I knew a lot about real estate investing. So people were constantly asking me questions, and I love that. And I also thought, you know, gosh, there’s so many free resources and books out there. So, like, I wonder why people aren’t taking advantage of those. I quickly realized that Finance and the books on Finance tend to be so complex, or intimidating or even just boring. So, it’s hard for people to, you know, learn about finance, get their questions answered. And that’s a lot of the reason they would come to me. So, I kind of, I had this idea, how do I make Finance more accessible for people. And it was around this same time that I read this book called Skinny Bitch. And it is a book about clean eating. And it’s super sarcastic and funny and humorous. And I love the whole premise of like, here’s how to take this clean eating subject, which could be boring to people, and how to make it really, really fun to read about. So I was like, I, I can do the same thing with personal finance. Like, I can write a book about Finance that’s sassy and sarcastic and just fun to read. And people can read it. And that’s how they’ll learn about how to manage their money. So, that’s where the idea came from. And I was so excited that I was spending like I would get up early in the morning. I’d work late at night or on the weekends, and I was writing my book on in my free hours around my full time job.

28:58  

So, now you’re You’re writing. What was that like? I mean, what’s it like writing a book?

29:06  

Gosh, there’s a lot of emotions! At first, I was like, gung ho and super excited. And I think in the first weekend, I sat down and wrote 5000 words, which is a ton. It just it came pouring out of me. Yeah. And so at first, I was like, yeah, this is awesome! I was super enthusiastic! Okay, then after a couple months, I was like, this sucks! This book sucks! And I can’t write this anymore. And I’m quitting. I’m done with it. So, I literally quit. I was like, I can’t do this. This is embarrassing. I quit writing for two months, and I decided I was never gonna look at that again. And then I was talking to a friend and a co-worker and telling her about it. And she was like, Rachel, you have to finish this book. Like, this is so cool. This is what you were meant to do. And she kind of re-inspired me and I was like, you know, you’re right. So I went back and I read what I’d written and I was like, this is good! Like, what was I thinking? Yeah. And so I kept going. And you know, if it’s like that constant up and down of feeling like, oh, this is awesome! I’m proud of myself and then feeling like, I suck! And if I publish this, then that’s going to be an embarrassment. And it’s those two emotions constantly conflicting with each other. So, it’s a difficult experience. I’m super glad I went through with it, though.

30:25  

Yeah. So, when do you think the fact because you went like you said, gung ho right out of the gate. You think going so hard for so long, ultimately, sort of burns you out? And then you needed to get to a point where you said, all right, give me two months. Give me a break. I gotta get my head together.

30:43  

No, I don’t think it was burnout. For me. I think it was just insecurity. And just not having the confidence in myself, which I’m a pretty confident person. So I really, my mind convinced me that my book was just awful and like, you know, what was I thinking Rachel So yeah, it was just more of the emotions rather than being burned out. I’ve definitely burned myself out before because I work really hard. But yeah, I don’t think that was the case at that time.

31:09  

Gotcha! So, you wrote this book. There’s tons of ups and downs. How did that ultimately play along with your standard career? And what did that look like as you started to move forward? And as this book kind of got some wind in its sales?

31:25  

Yeah, I published the book in September of 2017. And it did so well, it did amazing. I mean, I’m still just so proud and like, excited with how well the book launch went. To this day. It has over 400 reviews on Amazon, and I’ve sold over 10,000 copies. So it’s really yeah, like amazing milestones that I never would have thought possible. 

31:47  

Yeah. 

31:48  

And with that book, I sort of started this online presence where I was helping people. I had my Facebook group, my Facebook page. I was getting notes from people all the time thanking me and telling me that my book had changed their life. I mean, this was just incredible. And I got so much positive feedback and reassurance. And to me like this was when, you know, I started feeling so fulfilled because I felt, wow, I’m making a difference. You know, I’m helping some people out there make a difference in their lives. And that feeling to me was better than, like anything I could have gotten from Corporate America. So that’s when I started thinking, like, you know, this really is my passion, you know, be great at some point, if I could do this full time. And you know, that’s kind of what when my goal became to quit my job.

32:32  

So, now you have this huge goal of quitting your job? What did you do to get to that point, and to ultimately kind of pull the trigger when you were 27? 

32:42  

Yeah. So I didn’t want to quit my job and lose my income. So, I want it so there was one requirement for me to quit my job and it has replaced my full time income, and I’m not quitting until I do that. So now that’s pretty hefty task. I was making a lot of money working as a finance analyst. So I started getting into real estate investing. That’s another thing I started doing in 2017. I did that with my, we were not yet engaged. So, we were still dating at that time, me and Andrew, and we kind of pooled our savings together, we bought our first duplex. And that’s how we started getting into real estate investing. I kind of came across this term called passive income. And passive income is income that is earned with little to no work. So, think of things like book royalties, like JK Rowling wrote the Harry Potter series 25 years ago, but she’s still making tons of money off of them today, you know, for the writing that she did 25 years ago. So, that’s like a royalty income, which is passive, rental income from rental properties can also be passive. Because you put tenants in a building, you don’t have to do a lot of work, and then you’re just making money every month. So, I started thinking about passive income and how can I start generating passive income because if I do that, I can quit my job and never have to work again. It’s hands off. So, I got really excited by this idea. And at some point I had this epiphany where I realized if your passive income is greater than your living expenses, doesn’t that mean you’re retired? So, that’s how I kind of looked at it. That’s how you achieve financial independence. And that’s how I wanted to achieve early retirement. So, I started getting really into passive income with real estate investing. You know, I already had the money, the royalties for my first book, there was another business we started for passive income. And by 2018, close to the end of 2018, I had more than replaced my full time income from my job.

34:37  

Wow! And one thing about passive income, just as a side note, it’s not that it takes no work to kind of mean it takes no work to maintain it. It’s just all front-end loaded. So, for you, that work was like writing that book and sitting down for those hellish at times months to put this thing out into the world and then letting it run on its own. Similar to the real estate properties you have, it takes a lot of work upfront to get those up to snuff and ready to kind of operate on their own. But, once you get to that point, then it can take off and run without that constant attention.

35:15  

Yes, exactly. And thank you for making the distinction because that’s important. Passive income either requires an upfront time, or money investment, or both. But, once you make that investment, and you get those passive income streams built, then it’s much more hands off. It’s flexible. So, that’s why I love passive income so much.

35:35  

Gotcha! So, now you have a couple a couple of properties under your belt that are cash flowing enough, where you’ve kind of reached your retirement mark, what was going through your head at that time, walk us through that?

35:46  

Well, I knew, I had this amazing job that I truly loved my full time job. So, I knew when I got to that point, it was going to be hard to actually go through with it and quit my job. I got out Reset points sometime around September 2018. Then I was like, Okay, I’m ready to quit my job. And then I didn’t do it. And then in January, I’m like, okay, I gotta quit. And then I didn’t do it. So, this went on for an entire year. And I finally quit my job in August of this year. And you know, it works out fine because I was able to grow my passive income streams even more. And because I had kind of like a double income coming in, I was able to save a lot of money over the last year, so, you know, it’s fine. It took me a little bit longer to quit than I intended. I think it all works out for the best.

36:31  

Okay. Now, what are some things you wish you had known when you reach that financial independence number and were ready to kind of pull the trigger, what would you have done differently?

36:44  

What would I have done differently? I don’t know if there’s anything I would have done differently. Because I know that I kept saying to myself, like, okay, it’s time for you to quit, you gotta quit. And so you know, maybe I should have quit earlier because when I think back to that point in my life, when I had all of our rentals and then I had my job, it was a lot of work like that was a period of my life where I was getting burned out. Because you know, we were, we didn’t have a full time property manager in place. And that’s really what it takes to make rental income passive is having a property manager, like, that’s how you make it passive, or else you’re going to be a full-time landlord. So, I didn’t quite have that in place yet. So, I was still doing a lot of work. And for me, it was just too much work in like two little hours. I probably should have quit earlier or just manage something so that I wasn’t so burnt out because there is such a thing as like, too much work.

37:41  

Yeah, it does reach that point, eventually. 

37:43  

Yeah, for sure! 

37:45  

Now that you’re fully retired, which, congratulations, by the way!

37:49  

Thank you!

37:50  

And retirement kind of seems like a misnomer because a lot of us can picture a retirement. You’re going to kick your feet up and play golf every Tuesday. And that’s the life from that lot.

37:59  

Yeah. When I say retirement, really, what I mean is financial independence. When you have financial independence, you’re retired, meaning you can then do whatever you want. If you want to go to the golf course and kick up your feet, or go to the beach and not do anything, that’s great, you can do that because you’re financially independent, and you have income streams coming in. But the bigger benefit to me is, you know, I got to a point where I was working because I wanted to, not because I had to, and gosh, that makes such a big difference in your mentality. Everything just became more fun, like my business with my book and my professional speaking. It’s so exciting. I’m having so much fun with it, and I don’t have to do it for the money anymore. I do it because I love to do it. And then I got you know, I get to do things like traveling or spending more time visiting family and friends. So, it’s really made such a difference in my life. But retiring early just means you can do whatever you want. You can keep working if that’s what you want to do, but your financial independence and you get to have that choice now.

38:59  

You have that flexibility to really double down on what you actually care about.

39:04  

Oh, yeah, it’s a lot of fun.

39:06  

Love it! Now, as we start to get ready to kind of shift into this, the second portion of the show, there’s two things I wanted to touch on.Now, can you really quickly walk us through what investing is to you?

39:23  

Yes. So, when I think of investing, I pretty much think my go-to is stock market investing. But there’s also real estate investing, but normally when you know, people are talking about investing, they’re talking about investing in the stock market. Okay, so investing to me, the way I guess I would define it is, is taking the sum of money, whatever sum of money, and then finding a way to grow it over time finding a way to increase the value of that money over time.

39:47  

Gotcha! And you also note that that’s important, especially from a young age, how does that have that dramatic have an impact starting, you know, 10 years earlier than your peers?

39:59  

Yeah, so It’s actually funny you said 10 years because I have a perfect example to walk you through. Investing at a young age is super important. As an example, let’s take someone who’s 35 years old, 35 years old, they start investing. They start with $100 a month, you know, they invested in the stock market, they’re getting a 10% return. And they do that every single month until they’re 65 years old. Okay, when they retire at age 65, they’ll have about $217,000. Okay. Okay, so let’s take a 25 year old, so someone that’s just 10 years earlier, 10 years, they start 10 years earlier, they do all the same things, hundred dollars a month invested 10% return and they invest until they’re 65. The 25 year old will end up with almost $600,000 so that is more than double what the 35 year old had. And that’s all because they started just 10 years earlier, they started at a young age. Even if you don’t pick the best investments or you’re not some expert, even if you are that person, but you start right now, you’ll still be better off than an expert investor who waits 10 years from now to start investing. That is why it is so important to get started at a young age.

41:14  

So when it comes to investing time is really your greatest asset.

41:18  

Yes, time is your biggest advantage. You know, the saying, the best time to plant a tree was 20 years ago, the second best time is today. It’s so true when it comes to investing. 

41:29  

Love it! And now the second thing that we wanted to hit on was the fact that something you’ve sort of talked about really can resonate with our audience and its savings buckets. So what are those saving buckets? And how are they so important?

41:43  

Yeah, one of the things I struggled with when I was learning about personal finance, you know, in college when I was making money at first, is, how, what’s my savings strategy because a lot of the people out there will say, save 10% of your paycheck save 20% of your paycheck. I would do that. But I’d be like, what is this for? What do I do with it? Yeah, so it’s just confusing. You have all these different things you’re saving for like you’re saving for retirement, you’re saving for a trip you want to take. I just wanted a strategy. I could really kind of separate out those different goals. So, that’s where I came up with the savings buckets. And the savings buckets are four buckets that basically help you separate out your different savings goals. Bucket number one is for emergency savings, and you should have always at least $1,000 set aside for emergency savings. Because it’s for when, when not if you have an emergency. Yeah. So it’s really important. Bucket number two is for medium term savings. So, anything you’re saving for within the next 12 months. That could be like if you’re a college student, that could be a tuition payment, or books or like a trip home for the holidays. And then you have bucket number three, it’s for long-term savings. And those are things you’re saving for that are more than a year away, but before retirement, so, like these normally has your your bigger ticket items like a downpayment for a house or a wedding fund, those sorts of things. And then finally, you have bucket number four, which is for retirement. And you should always be contributing a little bit every month to bucket number four, even if it’s only 50 bucks or 20 bucks a month, you should always contribute to retirement. But otherwise, you’ll fill up the buckets consecutively. So, you’ll fill up bucket number one first, then bucket number two, and then bucket number three. So that is the savings bucket strategy for Money, Honey.

43:33  

I love it! And so what kind of targets in terms of like $1 amount or a percentage of your income should you have in each bucket before you move on to the nextone. 

43:43  

So I go more by dollar amount. So, bucket number one is 1000. That one’s really easy. Everyone just has $1,000 status. And then bucket number two, it’s really going to depend on what you’re saving for individually. So, I recommend you just get like a pen and paper out, list out everything you’re saving for within the next 12 months. And that should be your goal for bucket number two. And there is an asterisk, I would say, bucket number two should also have, it should have at least three to six months worth of your living expenses. Because that’s just like a fail-safe in case you lose your job or you get laid off, you have to have that savings in place. So, it should at least have that amount. And it can cover the other things as well. And, then yeah, exactly. And then same for bucket number three, you just total up all those big ticket items, or you might be sitting for the future. And that’s the amount they’ll come up with for bucket number three. Got it.

44:34  

Awesome. Cool. So now let’s kind of gear really up into the second part of this show. Now, what are some of the key takeaways that you have learned from your career or your projects that you’ve worked on so far?

44:47  

Alright, so I thought of two takeaways. The first one is to say yes, be a yes, man. I think there’s a whole movie called A Yes Man.

44:57  

Yep! Jim Carrey. Great! That’s right!

44:58  

Yeah. Earlier this year someone reached out to me, the College of Central Florida. They reached out to me because they’d heard of my book Money, Honey and they were doing a financial literacy speaker series at their school. And they wanted to know what my fee was. They wanted to see if they could bring me in to do professional speaking. Now, I have had a fear of public speaking. Okay, I hadn’t always had it. I used to be a good public speaker, but I kind of developed a fear of public speaking. So, I was like, feeling really nervous and anxious about it. But I knew that if I said yes, and it overcame this fear, it could open up so many doors. So I said, yes. And I attended all these speakers groups, and I worked on my speech with a speaking coach all year long. And finally, in September, they flew me down, I deliver the keynote, and I nailed it. Like, I was so proud of myself. Thank you. Yeah, it was a really defining moment for me because now I feel like I can go on and do that and that’s opened up so many doors, I can speak at colleges now. You know, College of Central Florida wants me to come back. So, I’m really excited to kind of be in this new avenue. So that’s my first takeaways, say yes,  don’t be scared, don’t limit yourself. Number two I would say is, you know, I’m a finance person. And I’m pretty frugal, I’ve always been that way. Sometimes I can be like a little too cheap. For example, I was so focused on launching my first book Money, Honey on a low budget, like I didn’t want to spend any money on it, I wanted to do it for as cheaply as possible. So, I didn’t want to spend a ton of money on things like a book cover or advertising. But that may have hurt me, you know, maybe I missed out on sales because I didn’t pay for advertising or I didn’t pay for certain things. And there’s no way to know really how that impacted me. But I definitely try to balance it better. Now. You know, I’m not the type of person where I’m going to spend $8,000 on a program or like a mastermind or coach, but I also know like, I need to invest in myself and my business in some way in order for it to grow. I’m just trying to be better about better Saying that and knowing that that you have to invest in yourself. So that’s my second takeaway.

47:04  

Yeah, for those of us that do come from the Accounting and Finance background, the phrase you have to spend money to make money can sometimes rub us the wrong way, but it definitely has some credibility to it.

47:15  

Yeah, for sure.

47:16  

So now, what is the one piece of advice that you would give to your 20 year old self?

47:23  

Yeah, so my advice is just to reassure my 20 year old self that my crazy career path will only make sense in retrospect. Okay, so I struggled after college because I had done well and achieve so much, you know, started in that financial advising path, wasn’t making a ton of money, didn’t really like the job. You know, I kept thinking it’s not supposed to be this way. Like, I had a 3.99 GPA and I have a Financial Economics degree, I should be making a ton of money. I should love my job. Now, those were naive and entitled thoughts. That was entitled But I didn’t realize that. And then you know, I switched over jobs moved into real estate works for that woman who bullied me every day, she made promises about what the job was. And in reality, I was like an assistant. And there’s nothing wrong with that. But I was overqualified for it with my Finance degree. So, it was a few very frustrating your screen. And then you know, I finally moved into the corporate finance career. But looking back, I would not be where I am today without the credibility of having been a financial advisor. I wrote my book about personal finance and I needed to be able to say, I’m a former financial advisor. And then most of what I learned about real estate I learned in that job so I would not have invested in real estate either if it hadn’t been for those jobs. So, just knowing that everything happens for a reason, and sometimes you don’t realize that until years after the fact.

48:49  

Love it! Love it! Now you read a lot clearly. And so, besides your book, Money, Honey. In the new book you have coming out in November, which you know, were more than willing to plug if you’re ready for it.  What is one book or resource that has helped you along in your journey.

49:08  

Yeah, so two of my favorite books. One is Millionaire Fast Lane by MJ DeMarco. And it kind of changed my whole way of thinking about life and just rewiring your brain to think in terms of being a producer instead of a consumer. And how can you be the person that starts businesses instead of working for businesses? It’s super, super interesting. I’ve read it three to three or four times now but I love that one. One other book I would recommend is the book called Published by Chandler Bolts. It wasn’t until I read that book that I started writing my own book, because I had this idea but I didn’t know how to do it. And his book gave me like the know-how of how to write a book, outline a book, market, publish launch a book. So, it wasn’t until I read that that I felt like okay, I can do this and I’m going to do it so I love that one as well.

49:56  

Got it! So Published made the whole process a lot more tangible for you. 

49:59  

Oh, yeah, that was a super helpful.

50:02  

Great! Now, Rachel, where can people learn more about you?

50:06  

So, I’m on Facebook and Instagram, you can just search Money, Honey, Rachel. I am getting ready to launch my second book in November. Super excited about this one. It’s all about passive income and early retirement and how, you know, I tell a little bit about my story, but then most of it is about here, the different five types of passive income. Here’s how anyone can get started making these passive income streams. I’m really excited about it. I’ve gotten a lot of good feedback. You’ll be able to find me if you go on my Facebook or Instagram page and you can also go to my website moneyhoneyrachel.com. 

50:41  

Awesome! Rachel, you are a former financial advisor, a best selling author of Money, Honey, you have a new book in the hopper. You’ve been published in the Penny Hoarder, The New York Times. You have a dog named Chloe, it has been an absolute pleasure chatting with you.

50:57  

Thank you so much for having me on. It’s been so much fun. I really appreciate it.

51:01  

Thanks, Rachel, take care! And that does it for our show with Rachel Richards, author and the original Money Honey. Now there was a lot we walk through in that show. But first and foremost, Rachel points out that everybody does things at their own pace. We’re all following different timelines. And so for her, she didn’t question what she wanted to do with her life until she was already in the workforce, which is a tough thing to handle. But, keep in mind that we’re all going to get to different phases at different points, and there’s no right or wrong timing. Have some patience with yourself and with where your life is going. And you’ll get there when you get there. Rachel also does a great job explaining the four different savings buckets that she typically uses. You have your thousand dollar emergency fund that you need to have on hand first, then you have your short term expenses or she calls a medium term expenses so things you’re saving up for within the next year, and you should also have three to six months worth of savings in there as well. And then you get into your longer term. So, things between 12 months from now and your retirement and then you have saving for your actual retirement. And those buckets really sort of segment off what money needs to go where so that you know what you’re actually saving for, in what you have available. She defined them slightly differently than I do. But keep in mind, we’re both getting at the same thing. You have your short-term expenses, your medium-term expenses, and then retirement and your long term expenses. So, having those different buckets to start chipping into really makes things a lot easier and a lot simpler to understand. A consistent theme we’ve also seen start to kind of emerge is that the people we’ve heard from are all people that go above and beyond their standard job requirements or their standard task. We heard it first significantly back in the show with Paul Riser. We’re hearing it again with Amy Peterson last week, and now we’re hearing it today from Rachel. A lot of times you have to go above and beyond to actually achieve what you want into create what you want to see. And so, living solely on average will get you the average returns. But if you want to go big, and if you want to have that huge impact, you have to go above and beyond your standard, typical actions. Rachel also shows a really great case study of why it’s important to listen to your gut. Sometimes you know, you’re in a crappy situation, but your brain decides to talk you through it and say now we can make this last we have to get to this point. But if you know something’s the wrong fit, in that it’s potentially a terrible situation for you. Trust yourself and sometimes you got to pull the plug to get yourself into the right situation. And frankly, just a safe situation. Keep an eye out for Rachel’s next book. Like she said, that is coming out very soon after this show airs during November. It’ll be a great read I’m sure. From Taste For Tenacity show number 27. This is Ben Trela. Thanks for listening!

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