400: Mindy and Scott’s Money Stories and Why They WON’T Retire Early

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30:41Just go to Indeed.com slash BiggerPockets right now and support our show by saying you heard about Indeed on this podcast. Indeed.com slash BiggerPockets. Terms and conditions apply. Hiring Indeed is all you need. I like that answer, Scott. But I would love to hear anybody else chiming in in our Facebook group at facebook.com slash group slash BP money. But Scott, this is enough about me. Let's turn the tables on you. Scott, welcome to the BiggerPocketsMoney podcast. I'm so excited to talk to you today. Thanks, Minnie. It's great to be here. Let's look at your journey to CEO of BiggerPockets. That's kind of an impressive deal because you're like 14.

31:21Yeah. Well, 32. So twice 14 plus four. But yeah, my journey to bigger pockets, I when I started my career in 2013 at a Fortune 500 company as a financial analyst, and within three months realized I wanted to become financially independent. So I had a massive advantage over a lot of other folks on the journey to FI in that I discovered the concept when I was 23, had no wealth, but also had no debts. Thank you to mom and dad for paying for college and discovered the core concepts right away. So I was instinctively fairly frugal and protective of my money, but was very much, again, informed by here's the playbook from Mr.

32:11Money Mustache from BiggerPockets. And so right away, within three to six months of starting my job, I discovered both of those platforms. I was immersing myself in the world of personal finance, mad scientist, all these other different types of content out there and formed the plan. I'm going to frugal my way to financial independence, put that money into index funds and house hack and invest in real estate to get there. And by June of 2014, I had saved up my first 20, 25 grand by working my job, packing lunch, driving for Uber, and otherwise just accumulating cash. At that point in time, I made two decisions.

32:52One was to go under contract on a duplex here in Denver. I bought it for$240 ,000. It's worth almost two and a half, three times that much now, maybe giving back 10, 15 % we'll see this year. in valuation. And then the other was to join BiggerPockets as an employee. And the way I did that is I met Josh Storkin, our founder, through a networking little mastermind group that I had joined because of the podcast, the BiggerPockets real estate podcast that encouraged me to go network with local real estate professionals. And so I did that. I followed that advice and one of them happened to work in the same space as Josh.

33:28I love that story. Would you please tell how you just barged into Josh's office to introduce yourself? Well, I was overwhelmed. I was like, oh, this guy, Josh, he's changed my life. And Brandon, and I'm following their advice. I'm here right now. So I knock on his door and I tell him, hey, Josh, I'm a huge fan. Would love to buy you lunch sometime. And he claims to remember it differently, but I remember something to the effect of go away, kid, you're bothering me. And so that happened. I got his email. I followed up three more times and eventually I met up with him. I can't remember if I ever got lunch with him or not, but I was definitely invited to an interview, which I was not expecting a few days or weeks later after that first meeting.

34:07I think it was a few days later because you had offered, when you told this to me, you offered your financial analyst services at the same time that he was like, I have a big financial analyst problem. And this kid comes in, barrels into his office. If you don't know Josh, that's not his favorite thing when somebody just wanders into his office unannounced, no meeting scheduled, you just wander in. Well, it worked. So for him to say, get out of here, kid, is pretty on brand. I want to point out, I was also offered a job in a brokerage. I might've gotten my agent license at that same time. And another guy from the mastermind that I was in took that route and became an agent.

34:53And I believe that route went very, very successful. The brokerage is called Thrive Real Estate. They're doing fantastic. And I believe that the income potential in that job would have been significantly high. So it's always interesting to go back to these inflection point moments because obviously joining BiggerPockets has been the ridiculous advantage in my career and building wealth, the connections, the network, the compensation and the role here of CEO. But it's always interesting to think about that inflection point of like, hey, you know, I would definitely not be hosting this podcast talking to you right now or doing any of these things, but I would probably still have a real estate portfolio and have had a couple of good years as an agent if I had taken that path.

35:39And I just find it interesting to kind of like think through that key point in going through like this incredible luck. But I actually had two good options at that point in time, one of which I'm very glad I chose. But just something I philosophize about sometimes. Were you actively looking to leave the world's worst company to work for? I was, yes. I was telling my colleagues about my goals to become financially independent. And one of them just said, was like, well, I don't know what you're doing in this chair right here. At that. And that just really stuck with me for all these years. And I was like, at that moment in time, it was six months, nine months into my job.

36:16I was like, I have to make a change into something that is scalable, that has opportunity in front of me. Okay. So how did you scale to CEO? That's not something that you do at 32. I don't know if you know that. So first I joined a three person company as the third employee, right? So that, this was a true startup at that point in time. It was bootstrapped by Josh. There wasn't investment capital in play. And so what did I do? I served Josh and BiggerPockets as loyally as I could. I said yes to every opportunity. I really wanted to write for the blog. I have an ego about me. That's just why I'm in front of this mic right now talking to you about money and my personal story.

37:01And I wanted to, I wanted to talk about these things and, and, and put my thoughts out there and get feedback and reactions. And he wouldn't let me do that. So I wrote for the blog. He, he wouldn't let me do that during work hours because that wasn't the job I was hired for. So I did it after hours. So I would stay from five until eight, nine o 'clock at night sometimes, uh, on my, after biking along the Cherry Creek trail path, I had a nice set of lights and all that kind of stuff. And I would just write blog posts for hours after that and participate in the forums and those kinds of things. And then I said yes to every opportunity.

37:36So every problem that materialized at the business that I was capable of solving, which is pretty much all the problems except for like at the time, except for like anything to do with technology, coding, those kinds of things, I would say yes to. I would be like, hey, we need to figure out this growth hacking thing. Go figure out how to how to set up A-B tests and other campaigns using these softwares. I would figure out how to do that. I would self-educate, read a book, and then go and apply it. And so I just did that for a couple of years. I never asked Josh for a promotion or raise in all the years I was working for him.

38:09What? Did you get promotions and raises or did you just not ask? Yeah. They just kind of came. So I don't know if that's a good advice. I don't know if other people should follow that or not. No. We always talk about ask for that, But I don't think I ever had a single conversation to that effect, maybe once or twice asking about different ways to earn commissions. But I was never like, Josh, could I get a new title or could I get a raise? I believe that because I served his interests and bigger pockets as loyally and to the absolute best of my ability, that that was just then rewarded by him and then by future shareholders.

38:50That's very interesting. So I would say, here's Scott's do as he says, not as he does thing, where we had Erin Lowry on the podcast and she recommended having these uncomfortable conversations. And here's how you have these uncomfortable conversations with your boss. And you keep a praise folder in your email. And anytime somebody sends you an email that says, hey, you did a great job on this thing, you put it into your praise folder. So when it's time to ask for a raise or it's time for your review, you can bring that forward because it's hard to find those, you know, in the moment. But when you get them, you're like, oh, let me just save it over here so I can find it easily.

39:31And I think that's good advice. And I agree with it. It's just not not not what I did. And my circumstances may be completely different. Right. Third person at a at a startup. What is what is my skill set? Like, where would I go? How would I apply to another job if I were to do that? like right now. My skill set is serving bigger pockets to the best of my ability for the last 10 years, nine years now. Has it been nine years? Holy cow. Okay. So I think that's a really good, I think you had a really good point there though. You said, I did whatever Josh asked me to. You were young. How old were you?

40:10Like 24 or something? Yep. You were young, so you didn't have any obligations. And I make a lot of fun of you being so young just because I'm so impressed with what you've accomplished at such a young age, not because I think that it's undeserved. I hope everybody gets that it's like fun, ribbing and fun, not like I'm not mad. But you were very young doing all of these things. You had no obligations, no wife, no child, no, you know, anything. So you could stay at work until eight o 'clock at night or nine o 'clock at night. So let's talk about the promotions that you got. When I started at BiggerPockets, you were the director of operations and you directed the operations of the company.

40:50And then a couple of years later, Josh stepped back and made you president. I don't think you were president before he stepped back. Were you? Well, first I had the title vice president of operations. So I don't remember exactly when that happened, but sometime between 2014. And I love that VP at BP. I could not stop. I put that all over my LinkedIn and all that kind of stuff. I was very proud of that and had a lot of fun with that title VP of BP. And then I, in 2017, Josh, late 2017, that's when Josh had the unfortunate situation with his family and his daughter's health. And so he had to step away from the business.

41:29And for a period there, there was no change. It was just kind of, we operate as a leadership team together. That was a big moment in my career where I was very grateful. and humbled was when I was elected by the team as the acting CEO in Josh's absence. And then he named me president three or four months later, formally. And that's when we began to bring on the new shareholders, our partners in McCarthy Capital. That took all of 2018. So Josh leaves in late 2017, late 2018, we bring on our new partners. And I remember thinking during that period, you know, geez, the, you know, there's a, there's, there's really good things that we're doing here, but I imagine that if you're a private equity investor or somebody like that, that you really know what you're doing here.

42:21And I'm 27 and I don't know what I'm doing. Um, but I, I don't want to, I don't want a new boss, uh, this or however that's going to work or anything. So I was like, I'm going to become, I don't think I can fool smart people who would have the means to make a large investment in bigger pockets. I'm going to do whatever I can to become the CEO that they would want to invest in. And so that meant more books, being fairly decisive, looking around and kind of doing an honest appraisal of like, you know, I've been here for a while and I don't really understand what these five or six people are doing, like what, what they're fundamentally, how that's translating to value creation for the business at the highest level.

43:04And I remember I had a conversation at one point that was like, with the group is like, I don't know exactly here, here and here, but you're now on this, you're now on this, you're now on this, you're now on this project. And, uh, that event, that conversation later became to be known as the bigger apocalypse. Um, because half of those, those folks left within a few months of that conversation. My, my fear though was, and again, we have great shareholders that none of these things came to pass or whatever, but was that new folks would then make the changes if I didn't make changes ahead of time.

43:33So there were definitely some hard moments in there, but that was a big inflection point for me was I think that that period from 2017 to late 2018. Yeah, I remember the bigger apocalypse. That's a great word. That's Craig Curlop's word. So you said earlier that you wanted to pursue financial independence while working at the world's worst company to work for. Why did you go the CEO route instead of the FI route? So that's the big contradiction, right? I wrote a book called Set for Life that talks about binge watching Game of Thrones until 2 a.m. in the morning and showing up at the gym on noon on Tuesday.

44:09And I live a pretty, you know, I would, I don't know, there's no such thing as normal, But I live in an average place in Denver. I go to bed at 9, 10, 1030 at night. I wake up at 7. I do the same thing and I've done it every day for nine years now. I work more than 40, 50 to 55, maybe a little more hours a week at a job in a corporation doing all these different, you know, drive my Corolla and, you know, live what I assume to be reasonably consistent with an upper middle class lifestyle. here. And so there's some ironies in that story. Is that answering your question, Mindy? Well, no. Why did you choose not to pursue financial independence?

44:57You could have. You've got how many rentals? Eight doors? Four doors? 16 doors? I can't remember. Oh, why? Yes. So that's the what. Why is because I'm addicted to this. I feel like we've got something really cool here. I feel like we're helping a lot of people. I feel like we're succeeding in our mission and people are actually becoming wealthier and investing and making better quality decisions as a result of the work we're doing here at BiggerPockets. We've got a team, we've got careers that are blossoming here at BiggerPockets. And it's fun to grow the business as a business challenge. It's fun.

45:33It feels a little bit like winning in a business context. Maybe it is. And I'm very competitive. And this gets my juices flowing. So I love what I do every day. And yeah, I suppose I could easily leave and retire. But I'm here because it's fun and I like it. In the FIRE movement, so many people focus on the RE part of FIRE. And we had Jill Schlesinger on just a couple of weeks ago talking about fine, financial independence, next endeavor. And I think that that is a better way to phrase it because so many people are like, oh, I can't wait to quit my job. Well, then get a different job that you don't hate actively.

46:21Um, it I've had jobs that I hated actively and it's so much easier to not work there. And I think, I think there's some chicken or egg too. There is as you move towards fi and get better at this, you're probably going to get very, you're going to get really knowledgeable about a lot of investing concepts. It's going to make you better at your job and you're going to have power over the situation with your boss where you can leave that job and begin exploring other options if you're unhappy. And mentally that leap is going to be easier and easier as you have more cash in the bank a more passive cashflow.

46:52So I think that's part of the story. Yeah. But also like if you, what is that phrase? If you enjoy what you do, you'll never work a day in your life. Sure you are. You'll still work a day in your life, but it's a lot easier to go to a job that doesn't actively suck. Well, Mindy, I want to go back one second here also, because I think that there's a, like a philosophically, what was the reasoning behind all of this? I think is what you're trying to get at over the last nine years from this journey? What motivated that journey? Is that along the lines of what you're - Well, I just want to know why when you worked at the world's worst company to work for, you were actively pursuing financial independence.

47:32And now that you don't work at the world's worst company to work for, you aren't actively pursuing financial independence. You're still, let's see, you're not actively pursuing retire early. You're still keeping an eye on your finances. You're still investing in real estate. You're still investing in the stock market. You're still investing in your 401k and you're doing all of these things to help further solidify your financial position, but you're not actively looking to quit. Yeah. And that's because I love what I'm doing. I will say that, you know, do as I say, do as I, don't do as I did, do as I say, or whatever you're talking about.

48:12Do as I say, not as I do. I would say that there was an intentional philosophy underlying all of these actions the whole way through. And it was two parts that I think a lot of people are either or on, and I was and on, right? And those two parts are one, a formula for moving towards financial independence. And that formula for me was spend less than I earn, house hack, and dump the rest into index funds. And I still follow that formula today. That's the underlying piece of this. But I also believe that on top of that, there are opportunistic items that people should pursue. For you, that was Google, Tesla, Facebook, these other investments that you put large dollars behind.

48:51And for me, that was a winter gloves for driving business that failed. Trenches is tees, which had a t-shirt with Buddha on the front asking a hot dog vendor or saying, make me one with everything on it, which surprisingly didn't sell. Um, and yeah, the vendor replied, uh, change must come from within. Uh, so this, this, I still have some of these shirts. They didn't, they didn't sell, but I took a shot every 90 days on something. Sometimes it was synergistic with where I work at bigger pockets. Sometimes it was totally unrelated. Sometimes it was a real estate investment. But I did that every 90 days for the last 10 years.

49:32I've done something with my extracurricular time to move my position forward, whether it's a big investment, like I said, in real estate, a shot at a small business, a major portfolio move, writing a book, writing another book with you. Those types of actions, I think, have been really important and I think are sometimes dismissed because you can't quantify it. But you know that if you nine out of 10 businesses fail and you start 10 businesses, one of them is going to be successful. And so look, I, what it was been 10 years, that's 40 quarters since I started my journey. And I've taken 40 some odd shots, uh, at, at, at, at, at advancing my position and four or five of them have been very effective and built 80 20 of my net worth.

50:19So Scott, this is episode 400 of the bigger pockets money podcast. And And way back on episode two, we interviewed you about your money story. What's changed in 398 episodes? Well, so the biggest change, I think, is becoming CEO. So that was that inflection point throughout that 2018. That was beginning of 2018 is when we started money, right? 2018. Yeah. You had a baby. Yeah. So that was a big, big change for me. Um, frankly, I would say by not much else has changed from a strategy perspective for me. I've bought, I bought two or three more properties, three more properties here in Denver. I made a handful of syndication investments.

51:07I piled, I added to the pile in the index fund investments. We came out with first time home buyer. We do all parts of, of, uh, of the portfolio. And it's really just been letting the snowball accumulate from a, again, from a personal financial situation. So there's been plenty of other updates on the personal front, like, uh, getting married to a wonderful, wonderful woman and having our first born child, uh, who, who arrived last October. Um, so, but yeah, that, those from a financial journey, those have been the, the big milestone. So right now, again, it's, it's my philosophy. My philosophy has not changed.

51:45I've stuck to it And I have continued dumping cash again into boring old index funds, buying, I think it's three more properties since that episode in 2018, a handful of syndication investments, and yeah, continuing to grow bigger pockets here. And from a financial standpoint, what percentage has your net worth grown? Probably 150 to 200%. Okay. Yeah, two to three times bigger than it was at the end of 2018. Scott, what are you doing now with your portfolio? Yeah. So one of the things that I have been noodling on for a while is why I'm not invested in bonds. Because you're not old enough. Well, so here's where I'm at with that.

52:31I feel like bonds are a drag on your portfolio returns over the long term. At least they were for the last 10 years because of such low interest rates. But what's changed in the last year is rising interest rates. And to me, an obvious conclusion that comes from rising interest rates is to lend more, own more bonds. That's a better investment now than it was two or three years ago, for sure. And I think that if you believe the S &P $8 ,500 is going to return 10%, give or take, over the next 30 years, and you can earn 8%, 7 % to 10%, and you can earn 8 % lending, why wouldn't you lend at least more with a bigger portion of your portfolio?

53:19And so, again, I think this is just a very simple observation, and I'd love to get beat up in the Facebook group if people have different opinions on this. But to me, it feels like, what am I doing here? Why am I all in stocks when it's higher risk or higher volatility, at least, in the same returns as what I can get or very close to what I can get in the bond market? So I'm actually really repositioning a good chunk of my portfolio into debt. And the way I'm doing that is I'm buying hard money loans or lending directly with private lending. This is Lend to Live. We had Alex Brashears and Beth Johnson on the Bigger Pockets Money podcast to talk about this a while back.

54:00But it's that approach. And I feel like, hey, these are great. My worst case scenario, Mindy, I actually met with you for a beer to talk about my first of these investments not two or three weeks ago, is, hey, I'll foreclose on this property and I'll now own it in cash for 30 % off its current market value. So I really like lending right now. I think there's a lot of safety in it. And that particular loan is going to generate 11 % return for the next six months. Short-term loan, I'll get my money back very quickly. if things go well, things go very poorly. I'll own a property near where Mindy lives for a significant chunk off.

54:37Although again, after figuring out the foreclosure law here in Colorado, but, but those are, that's the, that's the gist of it. And so I wanted to put, throw that out there that that's something that I'm, I'm very serious about doing with my own portfolio. I've already committed a big chunk there and intend to rebalance a little bit of my stock portfolio into more of this type of debt. Well, that's interesting. Well, I would like to catch back up with you in about six months and see how your experience went for the first one and see if you would do it again. Yeah, you will definitely know about that, Mindy.

55:08I know, but we'll share it with our listeners too. And if that house defaults, I almost hope that they do default. If that house defaults, then I want to buy that from you. Yeah. And Mindy, by the way, I'm very lucky to have a contact like Mindy and to co-host with her because she, again, it's right near there. She's an agent. And she was like, these are the things you should like about this. This place floods, but this is not a hill. It's going to be away from that. All these little things I could never have gotten as an out-of-state lender or someone without a friend like Mindy. So I really appreciate that.

55:41Scott, this is our 400th episode. It was very fun chatting with you over the last 400 episodes. and I'm so thankful to all of our listeners for sharing these 400 episodes with us. Yeah, and thank you, Mindy, for being such a great partner over these 400 episodes as well. It's been a lot of fun and a special thanks to Kaylin, our producer. For being the rock star that she is. All right, from this 400th episode of the BiggerPocketsMoney podcast, he is Scott Trench and I am Mindy Jensen saying in a while, crocodile. If you enjoyed today's episode, please give us a five-star review on Spotify or Apple.

56:26And if you're looking for even more money content, feel free to visit our YouTube channel at youtube.com slash BiggerPocketsMoney. BiggerPocketsMoney was created by Mindy Jensen and Scott Trench. Produced by Kaylin Bennett. Editing by Exodus Media. Copywriting by Nate Weintraub. Lastly, a big thank you to the BiggerPockets team for making this show possible.