Episode 101 – Rachel Richards on The Military Millionaire Podcast

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Episode 101 – Rachel Richards on The Military Millionaire Podcast

 

Rachel Richards on the Military Millionaire Podcast

00:00 - 05:00

Intro:

You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate, and become a person that is worth knowing.

David:

What's up military millionaires, I have not done a good enough job talking about syndication opportunities. So for those of you who don't know, I have been investing in some apartment complexes over the years as well as a bunch of other stuff. But I just have never really mentioned it on the podcast, so I apologize for making that hard to find.

Look, if you are an accredited or sophisticated investor or unsure and would just like to talk, go ahead and go over to the investor, Jim, Frommilitarytomillionaire.com/investor/ and just fill out a little form. Let's jump on a call and talk. I'd love to hear how we can help each other out. So some of the opportunities that we provide can be anything from really big cash flow event opportunities to big equity plays we do, I even do some private lending type stuff, but lots of different opportunities out there to invest. And I just want to make sure that you guys understand those are out there.

So if you're interested in syndications or private money, you know, I'd love to jump on a call with you. There are ways that we can help you out, you can help me out, we can help everybody out win win win win win situation. Our most recent deal was 146 units 7% preferred return, and projected 18% plus return on investment, but we've done better. We've done not quite as good with more equity play like lots of different opportunities, right. And if you want to be the separate email list that I have, which I send those deals to, and if you want to be on that list, then let's schedule a call and jump on it because we need to know each other if I'm going to be sending you information on these opportunities. I would hate for you to miss out on it just because of my ugly mug not telling you so if that sounds interesting, let me know if that does not sound interesting, enjoy the show, right now.

David:

What's up military millionaires. I'm your host, David Pere, and I am here with Alexander felice, who has decided to co host us again, which is awesome. It's so nice of him to join us sometimes.

But we're here tonight with Rachel Richards, who was financially independent by the age of 27. She's now super old. She's 28. And she's authored two books, money honey and passive income, aggressive retirement. And she's done just a whole bunch of different passive income stuff in real estate, which I actually didn't dig as far into, as I could add before the intro because I wanted to be able to ask those questions live, which is more fun.

So Rachel, welcome to the show.

Rachel:

Thanks, David. I'm so excited to be here.

David:

Now, why don't you tell the audience a little bit about yourself real quick, and then we'll dig in.

Rachel:

Sure. So I have a lot going on. I'm a lot of things. I'm a best selling author, former financial advisor, real estate investor, my husband and I own almost 40 rental units in Kentucky.

And then as you kind of already touched on, what people find most intriguing about me is the fact that I retired last year. At age 27, with over $10,000 per month in passive income, and even just back in 2017, we had zero dollars in passive income. So we were able to come a really long way in just a couple short years.

David:

That's short and sweet.

I like it. We're in Kentucky?

Rachel:

Louisville. That's where I live for the last 20 years and we just moved to Colorado.

David:

I like Colorado, what part?

Rachel:

Colorado Springs.

David:

Oh, nice, nice area.

Rachel:

Yeah.

David:

It's good. It's fun to be able to make that decision now. Or you know, whenever.

Alright, so my first question before we get into this is where did it start? Like when were you always frugal? or How was the switch that got you on this path?

Rachel:

I would say it was as early as sixth grade. So there I have this funny memory of being in summer camp and all my friends going down the water slides and playing. And then I was sitting at the edge of this pool reading The Motley Fool's guide for teens how to have more money than your parents have dreamed of. I was like, This is awesome. And it just kind of lit a fire in me. So from that young age, I was really excited to learn more about money management, I felt like I had the time advantage and took it seriously.

In middle school and high school, I started developing some fears because I grew up in this really white wealthy county surrounded by Uber rich people. And you know, my family was on a budget, we weren't going out to restaurants, we weren't going on trips, but everyone in my high school, they were getting BMWs when they turned 16. So I felt a little bit out of place. I never felt like I quite fit in. And that's not really the one the way that you want to feel in middle school in high school.

So it really sparked an even further interest, and I just decided then I didn't want to end up like everyone else. I didn't want to have to struggle with money for the rest of my life. I didn't want to have to operate on a strict budget, or borrow money from family and friends to make it to my next paycheck, I wanted to be different. And I realized that what I did then would either set me up for wealth or for poverty.

05:00 - 10:00

David:

Well, if it makes you feel any better about your early life decisions, you said sixth grade, you're sitting on the sideline, reading a magazine while people were playing in the waterpark, by senior year, I was still just pushing people down waterslides.

Rachel:

So yeah, I've been quite the nerd my entire life so.

Alex:

So where's Um, so what, do you retire at 27?

What do you do for fun because it doesn't sound like you do anything for fun.

Rachel:

I have a lot of fun. And when I say retire, I don't mean like I don't do anything. I really mean financially independent so I can have more flexibility to do work when we're in if I want but, you know, one of my biggest passions is traveling the world.

My husband and I love to travel. obviously haven't been doing much of that this year. But then our other really big passion is hiking. So that's part of the reason we moved to Colorado. We love the outdoors and we love hiking the mountains.

Alex:

I love hiking. I just guess we can, I miss hiking in Nevada.

David:

It's good it's way more fun when it's on your terms and not like a pack on because the military said you're gonna go hike.

Rachel:

Yeah, I can't, I can't even imagine.

David:

So, okay, so we see where you started.

What were the first passive income streams? So obviously, we're gonna dig into the 40 units at some point, but was that the first method you started using?

Rachel:

It was yeah, I, from I was an avid reader. I was always learning stuff. And to me real estate investing felt like one of the best tools for building long term wealth.

So I always knew I wanted to invest in real estate. 2017 was the year that my husband and I bought our first duplex in Louisville, Kentucky. Later that year, I wrote and published my first best selling book money honey.

So we have these two passive income streams rental income and royalty income and we basically focused on growing those as much as we possibly could over the next few years.

David:

Okay, I gotta ask, how does a book do in terms of royalty? Because I'm writing one and I'm just curious what it is, that's not my goal. My goal is not to make it some crazy passive income stream. But I've heard a lot of I've heard the gauntlet, I've heard authors who, that's what they do. And I've heard authors who were like, I still haven't made back my editing, you know, so I'm just curious, like, you know, what that kind of structure looks like?

Rachel:

Yeah, that's a great question. I was really concerned about going into it because I'm first of all, frugal people don't like to spend money and I didn't want to dump you know, invest thousands of dollars into this book, and then maybe not even make that back up.

So I launched money, honey for less than 600 bucks, and most of that was spent on my editor. And luckily, I broke it in that very first month, and it's increased and maintained momentum since then.

In February, I had my first $7,000 month book profits. So it is something that has turned into a really substantial income stream for me. But like you, I didn't start writing the book, envisioning this big income stream or trying to monetize it. It was just more of a passion project, something I felt compelled to do. And I'm glad it was like that because I think if I was just out for the money, people would have really seen right through that. And I probably just wouldn't have done this well.

David:

Actually, I find that to be quite true. It's usually the people who do things for the money who don't like, they struggle to make the money.

Rachel:

Yeah.

David:

Maybe not usually. It depends on how you make the money I suppose. But I find that people who do things for more of a philanthropic or hobby reason generally speaking seem to actually do fairly well with it I don't know if that's a karma thing or whatever you believe in but

Alex:

Soul in the game.

David:

That's probably a yes.

That's probably that's a good way to put it yeah. You're invested. Okay. Are you an avid fan?

Rachel:

A lot of fans sometimes.

I watch a lot of TV.

David:

Oh no sorry. He's awful

Rachel:

Oh, wait, that name sounds familiar but what did he write?

Alex:

The one that's popular is the black swan.

Rachel:

Ah, okay. I have not read that.

David:

Yeah, he's like the kind of book that you as a fellow data nerd, money nerd probably would enjoy but most people would be like, you read that?

Rachel:

I really love my dry finance textbooks and I'm being 100% serious.

Alex:

Do you have any education, finance, formal?

Rachel:

Yeah, my degree was in financial economics.

Alex:

Total nerd through and through.

Rachel:

Through and through

David:

It works!

Alex:

Hey, look, I have a finance degree. I've made as much as I the way I act. I have an undergrad in finance. So I'm a money nerd first. It works.

So what about real estate? So you said you have 40 units?

Rachel:

Yeah, almost 40. I think it's 38.

Alex:

Are they individuals?

10:00 - 15:00

Rachel:

It's a mix so we have two single families, one duplex and then three buildings that are like 10 to 12 units each.

Alex:

As a package and one parcel?

Rachel:

We bought two of them from the same owner but they were just all three separate buildings.

Alex:

Just give up. I was curious about financing, you finance them as one?

Rachel:

No, we had bought each property separately. They're all probably about six months apart. But yeah, I mean, that's I get that question a lot. You know, how did you and your husband come up with the money for the first one, let alone all the rest. So Have you guys heard of Cutco cutlery? Cutco knives?

David:

Yes, my cousin, I think at one point sold for them.

Rachel:

Okay, so I sold Cutco through college. That's how I paid for my school. I paid my way through school and graduated without debt. And my husband, who is a Navy veteran, used his military benefits to pay for his college tuition. So we both graduated without debt which was a huge advantage.

We were pretty responsible with our money. So we were saving some money. So it didn't take long for us to come up with about 10 grand each. And I bought our first duplex when I was 24. So I'd been out of school for about three or four years. So keep in mind too, this is a little low Kentucky, I can hear my Bay Area people scoffing at me, but Louisville is a great place to invest anywhere in the Midwest.

The duplex we bought was 100 grand, and even for Louisville, that's a great price, especially in the area that we bought. So we put our 20% down payment down and worked out a seller concession to make all the repairs that we needed to make, which that's a little bit harder to do these days. But that's how we bought our first duplex now the way we bought the rest of them is first of all, I had my real estate license so that's something I'm really glad I did from the get go. I only had it for my own purposes and for investing.

So I got those buyer's agent commissions every time we bought something. I would get a chunk of money back then we kept fading aggressively the way we had been. And then we had the cash flow on top of that, that we were now making from the investment property.

So once you get one or two under your belt, the momentum just starts to build really, really quickly. And we were always able to come up with that 20-25% down payment for every single property we bought.

Alex:

Real Estate is so easy.

Rachel:

Oh, gosh, I wish that was the case.

David:

Depending on how you do it I suppose, the concept is, uh, I think I think what he's just saying is like, people make things seem way more complex than they need to be with real estate. The overall principle is basically like, if you write down all the expenses over here, you write down the income over here, and this number is bigger and you can afford the house that like,

Rachel:

Yeah, no, it's so simple. And I love that, you know, going by how much money you're gonna make, I mean, in a sense, you know, you can be pretty precise and pretty accurate, but it's not like launching the book. Like, oh, is this gonna work? Am I gonna make money? I really have no idea, but with a rental property, you know the numbers going in and you know the ROI and that it's gonna be a good deal. So that's what I love about it . To me It's black and white.

David:

And 9 times out of 10 if something goes terribly wrong, you can point a finger back to yourself and say, Oh, I fucked this up how do I fix this? As opposed to like, you know, people who are only in something they don't have control over whether that be securities and not to say that that's bad, but you know if that's the only thing like there's always a risk like I always laugh about the whole security thing like Elon Musk smoked a blunt and the stock dropped 9% the next morning, like I had no control over that now granted advanced bounce back but I like the fact that with real estate, you know, if something goes really wrong, I can, I I'm responsible, I can fix it. I can control it like.

Rachel:

Yeah, I like that too.

Alex:

The upside is the ceiling is lower, though. You can't make way more than you know if the place rents for $1,000 a month. It's like you can't make three grand a month on this.

Rachel:

Yeah. That's true.

David:

What's your favorite income stream?

Rachel:

I think that's a hard question.

I would say my favorite right now is the royalty income. This is what I'm doing in my retirement. This is what fulfills me. And I'm passionate about teaching young people about financial literacy. So it doesn't even feel like work. It's just fun.

But probably a couple years ago, I would have said rental income because rental income to me, it's what got us from point A to point B. And by no means am I so passionate about rental income that I want to build this huge empire. For me it was more of a means to an end. But you know, I think that's how it is for a lot of people. I didn't want to quit my job to become a full time landlord or anything. But it's just amazing. So I think it's attainable for people. And it can be a great way to achieve financial independence, so that you can then spend your time doing what you love.

15:00 - 20:00

Alex:

So Dave and I were just talking about that and I talked about this quite often. Once you have enough money that you don't need a day job. A lot of people struggle to find ways to fill the time, both productively and meaningfully. Do you think that which problem is harder, getting enough money to retire or finding what to do with all your? I mean, you have enough. Right?

Rachel:

Yeah. That's a harder question. I, for me personally, was just getting enough money to retire because I had already built my book business. And by the time I quit my job, I already knew this is what I want to be spending my time on. So I think I actually got really lucky in that regard.

My husband, he's still working, you know, at this point, because he wants to not because he has to financially and he loves what he does. He loves his job. And, you know, I don't know if there would be something that he would be drawn to necessarily do if he decided to quit, you know, that might be a little bit more of a question for him. But it's such a great point, because, you know, no one should go out and just try to quit their job without having a really clear idea of what they want their life to look like. You know, sometimes I think we're so focused on getting out of the rat race and quitting our job, and you can't be still focused on running away from something that you're not thinking about what you're running towards.

Alex:

I, to push back on that. I think there's a lot of people out there that have miserable horrible jobs that are for tyrants and horrible, miserable people. And a lot of times quitting your job with no money is better than staying in a job that you hate just to make ends meet. I mean, that's just my personal opinion, but I'm definitely your style and my style are very different.

David:

Alex's style and anybody's style is quite different.

Rachel:

Yeah, that's too funny. No, yeah, I've had a job actually where I was, I would say, bullied by this manager. And this was somebody that she made her employees cry on a regular basis. I mean, she was cruel, demeaning, condescending, and it's tough, because I definitely felt I would be happier being unemployed than being employed by her but had to force myself to just try to wait until I got another job because I had quit a job previously without having anything lined up. And I did not like the way that made me feel like just for me personally, that's not going to be the right answer for everybody. But yeah, so that's kind of why I am the way that I am.

Alex:

Yeah, it's hard. It's very interesting like people's personal love for it to counter what you just said, right? Like, I quit a job about every two years, no matter what, because I get bored. I get sick of people, I get irritable, and it's like, I don't do anything, I'll take nothing over this. I gotta get out.

And I haven't and I don't like being unemployed, especially when I didn't have enough money. I didn't like that either. So I do that struggle, but it's interesting like, like you said, the answer is not the same for everybody. But that's why it's so important like people that are in jobs that are just okay, you know, that's almost the worst job that you don't hate but you're not doing anything with and you're just like, you know, lifestyle inflation and you getting back car payments, like Dude, that's the worst possible situation because God forbid one day at a time, boss walks in, and now you're miserable. And you've built yourself out or the most common scenario is you get a job you like enough, you hit 35 then you start to dislike it. You have nothing set up and you figure out, maybe Okay, and then by the time you're 40 you're like, well, now I'm miserable. I don't want to do this at all. I have no.

So the fact that they'll do this up by 27 is just awesome. David before the show, like I was still an alcoholic by 27 I don't know how you did all this. This is insane. But I love it because I could love people that watch the show. My I guess our demographics, probably a little bit. Probably mid 30s is my guess. But you know, a lot of people that are trying to get out and that's admirable. You know, to be able to like looks, be frugal, and get and go find your thing and then get out.
Rachel:

Yeah, and I love what you said about having an exit strategy. You know, just give yourself options. And one of the best ways to do that is to diversify your income and have multiple streams of income. The last thing you want to do is be 100% dependent on a single source of income.

David:

Agreed. Whether that's uh, yeah, I mean, even if it's a solid career, like the military, you know, I tell people all the time, like, yeah, so there's this thing that people like to do in the military where you go for a run and you think it's gonna be three miles and you come back around to like, your barracks where you live. And as you're coming back around, you're like, Oh, yeah, okay, we're done running. And then they like, turn and just keep going for like another mile. And I always joke with people because I'm like, dude, like, I would rather you tell me, we're running seven miles and we run seven miles, then you tell me, we're running three. And we come up to the barracks and run a fourth. Because mentally, I was prepared for seven. So no big deal. But I was prepared for the end. And then I had to keep going.

And I try to use that analogy for real for life. It's like, well, people in the military get to 20 years in the military and they retire, but then they'd like, they're not retired. You know, their pay isn't as much as they thought or whatever, and they have to go to work. So I'm like, you need to prepare for this. Whether you want to stay in or not, because ultimately, like that's, that would be the worst thing in the world, to play, to work for 20 years towards retirement and then realize you oh oh I'm not done I have to get..

20:00 - 25:00

Alex:

What about an o3 when I was in o 2 I'm not all 3-0-2 thousand and the 20 year guys were getting recalled to go to the desert like yeah we need you can't get out we're stop losing you you I know you did 22 years you can't get out you're gonna need another two years you yeah yeah there's no such thing as job security in this world unless it's got your name on it right like my I got a I got a buddy in Las Vegas was cop and he's like I don't need to save money you know I got infinite job security cops aren't going anywhere and now I look at the the you still got to be a cop still for highs is gonna go for the next 20 years.

David:

Yeah, even if everything goes back to normal. Like, is that something like I can't imagine enjoying that job right now at all.

Alex:

Nothing is impervious, nothing is impervious. Nothing's impervious.

Rachel:

Yeah, I agree. I mean, the most seemingly secure job. There's still risk. I mean, no one could have predicted Coronavirus so I mean, it's just crazy.

Alex:

How is it? How is it? Yeah, that seems like one of his haha.

David:

One of his books that was actually an example that he used for. But anyway.

Alex:

How is COVID in Colorado?

Rachel:

Um, it's tame. I think. I know there's spikes in other states right now.

Alex:

But how are the people? How are the people actively hiking?

Rachel:

No, but my husband and I are the only people wearing masks on hikes now. And there's not a lot of people even wearing them in grocery stores anymore.

David:

I would not wear a mask on a hike.

Rachel:

Well, I put it off when we're passing somebody. Yeah.

David:

Okay. Fair. Fair enough. All right. Yeah.

Rachel:

Yeah, others otherwise that'd be really yeah.

David:

Yeah. That was like cycling the other day, I saw someone wearing a mask riding a bike and I was like, that looks miserable. No, no, no, I like to breathe.

Alex:

Dave, can you get some masks for me with a military to millionaire on it? That'd be dope.

David:

By the time we get on with you might not have to wear them anymore but I’m down.

Alex:

I'll wear forever on the show. Never in public but on the show.

Rachel:

Memory in 2020.

David:

That would actually be really funny. I may just go on Etsy and there we go.

Alex:

You are welcome.

David:

Oh man.

Alex:

Has any of this affected your in fact my guess is all this is a probably make your business better, right because people now they're realizing the fragility of their situation.

Rachel:

Yeah, the rental income has been hurting the book realty income and I actually just launched my first online course in April. And it did really really well.

I was a little bit nervous that I was like having a moral dilemma with is this appropriate and I just ended up asking my platform you know, Hey guys, here's what I'm thinking is, Is this okay? You know, with this help, and everyone was like this would help please make this course, like, I want to sign up and I was like, Okay, this is good to be back. So I went ahead and made the course. And that did really, really well.

The rental income on the other hand, it's definitely been impacted. On a normal month, our rental profit is anywhere from seven to $12,000 per month. In April, it was $1,000.

Now, there's a lot of landlords that are worse off than me, there're a lot of landlords that are doing better than me, the way I see it is if my worst case scenario is that I break even for a few months, I'm totally happy with that. That's fine. You know, obviously there's tenants that can't pay rent, there's tenants that have moved out because they know they can't pay rent. And I haven't been wanting to put people at risk in terms of getting vacancies filled. So we just put a pause on that. So things are just vacant. And I think maybe we'll start to try to fill up the vacancies a little bit.

But you know, it comes back to this whole income diversification concept because my rental income is just like that, it's basically gone. The only reason I'm not in a panic right now is because I have all these other income sources keeping me afloat, and it's just Important you don't want to ever have to act out of a place of desperation when you're a business owner.

David:

What Uh.

Alex:

Yeah, hang on. I was May, you said April's bad and April was bad for many people, a lot of it because of mind, a lot of it was mindset in my opinion. Everyone was kind of like on this rent strike thing. It was like socially acceptable to skip rent in April but May was better for a lot of people, myself included, was May better for you?

Rachel:

Yeah, and I forget the number. I think we made somewhere around five or six grand. So we were getting right back up there.

David:

So May was actually my best month ever. But that's more because I had someone I was trying to evict pretty COVID that I couldn't because of the moratoriums, and then he made so much money on unemployment, he was able to catch up on like four and a half months of rent.

Rachel:

Oh my gosh.

David:

Lucky me. Hopefully he keeps paying. It's unemployment goes away. I'll just get him.

Alex:

I don't know what economic system we're at anymore, but it's working for some people.

25:00 - 30:00

Rachel:

Well that's what happened for us in May it was like all the unemployment checks and the grant money and the assistance started kicking in. So we got a lot of background from tenants. So that really helped us and things are getting better every month. So.

David:

I am curious, what class buildings you like, are these like A class properties, B class, C Class D class, like are these, you know, like what clientele does your, your 10 and 12 units rent to because I'm just curious.

Alex:

How many bullet holes are in the front windows?

Rachel:

The 10 and 12 units are classy. No bullet holes yet. Yeah, right. Um, you know, it's, it's a little bit of a tricky area. Um, a lot of our tenants, you know, they were servers or forklift drivers or whatever. And those are the people that obviously all the restaurants are closed.

David:

So not essential.

Rachel:

Yeah, they got laid off. So those three properties were the most impacted. The other ones we have had have been fine. I did have to put somebody on a payment plan, but otherwise everyone else has been able to pay in full.

Alex:

So for the last six years, the real estate narrative on the internet has largely been by C class properties, because those are the most rent resilient of any class cashflow kings, and so people went out and bought a bunch of C Class B minus that kind of thing. That's what I did.

And generally, they come with no appreciation, Virginia cash flow. And now we've seen a situation which is actually really interesting. Compared to the conversation we just had about, you know, a single point of failure or, you know, nothing is impervious to break in. And so now, I'm curious, are you rethinking C class or I don't know if you're planning on buying any more real estate, but are you rethinking that strategy to get away from C class because now we're seeing an obvious crack, or potential obvious, I call it an obvious potential crack in and kind of, you know, likelihood to pay.

Rachel:

Yeah.

David:

Sounds like it's a definite maybe.

Alex:

Yeah. But I think I'm picking up what I'm putting down.

Rachel:

Yeah, well, we stopped acquiring in 2018. We were because in that year, we were both still working full time. And we just got to this point where we didn't have the capacity anymore. And financially, we got to kind of like our goal, what we wanted to be making from the rental income. So we haven't been acquiring. I don't really have any intention of acquiring. But I will say that we've thought about selling some of the properties, maybe reinvesting and a really big complex out here in Colorado. And if I was going to sell the properties, I would sell the C class properties first.

Alex:

Yeah.

David:

I like what you mentioned there subtly about not buying more. And I think that's a point that we've had someone else on here before rethink the rat race and he had a similar mentality, and it was just kind of enough. I think A lot of people enjoy the game, right? I think I'll continue buying real estate because I enjoy it as a hobby kind of as well as all the income related to it.

But I think people get wrapped around buying more units and growing and building. And sometimes like, they just don't realize that once you have enough passive income or you know, whatever your goal is, may like I like I like what you're saying, I'm starting to look through the lens of like, do I want to do that long term, it might be a good opportunity, but do I want that to be part of my time long term, if it takes too much time, then ultimately, it doesn't help me achieve the goal I want, which is time, freedom. And so I'm having to put things in that lens, even if they're good opportunities. So I think that's I think that's cool, not conundrum but whatever.

Rachel:

Yeah and I always tell people, you know, if you are trying to get into rental income and you want it to be passive, you have to build in the expense of having a property manager.

Otherwise you're going to be getting the calls at 2am. You're going to be doing the maintenance and responding to to this dumb tennant issues, and no one wants to be doing that.

So you know, I always say build that expense in from the beginning, even if you're not going to hire a property management company quite yet. But I truly think the end goal for me is to get to a point where I can transition my money out of the rental properties and into something like portfolio income, which is a lot more passive. It's just that you have to have so much capital to make anything meaningful off portfolio income.

So eventually, I kind of want to make that transition, but we're probably not quite there yet.

David:

Would you define portfolio income for the listeners? Because I don't know if anyone's used that specific term on here before.

Rachel:

Yeah, so it's basically making dividend income or interest income or passive income from the stock market. So dividend stocks and you know, making interest on whatever investments you're making in the stock market or dividends from REITs. Any of those types of investments or bonds, but there's not a lot to be made with those these days. So.

30:00 - 35:00

David:

To play devil's advocate on the bond front or not the bond front per se, but on the dividend front. What are your thoughts on what happens to dividends when companies start to lose money? Like how would you, how would you balance that as far as portfolio lending?

Rachel:

So I'm not heavily invested in any dividend producing stocks right now. But I, I mean, I was just it always goes back to for me to diversify.

I would if I was trying to make significant income from the portfolio income, I would have dividend ETFs, I would have receipts and I would have fundrise, which I'm invested in and which I've really liked so far.

David:

Cool. I just asked that because I know I know a few guys who were like heavy dividend investors because it was, you know, there are some decent returns there, but all their dividends got shut off two months ago, and I've been not, I like to poke fun and talk smack but so I've been poking fun and talking smack like oh man, look, I got all my rental income, you know, while there like, but at the same time, like it's a very viable strategy and I do own dividend stocks too. So.

Rachel:

I wish there was something that was perfect and foolproof and you know, even a recession wouldn't kill it or whatever. But again, diversification, you know.

David:

it's called forex. Haven't you seen everybody on Instagram? You give me 500 bucks. I'll give you 10,000 by the end of the week.

Rachel:

Oh gosh.

Alex:

There's dude. There is a tried and true dead ass reliable way to make purely passive income bonds. They just don't have a fancy return.

Rachel:

I know. Yeah, that's true.

Alex:

So if you had enough, you're like, hey, look, just give me 3% whatever it to a quarter.

Rachel:

Once I get to three or 4 million in cash that I can invest in bonds, that's what I'll do.

David:

I mean, we laugh, but that's what Suzy Orman like people try to call her out on the fact that a large chunk of her money is in bonds, but if I had $20 million, that's where I'd put it. Yeah, who cares? I don't need, like a 2% even a 1% return on 20 million.

Alex:

No, you're, that's wrong. Sorry, that's wrong, because you had 20 million, right? You could sink it into an ETF and even if it tanked, you lost 40% it's gonna come back. Right?

David:

Agree.

Alex:

It's like you can live on the 1.2 million you got left for in the interim.

David:

I put a piece of it in bonds.

Alex:

You have the potential upside to protect 2 million. I mean, unless you're at the end of your life.

David:

True.

Alex:

Which suits yours or mine is.

David:

Oh, man, anyway.

All right, so what's next?

Rachel:

Um, I've been getting that question a lot lately. I don't know how to respond because I feel like I've achieved this huge thing that I spent so many years sacrificing for and I'm here and so right now I'm just really enjoying the lifestyle and try not to work a lot even though I really like what I do.

But one of my big dreams has always been to write a fiction novel. So it's just one of those things that I think would be fun. And I might start doing that on the side.

David:

I like it.

Rachel:

Yeah.

Alex:

Did you have a book list by chance?

Rachel:

In terms of books to read or books, I have read?

Alex:

Books you have read.

Rachel:

No, but I read a lot of books.

Alex:

I'm going to share with you my book list.

Rachel:

Show me your book list. I should keep track.

Alex:

I think it's super healthy to do a book. I do small reviews and big reviews. But a lot of books that other people are never ever going to read and a lot of books that other people God know who would read it.

But sometimes I'll catch, you know, like everybody has their well if you read enough, you know, like I feel like if you dive into you go down wormholes of books that you like whatever that other people are gonna read. So I was just curious because you are so...

Rachel:

What's your favorite book? I have all these ones up here.

David:

Everything seems to lab.

Rachel:

Okay, well, I got to look it up. My problem right now is I have so many books on my nightstand that there's no room anymore, I've started another stock on the floor and so I've banned myself from buying any more books until I read it.

Alex:

No, no, you should always, you judge a person out of the books that they've read in the books that they own that they are to read.

So I recommend I have so many books in my house that I bought that I haven't read yet. I think it's so much more valuable than the books that you have that you have read. So I encourage you to go buy more books even though you can't get to them just that stack man just gives you.

Rachel:

I'm so excited that there's a couple that I'm excited about. The artist's way is one I'm about to read and then the War of Art.

David:

War of arts good one.

Rachel:

Yeah.

35:00 - 40:00

David:

I haven't read the order. way, but I don't think Alex would like to work in art. But that's, you know, I'm just gonna say that before he goes and reads it and thinks I'm a terrible person, but if it's like self helpy, or terribly, it's not really his thing.

Alex:

You know what it is? I don't like to read books that are less than 50 years old anymore. I found it. I don't know. It's weird. If they've stood the test of time, and they're good enough, if they've lasted 50 years and print them usually good enough for me.

David:

All right, well, since we're talking about books, I'm going to go out of order here. And the first question I'm gonna ask you is what resource book course, website or whatever would you recommend anyone looking to get started on a journey to financial independence?

Rachel:

I could list 100 things.

David:

Please don’t, that’s a lot of show notes to write down.

Rachel:

One of my favorite books is Hold by Steve Shader and the mckissick. I think this is who wrote it, so hold on. Then two podcasts, a military millionaire. Obviously, if you guys are listening, subscribe and leave a five star review because these guys are awesome.

And then another one that I like is Afford Anything by Paula Pant.

David:

I know Paula.

Rachel:

You know, Paula?

David:

She’s cool.

Rachel:

I am her biggest fan. And I actually just recently connected with her and I'm so excited.

Alex:

I've met Paula, five, six times we do not get along.

David:

Really? I can see that she's a very strong personality.

And so are you and you guys seem to have very different. Yeah, I don't know.

Alex:

Paula has her stuff together. This is not a I mean, I don't get a lot of nothing from her. She's got her stuff and the other she does a fantastic service. I listened to her podcast for a while and it's a good one too. I like that.

Rachel:

Yeah, I like it because it's a mix of just pure money management, financial independence and then also real estate

Alex:

Yeah. What was the book Hold?

Rachel:

Hold, yeah, it is. Hold.

David:

What's it about?

Rachel:

Um, rental property investing.

David:

Interesting that neither of us seems to have heard of it.

I'm actually, I'm officially peaked. I'm gonna go and order that right now.

Rachel:

Yeah, there's, um, hold. There's a flip. It's kind of a series of books, but I like Hold because I like rental properties.

Alex:

Hmmm, nice!

David:

I mean, it's a catch. It's a simple enough title. I like it.

Rachel:

Yeah.

David:

Alright, so the second question that's usually number one that I'm going to ask is if an 18 to 19 year olds watch, walk up to you and ask you for advice.

You only had a few minutes. What would you tell them?

Rachel:

I would say if they are wanting to become an entrepreneur, business owner or really make an impact on the world, then you can't start a business selfishly.

You have to find a hole in the market and solve a problem, you really have to be thinking about, what problem am I solving? And how am I going to add tremendous value to other people. And I think that's where a lot of people have trouble generating royalty income in the first place.

You know, with the books, for example, you have to really be able to articulate well, why would someone buy my book over the thousands of other books on the same topic that are already out there. And if you can't articulate that, then you're not going to be able to make the impacts that you want to make.

David:

I like that.

Alex:

I like any Yes, sir. First, that's how I kind of say what I think you're saying.

Rachel:

Yeah. Give first, asks second.

David:

I mean, this goes back to what we were saying earlier about the, like, the people who make the money aren't the ones who try to make the money.

Rachel:

Yeah.

David:

Generally.

David:

Yeah. I mean, yeah.

Alex:

Well, the problem is if you just do it for the money, you're gonna quit before the money comes and you are not gonna put out that good a service because you don't really believe in it. And so conviction as part as it is an important part.

Yeah, it's her answer.

Rachel:

I agree.

David:

It’s good.

All right. And finally where can people get a hold of you?

Rachel:

Yeah so both of my books money honey and passive income, aggressive retirement are on Amazon and audible so ebook paperback audio and you can find me on social media just by searching money honey Rachel and if anyone listening once I will offer my passive income starter kit for free.

So this includes deadly mistakes to avoid you know which passive income stream should I start trying to create first, free resources and tools so you can download that at moneyhoney.rachel.com/bonus.

David:

Alright, I will link that'll be in the show notes as well.

40:00 - 42:13

Alex:

Rachel, do you narrate the audible?

Rachel:

I don't think a lot of people asked me that and it was, to me, it was just a time constraint. I did not give myself enough time prior to launch, I was operating under a very tight, tight deadline. But I found someone who did a really, really fantastic job. Like I think she did better than I would have been able to do.

Alex:

That's kind of where I was getting at, like, does it hurt your ego? Because I feel like I haven't read a book, but it feels like I don't think I could do it. I feel like it would hurt my ego to let somebody else read my book.

Rachel:

No, I don't think so. If it was like a memoir or something like that, then I feel like I would have had to do it. But it was just it's more generic, you know, finance advice.

David:

So I have every intention of narrating my own audiobook. But now that you've said this, I'm thinking maybe Alex, Alex should narrate my book. Yeah, that'd be good. Then the whole book could just be like, Hey, bro, this, well, that's dumb scratch, it.

Rachel:

He should add in all of his own commentary.

David:

Dave should have said this. This is what Dave meant. Oh, this chapter I'm like just tearing a page out.

Rachel:

That's hilarious. I would buy that. So please, I hope you do that.

David:

Yeah, everyone's trying to do the unique spin on audiobooks might be having someone who hates me read it and talk to you. Hold on.

Alex:

I can't believe he wrote this, but this is what it says.

Rachel:

Oh my gosh, that would be so funny.

Alex:

I think we're gonna do that. I think we're gonna have to figure that out.

David:

It's like a piece of like, this is what would happen if my co host wrote.

Alex:

Like yeah, they do a director's cut in the movies. I'd be like that would be like them.

David:

I love it. Oh, man. Rachel, this has been awesome. Thank you so much for joining us this evening.

Rachel:

Yeah, thank you guys for having me. It was a lot of fun.

David:

Absolutely. And have a great rest of your day.

Rachel:

Yeah, you too.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it. Be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show, give us a review on iTunes. Now get out there and take action.

Rachel Richards Show Notes

Episode: 101

Rachel Richards

Join David Pere and Alexander Felice with Rachel Richards as they talk about creating passive income. With the pandemic trying to bring everything down, it’s essential that we’re prepared for the worst. Rachel shares her experience of being financially free at 27 years old!

 

In this episode, you’ll learn:

  • Different passive income options, including book royalties and launching a course.
  • The control you have over problems with real estate.
  • Finding fulfilling things to do when you’re financially free.
  • Having an exit strategy and not putting all your eggs on one basket. Don’t let yourself act out of desperation!
  • Transitioning from rental income to portfolio income.

~

 

About Rachel Richards:

Only 27 years old, Rachel quit her job and retired, living off over $10,000 per month in passive income. Rachel has made a name for herself in the personal finance realm. She is the bestselling author of Money Honey and Passive Income, Aggressive Retirement. She has been featured on the Penny Hoarder and the New York Times and contracted to speak at colleges. Her valuable lessons have helped thousands of female millennials work their way out of financial despair. She has successfully done what no one has done before: made the topic of money management fun, entertaining, and simple.

 

​Rachel has a Bachelor of Science in Financial Economics from Centre College. She has held roles as a financial advisor, a real estate analyst, and a senior finance analyst.

 

Rachel is based in Colorado with her husband and dog.

Advice to an 18-20-year old:

You can’t start a business selfishly, you need to solve a problem

Recommended resource(s):

Hold: https://amzn.to/38MOyRd

~

You can find Rachel Richards on…

Website: https://www.moneyhoneyrachel.com/

Instagram: https://www.instagram.com/moneyhoneyrachel/

Facebook: https://www.facebook.com/MoneyHoneyRachel/

 

Get Rachel’s book here: https://www.amazon.com/Passive-Income-Aggressive-Retirement-Independence-ebook/dp/B081DH1V97

Invest with us here: https://www.frommilitarytomillionaire.com/investors/

Real Estate Investing Course: https://www.frommilitarytomillionaire.com/teachable-rei

Recommended books and tools: https://www.frommilitarytomillionaire.com/kit/

Become an investor: https://www.frommilitarytomillionaire.com/investor/

SUBSCRIBE: https://bit.ly/2Q3EvfE

Website: https://www.frommilitarytomillionaire.com/start-here/

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Facebook: https://www.facebook.com/groups/militarymillionaire/

My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!

THIS SITE IS INDEPENDENTLY OWNED AND OPERATED. ALL OPINIONS EXPRESSED HEREIN ARE MY OWN. THE VIEWS EXPRESSED ON THIS SITE ARE THOSE OF THE AUTHOR OR THE AUTHOR’S INVITED GUEST POSTERS, AND MAY NOT REFLECT THE VIEWS OF THE US GOVERNMENT, THE DEPARTMENT OF DEFENSE, OR THE UNITED STATES MARINE CORPS.

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to teaching personal finance and real estate investing for service members, and the working class!

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