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What Passive Income Really Is And How To Get There With Rachel Richards

Episode 402: What Passive Income Really Is And How To Get There With Rachel Richards

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REIS 402 | Passive Income

 

When you hear “passive income,” you’d most probably be conjuring an image of an old, retired investor sipping his cocktail while lounging on a tropical beach. Mitch Stephen’s guest for this episode stands in stark contrast to that image. Retiring at age 27 and living off over $10,000 per month in passive income, Rachel Richards, otherwise known as the “Money Honey” is living proof that financial independence is something that can be achieved regardless of your age or initial net worth. She is also living counterproof to the myth that you’d have to quit your job and “take the leap” to succeed in real estate investing or any other path to passive income. In this episode, she shares her amazing story and a sneak peek at two of her books, Passive Income, Aggressive Retirement and the bestseller, Money Honey.

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I’ve got Rachel Richards. She’s from Colorado. Her husband does the buy and hold and they have 6 properties, 40 units. They are out proliferating and we want to talk to her about that. How are you doing, Rachel?

I’m good. Thanks, Mitch. How are you?

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Real estate investing is something I had always been interested in. I remember reading books about it in high school and college. I knew I always wanted to do it. I figured I could retire early if I did it the right way. In 2017, my husband and I purchased our first duplex. We had been looking for nine months scouring the market. Deals fell through, offers fell through. This one worked out well. I think that the first purchase was my a-ha moment because up until then it was so abstract. It was this idea I had in my mind. Once I got that first house and I saw the numbers and I saw that it was working, I was like, “This is happening. I can replicate this process and achieve financial independence.”

I’ve had that same kind of learning. It’s not real until it happens to me. Half the time, it happens in an accident and then you go, “That’s what they were talking about in that book. That’s what Robert Allen, Kiyosaki, and all these guys are talking about.” You started out with one, do you have a full-time job at that point?

We worked and I just quit my job in 2019. We were working full-time, 40, 50-hour a week. On the weekends, we were looking for and managing our rental properties. In the evening, I was writing my book.

What do you do in the real world?

I was a senior finance analyst at a global manufacturing corporation. I also used to be a financial advisor and then my husband is in cybersecurity.

Cybersecurity is a good one to be in these days.

He loves it.

How long was it until you went full-time? Is one of you still working on the side?

We’re financially independent. We’re bringing in about $10,000 to $15,000 a month in passive income. We work when, where, and if we want. I chose to quit my job in 2019 and my husband chose to keep working because he loves what he does. It took us about 2 or 3 years to get from $0 to $10,000 in passive income.

That’s a misnomer that everybody wants to quit their job. Some people love what they do and it can be a great return. As long as you love what you’re doing, why skip out on the income and maybe the velvet handcuffs with the insurance, the 401(k) and all that.

He is lucky to have a career that he enjoys. It has made a big mental difference for him that he knows he doesn’t have to work, but he’s continuing to work because he wants to.

There’s always that thing in the back of your mind. “I can tell my boss to shove it, but I’ll keep my pension for one more day here.” Plus, it’s a perfect thing with one person. Are you full-time?

Passive income is money that is earned with little to no ongoing work, but it’s not a get rich quick scheme. Click To Tweet

I’m just self-employed/financial independent.

Are you full-time in the business?

In the real estate business, it probably takes about ten hours a week to manage.

I was going to say having a job makes you figure out how to manage the business more efficiently. After all, you’re not there for it to suck you dry because you’re doing something else. It forced you to make more of a real business out of that little side gig you have.  

All of our properties are in Kentucky, so moving to Colorado has also forced our hand and made us more efficient because we would go down to the properties a couple of times a week if something happened. We’re forced to outsource and it’s made managing things easier from out here.

Even in the business that I’m in, which is a seller finance business, especially in the landlord business. By the way, I take the money that I make from seller financing and I buy a boat and mini storages. I still rent a certain amount of a product. Since it’s my business, my money, and my face on this thing, I found that dealing with tenants is difficult. They expect more out of me because I’m the owner and I’m supposed to do anything I want so they demand more unreasonable things from me. Whereas if I was an employee, I could say, “I’m sorry, I’m looking in my book and it doesn’t say I can do that.”

That’s something my husband and I have done well is whenever we’re talking to a prospective tenant or a tenant, we present one of us as the property manager and one of us as the owner. That way we can put a little bit of distance or a wall between us and we can say, “Let me talk to the other business owner,” “Let me ask the business owner if that would be okay.” It helps us manage the tenants a little bit easier.

After many years in the business, I have no patience for people. I don’t believe anything anyone says anymore. I’ve been lied to so much and I am jaded that I’m the last guy that you want dealing with a customer because I put up with no bullshit from any of them. I just had it.

I’m jaded too. I don’t take excuses from anybody anymore. That’s what landlording will do to you.

I used to be a nice guy, now I’m a prick. The last straw for me, if I remember, it was a lady. I went to collect a mortgage and she came to the door. She had her head shaved and she said she had cancer so I let her ride. I told her, “Let me ride this for six months out of the compassion of my heart.” Eight months later, they still haven’t called me or anything. I thought, “Maybe she died.” I drove over there to talk to her and I knocked on the door. The mom came to a deal and I said, “I’m praying to God, she’s still with us.” She went, “Who? My daughter? She never had cancer.” I found out all this time, she never had cancer. I said, “That’s it.” If I had any compassion left in me for that side of the business, it left that day. It’s packed up and gone. Tell me about passive income. Is it passive?  

The way I define passive income is that it is the money that is earned with little to no ongoing work. It’s ‘no get rich quick’ scheme. I think a lot of people think it’s this easy money tree or that it is 100% passive. Maybe the only 100% passive income stream is portfolio income, where you set your money there, you earn dividends and you forget it.

Mark my words, if you don’t want your portfolio manager, what’s going on is your money will disappear.

That’s true too. There’s always an aspect of manage the manager. That is a good point.

REIS 402 | Passive Income

Passive Income: If you want passive income to become even more passive, you need to hire a property manager.

 

We don’t want to split hairs, but it changed my whole life one time when I read this definition of financial freedom. It said, “Financial freedom happens when your wants and your needs are exceeded by your passive income.” I did strike the words, passive income and I put cashflow, when your wants and your needs are exceeded by your cashflow. It is because I never see anything as passive. Technically, there’s no zero down deal either. You’re exchanging cash for money, gas, expertise that you learn from courses. It costs you something to breathe every day. If you don’t believe me, let’s see how long you can breathe without getting into your wallet. It might be 1 or 2 days, but sooner or later, you’re going to have to stop what you’re doing and get something and spend money.

It takes time or money to create passive income. You do have to invest something. Is it ever truly hands-off? Not in most cases. In real estate investing, I always tell people, “You have to hire a property manager.” If you want it to become more passive, you have to build-in the expense of having a property manager because chances are, most of us don’t want to quit our jobs to become a full-time landlord. At least that’s not what I wanted to do. You’ll be managing things. Maybe you’ll put in a few hours a month or a couple of hours a week. Some people say, “That’s not passive,” but in my opinion, compared to a 40-hour week job, it’s very passive.

I think the idea though, more accurately and I’ve heard someone say it, is that we can do one thing and it pays us for a minimal amount of work for a long period of time, if not forever. In the rentals, it’s forever. In the mortgages, it’s 30 or 15 years. Once I make a good deal, that good deal is a good deal for a long time. It’s got some upfront work to it, just like you find a good rental. You had to go bust your buns. You went around, you searched, you found, you made offers, you negotiated, and then you went and found the money to fund the deal. Now, all that work collapses down. You’ve got a tenant in it. Maybe you’ve got a 2-year or a 4-year lease or whatever and all of a sudden, things get quiet and the check just starts coming in.  

The hope is that things get quiet for sure.

Tell me about your best-case scenario. What’s one of your best case studies?

With my real estate, I would say that the first duplex we bought was our best purchase ever. We got lucky in many ways. I have my real estate license for the purpose of me buying my own rental properties. I’ve been looking at the MLS. I found this expired, canceled listing in this great area of town. I started emailing the listing agent and said, “Is this going to come back on the market at all?” She said, “Yes, it will eventually.” I would follow up with her maybe once every other week to let her know I was still interested. Finally, when it was time, she reached out to me before relisting it on the market. She said, “Do you want to make an offer because we’re ready.”

I did. It was because I was persistent that I was the first one that was able to make an offer on the property, but it was such a great purchase. It was $100,000. Keep in mind that it is in Louisville, Kentucky so it is a pretty reasonable pricing, cost of living. Even for Louisville though, that’s a great price. My husband and I put down $20,000 and it was cashflowing $500 per month in profit right off the bat. Fast forward, it is now worth about $175,000 and it’s cashflowing $800 or $900 a month. I think the cash-on-cash ROI has been over 20%. I always tell my husband, that’s going to be the best investment I’ve ever made.

Sometimes, as a coach, I shudder at how much people made on their first deal because they were completely under the wrong illusion of this business. That is not going to happen again for another ten years. Sometimes the worst thing that could happen to somebody is that they made a great deal on their first deal. I was like, “These people made $100,000 on their first house and they think every deal is going to be like that.”

You have to set your expectations accordingly. Luckily, I knew that we were pretty fortunate and I was like, “I doubt we’ll ever have an investment this good again.”

I’m sure you will, but you’re not counting on them being every day. We hear a lot of horror stories about property managers, but then also if you get a great one, your life can become pretty simple. What’s the secret to picking up a good property manager? My biggest fear is that it’s not their money. They call people, the high-ticket advertiser off the billboards on the highway, and call plumber to go fix it. That guy is $200 an hour. They don’t watch after my money like it’s their money. That’s my biggest fear.

I have a horror story for you. I don’t maybe know what to do, but I know what not to do when it comes to hiring a property manager. It was awful at the time, but we can laugh about it. We were looking for a property manager and there was this couple that had been working for us for about a year and a half. They were doing on-call things. They were doing the cleaning up the properties, the lawn maintenance, random things that we asked them to do. They are the hardest working couple I’ve ever met. They always went above and beyond. You can already see where this is going.

I was starting to laugh and say, “Let’s make them in charge of the books and the money.” I’m like, “No.”

That’s what we did. It’s almost embarrassing to admit because it seems such a stupid mistake. In retrospect, I was like, “What were we thinking?” but we were like, “It’s going to cost so much to hire a legitimate property management company.” We were thinking at the time we trust these people. They want the job. This way we can pay them less than we can oversee the way that they are going to run things. That was our thought so we hired them. It started out great. About six months in, my husband goes to collect the rent one Saturday morning at the lockboxes on the property and noticed some rent went missing. It’s not just the normal tenant paying late. There was a significant amount missing.

We’re calling our employees to know what’s going on. They’re not answering. It turns out that that weekend they stole $6,000 and disappeared. We found out that they had been living in vacant rooms on our properties for about a year. They were squatting and that was a disaster. We found out later that they went on drugs so that’s not a surprise, but we learned a big lesson, which is this is not the place to be cheap. You want to pay more money to have someone that’s high quality in place and you want a property management company that’s licensed, bonded, and insured. If that’s what we had hired and one of their employees has stolen our rent money, they would have been liable for that money, not us.

They would have had insurance to pay it back. Can I add to that? Cheaper is not better and charity has no business in your business. If you want to give charity, then get some money and hand it to a church or write a check to whoever it is you want to help out. You do not help people with your business, your rental houses, or your selling houses. It’s a fast way to get in lawsuits or to get yourself over in situations that are hard to undo. Especially when the person that you did the favor for starts expecting certain things and you can’t retreat. Please, keep charity and your business separate. I’m not saying don’t do charity at all. What I am saying is if you want to do some charity, do it outside the business. The business is business. Sign the papers, do this and you don’t do whatever.

We are in a financial education crisis. Young people need resources to be able to learn about money in an easy way. Click To Tweet

I also like to say, keep family out of the business. I’ve had family in my business for a long time, but I will not sell or rent a house to anyone I know, anyone I’m friends with or anyone of my family. It’s not going to happen because I need to be able to protect my own family and my own finances and have to do sometimes what I have to do if people can’t perform. That gets very cloudy in family situations. As I say that, my wife runs all the books and has run all that stuff forever and my daughter has been the center of my business for years. It causes it’s level now, but there were times in my life when it was stressful.  

That is great advice. Don’t mix business and pleasure. Don’t mix business and charity.

Don’t mix business and friends or family. Do you have family working with you besides your husband?  

My dad does some stuff for us if we need somebody we trust to be on-site for something since we’re out of town. He helps us a little bit.

I have gone against my own advice many times, but I’ve got to have it down to a core that has been around for a long time, but we all understand each other, what our responsibilities are, and do our jobs. You’re an author of a couple of books. Tell me about the book Money Honey. I liked the way that sounds. I’m going to send it to everyone and this is the link, 1000Houses.com/moneyhoney. You can go there and find out whatever it is we’re talking about. What inspired it?  

I was at a point in my life where all my family and friends were coming to me for financial advice, which is great because that’s what I love to help people with. I began to wonder, “Why aren’t they reading or learning on their own?” I realized that personal finance is boring. It’s complex, dull, and intimidating. No wonder people don’t like to learn about it. I thought to myself, “How can I make this topic sassy, fun, and simple?” That’s where the idea for Money Honey came from. I wrote and published it in 2017 and it has been more successful than I ever could have thought possible. I think it has over 555-star reviews on Amazon.

That’s tremendous. Is there a trick to getting that many five-star reviews besides writing a decent book?

Asking people. It is hard to do to send a text or message somebody and say, “If you’ve read this book, can you leave me a review?” It feels kind of salesy. It is like you’re promoting yourself, but if people read your book and like your book, they want to help you. I say, “I’m a self-published author and these reviews will help me out. If you’ve read the book and you liked it, would you be willing to leave me a review?” The biggest thing I did is send out one-on-one messages to everyone that read my book.

Are you selling on Amazon too?

It’s also on Amazon. I think there’s some extended distribution.

Does Amazon tell you who bought the book?  

No, you don’t get any of that information, but I knew from my social networks and the groups I was involved in on Facebook, when somebody would buy the book or comment, I would message them.

You were just paying attention. If someone said, “I read this book,” or “I read your book, good job.” You then ask. Isn’t that amazing? You won’t get anything unless you ask. You’ve got to ask. When you ask, do you say, “Could you give me a four and a half-star review?” No, you’ve got to ask, “I need a five-star review. I don’t need 4.5, 4.75. I need 5.” What are the basics of the book Money Honey?

It’s about money management. I go through the basic foundational topics, budgeting, saving, debt payoff, investing, taxes and insurance. There’s a strategy at the end for basically putting it all together.

REIS 402 | Passive Income

Money Honey: A Simple 7-Step Guide for Getting Your Financial $hit Together

It’s amazing how many people, including myself, had functioned for years, if not forever, without a budget. In my case, it worked in my favor because I didn’t have a budget and I wasn’t keeping track of income expenses. I always figured I was broke. I was always running lean. I didn’t know that I was rich. I didn’t have any idea that I was rich so I kept plowing along like I was broke.  

Ignorance is bliss and that worked out for you.

It worked out that time, but honestly, it would have been better off to know because when you’re in order, you can get bank financing and you can get some cheap money. Things can happen when your books are in order. If your books are not in order, things can still work well, but you’re going to miss out on some opportunities. You don’t know you can’t paint a picture to someone about, “This is my life and my finances. I’m a good risk. Here, loan me this money at 2.5%.”

To your point about not knowing, we are in a financial education crisis. At no point in our lives, are we taught how to manage our money and then we’re left as young adults to try to figure it out all on our own. One of the reasons I wanted to write the book is because young people need resources. They need something that’s approachable. They need to be able to learn about money in an easy way. That is what I’m passionate about and lights me on fire.

I think we need to get a GoFundMe page together so we can send every one of our politicians the book Money Honey, so they can figure out how to make a budget and stay into it. Do you think they should run this country with a budget or not?

I’m on board. They should run without a deficit every year.

You wrote another book called Passive Income, Aggressive Retirement. I love that name. How did you come up with that?

One of my readers thought of it, so I can’t take credit for it, but it’s very creative. I wrote Passive Income, Aggressive Retirement, and launched it in 2019. It outlines 28 different passive income models. Basically, my argument for why passive income is a more attainable way of achieving retirement than anything else. What’s cool about that one is I got to interview some big case studies as sort of experts. I got to interview Hal Elrod who’s an international bestselling author of The Miracle Morning, about his book royalties and how that’s passive income. I got to interview David Osborn, who is a real estate mogul, one of the biggest franchise owners in the world about his rental income. It’s a lot of fun.

Part of the thing I like about the interview process and the podcasting is that I get to talk to smart people that would probably never talk to me otherwise. If I say, “Would you go to lunch with me, David Osborn, so I can rake your brain a little bit over some for the price of bacon and eggs?” He’ll go, “No,” but if I go, “Would you like to be on my show or can I interview you for my book?” They might say yes. The questions are all the same. Do you have an online course on money management?

I do. That is the fourth passive income stream that I launched in 2020. It’s called Get Your Financial Shit Together and it goes along with my first book, Money Honey.

That’s a passive income, aggressive retirement. That’s my second favorite title, Get Your Financial Shit Together.

It’s a lot of fun. It’s an online course. It’s for eight weeks. It goes along with Money Honey. It’s a more direct way that I get to teach and help people. That just launched in 2020. It’s $297.

I saw and we talked and this is a $600 value all the time. I help my people all the time. When I go on other people’s shows, I can give them a break. We try to help each other’s audience by giving them a special, so you cut yours in half, which is a lot. I appreciate that. Instead of $600 for the online money management course, it’s $297. I’m going to take a wild guess because I’ve got to be honest, I haven’t been through the course, but there’s probably $297 worth of savings ideas or some idea in there, probably within the first five minutes.

I just finished up the beta round of the course where I had 50 people take it. The average amount they saved in the two months was $2,043.

This is not a sale. This is an offer for you to improve your position in life. You start out by putting out $297 and then you get a bunch of ideas that will help you save, in her case study, was $2,000. All you’ve got to do to break even on this deal is save $297, which I’m pretty sure it’s a no-brainer. If you and I have sat down and talked to people about budgeting, saving, where you can cut, how you can replace and all this stuff, usually your eyes are opened fast as how to save $500 or $600.

Don't quit your job and hope that you're going to be able to make money. Have a plan. Click To Tweet

A lot of times, it’s not even the knowledge that’s the problem because we often know what we should be doing. We should be working out every day. We should be eating healthy. We should be saving more money, but it’s the implementation that’s the hard part. It’s doing what we know we’re supposed to be doing. The course is designed to hold people accountable and help them implement those things.

Here’s the bottom line, don’t write a check for $297 if you’re not going to get off your ass and do something, because then you’ll be out $297. If you plan on doing something about it, then go ahead because the money’s going to come right back. It goes out and then it comes right back and it keeps coming back for months. I like to talk to the young entrepreneurs or the people thinking about going into real estate. What’s your advice to the newbie?

I think there’s some advice that’s given that I don’t agree with.

Let’s talk about the bullshit and myth out there.

The bullshit is, “Quit your job and take a leap of faith and the net will appear.” You have to have a solid plan in place. I was working my job for years before I quit my job. I didn’t quit until I had $10,000 a month in passive income. Do you have to get to $10,000 per month? No, but I would recommend having some type of plan and exit strategy in place. Don’t quit and hope that you’re going to be able to make money. Have a plan.

In my book, I call it the moat theory. Let’s picture like you have your kingdom, you’ve got your little castle, you’ve got your chickens, horses and you’ve got everything you need inside there. You figure out what that is and then you dig a moat around it. You fill it up with water and alligators. You want to protect this thing because this is where you live. This is your whole little personal economy. It’s right in there. You’ve got the drawbridge and it’s up. When the drawbridge is up, nothing can get to it. That’s why you want to build this fort like this inside your moat, where you’re protected. What Rachel said she did was she got moat paid for $10,000 a month. It’s probably more than she needed to live. When I’m talking about moat I’m talking about what it takes to live. If you never wrote a check for a bill again, and it could be handled by your CPA from the income that’s rolling into your mailbox, what is that number? I call it the freedom number. What’s your freedom number, which means anything over that is disposable.

Once your freedom number equals or exceeds your living expenses, you’re retired and you’re financially independent.

You have the option. That’s what I’m saying. What happens is instead of this idea of, “Let’s make $1 million,” “I’ve got to make $1 million,” or “I’ve got to come up with a big business plan.” At the time, I needed to get financial freedom. Remember that the definition of financial freedom happens when your wants and your needs are exceeded by your cashflow. At the time, my wants and my needs were $3,500 a month. All of a sudden, I didn’t have to make this big multimillion-dollar business plan. I needed to figure out how to get a measly $3,500 to come to my mailbox in the United States of America, the greatest capitalistic country in the world. I just needed $3,500 a month to come in, less than $40,000 a year. All of a sudden, that was my only focus. I think that’s what you did. You said, “Let’s break this down to the smallest thing and start chiseling on it.”

There are studies that show that Millennials will need to accumulate at least $2 million by age 65 in order to retire. I don’t know about you, Mitch, but to me, trying to accumulate to $2 million, I don’t know many multimillionaires, but I was like, “I could do that or I could generate $3,000, $4,000 or $5,000 a month in passive income, which would cover my expenses then I would be retired if I want it to be.” The latter sounded easier to me if the passive income is the route that I decided to go.

In the moat theory, I said, “Don’t worry about becoming a multimillionaire. Worry about getting your freedom number to come into the mailbox.” At the time, mine was $3,500. Once you hit $3,500, you can elect to keep going. If your minimum bills are $3,500, I would say you need at least $7,000 because shit happens, cars break, things happen. Get a little cushion in there. Everything over $7,000 is R&D money. This is where it gets interesting. If I save up an extra $15,000 or $20,000 in the account, I can drop the drawbridge, charge out across this frontier of unknown things that can happen, and start investing and try things. If I lose it all, as long as I didn’t risk what paid what’s inside that moat, I can chargeback over the drawbridge, pull up the drawbridge. I can sit in my castle and my air condition, all the bills are paid and go, “What did I do wrong? How did I mess up? Why did they have those that could shoot so far? How come I didn’t know they were there?”

You then have to save up some more and you can go out. It’s a way to fail forward. How do I set myself up so I can go out and learn? I can fail, but I’m not going to be collapsed, have to get a divorce, or I’m not going to go completely under because I failed. The answer was to protect what’s in your moat, get that coming in, and then with your extra money, experiment and find out what you can do. The coolest part about being retired and I bet you, this was a problem for you because you seem like a person who needs to move. You had an extra 2,600 hours a year to work on nothing, but what you wanted to work once you got financially free? You stopped working for the man or whoever and all of a sudden, you’re sitting there with 2,600 hours a year that you could work on yourself and your businesses. How was that? Tell me how you handled it.

A lot of people retire and they want to retire on the beach or play golf. That’s great to each of their own, but you’re right. I get bored easily. My true passion is my book business. It’s writing, empowering young people to learn about money management. I was worried when I quit my job that I was going to be lazy or sleeping all day or not do anything productive, which would have been fine, but the opposite happened. I guess I didn’t know myself very well because I went from working 40 hours a week full-time to working 80 hours a week on my own. The reason is because I didn’t have a clear stop-start and stop time to my day. I wasn’t going into an office and then leaving an office. Secondly, this isn’t work for me. This is fun. This is what I choose to do with my time. I could work on this book business and helping people with money, twelve hours a day. At the end of the day, it would be like, “That was such a fun day. It’s changed my life and I have a lot of fun doing what I do.

I put this quote in my first book, “My Life & 1,000 Houses: Failing Forward to Financial Freedom.” When my wife read this quote, she said, I think I finally understand you. It would be like, “You didn’t get until 9:00 tonight. What were you doing?” “I was at a restaurant. I was working.” “You weren’t working, you are at a restaurant.” I said, “I was with these people that are worth a lot of money and we’re having dinner.” “You were just having dinner.” I said, “I had dinner, but I was working. It might not look like work. It might not have felt like work, but I wasn’t there for my health.”

This is a quote from James Michener. He says, “The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence at whatever it is he does, leaving others to decide whether he is working or playing. To him, he is always doing both.” That’s where you get to be working 80 hours a week because you don’t know the difference.

I love that quote. That resonates with me so much.

REIS 402 | Passive Income

Passive Income, Aggressive Retirement: The Secret to Freedom, Flexibility, and Financial Independence (& How to Get Started)

That’s part of what has to happen for people to be successful in any business because you’ve got to be turned on by whatever it is you’re doing. You’ve got to be excited about it. You’ve got to see the potential of it for yourself and you’ve got to be enthralled with it that you’re putting in, especially in the first couple of years, 12, 14, 16 hours a day, but it can’t seem like work because no one can withstand sixteen hours a day of something they hate.

That is true. You could not have said it better.

People asked me, “How many hours a day do you work?” I said, “I don’t know because I don’t know that I’m ever turned off. Is this always monitoring in the background?” I might be at the happy hour having a drink and hear someone say something out of my left ear. All of a sudden it’s like, “This guy needs to know what I’m doing because there’s a place for him and I’m at work.” Do you have to get a lot of sleep at night or are you a night owl?

I’m a night owl, but one of the things I’ve done since I quit my job is I don’t set an alarm anymore. I wake up when the sun comes in my bedroom window, normally 7:00 AM or something. That has created such mental clarity and peace for me. I sleep better than I have ever slept.

That’s cool because you’re rewarding yourself by saying, “I’ll do whatever it takes and I can do it in the time that I give myself, but I’m going to sleep until I’m not tired anymore.” You then wake up full of energy and it’s a real reward. My wife used to get up at 6:00. I don’t know what happened, but when the minute I retired her, she started getting up at 5:30. I said, “You’ve done this all wrong, woman.” We took the shotgun and the alarm clock in the back of the limo and we drove to a shooting range. I put the alarm clock on top of a wooden post and I gave the shotgun to my wife and we shot the alarm clock. She then got up by instinct without an alarm clock every day after that at 5:30.  

I love that retirement celebration, though. That’s brilliant.

It gets worse. She wouldn’t quit so I called her boss and quit for her. You can just imagine how well that went over.

I can relate. It’s scary to quit your job. It took me an entire year after I first started thinking, “It’s time to quit.”

At least you have an entrepreneurial spirit or some entrepreneurial bones in your body. She has none. She’s a pack mule. I’m not saying that indignant. I’m saying she will carry whatever load you put on her back. She’ll take it all the way up the mountain. She was very responsible. She was making the people that she worked for a lot of money. I’m looking at it going, “I need that on my business. How much are they paying you? I’ll pay you $5,000.” She went, “How are you going to pay me?” I said, “I’ve made more in the last two months you’ve made in the whole year.”

I called up her boss and I said, “This is Mitch. Tommi’s husband.” He said, “What’s going on?” I said, “I’m calling to give my wife’s two-week notice.” He said, “Does your wife know?” I said, “Not yet, but I want to make sure how much time do you need. If you need a month or whatever because you’ve been good to her. We’re not going to do anything.” He went, “Isn’t this going to cause you a problem?” I said, “For a little while.” He said, “Why are you doing this?” I said, “We both know how much money and what she’s worth and I need her on working for our company, not in your company. That’s as straight as I can tell you. She needs to be working for us, not you.” He said, “If I was you, I would have done it a long time ago.” I said, “I’ve been thinking about it, but this is a pretty ballsy move.” I hesitated a little bit there for a while because she wasn’t going to quit. I was trying to get her to quit, but she wouldn’t. I finally called it and quit for her. Believe me, I wasn’t a popular person at my house for a while.

It sounds like you’re lucky to have her and you guys make a good team.

I want everyone to go to 1000Houses.com/moneyhoney, check out the two books, Money Honey and Passive Income, Aggressive Retirement. Keep an eye out for this girl, Rachel Richards. She is writing some more books. Who knows? Maybe we’ll do something together one day.

Thanks, Mitch. I appreciate you having me on.   

Thank you so much. The money management course for $297, go to 1000Houses.com/moneyhoney. Check that out. I see that money coming right back. If you do what it takes and send it out, I’m sure it will come right back. I’d like to thank my sponsor TaxFreeFuture.com. You have no idea what your financial advisors are not telling you. We’re going to tell you what they’re not telling you. We’re going to tell you why they’re not telling you. We’re going to tell you what to do about it if you want to and then it’s all up to you, but it will all make perfect sense. See what tax-deferred or tax-free retirement accounts can do for you. We’re out of here.

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