Getting Yourself Ready to Invest with Joe Saul-Sehy

Posted by Shannon Robnett Posted at November 1, 2022 Posted in Podcast

We are going to take a step back. You all know that Passive Investing in Real Estate is the best way to earn a steady cash stream without having to  toil over renovating a property or worry about managing tenants or even gambling in the Stock Market, where you have zero control. But how do you get started? Is  your financial house in order? Do you have a plan in place to get you to the place where you CAN invest and build a passive income stream for financial independence?

In this episode, we are joined by Joe Saul-Sehy. Joe created Stacking Benjamins, one of the most listened-to podcasts in the personal finance sphere. His book Stacked, Your Super Serious Guide to Money Management, is now on Amazon.

Watch the episode here:

Listen to the podcast here:

Getting Yourself Ready to Invest with Joe Saul-Sehy

Hey everybody, welcome back to Season Two of the Real Estate Rundown Show, guys, we are going to break out our time machine, we’re gonna jump in the DeLorean, we’re gonna go backwards because I get this request a lot from people. They’re like, Yeah, but Shannon, you know, you don’t understand, I can’t build wealth, I got all these problems. And I got this dad and I got this stuff. Well, we’ve got a guy, we have the guy, right, not just a guy, the guy, we’ve got a guy that actually has built his brand around the thought process of how you get there. You know, in this episode, we’re going to talk about not only passive investing, but we’re going to talk about the way to earn steady income streams. After you’ve taken the time to take control. Take control of your finances, move your ball forward to where you can get from the I don’t have a choice. I don’t have control. I have nothing but payment books, to a place where you can set yourself on a path that will take you to the next step, which will allow you to begin your real estate journey. So guys, help me welcome Joe to the show. Joe, welcome to the show. I’m excited for our conversation. We got started early, but I’m super excited for what we’re going to get into here.

Shannon, I’m super happy to be here. I am here to announce my retirement. I finally made it on the show. So I need to go out on top. Yeah, tell everybody. I’m finally here.

The wrong show. This is The Real Estate Run Down. This isn’t the Daily Show. But no, you know, so. Love it. So tell us a little bit about your story. Why this became your niche. Why this became your focus and then we’ll just we’ll just jump off the deep end right into it.

Man, Shannon, there’s so many nuances to my story, but I was a money disaster. Number one. That’s where we start. I was the guy. So I went to this school, the Citadel, the Military College of South Carolina.

Bunch of slackers over there, right?

Oh, yeah. Nobody is doing anything. Yeah. But this is before email so this is old guy storytime. But I walk into the Marklar Hall, which is the Student Union, the the first week of school. And there’s this line out the door, right of people that are I don’t remember if it was for a stadium blanket or a beach towel or what it was, but it’s a line of people waiting to get into debt. And by the way, imagine if there was a line, Shannon, a people that were trying as hard as they could to get rich, building a real estate empire, like if they had that line versus the number of people that are just hoping to get an American Express credit card.

Yeah, but you get a free pizza with that. See, if you’re building a real estate empire, there’s no free pizza. There’s no free lunch, right? Everybody’s out to eat your lunch. Right?

It is so wild to me that we just all stand out. And of course, I see how long the line is. And by the way, this all began even earlier because my parents didn’t really talk about money. Like most parents didn’t talk about money. If If mom and dad were talking about money, my sister my brother and I, we had to leave the room. So I get in this line. I very honestly tell them I have no income. I have no assets. And I really want American Express card. You know exactly what happened, man. About two weeks later, I get this cool green card member since I take my go with my friends. The first day we have leave to this North Charleston Mall. And we go to this high end restaurant. You might have heard of it before. It’s called Ruby Tuesday. Huge, amazing. They had a salad bar. Like it was it was incredible. And at the end of lunch just because I wanted to be everybody’s buddy. I wanted to make friends. I waved that card and I said I got it. I got it. This is on me. And of course everybody loved me. I bought lunch then I go down to the other end of the mall like a magnet to the most expensive store, Nordstrom, and I buy this sweater it’s 1987 I buy this sweater that is Duran Duran awesome it is like this purple…

I’m laughing because I have one still.

I have it in the other room I should have brought it so you can see it but cuz because I remember remember what an idiot I was. And and it had this like Paisley V-neck. But I’m at the Citadel I’m at a military college. I can’t wear a sweater and plus how many days a year is it cold enough to wear a sweater in Charleston, South Carolina like to like both days? It’s really tough. Yeah, so I buy this stuff. And you know, being before email. I don’t think to check my bag. I don’t think I’m gonna have a balance Shannon. I’m like, hey, you know what everything’s everything is gonna be gonna be hunky dory and I want to get my mail every day. You never got mail. You were always excited to get mail. You know, not like today where it’s a bunch of junk in the mailbox. There’s something in your mailbox, you’re pretty excited. So I go to Marklar Hall again. I checked my mailbox and there’s a letter for me like three weeks later, like, unbelievable. I open it up. It’s from American Express. I’m thinking they want to thank me, you know, they’re like, Thank you, Joe. Hey, brother, we did this together, you took your friends out, used our card good for you. That’s great. Now they wanted money. And I, frankly had never thought about that until that time. And immediately, obviously, I did what any smart person would do. I called my mom. And I said, “Mom, we got a problem.” And mom said, No, we don’t have anything, you’ve got a problem. And so my credit was wrecked. I spent the whole summer that summer, by the way, paying off a collection agency, you know, to the tune of what, it ended up being maybe $200 worth of debt that it turned into $400 in a hurry. Right, right. So so making my $400 bucks back

Inflation adjusted, that’s $17,000. But, anyway.

That’s right. Well, that’s just in the last eight months. From the time we recorded this, but But you know, to make a short story really long, I was a financial disaster, who became a financial advisor and I was telling other people what to do with their money while I was still, like, I kept touching the stove shaven and I was not good with money. But I figured it out. Not only did I figure it out, I actually got really good with money. I became financially independent at age 40. When I sold my business, I sold my financial planning business, decide to become a high school teacher while I was taking classes, I had done a bunch of marketing media for American Express. So a lot a bunch of financial planners hired me to write things for them, you know, financial pieces to help them with their PR stuff. That turned into a blog blog turns into a podcast. Now the Stacking Benjamins show is 11 years old, we focus on comedy, because I believe we got to lower the temperature. We’re at, we’re at 52 million downloads of the show, we hold those three days a week, part of the Westwood one radio network. So yeah, it’s weird how I got here,

You went from economic disaster you went on, the only thing that you didn’t tell them was that you didn’t, you didn’t have any assets, you didn’t have any income, and you were the liability. So that’s probably where they would have. That’s probably where they would have bounced you at that point. So you know, full disclosure, you went from getting an American Express to actually advising American Express, you had from from not understanding how money works, and why you want it and why you want to spend it on certain things. Not that. And by the way, Joe, I do still have that. But mine is now a Duran Duran tank top. And I think it’s, it has more to do with my size not the sweater size.

But, nothing to do with the shirt, right?

No. But, but you know, what I mean, and I talked to a lot of people in my business, you know, we tend to deal with people who have some money, right? I mean, I’ve got I’ve got some of my investors in our syndications that have inheritance, we have some investors that have, you know, 401 K’s that they didn’t realize that they could use because their employer has been putting it away for him. But I still have people that are that are toast. I mean, they’re literally walking around, I got you know, guys that are 40 5060 years old, 50 years old, that need to split a security deposit on my apartments, right, they don’t have enough in their world to pay the whole security deposit out of a savings account or, or any method like that. And so where do you start with people? Because I know that money team seems to be a taboo subject. But where do you start with people that says, okay, look, let’s, let’s not get the free towel from American Express. Because you don’t want that. But here’s how you start down that road of becoming financially literate. Let’s not worry about financial independence, you’ve got to get literate first.

No, great point. Shan and, you know, there’s a recent study that was done called the secret financial lives of Americans. And it’s a fantastically disturbing study about some of the statistics in here. You know, a lot of people listening may be working in office, and when I worked in office, there was always some jerk that was stealing somebody’s lunch or stuff out of your lunch, you know, out of the refrigerator, like who the hell steal stuff out of somebody’s lunch while this study showed, this isn’t somebody I mean, maybe they’re a jerk, but the vast majority of those people are they’ve screwed up their money so much. They’re broke, they’re starving. And because they’re starving, they have to steal other people’s lunches. The number of people that that reported that they would have sex for money, if given the opportunity, is another one that people dumpster dove but the biggest one of all, and the reason why I’m so into the fact that we need to keep this light and fun, is because the biggest statistic in your Shannon was that of 330 million people in the United States, nearly half of us say we’ve cried about our money, right, nearly half of us have cried. And you think, by the way, to your point earlier about most people listening have some money, right? They’ve done a good job, they’ve done at least a decent job of saving to be somebody that knows you works with you. Well, you know what, of people making $200,000 a year or more nearly half of those people say they’ve cried about money, like a miniscule amount less that people living paycheck to paycheck. So clearly, we have this problem in America where our goals are going one way our values are going one way and our money’s going a whole different direction. And for me, where I had to start, because I got to that point, I was actually leaving a meeting, where I had had been counseling some clients, and I, I am going down this ugly, this this this horrible part of town, and I run out of gas. And I realized that I have no money left. Not only do I have no money left, I have no resources. I have no credit, I borrowed money from all of my all of my friends. I borrowed money from so many people. By the way, the reason I’m in this rusted out minivan that I’m driving at this time, is because I came clean with a friend of mine about getting a loan talk about guys, and you split the security deposit, listen to this. So I come clean to this friend of mine. I’m like, Dude, my credits horrible. It is just horrible. But my car is gonna die. And I these young twins, this is 1994. And I got these young kids on my wife still in school. And I said, I said, “Where am I gonna go? Like, I can’t get a car.” He goes, dude, here’s what you do. Go to any car lot in America, because these car dealers will give money to anybody, like, seriously get the worst credit ever. And get a car. So he gives me the name of a guy, I go to the I go to the place. And the salesman goes, Oh, yeah, oh, we’ll give you a loan. He walks back in his office with my social security number comes out like three minutes later and goes, dude, your credit is horrible. And I cannot give you a loan. Like there is no way I can give you a loan. Yes. Which is a long way saying, here’s, here’s where I had to start. I had to realize number one, and this is what somebody anybody in that situation has to remember. There’s no shortcut. Like I kept, I kept trying to tell people to build a foundation Shannon, I didn’t build a foundation, I kept looking for a shortcut. Even though I’m telling other people the right thing to do, I’m doing the wrong thing. That’s number one. Number two is you have to surround yourself with the right people. I had to change the game on what I was filling my head with. And I had to make sure that I had people in my corner that had walked the walk that I really wanted to walk. And so I started, I couldn’t afford to take people to breakfast or lunch. So I would take them out for breakfast, but I just have a cup of coffee, I’d say hey, let’s let’s go out we’ll have we’ll have some coffee.

That’s better than raiding the fridge at work and taking somebody else’s lunch to him. You know? 

I mean people would do it by the way, you know, I mean, smart people want to give back I found and I feel so much gratitude. Not only that I had that experience, and I had that wake up call. I feel so much gratitude. But I also feel a lot of gratitude that smart people went no, I will share with you the secret guess what the secret was? There’s no secret there’s no secret. There is no secret. And what’s funny is, when I stopped looking for shortcuts, I built that foundation in a hurry. You know, the first thing that I did was I ignored my creditors. I ignored these people that were that you know called me every day begging for money, I was already screwed. So I did forget about them. I built an emergency fund number one. Number two is I started living in all cash lifestyle now tell you today I do not live in all cash lifestyle. I live a lifestyle why where I play credit card reward point games, I use leverage. But I had to get a healthy respect for money before I got there. I had to realize the value of $1. And how much interest against you can screw you blind, just completely blind?

Well, and here’s the thing, you know, let’s talk about this for a minute. So from my perspective, you know, we have investments that are doing, you know, somewhere between a six and a 9% cash on cash that are doing a 16 to a 25% IRR, right. So over five years, we’re getting a 25% return. That means that if you’re playing the game, the way that most of America plays the game where you pay 30% in taxes, you pay 22% on your credit cards and you’re carrying a $10,000 balance or a $25,000 balance right? You have at the end of that $75,000 annual income. You’ve only got 40,000 to live on by the time you make those two payments that are non negotiable, right? You cannot negotiate with the credit card company for a cheaper payment. What you get is the grace period to pay it you cannot negotiate with the IRS about what your taxes are going to be if you don’t do the certain things they’re asking you to do. So at the end of the day, if you’re looking to invest with someone like me, and you’re not taking care of that kind of thing, by the time you eliminate your credit card debt, and get your tax bills in line and deal with things like that, you’re already making more than I’m going to make you. Right, you’re saving 30% by not paying the IRS and you save another 20% by not paying your credit card interest. Yeah. So really, at the end of the day, when people get a hold of this fundamental thought process and can live that cash lifestyle, can borrow smart money when Smart Money returns money to them with friends, rather than live on the credit card, because we want Gucci shoes, or we want to drive that car to impress everybody else at the minute you don’t have the car, they don’t care. Right? And here you are switching that mentality, that mindset to the people that want to help you not want to use you. What a difference that that makes in someone’s life.  So you went from totally toasted credit wrecked. wife, two kids and a sweet Right. Right. Yeah. Yeah, I know you’re good at sales, because you talk some woman into marrying you, you know, you must have talked about finances before marriage, because if she didn’t on your credit score, I would have been a deal changer, right? You take my age, you divide by three. 

But she’s a very smart woman. But I don’t know what happened that day.

If you know, everybody has a bad day and you happen to be there. You know, that’s, that’s where luck kicks in. But, but here you are, you know, you’re turning that around, you go into the cash life. What What kind of, I mean, nobody wants to do this. Nobody wants to have to clean it up. But what, how long did that take to get it turned to get it to stop bleeding to get the tourniquet on it. And to get it turned so that now okay, I have my emergency fund. I’m headed in the Dave Ramsey direction I’m getting my crap paid for I’m getting a handle on the unseen part of my life? 

Way faster than I thought, way faster than I thought two and a half years. way faster than I thought I was. It blew me away. 

So it took you what, 12 years to wreck it?. Yeah. Was that about? Right? Yeah. And two years to two and a half years to fix it. Yeah.                                 

It was amazing. But you know what? Very honestly, you know, it took two and a half years. But it really took a second is when I took right. Because from this from the point that I actually made the decision that I was going to change. Everything changed. Like everything changed the second that I realized that I was in control. And I could I could flex that. Yeah, it was it was awesome. Even that two and a half years. I mean, don’t get me wrong, I was not buying anything. But within within three or four months, it had become a game with how fast can I go? Right? Right. So how can I increase my income streams? How can we decrease our expenses? And what was cool was, was that I got my kids involved. I mean, I would come home from work Shannon and my, you know, my house would be lit up like Disney Land. We had two televisions are both on and as you may may know, nobody’s in the house. Right? Every it’s, it’s cool aside, it’s Michigan weather and, and, and I’m heating the doors. And so I realized as an exam, I mean, this is one little example. I could complain about that, like I did over and over and over. Or I could turn into a game for my for my young kids that were that were at this point about five. And we would have so much fun with playing this utility game where it became a game to see every month when utility bill came again, pre internet so when that utility bill came everybody got really excited because we we played a limbo game of how low can it go. And we would by the way, there was no there was no price because we couldn’t afford a prize. It was just the price was we were working together. I remember watching so there’s

Where you were wearing that Duran Duran sweater. You finally had the place and I can see your kids running around in their snow suits in September right you know because the heat hasn’t been on and your wife going through the house looking like Ebenezer Scrooge his daughter cuz she’s got the candle you know?

Is it the third snowfall yet? I told you no heater till the third snowfall? Yeah, get with it. No, but we I remember I left a room one day and I was watching. I was watching my Detroit Lions lives on Sunday like they still do and and I walk out to get a glass of water. I come back my daughter’s turned off the tee She’s like Devaney leaves the room. You got your knots TV. I’m like, I’m coming right back. Yeah, I mean, now instead of me complaining my family’s on me, which was really cool. So, but anyway, my point is, is that we turned, the whole thing that it went from woe is me, to this is a game and we’re all together in it. And we can have some fun with this in a hurry. And that was pretty powerful. But two and a half years into this, we were, we were rockin, and within 10 years, I was doing very well financially.

So you know, when you think about it, and we talked about this a little bit earlier, you know, so this timeframe that you’re talking about is, you know, mid 90s, right? When this transformation is happening in your life. You know, and I remember, you know, when I first got started in life was about that time I graduated in high school in 1991. And you, you had things that you bought, right, you didn’t have a lot of the things that we have now, like this payment, right, or the Amazon Prime payment, or the Spotify payment, or the, you know, the 27 different apps that you have that are $2.95 apiece, I can just see where there are so many places that we as Americans get bled dry, over these necessities, that we’ve got to have the convenience of this, the convenience of that, that really at the end of the day, all we’re doing is creating other ways for $9 at a time, our ability to save to be ferreted away, let alone getting to the place where we get that kind of stuff cleaned out of our closets. So we could so we could worry about the thermostat. Yeah, yeah. I mean, you were talking about watching the Detroit Lions on rabbit ears. You weren’t paying if you weren’t paying an $80 cable bill to go with your $40 internet bill, to go with your $39 Roaming plan to go with your you know, with all the different things that we wind up with, right.

But this is why it’s important, Shannon, that we start with. I mean, this is where this is where we all should start. You should start with what you value, what do I value and spend a bunch of money on what you value. If you value it, spend a bunch of money, but if you don’t really care, stop spending money on that stuff. We spend money on so many things that we don’t care about. And it’s like flushing cash down. I have a family member. They always talk about how they struggle with money. And they have two young daughters now and it’s so frustrating because I’ve tried to get them to not just listen to my show, but listen to any financial show. I’ve tried to get them to you know, when I was in Detroit there in the Detroit area, I would try to get them to come to we would have events. When I was there, we bring speakers in. And these are all normal people like you and me. But they’re doing great. And yet they’re in this group of friends that all have this big old cycle of impressing each other and they have so much debt. They can’t afford to take their daughters on a on a vacation. And this family member came clean with me. He’s got a lease payment on a Mercedes. That’s $850 a month. Yeah. And his wife has a lease payment. That’s $1,100 a month, right? I have I have two vehicles, one vehicle but a Volkswagen Tico Tiguan nice nice car bought it new by the way. My wife drives it, she is wonderful woman. I want her in a new car because she is not the world’s best driver.

So, there’s two things we know about her that she is faulty on right? Picking men and driving abilities.

 That’s why I slowed down halfway through that story. Look at me, I’m gonna say I slow down because I’m like, oh, man, Cheryl’s gonna hate this. But you know, and I don’t want her on the side of the road. So they offered 0% financing a couple years ago. And I took it because I could have paid cash for it. But how many 0% financing all day long? My car, Shannon, that I drive because I work from home, so I drive – never, I paid $7,000 bucks for my car.

That’s awful expensive slippers, man. I mean, you know, you’re driving down the hallway, hanging right into the kitchen.  

But my big point is these people are struggling. I’m not struggling. I’ve got $400 a month and a car payment. $400 a month.

Yeah, you know, those are the kinds of places where you can save massive amounts of money to drive that in the future. Right. I mean, I’m gonna go out on a limb here, Joe, but you can write a check for both of the cars they’re driving. Agreed, yeah, right. Write a check and buy it if that’s what you want. They can’t go on vacation because they’re too busy driving something that in three years they’re gonna give away. Now I’m not saying that a lease may not be a good business move. Right? That’s not the discussion we’re having what we’re having is you spent money to impress people that the minute you change your car to the $7,000. You know, car of your choice, those friends that you were trying to impress are going to begin to talk behind your back. And it’s amazing how much stock we put in people and their opinions when we’re destroying our future to, to get them to like us when we could really, I mean, you were talking about just those two right there, then you now let’s talk about the insurance. By the time those two vehicles and insurance are $2,500 a month. That puts you at $30,000 a year in savings to drive a skateboard. For one year, all you got to do is one year, right? If you were to do that for one year, and then put that in an investment that paid 8% Now you’re able to afford your wife’s Tiguan.

Let me give you an example. Yeah, no, it’s totally simple. By the way she can if you ask them, which I haven’t done, but if but if I’d asked them what was more important, taking their daughters on a nice vacation, or those cars, you and I both know what they’d say, in a heartbeat. They’d say no, taking my daughters on vacation be far more important, we’d love to be able to do that.

Minus the illiteracy that they grew up with.

It’s better. And it’s all of us. It’s systemic. It’s horrible. My now my cousin on the other side does something I’ve been bragging about that I need to do that I haven’t done. And this is a little tiny thing. By the way, everybody listening is gonna go this is the world’s smallest thing. But it’s a huge thing. So about once every quarter once, every four months, he’ll text me and go, what what shows you watch on Netflix that you really like? And then four months later, he’s like, What shows you watching on apple plus that you like, what shows you watch and on you know, on Disney but because I got them all, I’ve got Disney+, Amazon Prime, to your point about all the subscriptions I’ve got somehow I don’t have HBO max and I don’t have Showtime, though, how I stayed away from those, I have no idea because I have all these subscriptions.

Google just just picked up on that. And it will be in your browser in moments don’t.

Over and over and over and over. So I I cut the cord, you know, $79 a month a long time ago on DirecTV. And now my subscriptions for everything I have are more than what I cut back back in the day. What he does, and I asked him after the second time he did this. I’m like, Oh, I really liked this show. And after he did second, I’m like Randy, what’s How you doing? He’s like, I only have two eyes. And I can only watch one thing at a time. So here’s what I do, I sign up for Netflix. And I just watch all the Netflix shows my friends told me to watch and I watch those for like four months, we binge them, he and his wife. And then they cancel that then they get Disney+, then they binge all the Disney plus and then they do it. So this is a really small thing makes them maybe maybe let’s say it saves them $50 A month, probably a little more than that. But about $50 a month by doing that $50 a month seems like nothing and frankly it is but in the course of a year that $600 bucks, still nothing. My cousin though really likes to travel. And I know on his bucket list every year, the thing he values is making sure they go on a damn good vacation. So are my, my these other family members, I won’t say who they were but these other family members cannot do anything. My cousin, Randy always takes these really nice ones. But here’s the deal. At the end of the year, it’s 600 bucks at the end of a decade. That’s $6,000 he saved to $3,000 Vacations every 10 years over and above the ones he was taking. That’s something right to two more on top of it. Just because he’s doing this thing that I’m bragging about that I still am not doing. These little things can be big things.

But again, here’s the other side of that. And this is where I look at things, right I live life. Everything I’ve done in my life is to build cash flow so that I can do what I want, right? So I can have the things that I want. And I don’t have to I don’t have to play the thermostat game. I don’t have to call my friends and ask about Disney+, and that because I’ve stacked that away, right? And so when you start taking these things, and you start combining them and you start saving up, you know I interviewed a gal Rachel, I’m drawing a blank on her name, last name right now, but she wrote a book called Money Maven. And her and her husband both worked like dogs for five years. And they built a real estate portfolio that allowed them to live on $15,000 a month in cash flow after five years. Yeah. Now the reality is they did something extraordinary for a very short period of time that at 27 years old, they walked away from corporate life, right? This is that same kind of thing if you can, but but like we discussed before the show, if you would have done that and still not have the foundation you would have been like You were in the early 90s, where you’ve got a job, you’ve got what appears to be on the surface, everything working out, but your financial life underneath is a disaster. So if you did get a $300,000 inheritance, it’s not going to do you any good, you’re not going to be able to invest it, you’re not going to know what to pay up, you know, so, so you’re never able to build anything to that allows you that freedom, you’re always going to wind up in debt, your cousin or your your friend, Randy, who did that, that $600 a month that thought process. I know for a fact that one little thing is not the only thing in his life that he does, that provides him with the lifestyle that with the same amount of income as the other couple lives a completely different life with completely different money worries.

Agreed, it is much more about the fact that he’s spending money on what he values, period. And you know what, to this woman’s point, Rachel’s point, let’s talk about this for a second, because when I was a financial planner, I’ve been a financial planner, long time, but even when people you know, write to me, when when when I talk to people, the most underlooked way to get what you want, is to make more money. There are so many people by the way, on the other side of this, there are people that are frugal scuze me they they, they it’s like they want to You can’t shrink your way to greatness, Shannon, right is I guess what I’m trying to say they want to get rid of so many things. And it’s so difficult. And studies show that your boss wants to give you a raise you just haven’t asked, right. Building that second income stream, that third, that fourth income stream is far easier than people think that it is like making money is this blue sky opportunity. But to your point, you know, having Ramsey’s value system first. And then making that gap bigger between what you make and what you spend. Because my goal is not to care about my subscriptions, I don’t want to care about that.

You know, but then Joe, let’s go back to let’s go back to that time in your life when you ran out of gas, right? How much of your free thinking space, your gray matter that wasn’t dedicated to doing your job. So you didn’t get fired, because you could not miss one day of work. And then going home and trying to explain to your wife why we were not going on vacation, why we got to drive this rusted out minivan, how much of your gray matter, your thinking capacity, was then consumed by the life you lead. And the way the reasons the the thought process of I’ve got to go talk to a friend about how to get alone I’ve got to this, I’ve got to make excuses for the fact that my life sucks.

I love that you brought this up. Because I remember thinking cause because I’m not a dumb guy. I remember thinking I was doing a bunch of dumb things. But I’m not a dumb guy that I just needed a break, I needed one break. So that I didn’t have to think about tomorrow, I knew the key to success was if I could make some moves that were long term chess moves, versus this daily grind every single day, I had to get my life out of that daily grind, to be able to actually build something. And to do that. That’s why I had to let the creditors go. I’d never declare bankruptcy, I paid everybody off. But you know what, the only way that they were going to get paid off was if I quit paying attention to their priority, right there. Their priority was to get me you know, off of off debt be pay the debt, the only way I was going to pay the debt was if I built an emergency fund, I got that in place, I got positive cash flow in place, right. And then I continued to build my income so that I had cash flow so that I could then take that money and pay them off later on down the road.

But you know, what I’ve seen in my life is when I’m consumed with thinking about where my next deal is going to come from, or I need the cash or I’m you know, the times are tight thing financially, things aren’t going well, when I’m focused on that I’m missing deals I’m missing, I’m missing opportunities. And so what you see a lot of people, they’re just it’s like there’s this chain hooked onto them, and they’re drugged down by the debt so that they’re literally phased out. They can’t see the opportunities around them, they can’t see the forest for the trees, they can’t see the sunshine. And they’re literally chained into that into that place where they’re never going to get away from it. Unless they can break that and literally look up. And I see so often. Joe just like you’re describing that until that happens until you ignore the creditors long enough that you can get your head focused. Now you can begin to make advances in your income. Now you can become the employee that gets that huge raise and gets that promotion into another department and gets recognized for the talent that you have instead of being the employee that’s so fraught with disaster right around the Dora, and how do I pay this electric bill, and I got to hurry up and leave early on Friday to go get a payday loan so that I can pay the utility bills, so I can have it, because it’s seven days until until payday. And then I can, and then I can get my paycheck back. And I could go pay back. I mean, I’ve watched my employees do that. And I can tell you which ones they are, because they’re the ones that are smashing their thumbs with hammers. They’re the ones that are backing equipment into buildings, they’re the ones that are doing the things that don’t get them the raises, that don’t give them promote that they can’t catch a break because they’ve broken their own vision.

 Yeah, no, it’s it is, it’s funny, you say that, because I was in this space where I could see that my head was that my head was down, and I was consistently getting bashed in the head, with my own stupidity having to to make up for all the problems, you know, that I caused myself. But being a financial planner, and watching what my clients were doing, while at the same time I’m messing stuff up, it was just was just surreal, because I’m cuz I’m seeing all the deals than Shannon, I’m seeing them all. I’m helping people put their money in all these cool deals. And I’m going home every day, and I’m doing none of them.

Right. So we understand that a foundation, we understand that paying attention being in a positive cash flow situation, you’re making $2,000 a month, you’re getting home with 1700, after Uncle Sam takes his portion of that you were agreed to with your partnership, and then living on 1500 or 1200. And then beginning to advance that, you know, one of the things that a lot of people go to is, you know, there’s there’s a couple of really popular people out there Dave Ramsey being one of them, that says, hey, live a debt free life. Right. And you and I talked about this a little bit, you know, it’s great to be financially free. But to you does financially free mean debt free?

No. And the reason for that is, is that you, you’ve got if you start off with what you value, and you know, the way their responsible use of debt is is just a function of building your net worth statement. It’s just a function of it. Not now now taken out, like you know, the the piano guy again, the Popeyes, I will gladly pay you Tuesday. Remember this guy? Yeah, I’ll gladly pay Tuesday for a hamburger today. Well, how’s he gonna pay me Tuesday, like, if you have no idea how the hell he’s gonna pay Tuesday. And that was me. I’m borrowing money from everybody, I got no idea. So if you’re taking out debt, and there’s no repayment schedule in place, you really mess it up. But if we look at any company in America, this is what frustrated me when I was a financial planner, any company in America has a has CFO and that CFOs job is to go to the bank and go Shannon, if you’re the bank, Shannon, what are the best terms you can give me? What are the best terms you can give me and then sit down with these terms, and create a debt strategy, a debt payoff strategy that makes sense for that company. And then that a lot of the same people, by the way, will then go home, and they’ll make all these emotional decisions at home while they’re structuring things at work. So I would see all these people that had debt, but had no debt strategy. And debt strategies. Huge thing is an example. If I take out a 30 year mortgage, on a on a on a property, take out a 30 year mortgage. I don’t have to repay that in 30 years, like I, I would see people that would take out like a 10 year or a 15 year loan. I’d say Why’d you take out a 15 year loan? And they go, Well, I don’t want to have a loan for 30 years. Well, you could take a 30 year, right? You could pay extra if you wanted to give yourself the optionality. You can pay it off in eight, you can pay it off in six, you can pay it off, whatever, but I’m gonna go to the bank and get the best terms I can possibly get. And then I’m going to have a system to repay however, it suits me best. Yeah. So having debt on the books, if you have a debt strategy can be a powerful thing. It can be a powerful thing.

And that’s where, you know, when you look at, you know, this is back to your cashflow statement, right? If you’re having a positive cash flow situation, and this is where I see a lot of people, right, they go out and they, they they feel like their home is an asset, right? Your home is really a liability because you’re the one that has to pay it. And then we see people go well, I have equity in my house. So I’m going to buy a bigger house and then I’m going to get a bigger house. So the next thing you live in in a McMansion and you’ve got a $12,000 a month payment. Meanwhile, you are creating equity there. Whereas if you still had your original house and a $2,000 payment and did use that debt in a way that it allowed you to buy four single family homes that now somebody else was paying on now you’re letting letting five mortgages be paid by five people, four of them, not you. Now you’re creating wealth on your balance sheet with your house. And the four other houses that somebody else is choosing to pay you for. This is the kind of debt strategy that we work with people all the time on in creating, but it’s created because there’s cash flow back to your very first principle of build the cash flow, that what you have coming in is more than what you have going out. That’s that repayment strategy. And that’s what’s really going to build your wealth.

Can I light a fire on this thing there and do it, there’s going to be people that are gonna hate me for what I say next. I love my house. I love my house. I love owning a house. I went through a time when I thought I was going to be a nomad. And Cheryl and I were living in different places. I realized I liked having a house, I like having a place to hang my hat, my house, my house is the worst investment that I have. Because it generates is because it generates zero, it generates nothing. My son, my son is 27 years old. And he already has, he already has 15 rental properties at 27 years old. Right? He still rents Shannon, his house because he understands the place that he lives is not a great investment.

Well, I mean, your son at 27 years old, he has 15 rental houses. And we’re just going to throw some numbers out here because I like numbers, right? We’re gonna say that each one is worth 100 grand because I want easy their investment property. So he’s had to put 20% down, if he didn’t want to have mortgage insurance. If he would have bought one house for himself, he would have sucked up 20 grand. And he said instead he put that in the house that somebody else is paying for that now he however, he got that 20 grand, that cash flow of his own life. He’s now putting away in the next three years, he’s now putting away we’re gonna say another 20 grand. Plus, the guy that rented the first house is giving him an additional $200 A month toward that 20 grand. I did this one time with a spreadsheet for a friend of mine, and how many houses you could buy in 10 years? And if you started with just one, right, and the spreadsheet worked out that that in year 10. You were buying 31 houses, yeah, 31 houses, because if you were not touching the money, and you put $700 a month away, to get to number one, and you kept doing the 700 a month, that meant that in year 10. You were buying 31 More, there comes a point, Joe, when buying 31 houses a year, you can’t buy that many. Right? I mean, you don’t have time to do all the due diligence. Right? I mean, that’s that’s one house every 10 days, really. And yet, here’s your son, putting himself in that position, because he did not invest the first one T into his All right into that TransAm or whatever it was he wanted that car. Now by the time that guy’s 35. He’s not going to be asking what car fits his budget, he’s going to be asking what car fits his lifestyle, because he’s put those foundations first. And I and I love that because there’s been a there’s been a huge, I would say it’s probably the biggest rift in our marriage, between my wife and I is homeownership right now having a place to hang your hat and, and renting that’s they can be they can be synonymous, you can rent somebody else’s house. But where we develop and we do, you know, currently we’ve got about $100 million worth of construction development going on. And we rent, we rent, because I live by that exact same principle that I’m going to put my money out there making 30% a year 40% A year, rather than tie it up in a house that’s doing eight 910. Right. I mean, it just the math doesn’t make sense. pick where you want to live. But don’t get that confused in your head. And a lot of people they do that they get confused in their head where it doesn’t make sense, right? Why do you know Joe, this has been an awesome conversation and you and I could go on for quite some time with this. I can tell. But you know, let’s just recap. Let’s just recap real quick. Give me the top four things, somebody that’s in the deepest, darkest hole. What are the four things they need to do to turn from being a a despondent person who is consumed by it to somebody that has the is moving forward and is building a financially free lifestyle? What are the four things number one

Shut off everybody else and know that you’re the one in charge? You are purely in charge?

That doesn’t mean you’re one If that just means clarify.

Yeah. And I wouldn’t say that out loud with, I would say no, honey, you’re in charge. However, yes. Number two is build that foundation, meaning you have to have the emergency fund, it doesn’t make sense, by the way, to not pay the debt. This is the only place Shannon where the numbers don’t seem to make sense. Why am I putting money in something that earns zero, so that I instead of paying these interest rates at 2530, because if you’re constantly paying the this interest, you’re just going to keep digging holes every time you create that safe space? Yeah, your muffler is dragging on your car, your dishwashers broken, you gotta go back to debt. So number three is actually initially get some respect for cash, live a cash lifestyle, right. And then number four, as you’ve decided what’s important to you locked down that budget, earn more money and build a bigger gulf between what you earn and what you pay, realize that you’re the chief financial officer and build build your house based on the way that accompany would instead of the emotional way that most of us do,

You know, and Joe, this is, this is all I’m gonna, I’m gonna let the cat out of the bag too. You’ve got a book that goes into depth on this. That is, I do, it’s you do, I didn’t know if you knew this, but I’m gonna I’m gonna let people know about the book. But you go into more depth on this. And you really get into detail on that. And, and it’s really a great place for them to really go to tell us about your book real quick.

Yeah, thanks for bringing up the book. It’s called stacked your super serious guide to modern money management, which not, I don’t want to be super serious. 

You want to be super serious, right? This is a serious book.

You could already tell when I say super serious, there’s gonna be a lot of humor in this book, because that’s the way we do things. Because you don’t want to cry. You have to laugh, I think I think we have to laugh. So we do stuff. People are paralyzed. They don’t do anything. This book is The Hardy Boys detective manual that I carried around when I was in fourth grade, meets the Cub Scout wolf guide. And what I mean by that is we’ve turned it into achievements. The easy achievements are in the front. The tough achievements are in the back. And if you do all the achievements we have a we actually have a certificate in the back Shannon that you can rip out of the book and post on your refrigerator that signed by my mom. So because our podcast is live from my mom’s basement. I also have at the end of every chapter, every chapter we have a pro in this area. It interview from our podcast that is you know, 1300 episodes that we talked about Jean Chatzky from the today’s show, we talked to her about beginning with your values. Tiffany elite J the budget nista talks about getting your budget in order. We talked to Phil town about about why individual stocks can be better than indexes however we get into indexes for beginning beginners. We talk about building wealth more quickly with Jill Schlesinger from CBS News. So we’ve got a great lineup of people. It’s not just what I think it’s backed up by a lot of other people. By the way, the editor of this book, this is a Penguin Random House, it’s Avery imprint is the same editor as James clear atomic habits. If you’re familiar with atomic habits by James clear, you’re familiar that which by the way, that is a flex on my part, Shannon saying that, and it’s really cool to say that to you. But I will also say this when you go into a room with Nina and the rest of the team at Avery about your book, and they have also dealt with James clear you feel like the stepbrother they can’t do anything right comparatively?

No, just my drums.

Right? Every conversation is Oh, James. James is deaf. I told you what James did. That’s incredibly awesome. James is so great. I’m like, you know, we’re pretty good too, but it’s stacked. You’re super serious guy to monitor money management.

So guys, if you want to know more, definitely grab the book. It’s on Amazon. And if you want to figure out where all of this crazy, great information that Joe’s spouting and tap into him on where he’s at with his journey and how he’s helping other people. You’ve got to tune into his podcast. Where is your podcast? And where can people find you?

It’s called Stacking Benjamins wherever you listen to find your podcasts like Shannon’s podcast, just put in Stacking Benjamins it’s every Monday Wednesday Friday. We are not going to preach at you I think people already know that I beaten that drum a lot. It is money surround sound it is we call it the greatest money show on earth Shannon because it is a circus. It is not circus.

Well I can see who the ringmaster is so thank you Joe for being on The Real Estate Rundown. This has been a delightful episode guys. As you could tell, Joe doesn’t take Get to seriously I don’t either. And but we want to tell you thank you. We want to appreciate you guys for tuning in the Real Estate Rundown don’t forget to like, share, subscribe, go check out Joe’s show, come back to the real estate rundown. And we would love it if you would leave us a review. We’d love to get your feedback. If you’d like to connect with me on other issues and talk about what we can do to help you once you’ve got that foundation. Shoot me an email at connect at www.shannonrobnett.com. We’d love to have the further conversations with you. And again, Joe, thanks so much for being on the show.

Thanks a ton This was great.

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About Joe Saul-Sehy:

Joe Saul-Sehy learned from failure. Destroying his credit immediately after leaving home, he had to learn about money the hard way—and much of it as he was telling other people how to manage their money as a financial advisor. After 16 years in the industry, he moved to financial media, creating Stacking Benjamins, one of the most listened-to podcasts in the personal finance sphere. Kiplinger has called the show the “best personal finance podcast,” and Fast Company has described it as striking a “great balance between fun and functional.” Joe lives in Texarkana with his spouse, Cheryl, and cat, Cooper.

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