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I had that insecurity the whole time I was in the military. Rich:I wanted the 20-year retirement, but I saw people around me sometimes being pushed out the door before they hit 20 years and not able to get that retirement. I saw it happen to people at the 15 or 16-year point, and that made me nervous.
So, it looks like things are all coming together in 2020 for you. Walk us through what that was like for you and your decisions leading up to August this year. Rich:So, I did my last year in the military, right? By the way, while we were in Korea, from our perspective, quick loans chattanooga tn we almost went to war with Korea, so that was a very busy two years or with North Korea.
Rich:Anyway, I come back in 2019 and I have a year left. So, I took over management, which actually makes me a lot more money, right?
I bought a sixplex before I knew there was a pandemic. I mean, who knew what was going to happen back in March and April.
Then actually, in June, again, just through networking and knowing people, somebody brought a fourplex to me. Again, I wanted a place that was loan with no credit check comfortable and mine to hang out with my family should we all be stuck working and doing school at home. I was looking at a 16-plex, and I was getting excited about it, but there was just too much going on for me with also buying this newer home, which is large. Rich:Once my wife got into this property, it surprised me how fast we were spending money, hardwood floors, painting the house, replacing fixtures.
Just stepping back one second here, what do you think would happen to your financial journey if you bought this house 10 years ago in 2012 or something like that or a house of this sort? Your primary residence is typically not a very good investment, and is pa payday loans certainly for a military member, absolutely for a military member. That is just not a good investment for a myriad of reasons. So, I think it would have been a bad idea for pa payday loans me to purchase this house at any other point. I think you went through, you spent 20 years of a career building up a real estate portfolio, and a financial fortress, and a pension, and all these other wonderful things. Now, your assets buy you the lifestyle that you exactly want, which includes this house.
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The rents from that sixplex, I am assuming at least cover the expenses of the sixplex. Rich:Then the fourplex that I bought after that, somewhat, from my perspective, is a home run because it cashflows well with the mortgage. Scott:Let me ask you a philosophical question here because you spent 20 years building a really strong position. Is that how you think about things or do you think you have a different approach to how you run your portfolio. Rich:Then to be quite honest, I just wanted the challenge of buying during the pandemic and I also want to take advantage of a really cheap money.
Do you have a formal reserve fund for your 30 units? How much reserves do you have in relationship to how much mortgage payments you owe every month? I guess since then, since retiring, I also have a retirement income now. The cashflow that comes in every month is a decent cashflow, right? I have Roth IRAs, and I have a Roth TSP, which has now been rolled over to an IRA. You can withdraw the contributions to it without penalty.
Rich:I usually keep a decent amount of money in cash in the banks. These are people that I knew where very good investors. I knew what they were doing, and they were just BRRRR-ing properties.
You can make a lot of good connections in the forums. In fact, the person that safe same day loans brought me the fourplex is somebody that also was hopping around in the forums there. Do you have a ballpark of where your money is in real estate versus index funds or real estate versus stocks in general? Scott:Just if you have a big pie chart of your overall asset allocation, what percent do you think is in real estate? I mean, my whole TSP and TSP is Thrift Savings Plan. The military pays you your base pay and your rent pay separately, right?
Lieutenant colonel 20 years, see what the salary is.
I think there need a quick loan today might even be states where … There are states where military pensions pa payday loans are not taxed.
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Rich:I mean, I just kept trying things and trying things, and being cautious and protecting what I had already while cautiously moving forward.
Actually, he started up with a townhouse and then moved up. You have been investing for seven years and you have 30 units. I think a lot of times people will try to use real estate as a way to get out of debt. Real estate is a way to get rich quick when they still got other things in their lives that they have to fix.
I mean, I think there have been people on podcasts who have done it, but those people are in the minority and more fail than make it with that method. Well, pay off your debt, get some money, get experience, and then invest in a property. Nobody wants to hear that, but that is the smartest way to do it. I just looked it up and all military retirement pay and survivor benefit program payments are exempt from any Alabama state, county or municipal income tax. I love the fact that you are not just jumping in with both feet and doing everything you can to make the most amount of money right now, and really being cautious. Mindy:It is now time for our famous four questions. The finance book, Nassim Taleb, he has a book called Fooled by Randomness. I feel like that book, maybe more so than any other, shaped my opinions about money and chance and the markets. Basically, it has a lot to do with understanding and maybe not being a huge fan of most types of money managers and investment bankers and how chance plays a role in the success that certain people have.
I was looking at my TSP, which is my 401K, and I have this little blog and I try 1000 dollar pa payday loans loan bad credit to talk about finance and real estate with people.
I always preach that you got to max your TSP, which is your 401K and you got to max your IRA, and you got to do it from a young age no matter what, no matter how hard it is.
Rich:When I went back and looked at what I did, I think I somehow thought that I started much earlier maxing it out, but it actually was more 2011 or 2012 until I started maxing it out. If I would have found a way to max it out, where would I be sitting today versus where I am now. Rich:Certainly pa payday loans hundreds of thousands, yes, certainly. I could have made a million in net worth or more than a million.
Those are the years that really make you a lot of money. Rich:So, invest from a financial position of strength. So, reach out to him if you have any questions about real estate investing or Alabama, specifically.
Scott:Thank you, Rich, for just incredible content today. I think this is a perfect phrasing for how to get started in investing, do it from a financial position of strength, get everything else be ready for that opportunity when it comes along. I think the guy has, again, complete mastery over this world of money and investing.
So, look, I think that this is the way to go about it. This i need a personal loan now with bad credit is where we all want to be in terms of our money journeys I think right where Rich is today. Look, the guy was extremely installment loans online bad credit disciplined with his budget for a very long time.
Nothing he did was unrepeatable, and he spent a large amount of time and a large amount of energy in his free time just looking for opportunities to make more money on the side of his very successful but not high-paying military career.
You can go in there and we have I think something like 87 forums, 87 different categories. We talk about real estate all day everyday on Bigger Pockets, and the forums are a great place to ask questions or just read the answers from other questions that you have, and learn all about real estate investing, so you can have the best chance to be successful in your real estate endeavors.