421-Success-Failure-Success-Felisa
00:00:00.000 | As a parent, you know it's not just baby talk.
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00:00:26.000 | to help prevent infections from 20 strains of bacteria that cause invasive pneumococcal disease.
00:00:31.000 | Do not get Prevnar 20 if your child has had a severe allergic reaction to the vaccine or its ingredients.
00:00:35.000 | Those with weakened immune systems may have a lower response to the vaccine.
00:00:38.000 | Talk to your health care provider before vaccination if your baby was born prematurely.
00:00:41.000 | Side effects may include irritability, pain, redness, swelling at the injection site,
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00:00:48.000 | For full prescribing information, please call 1-855-213-2138 or visit Prevnar20.com.
00:00:55.000 | Ask about Prevnar 20 for your baby. Visit AskForPrevnar20.com.
00:01:00.000 | In life, and especially in finance, it's tempting to want to listen only to success.
00:01:05.000 | It's tempting to want to think only in terms of success.
00:01:10.000 | And yet, all of our experience would tell us that that's simply not realistic.
00:01:17.000 | You can think and believe positively, but at the end of the day, you gotta face reality.
00:01:24.000 | So, wouldn't it be helpful to sometimes think about failing?
00:01:29.000 | And perhaps more importantly, wouldn't it be helpful to talk to people who have failed big?
00:01:35.000 | Today on Radical Personal Finance, we do exactly that.
00:01:38.000 | [Music]
00:01:53.000 | Welcome to Radical Personal Finance, the show dedicated to providing you with the knowledge, skills, insight,
00:01:59.000 | encouragement, and experiences, live vicariously, hopefully, that you need to live a rich and meaningful life now,
00:02:07.000 | while also building a plan for financial freedom in ten years or less.
00:02:10.000 | My name is Joshua Sheets, and I am your host.
00:02:12.000 | And today, we talk with somebody who's been to the top, been to the bottom, and then back up again.
00:02:18.000 | [Music]
00:02:26.000 | Listen, I believe in studying people who are successful.
00:02:30.000 | I think that's really, really a good plan.
00:02:32.000 | Obviously, that's the vast majority of the show here.
00:02:36.000 | I believe that you can learn a lot from people who are successful.
00:02:39.000 | But sometimes, I think you can learn more from people who have failed, especially from people who have failed big.
00:02:46.000 | Because if you can study the people who have failed and the people who have failed big and start to figure out what are some of the common threads,
00:02:55.000 | I think you can potentially inoculate yourself against some of those behaviors.
00:03:01.000 | So it's been hard for me, however, to find people who have failed.
00:03:06.000 | After all, most people who have failed don't want to walk around and talk about it constantly.
00:03:12.000 | Secondly, people who have failed don't want to be presented as being somebody who has failed.
00:03:18.000 | And somebody who has failed financially is just – I mean where do I come into contact with that person in the sense where they tell me and walk up to me and say, "Hey, absolutely.
00:03:26.000 | I'm a failure."
00:03:28.000 | That's hard for me.
00:03:30.000 | But I had a really neat experience a couple weeks ago here at Camp Mustache Southeast in Gainesville, Florida,
00:03:37.000 | where I was listening for interesting stories and I came across an interesting story of a lady named Felisa.
00:03:44.000 | And she shared how she and her husband had been to the top and then had lost it all.
00:03:51.000 | Now, they're back up again in terms of working hard and still following the plan.
00:03:57.000 | And I was so intrigued with their story because I felt like it gave such a valuable insight to you and to me.
00:04:04.000 | I knew I wanted to bring it to you. I'm really pleased with this interview.
00:04:07.000 | I feel like if you're going to listen to something, spend a lot of time listening to this.
00:04:13.000 | I think I was just so, so pleased with it.
00:04:15.000 | I think you're really going to like it.
00:04:17.000 | Before I play the interview with Felisa for you, two sponsors for today's show.
00:04:20.000 | Sponsor number one is YNAB.
00:04:22.000 | You need a budget.
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00:04:45.000 | Simple as that.
00:04:46.000 | Number two, sponsor number two is Personal Capital.
00:04:48.000 | Personal Capital is the other personal finance app that I use to track as a dashboard of my various financial accounts.
00:04:56.000 | YNAB I use on checking accounts.
00:04:58.000 | That's proactive, future-looking budgeting.
00:05:01.000 | Personal Capital is what I use for investment and management to see my accounts all laid out in one spot.
00:05:08.000 | You can track all kinds of different assets, et cetera, on there.
00:05:11.000 | It's a beautiful dashboard.
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00:05:13.000 | They work on a freemium model where they give you the tool for free in exchange for being a lead source for possibly using their money management services.
00:05:22.000 | But you're not required to do that.
00:05:23.000 | They just do a great job with it.
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00:05:27.000 | So it's free.
00:05:28.000 | So there's two free sponsors for you today.
00:05:30.000 | And with that, let's chat with Felisa.
00:05:33.000 | Felisa, welcome to Radical Personal Finance.
00:05:35.000 | Thank you.
00:05:36.000 | So we're here at Camp Mustache Southeast 2017.
00:05:39.000 | And I've been trolling around looking for interesting stories to bring to my audience.
00:05:44.000 | When you get a group of mustachians together, there's some neat people involved.
00:05:49.000 | Absolutely.
00:05:50.000 | And I think this is going to be particularly helpful because you've been rich and then you've been poor and then you've been rich again.
00:05:57.000 | I don't know about rich.
00:05:58.000 | Working towards.
00:06:00.000 | So let's start at the beginning.
00:06:02.000 | And I'd love to hear a little bit of your personal story, especially as it relates to money.
00:06:06.000 | Where did you start early in life and what were the first paths, first steps towards wealth?
00:06:12.000 | I would actually say it kind of started with my mother.
00:06:15.000 | My mother was a CPA, so I always had a good financial background.
00:06:18.000 | My parents were pretty responsible.
00:06:20.000 | Got a finance degree.
00:06:22.000 | Thought I was doing kind of everything right.
00:06:24.000 | No credit card debt.
00:06:25.000 | Didn't have any student loans.
00:06:27.000 | Came out of school.
00:06:28.000 | Got a traditional job.
00:06:30.000 | My fiancé, then husband, wanted to get into real estate.
00:06:33.000 | So we thought we would get into real estate.
00:06:35.000 | And we still both had regular day jobs.
00:06:38.000 | And we were buying real estate one at a time.
00:06:41.000 | We would move into one so you could get owner-occupied financing.
00:06:44.000 | After a year, we'd move to the next one.
00:06:46.000 | Nice.
00:06:47.000 | We got a second mortgage on the first one.
00:06:48.000 | That became the down payment on the second one.
00:06:50.000 | And that was the start.
00:06:53.000 | The issue for us was we were starting to get--it was starting to become a little too easy.
00:06:59.000 | And I had these visions of retiring by 30.
00:07:04.000 | We also were starting to--the first book I actually saw was Your Money, Your Life, which was a very inspirational book.
00:07:11.000 | And I was trying to figure out how to hit that crossover point,
00:07:14.000 | thinking real estate was going to be the thing that would bring me over the top.
00:07:17.000 | I was planning on quitting my job.
00:07:19.000 | I think that's where maybe we got a little arrogant or cocky that we knew best,
00:07:23.000 | even though we were still in our 20s and early 30s.
00:07:28.000 | Then 2008 happened.
00:07:30.000 | So before we get to 2008, because I want to get--because with real estate, we've got to place the times.
00:07:34.000 | What year did you and your husband buy your first property?
00:07:37.000 | It was 1996.
00:07:40.000 | Okay, so you had a slight--let's see, did real estate prices go down in 2001?
00:07:45.000 | Not much, right?
00:07:46.000 | Not much.
00:07:47.000 | So you kind of hit from 1996 to 2008.
00:07:50.000 | You basically had this giant, long, beautiful upswing in real estate.
00:07:54.000 | Right.
00:07:55.000 | There wasn't a huge surge, but everything was moving along pretty positively.
00:07:58.000 | Right, consistently strong.
00:07:59.000 | It was a very, very strong time to be in real estate.
00:08:01.000 | So 2008 happened.
00:08:03.000 | 2008 happened.
00:08:04.000 | And what does 2008 happen--what does that mean to you, or what did it mean to you?
00:08:09.000 | Well, by that time, I was actually "a stay-at-home mom" at that time.
00:08:15.000 | And my husband actually had ventured full-time into real estate.
00:08:20.000 | So he was a real estate agent, mortgage broker, mortgage lender.
00:08:23.000 | So that's when he was actually starting to give mortgages to other people.
00:08:28.000 | But we were personally guaranteeing those.
00:08:31.000 | But nobody ever really understood the concept.
00:08:33.000 | Why were you personally guaranteeing those?
00:08:35.000 | Well, ultimately--not those mortgages, but ultimately the blanket lines of credit that they were on.
00:08:41.000 | Got it.
00:08:42.000 | So we had commercial lines that his business was running off of.
00:08:46.000 | So we kind of had that side of the business, and then we also had, at that time, 20 rental properties.
00:08:51.000 | Wow.
00:08:52.000 | So we were still planning on--we were, for the most part, living off the income of the rental properties.
00:08:57.000 | And then he was still growing the business, but we weren't taking any money out of the business.
00:09:02.000 | Was everything cash-flowing?
00:09:03.000 | Everything was cash-flowing.
00:09:04.000 | And you were living on--like you said, you were living on the rental properties.
00:09:07.000 | Absolutely.
00:09:08.000 | I don't know if you're willing to share any numbers.
00:09:10.000 | How much income were you gaining from the portfolio at that point in time?
00:09:14.000 | I would say we probably had about $4,000 a month that we were living on, which was just--
00:09:19.000 | So you weren't driving Porsches.
00:09:21.000 | No.
00:09:22.000 | I was going to say we were never living large, but I would also say every time we had a little bit more money,
00:09:26.000 | we were either investing it in the business or investing it back in real estate.
00:09:30.000 | But we had this vision of this big empire.
00:09:32.000 | We did have probably a million dollars worth of equity, though.
00:09:35.000 | Right, right.
00:09:36.000 | So this would be lots of equity, lots of debt, but you're not going crazy.
00:09:40.000 | You feel like you're doing everything right.
00:09:42.000 | You're paying down mortgages as you can, just continuing to build and to invest.
00:09:46.000 | We weren't really paying down mortgages, but we were--I think what got us in trouble is we were actually starting to take seconds on mortgages.
00:09:53.000 | But we were using that money, what we thought was appropriately or responsibly, because we were putting it back into real estate.
00:09:58.000 | Right, right.
00:09:59.000 | So we didn't have any credit card debt.
00:10:01.000 | We didn't have any boats or planes or Rolexes or anything like that.
00:10:05.000 | Right.
00:10:06.000 | But it still came around and kind of bit us in the tushie.
00:10:10.000 | So what happened?
00:10:11.000 | So in 2008, that's when kind of the economy started crashing, and actually I think Florida was starting to crash a little bit sooner.
00:10:18.000 | So I think we kind of started to see it.
00:10:21.000 | But our properties, we still--for the most part, we were still managing.
00:10:26.000 | Our rental income was coming in, but his business--I will say looking back in hindsight, you could see the mortgages that we were giving, they were estate income, no qualifying.
00:10:38.000 | Right.
00:10:39.000 | Appraisals were coming in just crazy numbers.
00:10:43.000 | People started--to the business--started just handing back properties.
00:10:47.000 | They would quick claim deed the properties back to us because they just couldn't handle the property anymore.
00:10:53.000 | So we were getting properties back that we didn't want, that the loan was more than what you could sell it for now.
00:10:59.000 | A lot of them, the property--somebody started a renovation, they ran out of cash, or they didn't know what they were doing, so the repairs sometimes weren't up to code.
00:11:07.000 | They didn't pull proper permits.
00:11:09.000 | They were in areas that weren't necessarily the ideal location.
00:11:12.000 | And then on this kind of the same time, that's where on our rental properties, people were getting laid off, and so people started becoming late on their payments to us.
00:11:21.000 | They needed extended time.
00:11:23.000 | Obviously, you couldn't increase the rents.
00:11:25.000 | A few of them, we were actually decreasing the rents.
00:11:28.000 | Some people would just move out.
00:11:30.000 | Evictions started taking a lot longer, and so everything just started kind of crumbling on itself, and that's when you kind of have the real, "Oh, my, what am I going to do now?"
00:11:41.000 | Right.
00:11:42.000 | At the time, I had two small--well, we had two small children, and so I'm starting to panic about--
00:11:47.000 | Right.
00:11:48.000 | --what are we doing?
00:11:49.000 | I've got to take care of my children, and the biggest challenge, frustration for me was the fact that that's where I think myself and my, well, ex-husband now, we started to verge.
00:12:01.000 | He kept saying, "Just hold on. Just trust in me. I can get through this," and it wasn't that I doubted him.
00:12:07.000 | I just doubted the economy and everything else.
00:12:12.000 | We just didn't have enough in reserves.
00:12:14.000 | He was trying to hold on to the business as best he could.
00:12:17.000 | He tried really, really hard.
00:12:19.000 | I don't fault him for anything, but ultimately, it came down to just too much, and so it caused too much stress.
00:12:26.000 | We ended up having to get divorced, and we actually had to get to the point where we filed what's called a Chapter 11 business reorganization bankruptcy because we had over a million dollars worth of assets, so it's not like the TV commercials that you see.
00:12:39.000 | Wipe it out and go free now.
00:12:40.000 | Right.
00:12:41.000 | Definitely not.
00:12:42.000 | That's where we had to get to the point where we're actually going to a business reorganization bankruptcy, hoping that the banks will work with us so we could try to save the houses and save what we could.
00:12:53.000 | Wow.
00:12:55.000 | Before 2008, did you and your husband talk about risk management?
00:13:01.000 | Did you talk about, "Hey, what if things happen?"
00:13:05.000 | No.
00:13:06.000 | I think we thought as long as you worked hard and you believed in the American dream, things would be okay, and I think we thought we were doing everything right because we were "responsible."
00:13:18.000 | We didn't have credit card debt.
00:13:20.000 | We weren't taking extravagant vacations.
00:13:22.000 | We thought we were putting it into safe assets, which was real estate.
00:13:26.000 | I don't think, at least in my lifetime, I've never seen real estate go down, so I thought it was a very secure asset.
00:13:33.000 | Were you following the advice or instruction of any particular real estate mentor or guru?
00:13:40.000 | The first person was actually Carlton Sheets.
00:13:42.000 | Okay.
00:13:43.000 | That's who…
00:13:44.000 | You saw an infomercial and boarded the program?
00:13:46.000 | That's exactly what happened.
00:13:48.000 | I still think his principles are pretty good.
00:13:50.000 | Sure.
00:13:51.000 | We were to single-family houses.
00:13:53.000 | We were putting 5% down, solid rentals.
00:13:58.000 | I think Florida's still a pretty good market.
00:14:00.000 | Sure.
00:14:01.000 | But that's where the issue became…the market just bit us.
00:14:06.000 | Right, right.
00:14:07.000 | Were there any other kind of mentors, gurus in the real estate space that you found helpful along the way?
00:14:12.000 | I can't really remember all the names, but actually we were a part of the NEFAR.
00:14:17.000 | We were part of Jack's RIA.
00:14:19.000 | So we were part of all of the real estate investment groups in town.
00:14:22.000 | He was actually the president for one time.
00:14:24.000 | Wow.
00:14:25.000 | So we both ended up getting our real estate licenses.
00:14:28.000 | So I mean I felt like we had the knowledge and background, but I don't think anybody ever said real estate's a bad investment.
00:14:36.000 | Or not necessarily…it's not a bad investment, but it's that it's…there are risks and perils with it.
00:14:41.000 | Yeah.
00:14:42.000 | The reason I was kind of probing on that is because I had an experience when I was in college.
00:14:46.000 | I graduated from high school in 2003.
00:14:48.000 | And during the time that I was in college from 2003 to 2007, I went to a motivational seminar and then I went to a real estate seminar.
00:14:59.000 | And I started to get involved.
00:15:01.000 | I went to…it was one of the Russ Whitney real estate seminars.
00:15:04.000 | He was big in Florida with his organization.
00:15:07.000 | And I vividly remember how easy the whole thing seemed.
00:15:12.000 | I went to the three-day Russ Whitney seminar.
00:15:14.000 | And the guys there and all the way that they did things, they were sued and found…I believe they were found guilty of fraudulent business practices.
00:15:22.000 | But I was in those seminars.
00:15:24.000 | Guys up front, looks great, showing off all the great stuff, showing the deals.
00:15:28.000 | I mean I could do the whole and show how the whole marketing arm of that works.
00:15:32.000 | But I was so gung-ho and I was ready to go.
00:15:36.000 | And I vividly remember I was sold on the idea at the seminar, I was sold on the idea of some big coaching, mentoring, consulting package.
00:15:46.000 | I was ready to plunk down $30,000 for my real estate mentoring package.
00:15:52.000 | And it was only by the grace of God where my dad sat me down and said, "Joshua, do not do it."
00:15:58.000 | And I chose to submit.
00:15:59.000 | And in hindsight, I'm so thankful that I did.
00:16:01.000 | Because I was maxing out credit card limits.
00:16:04.000 | Let me be clear.
00:16:06.000 | I was increasing credit card limits all over the place, getting ready to access lots of cash.
00:16:11.000 | And I was ready and primed for that.
00:16:14.000 | And I read a bunch of books, all the gurus, etc.
00:16:18.000 | And what I found at that time was that almost nobody would talk about what could go wrong.
00:16:25.000 | Nobody talks about an exit strategy.
00:16:28.000 | Nobody talks about the downside.
00:16:30.000 | And I think that's the part that I kind of want to share because I feel kind of the same vibe going on right now.
00:16:37.000 | Where people are talking about credit getting easier and real estate's the way to get to financial freedom.
00:16:43.000 | And I'm not saying it's not the way.
00:16:45.000 | Because you're still involved in the real estate business.
00:16:47.000 | I am still involved.
00:16:49.000 | And I wouldn't discourage, but I do think people need to think about what is your exit plan and what happens if the economy does take a turn.
00:16:58.000 | What if 25 or 50% of your tenants can't pay their rent anymore?
00:17:03.000 | What if you can't make those increases?
00:17:06.000 | And people will say, "Well, I'll just evict them."
00:17:09.000 | Well, in the state of Florida, eviction's $400.
00:17:12.000 | And you're not evicting on the 5th.
00:17:14.000 | You're usually trying to give them a little bit of grace.
00:17:16.000 | You're trying to work with them because they say, "Oh, please, please. I get paid on Friday and I can do this.
00:17:21.000 | And I've got 300 of the 900."
00:17:24.000 | And also your humanity comes into play, too.
00:17:27.000 | And it's really hard to kick people out when they have kids and they have pets and they have grandma living at home.
00:17:36.000 | They're not making up the hardship.
00:17:37.000 | No, they're not.
00:17:38.000 | Like, they really did get laid off.
00:17:39.000 | They really did.
00:17:40.000 | There really aren't that many groceries in the fridge and they really don't know what to do.
00:17:42.000 | They're not making it up.
00:17:43.000 | But you're not a charity.
00:17:44.000 | But it does pull on your purse strings a little bit and your heart strings.
00:17:48.000 | Right, right.
00:17:50.000 | One of the interests that I've had since then is try to find realistic gurus/mentors, etc., who provide the useful education,
00:18:01.000 | but who also provide education on things like risk management and who have also been through it.
00:18:08.000 | So, for example, I'm a big fan of John Schaub's work.
00:18:11.000 | He does a great job, but he's been through it and he's reasonable and he talks about, "Here are the downsides.
00:18:16.000 | Here are the upsides."
00:18:17.000 | And there are others as well, but I appreciate very much when people are practical and reasonable because, as you could say, it's a big deal.
00:18:24.000 | Yes, it's a hard lesson to learn.
00:18:26.000 | So, what was it like in terms of emotionally?
00:18:31.000 | I would guess that it didn't hit you right at the beginning like, "Oh, this is all going to go away."
00:18:38.000 | It was probably a long period of time.
00:18:40.000 | When did it hit you?
00:18:42.000 | It's kind of one of those slow things.
00:18:44.000 | Like it's one person getting late and one person late off and the business just not doing quite as well.
00:18:50.000 | But you think you can ride it out.
00:18:51.000 | We actually had some investments.
00:18:53.000 | We had some savings.
00:18:55.000 | My parents were actually helping us out, so we thought we could just ride through the storm.
00:19:00.000 | And I would say if it would have lasted maybe a year or wouldn't have been quite as bad, we probably would have made it through.
00:19:08.000 | But the flip side of that is we were, I wouldn't say putting more money in, but we actually probably would have been better off if we would have cut our losses earlier.
00:19:19.000 | We were holding on to properties that ultimately the bank wouldn't work with us.
00:19:24.000 | People gave us properties back that were such deplorable conditions that it was better to hand it back to the city than try to fix it up.
00:19:33.000 | But we did some of those things.
00:19:35.000 | It's very much about your word and people trusting in you, so you want to follow through.
00:19:42.000 | We wanted to make those payments to the bank.
00:19:45.000 | It's not that we didn't want to make them.
00:19:46.000 | It wasn't that we weren't -- you want to try to make those things happen.
00:19:50.000 | So you're hoping that, well, if we can close this property, if we can sell this one, if we can liquidate that, then we can make --
00:19:56.000 | so you're always kind of playing the time/money game, trying to see if you can figure things out.
00:20:02.000 | But it took a process.
00:20:04.000 | It was 2008 for us that things kind of started crashing.
00:20:08.000 | I actually went back to work full time so I could kind of support the family,
00:20:12.000 | so then we didn't have to worry about the real estate actually supporting ourselves.
00:20:16.000 | My husband at the time was focusing all of his energy and effort into saving the business.
00:20:22.000 | He wasn't taking a paycheck.
00:20:23.000 | We didn't have any credit card debt.
00:20:25.000 | So it wasn't until 2010 where the banks were starting to, you know, request demand payments.
00:20:33.000 | It was mostly blanket mortgages at that time, lines of credit that were fluctuating up and down,
00:20:39.000 | and the banks wouldn't talk to us, wouldn't work with us.
00:20:41.000 | And so that's when we were forced at that time to go to a Chapter 11.
00:20:45.000 | In 2010.
00:20:46.000 | Yep, so two years.
00:20:47.000 | How long did the process of bankruptcy take?
00:20:50.000 | That took about a year, and that is not as easy as the TV commercials tell you either.
00:20:54.000 | Tell me more.
00:20:55.000 | Chapter 11.
00:20:56.000 | So that's -- for people who don't know, it's a business reorganization bankruptcy.
00:21:00.000 | So you are trying to still hold on to your -- for us, it was trying to hold on to the properties
00:21:05.000 | and our personal house and see if the banks would work with us.
00:21:09.000 | We had 20 rentals at the time.
00:21:12.000 | Four of them were tied to one bank, and they absolutely would not work with us, would not talk to us.
00:21:19.000 | But this is while we're already on bankruptcy protection,
00:21:23.000 | so that's where our lawyer is trying to negotiate with each one of the banks.
00:21:27.000 | Most of them would work with us, but then you're taking a property that we've now paid 10 years of payments on,
00:21:35.000 | seven years, nine years, you're refinancing all of them to back out to a 30-year mortgage.
00:21:41.000 | We were able to adjust some of the -- at least some of the variable rates.
00:21:45.000 | They were able to negotiate to fixed rates.
00:21:48.000 | The basis was reset on a lot of the properties, so we had to negotiate.
00:21:52.000 | They would, you know, re-praise what the property was worth because the banks didn't want the properties back,
00:21:57.000 | except for the one that just wouldn't work with us.
00:22:01.000 | But it kind of put you all the way back to square one, so now we're starting all over again with the new payments.
00:22:06.000 | So it did help us.
00:22:07.000 | That's how we were able to get through it because most of the properties were able to be reset at a lower payment.
00:22:15.000 | But it did really hurt us in the fact that you still have -- taxes were still going up.
00:22:20.000 | Insurance was still going up.
00:22:22.000 | We had to --
00:22:23.000 | Vacancy was probably still high.
00:22:25.000 | Vacancy was still high, so you're trying to keep people in.
00:22:28.000 | You can't do the repairs quite like you want to do, so you're trying to push out repairs.
00:22:32.000 | You're trying to do stopgap.
00:22:34.000 | You're patching a roof versus replacing a roof.
00:22:36.000 | Right.
00:22:37.000 | You're trying to be creative on some of those things, trying to get through the process.
00:22:41.000 | Wow.
00:22:44.000 | What was the bank that wouldn't work with you?
00:22:46.000 | Jacksonville Bank, which is now the nearest bank.
00:22:49.000 | Okay.
00:22:50.000 | So why didn't they work with you, do you think?
00:22:52.000 | They actually thought the properties were worth way more than what we kept telling them.
00:22:55.000 | We had to lay everything out.
00:22:57.000 | It was full disclosure.
00:22:58.000 | They actually took over our books.
00:23:00.000 | You have to have a separate bank account, and the trustee has to review everything.
00:23:04.000 | We were showing them exactly what the rent was, what the interest payments were,
00:23:09.000 | and they just thought for sure that they could sell those properties for more than what we could finance them for.
00:23:17.000 | I will say in hindsight I'm sure they are kicking themselves now because we watched those properties.
00:23:22.000 | They sat on the market for another 18 months, and they sold for half of what we said they would.
00:23:27.000 | A little bit of justification to ease the pain a little bit.
00:23:32.000 | But it's still one of those things that got flagged now.
00:23:35.000 | Forever I will have a foreclosure on my credit, which I never thought I would have any of those things.
00:23:41.000 | I never thought I would have a bankruptcy.
00:23:43.000 | I didn't have credit card debt.
00:23:45.000 | I wasn't irresponsible with my money, but still bad things happened.
00:23:49.000 | I think that's probably my guess, and I can see it on your face, and I know my audience can hear it in your voice.
00:23:55.000 | That's probably the most frustrating thing.
00:23:57.000 | When I think back of some of the financial mistakes that I've made,
00:24:00.000 | one of the most frustrating things has been when I felt like I did everything right.
00:24:05.000 | It's like I did it all right.
00:24:07.000 | I did what I was supposed to do.
00:24:08.000 | I didn't go and take my money and blow it on--what's that quote?
00:24:15.000 | I think you have that quote where the person says, "I spent all my money on wine, women, and song, and the rest I wasted."
00:24:22.000 | I didn't go and spend it all on absurd things.
00:24:28.000 | And yet here I am paying the price, and I didn't even get the fun of it.
00:24:32.000 | And here I see my friends or peers or neighbors.
00:24:35.000 | They all went and had a good time, and they got the fun of it at least.
00:24:39.000 | It's very, very frustrating.
00:24:40.000 | Yeah, we went through a lot of stress.
00:24:42.000 | We were working crazy hours just trying to keep afloat.
00:24:45.000 | Wow.
00:24:46.000 | So when did the bankruptcy proceedings finalize?
00:24:49.000 | It finalized in 2011.
00:24:51.000 | Okay, and when you came out of that, did you come out owning the properties and just having things reorganized,
00:24:56.000 | or what did it look like financially?
00:24:58.000 | Financially, we were able to come out with 16 properties.
00:25:01.000 | They were all re-amortized to a new fixed rate.
00:25:06.000 | At the time, we thought that was pretty good, which was 5 and a quarter, which if you look at it now, oh, well.
00:25:12.000 | But at least they were willing to work with us.
00:25:14.000 | Now you still had to work with the trustees.
00:25:16.000 | You still had to make quarterly payments.
00:25:19.000 | But once you got through, actually they put you on a plan once you can prove that you can make all of--
00:25:26.000 | So all of our debts were now satisfied, and then now except for all the mortgages,
00:25:32.000 | because we didn't have credit card debt.
00:25:33.000 | We didn't have any of those other things.
00:25:35.000 | We had some banks that were trying to go after my husband, the copier company from his business.
00:25:41.000 | Don't ever sign a copier lease ever in your life.
00:25:44.000 | Duly noted.
00:25:45.000 | Yeah.
00:25:46.000 | I mean, they still show up now if I try to sell a property, which, I mean, should have been discharged in a bankruptcy,
00:25:51.000 | but it still pops up on every property that I have.
00:25:54.000 | Wow.
00:25:55.000 | So when we came out of it, we had the properties.
00:25:59.000 | They were still--so there was still--for the most part, they were set to what their new value was worth.
00:26:06.000 | So there really wasn't any equity in the properties anymore, but they weren't upside down either.
00:26:11.000 | So they were kind of set to a neutral bar.
00:26:14.000 | So they were valued back at 2010 rates now.
00:26:18.000 | And so then the payments by being stretched back out on 30-year fixed-rate mortgages would probably have been below the rents.
00:26:25.000 | Right.
00:26:26.000 | So that helped.
00:26:27.000 | So you could cash flow them.
00:26:28.000 | So at least there was a possibility that with steady rates, the possibility of increasing rents,
00:26:34.000 | and the possibility of appreciation, hopefully, from a low,
00:26:37.000 | there would be back in a position where the business would start to make sense again.
00:26:41.000 | Right.
00:26:42.000 | And so that's where we are now.
00:26:43.000 | So we still have those properties.
00:26:45.000 | I am slowly starting to sell them off at this point.
00:26:48.000 | But it's taken from--they were reset in 2010.
00:26:52.000 | Here we are now in 2017.
00:26:54.000 | I would say we're finally back to where those properties now have some equity in them.
00:26:59.000 | Right, right.
00:27:00.000 | And what was the timeline of your divorce?
00:27:03.000 | So the divorce actually went final in 2012.
00:27:06.000 | So that's--you can see, same thing.
00:27:08.000 | We separated in 2010, tried counseling, everything else.
00:27:14.000 | I would say the circumstances were just too high to bear.
00:27:19.000 | It just became too much of a crossroads.
00:27:23.000 | There was too much fighting and tension and stress that I just--I don't think any marriage could have taken it.
00:27:29.000 | Was your portfolio divided as far as the divorce proceedings?
00:27:33.000 | So, yeah, which that makes a divorce fun too, even though we were very amicable
00:27:37.000 | and we both agreed to put our children as first and foremost, so I'm very thankful to him for that.
00:27:45.000 | But so we at the time--one of the houses was--so we had 16 houses at that time.
00:27:50.000 | One of them was our personal house.
00:27:52.000 | And so he actually took one of the rental houses and made that his personal house.
00:27:57.000 | And so then we each ended up with seven rentals each.
00:28:01.000 | And I believe to the best of my knowledge he still has his seven.
00:28:04.000 | I had those seven.
00:28:06.000 | I've sold two of them, so now I'm down to five.
00:28:09.000 | Subsequently, though, my parents also were investing in my ex-husband's business.
00:28:14.000 | And so when they didn't get their money out, they were given properties in exchange for the money
00:28:20.000 | as part of kind of the bankruptcy proceeding too.
00:28:23.000 | You could take back equity.
00:28:24.000 | So they ended up with some rental properties that they didn't want, that they didn't know how to manage.
00:28:29.000 | And so my ex-husband was doing all the management when we got divorced.
00:28:34.000 | Guess what?
00:28:35.000 | Now I had to learn how to manage properties, and I had to start managing my parents' properties
00:28:39.000 | because they didn't live in town.
00:28:41.000 | It was something they were doing really to help us out.
00:28:43.000 | Subsequently, my mother has passed away, and so now I've inherited those properties.
00:28:48.000 | So now I'm back up to 12 rental properties again.
00:28:52.000 | So even though I'm trying to get out, it just seems to keep pulling me back in.
00:28:56.000 | So you're trying to get out of the real estate business now?
00:28:59.000 | Slowly, yes.
00:29:01.000 | And is that just an emotional thing of saying, "I just don't want this"?
00:29:07.000 | It's too much pain associated with it?
00:29:09.000 | Or is that recognizing that there's a better alternative or something different that you want to do?
00:29:14.000 | There's probably a couple pieces for me.
00:29:16.000 | One, I like real estate from a business standpoint, but I am not a handywoman.
00:29:23.000 | That is just not my skill set.
00:29:25.000 | I think you can make good money in real estate if you are a natural kind of fix-it person.
00:29:30.000 | You enjoy rehabbing.
00:29:32.000 | You don't mind fixing a toilet.
00:29:34.000 | You know how to fix a fence or do some of those things.
00:29:39.000 | I don't know how to do those, so I'm paying handymen and my fiancé now, who really helps out a lot.
00:29:45.000 | So I can't do some of those things that I think help--
00:29:49.000 | that make that kind of edge that makes real estate profitable for a lot of people.
00:29:53.000 | I would also say I'm at the point where a lot of these properties are now 20, 25, 30 years old.
00:29:59.000 | So I'm replacing--
00:30:01.000 | They're fully depreciated.
00:30:02.000 | Yes, they're depreciated now, and roofs are going for $8,000 a pop.
00:30:07.000 | Air conditioners are going for $2,500.
00:30:09.000 | So it's becoming--so the idea that you can sit--
00:30:13.000 | and they're completely rented right now, and they're pretty stable, knock on wood.
00:30:17.000 | But I still have--now I have some equity in properties where I think if I could just take that equity,
00:30:23.000 | throw it into a Vanguard index fund and not have to deal with it,
00:30:27.000 | that just sounds more appealing to me at this time.
00:30:29.000 | Right, right.
00:30:33.000 | You're here at Camp Mustache.
00:30:35.000 | So this is obviously kind of an outgrowth of the Mr. Money Mustache community,
00:30:39.000 | which is largely focused on financial independence.
00:30:43.000 | And you've pursued financial independence.
00:30:47.000 | What have you learned about financial independence and the pursuit of it as--
00:30:56.000 | I'll rephrase my question.
00:30:58.000 | What have you learned with regard to living through all this while pursuing financial independence
00:31:05.000 | and the impact of that on your own life?
00:31:09.000 | It's definitely taught me to be a lot more humble.
00:31:12.000 | It's also taught me to not judge other people's circumstances.
00:31:18.000 | When I look back at my younger self, I saw people who--
00:31:24.000 | even we talked about it this morning where you saw other people and they got laid off,
00:31:27.000 | and you thought, "Well, they just weren't working hard enough," or "They weren't smart enough,"
00:31:31.000 | until it happens to you.
00:31:32.000 | Same thing in real estate.
00:31:33.000 | "Well, they just didn't run their appropriate credit checks," or "They just didn't buy the right location,"
00:31:39.000 | or "They were this, that, and the other," until it happens to you.
00:31:43.000 | So I definitely understand people's circumstances a lot more.
00:31:48.000 | And I've also looked at--for me, I don't think financial independence can necessarily be one piece of the stool.
00:31:57.000 | I think you do have to have the frugality component of it.
00:32:02.000 | And I love to travel, and I will spend money on travel.
00:32:05.000 | But at the same time, I may be a little more frugal on bringing my lunch to work
00:32:12.000 | or cutting cable or something like that.
00:32:15.000 | You just have to find the things that are important to you.
00:32:18.000 | And then I think having that good base of--I really have put a lot of money--I try to save as much as I possibly can.
00:32:24.000 | I probably save about 40% of my regular take-home paycheck and then all the extra rental income.
00:32:30.000 | Because you've been working all the way through.
00:32:31.000 | I've been working all the way through.
00:32:34.000 | So I'm trying to also kind of be an extreme saver to the best of my abilities.
00:32:39.000 | So it's kind of that balance.
00:32:40.000 | And then also have, hopefully, the real estate.
00:32:42.000 | So as I sell some of these properties, now I get that pop of the real estate of--
00:32:47.000 | when I sell a property now, that can be $40,000 or $50,000 each time.
00:32:52.000 | And if I can do that, I'm probably five to seven years away from financial independence.
00:32:58.000 | But I do at least know now I have that--if I got laid off tomorrow, I would be stunned.
00:33:08.000 | But at the same time, I wouldn't think my life's over and I could still provide for my children.
00:33:12.000 | And that's ultimately the most important thing for me.
00:33:15.000 | Did you think about giving up?
00:33:20.000 | I did a little bit.
00:33:23.000 | And if I wasn't a mother at the time, it probably would have been a lot easier.
00:33:27.000 | But once you have parents, your world changes.
00:33:32.000 | It was all about them.
00:33:34.000 | And I remember when I was going through bankruptcy and I was really hitting--I started to become depressed.
00:33:41.000 | I didn't know what--you just couldn't see the future.
00:33:43.000 | All I was doing was working and working and working.
00:33:45.000 | And you cut out everything at that point.
00:33:48.000 | There was no extra money.
00:33:50.000 | I remember even having--giving up the gym membership and couldn't go out to eat, forget going on vacation.
00:33:58.000 | You're just keeping your head above water.
00:34:00.000 | And I remember just thinking, "What is life about?
00:34:04.000 | I don't know if I can do this for the next 40 years, just this grind."
00:34:09.000 | And I remember I actually had to sit down with a very good friend of mine who actually was a counselor.
00:34:14.000 | And she's like, "We've got to figure out what is your--what gets you to your raw, raw place."
00:34:23.000 | Let's say--because I thought at the time we were going to lose the house.
00:34:27.000 | And we were--my--what little was in my 401(k) was almost wiped out.
00:34:33.000 | All the properties were upside down at this time.
00:34:35.000 | And she was like, "Let's get back to square one.
00:34:38.000 | Okay, let's say you lose the house.
00:34:40.000 | Okay, let's say you lose all of your--you don't have any of the rental properties.
00:34:44.000 | They take everything.
00:34:45.000 | What do you have?"
00:34:47.000 | I was like, "Well, I have my college degree."
00:34:49.000 | And she's like, "Okay, so let's say--and you've got a job," which I did.
00:34:53.000 | And she's like, "Ultimately, do you have enough money that you could go get yourself an apartment and take care of your kids?"
00:34:59.000 | And I could answer, "Yes, I could do that."
00:35:02.000 | It wasn't what I thought of.
00:35:03.000 | I was going to be giving up my nice four-bedroom, 2,600-square-foot house.
00:35:07.000 | But, yeah, if it came down to it--and she had to push me to that limit of, "Okay, what if everything hits the fan?
00:35:15.000 | Could you--you know, where is your breaking point?
00:35:17.000 | What is that?"
00:35:18.000 | And I knew that, okay, I at least had enough money, and ultimately I had the support of my parents that I knew that, you know, they would love me
00:35:26.000 | and ultimately the door would always be open that I could take care of my children.
00:35:31.000 | If I could put a roof over my children's head, if I could feed my kids, my kids were safe, I could make it through.
00:35:38.000 | And so that's where I got to.
00:35:40.000 | And from there, that's where I was able to kind of build back out again.
00:35:47.000 | When people are going through difficult situations, a lot of times very well-meaning people will come alongside and offer advice.
00:35:55.000 | Solicited, unsolicited.
00:35:58.000 | I think we've all probably been there, and we've probably all done it.
00:36:01.000 | When you were in this period where everything was falling apart, what was the advice that was offered to you that just wasn't helpful, wasn't relevant?
00:36:15.000 | I would say I was actually probably in a little bit of a different situation in the fact that I was still, for the most part, hiding it.
00:36:21.000 | Nobody at work knew that I filed bankruptcy.
00:36:24.000 | I was so embarrassed.
00:36:26.000 | I actually thought they would fire me at work if they found out.
00:36:29.000 | I don't know why I thought that, but I was so humiliated and embarrassed that only my really, really close friends knew about the bankruptcy.
00:36:40.000 | And I would say if any of my friends are hearing this now, most of them, this would be a shocker to them.
00:36:45.000 | Most of them, I would say I think I told like three of my best friends.
00:36:50.000 | And I remember actually going on a--my sorority always had a weekend reunion, and I remember I didn't want to go that year.
00:36:59.000 | I was so embarrassed.
00:37:01.000 | I didn't want to see them.
00:37:04.000 | And these were my closest friends, and I loved them dearly, and I knew they would support me.
00:37:08.000 | I didn't want to admit to them.
00:37:10.000 | I didn't want to go, and I just--I didn't want to face them.
00:37:14.000 | So I would say for the most part, people just didn't really even know what I was going through because I was hiding it,
00:37:20.000 | because I was still trying to keep up the image.
00:37:25.000 | What changed from that to where today where you offered--you know, you volunteered and said, "I'd be willing to tell you my story,"
00:37:32.000 | to where you're sharing these learning experiences with others?
00:37:35.000 | What changed?
00:37:38.000 | Hopefully a little bit of wisdom that goes along with age,
00:37:41.000 | and just because I feel like I've been fortunate that I've kind of come around, not--almost full circle again,
00:37:52.000 | and I feel like things are going really, really well in my life, and I'm very happy and very grateful for everything.
00:37:58.000 | And so I do feel like at this point in my life now is where I need to share some of those stories,
00:38:06.000 | especially at a camp like this or some of the forums that I'm on, listening to your podcast.
00:38:12.000 | I hear people starting to get into real estate, and I don't want to discourage people from real estate,
00:38:17.000 | but I just want to make sure people understand, just like the stock market could crash tomorrow or it could double tomorrow,
00:38:24.000 | we don't know. Real estate is not a guarantee, and I think that message isn't necessarily getting across.
00:38:31.000 | And I also still think that there aren't--people don't talk about the exit strategy for real estate.
00:38:38.000 | Everybody talks about how to get into real estate. People don't talk about how to sell your property,
00:38:43.000 | and oh, by the way, you've depreciated it, which is great when you're doing it. Great on your tax return.
00:38:48.000 | It's great in the early years. Look at all this tax-free income. This is great.
00:38:51.000 | Right, but wait until you have to do your tax return, and now you've sold three properties, and guess what?
00:38:56.000 | You have to recapture all that depreciation. I don't think people are talking about that part.
00:39:01.000 | So I just want to make sure people have a good understanding.
00:39:04.000 | And also, when you're 25 and you're buying your first house or your first quadplex,
00:39:11.000 | and it's just you and your husband, and you have all this extra time, and yeah, we would paint all weekend,
00:39:16.000 | but it's different when you have two kids, and now you have elderly parents,
00:39:20.000 | and if you still have a regular corporate job, you're now balancing things between getting to your son's taekwondo competition,
00:39:30.000 | oh, but there's a leaky toilet, oh, but you're expected to be at this corporate event.
00:39:35.000 | So that's the things you have to think about. Real estate might be great at 25, but what's it going to feel like at 35 or 45 or 55?
00:39:43.000 | Right. Yeah, I feel like you're hitting the nail on the head in terms of a few things that people don't recognize.
00:39:49.000 | They don't recognize often the risks of the real estate business.
00:39:54.000 | A lot better now than it was 15 years ago, for sure, but still, I see more fancy presentations coming online now.
00:40:02.000 | I do, too.
00:40:03.000 | And we've got whole new generations of people who haven't lived through it.
00:40:06.000 | I think about something like the Great Depression.
00:40:08.000 | The Great Depression impacted the lives of a generation of people, and they never forgot those lessons.
00:40:14.000 | Well, the real estate crash of 2008 impacted the lives of a generation of people, but that's not forever.
00:40:24.000 | New generations will come up, and you can do the math on, let's say, you had a 10-year-old in 2008.
00:40:29.000 | That person right now is at the point where they're graduating from high school,
00:40:35.000 | and they're starting to look around, and they're in that situation of, "Hey, I'm going into my 20s, and real estate's a good deal."
00:40:40.000 | And they don't know it in the gut, viscerally, like perhaps you do.
00:40:45.000 | The other thing that people underestimate is your right, when you come to sell it,
00:40:48.000 | and how the actual details of something like depreciation work.
00:40:51.000 | And then to highlight what you said about being a handywoman, that in real estate, you have to find--
00:40:58.000 | Here's my analysis. I'll be interested to hear if you agree.
00:41:03.000 | It's my opinion that real estate only ever appreciates in the aggregate as wages appreciate, because it's a commodity.
00:41:12.000 | So on the whole, it will never rise in value faster than wages do.
00:41:20.000 | So in order for real estate to be a good investment, you need to find some situation in which your real estate will appreciate at--
00:41:29.000 | Not necessarily, it's not all about appreciation, but you need to find some way that you can find a disparity,
00:41:36.000 | an irregularity, an inefficiency in the market.
00:41:38.000 | So that might be something like recognizing that this particular city is experiencing economic growth.
00:41:44.000 | So perhaps the wages in the United States are not increasing significantly, but this city is.
00:41:49.000 | And so therefore, by buying in early here, you can experience that.
00:41:53.000 | Or you find it based upon finding a property that's discounted significantly.
00:41:57.000 | It's discounted at a deal. You can find it. You can buy it.
00:42:00.000 | Now you have some significant gain there because you found a deal.
00:42:04.000 | Or you can find a property that is based upon--
00:42:08.000 | This was underutilized. We can divide the bottom apartment and turn it into a triplex instead of a duplex.
00:42:14.000 | Or we can tear down this building and build something that's better, and we know a highway is coming through town, etc.
00:42:19.000 | You've got to find some wrinkle.
00:42:21.000 | Now the wrinkle that a lot of people can find and exploit is the fact that they are good at doing the work.
00:42:27.000 | And it's not that there's a lot of work all the time, but it's that there's a steady flow of work.
00:42:33.000 | And so here's where you get this mixture in real estate between a business and an investment.
00:42:37.000 | It's not a pure investment. It's not a pure business.
00:42:39.000 | And so that can work really well for somebody with those skills, but for somebody without those skills--
00:42:43.000 | And in a situation like you're describing to me, the properties, once they were revalued, they weren't deals.
00:42:49.000 | They were just revalued to market rates.
00:42:51.000 | They weren't particularly inefficient.
00:42:54.000 | They were just in the market where you were in, which wasn't necessarily experiencing tons of massive growth.
00:42:59.000 | And so you basically just had the-- not the worst of all worlds, but you basically had a level playing field.
00:43:04.000 | In which case your profit is basically, well, the economy has improved a little bit.
00:43:08.000 | Rents are going up a little bit. Values are going up as credit markets have loosened up.
00:43:12.000 | And so here's the value. Is that an accurate analysis?
00:43:15.000 | I think so, and I think something that people don't look at is the time value of your time.
00:43:22.000 | People look at real estate and they think, "Oh, I'll just do this."
00:43:26.000 | But you have to factor in, if you're spending five hours a week fixing this or painting that or marketing the property,
00:43:35.000 | that's still your time.
00:43:37.000 | And so you have to calculate what your value is worth.
00:43:40.000 | So if you're normally making $30 an hour at work or you can blog or do something else for $30 an hour,
00:43:50.000 | that's not free money. People keep looking at it as, "That's your profit or that's your free money."
00:43:55.000 | That's your time that you're putting into it.
00:43:58.000 | So I don't think necessarily some of the new people coming out in real estate really track their time in it.
00:44:05.000 | And then I also think you're right. You have to find your niche.
00:44:09.000 | And you can make a lot of money in real estate.
00:44:11.000 | If you have a friend who's an agent who can find you REOs or you're really good at flipping or finding that next niche market,
00:44:23.000 | yes, there is opportunity.
00:44:25.000 | But if you are just an average Joe that think you can take a little bit of money,
00:44:31.000 | the thing that really scares me is I hear all the time on a lot of blogs about somebody who just bought this property
00:44:38.000 | in a different state and they now have this property manager who's managing it
00:44:42.000 | and they just get sent a check for $100 a month and they just think that's gravy.
00:44:46.000 | Well, that's fine when everything's pretty imperfect.
00:44:49.000 | And if you just bought a newly rehabbed house or newly renovated house, that might work for a couple of years.
00:44:56.000 | But eventually something is going to break.
00:44:59.000 | Somebody will move out.
00:45:01.000 | And when somebody moves out, I don't care if it was the best tenant,
00:45:04.000 | you're still going to have to repaint, most likely recarpet.
00:45:09.000 | There's still going to be some vacancy time.
00:45:11.000 | If you have a property manager, nobody's going to manage your property quite like you're going to manage your property.
00:45:16.000 | That property manager gets paid whether it's vacant or it's full.
00:45:20.000 | And quite honestly, they actually get more money if they can turn it
00:45:24.000 | because they usually get one month's rent when they lease it out and then 10% for each month.
00:45:29.000 | So if somebody moves out at the end of the year, guess what?
00:45:31.000 | They get a whole other month's rent.
00:45:33.000 | So is it really their best incentive to find the best tenant possible or just an okay tenant?
00:45:40.000 | Right. Quick one.
00:45:42.000 | Last question. How old are your children now?
00:45:46.000 | So they are 11 and 14.
00:45:48.000 | What do you think they learned through this circumstance?
00:45:51.000 | How did you interact with them? How much have you told them?
00:45:54.000 | What do you think they'll have learned from this?
00:45:56.000 | How did you handle that as a mom?
00:45:59.000 | At the time, they were really too young to know what we were going through in the process.
00:46:04.000 | And actually, I think I tried to shield them more.
00:46:09.000 | But I would say now they definitely know about real estate.
00:46:11.000 | And with the fact that both their mom and dad have real estate,
00:46:15.000 | and they've been to some cleaning parties and they've painted and mowed lawns.
00:46:20.000 | So right now I would say they probably don't like real estate because to them, that's work.
00:46:24.000 | I do try to share with them that that's probably what's going to help fund your college.
00:46:29.000 | And I've even tried to say, you know, there's a possibility that you could be managing these when you're in college or afterwards.
00:46:35.000 | And they don't seem to be interested.
00:46:37.000 | So right now I would say that's probably their view of it.
00:46:42.000 | That's just -- A lot of work.
00:46:44.000 | That's a lot of work. They do get paid a little bit.
00:46:46.000 | But, yeah, they would much rather be home playing on their DS.
00:46:50.000 | >> Felicia, thank you for coming on.
00:46:52.000 | Do you have any -- I don't think you have a website.
00:46:54.000 | Do you have anything that you want to have my audience do to connect with you?
00:46:57.000 | Or do you have any final words of advice that you'd like to give or closing thoughts here?
00:47:02.000 | >> I guess my only thought is I want to make sure people don't hear this as a negative against real estate.
00:47:08.000 | I just want to make sure people are aware of all the spectrums
00:47:12.000 | and make sure that you have an action plan kind of for the beginning and the middle and the end.
00:47:17.000 | And it can be very successful, but I think it just needs to be one piece of your portfolio.
00:47:22.000 | >> As with all things, go in with eyes wide open.
00:47:25.000 | >> Absolutely.
00:47:26.000 | >> And then when you experience the good and the difficult, regardless, you'll feel better because you went in expecting it.
00:47:33.000 | Valuable wisdom.
00:47:34.000 | I really appreciate -- and I'm going to say this again just because I want it to be on the record.
00:47:39.000 | I appreciate your being willing to share the mistakes and the hard times
00:47:44.000 | because it is so easy for me, other podcast hosts, teachers, writers, et cetera, to just focus on the good.
00:47:54.000 | Because in many ways, the good sells.
00:47:57.000 | I recently did an episode on -- I was feeling very punny that day.
00:48:02.000 | I called it "How to Get Yourself Put Six Feet Under, Dirt Cheap."
00:48:06.000 | And I was so excited about the episode because I just thought it was a subject that was super fun.
00:48:11.000 | It worked with my -- I thought it was super fun.
00:48:16.000 | And it was all about how to have cheap funerals and get buried cheap.
00:48:21.000 | Incredibly unpopular.
00:48:22.000 | Nobody's listened to the show.
00:48:24.000 | And I was so disappointed because I said, "This was a really great topic.
00:48:27.000 | I was really proud of it.
00:48:28.000 | It was really radical."
00:48:30.000 | And nobody listened to it and just reminded me, "Joshua, of course nobody listened to it.
00:48:33.000 | Who wants to think about dying?"
00:48:35.000 | And I was reflecting on it and thinking about just how much we always want to talk about the good.
00:48:42.000 | We always want to talk about the fun.
00:48:44.000 | We don't want to tell the hard stories.
00:48:47.000 | We don't want to tell when we got ripped off.
00:48:49.000 | We just want to tell how we made loads of money because we want to look smart.
00:48:53.000 | All of us want to look smart.
00:48:54.000 | Right.
00:48:55.000 | That was one of my New Year's resolutions actually for Facebook was to try to be a little more authentic
00:49:00.000 | and not just throw the pictures out there of me traveling to here or there.
00:49:05.000 | This is when your child got an A on their report card.
00:49:07.000 | You also have to show the, "Okay, they also got a D, but here it comes."
00:49:12.000 | You and me both.
00:49:13.000 | And so, especially in this world of money, it's very important to me to do my best to be accurate
00:49:19.000 | and to demonstrate how great things can be but also how to plan.
00:49:23.000 | Because then when you go in with eyes wide open, I think that'll help.
00:49:27.000 | I think you performed a really valuable act of community service for my audience today, and I thank you for doing it.
00:49:32.000 | Thank you.
00:49:33.000 | As we go away from this interview today, I want you to really think about Phyllis' story
00:49:37.000 | and recognize the things, the errors, the misjudgments that led to the great problems
00:49:43.000 | but then also recognize the habits that led to being able to work their way out
00:49:52.000 | because some of those things are important.
00:49:56.000 | And also recognize the fact that even to this day, Phyllis has continued to work hard on the fundamentals of finance
00:50:03.000 | and has continued to dig herself out and has a bright and hopeful future.
00:50:07.000 | I hope you can pay attention and learn from Phyllis' story.
00:50:12.000 | I know it really was impactful and helpful for me.
00:50:15.000 | If any of you in the audience listening have similar stories where you've learned a lot through the circumstances,
00:50:20.000 | feel free to email me if you know somebody who does.
00:50:22.000 | joshua@radicalpersonalfinance.com. I'm always interested in stories like this where we can hear from real people who've learned things the hard way.
00:50:29.000 | Feel free to get in touch with me.
00:50:31.000 | And with that, that's it for the show today.
00:50:32.000 | If you've appreciated and benefited from this content, I would ask you to consider supporting me directly on Patreon,
00:50:38.000 | radicalpersonalfinance.com/patreon, if you'd like to support the show directly.
00:50:42.000 | Also, if you'd like to book a phone call with me for a personal consulting call,
00:50:45.000 | perhaps fill in a little bit of potential blind spots for you,
00:50:48.000 | you can book a phone call with me at radicalpersonalfinance.com/phonecall.
00:50:52.000 | Take my free survey at radicalpersonalfinance.com/survey. Free, of course, it's free. It's a survey.
00:50:56.000 | Take my six-question survey, please. Quick demographic survey, radicalpersonalfinance.com/survey.
00:51:01.000 | And I'll be back with you tomorrow.
00:51:03.000 | [Music]
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