486 | The Wealthy Educator | Chris Travers

0:00Hello and welcome to Choose a 5 today on the show we have a really interesting story from one of our community members Chris Travers who is a New York City public school school a couple of a few of a new year. There were a ton of questions. How does a public school teacher do this? How do you do this in such a short period of time? How do you do this living in New York City? Chris's story has a little bit of everything. And I knew that I had to have him on. I think this is one you're really going to enjoy. And with that, welcome to Choose FI.

0:53Chris, thank you so much for coming on the show. I'm really looking forward to this chat. Thank you for having me. Big fan of the show. Happy to be on. Nice. Yeah, this should be fun. So, okay, I guess let's start at the beginning, which sounds like it was somewhere in the vicinity of the age of 26. I'm not sure if it was somewhere prior to that, but talk to me about the origin story of Chris figuring out money. Yeah. So I've always been a good saver. I think I was blessed with that. I always had that saving mentality. No one in my family really knew anything about investing. And at that point in my life, I saved a good amount of money.

1:27And I kind of realized I'm losing purchasing power due to inflation. I can't just have this sitting in a savings account. I need to start figuring something out. I had an uncle who was good with money. So my mom at the time said, reach out to him. He could tell you where to invest your money. So I reached out to him and said, hey, I have X amount of money saved. I need to know what to do with it. I'm losing to inflation. He gave me the best advice. And he basically said, if I tell you where to put your money, you're going to learn nothing. So if I just tell you to invest in A, B, and C stock, you'll learn nothing and you'll be back with the same issues.

1:57So what I'm going to do instead is I'm going to give you this link. And I remember this, it was a website. It's not up any longer, but the title of the website was How to Get Rich Slowly. And basically teaching you about broad-based index funds, how to stick to the course. And the best part, there was homework assignment. So there was a book, a reading assignment of a homework assignment you had to read before getting to the next level. And the first book I'll never forget was The Millionaire Next Door. It was the first assignment to read. And I would tell you, I was always a saver, didn't know how to invest.

2:27But once I read that book, the light bulb kind of went on, hey, this is possible. This is feasible. What's next? How do I learn more? And I just got my hands on every book possible and then started going from there. That's so cool. So that was called How to Get Rich Slowly, not to be confused with J.D. Roth's getrichslowly.org, which is where I think that was one of my first personal finance, like the forays into the personal finance world. But yeah, similar to you, Millionaire Next Door, it jumped off the page to me. It just seems so intuitively and fundamentally true. It was like the pieces, the stars aligning, I think.

3:04And it's neat to hear that that resonated with you. Do you remember any of the other books that were on the homework list or any of the other readings? I want to say the rich dad, poor dad, the original one that was definitely on there. Hard to remember off the top of my head. I just distinctly remember millionaire next door and the ball got rolling from there and just kind of kept reading everything I could. Nice. Yeah. For me, another one was smart couples finish rich by David Bach, who doesn't really get enough airtime in the personal finance and certainly in the five world, but he always put out some just really intelligent stuff.

3:37So yeah, it's, it's fun to look back on those formative days. And it's interesting because you and I, it sounds like we were both natural savers, but that only takes you so far, right? Like if you don't have any sense and I love how your uncle, essentially it was teach a man to fish, right? Like the proverb. And I think he set you on your way. A hundred percent. Yep. That was the best advice because I learned everything on my own. Yeah, that's awesome. Okay. So we are about 10 years ago, approximately, and you're reading voraciously, you're devouring all this stuff. That's all well and good, right?

4:13Because plenty of people take in information, but they don't actually do anything. What were the first couple of steps that you actually took to make your life better? In terms of investing? Sure. I mean, investing or yeah, anything. I mean, you're again, devouring all this information. Like, Where do you go from there? Yeah, at that point, I started reaching out. I just started my first full-time job as a teacher at around 26. So that's when I started asking the questions about what should I invest in? What do we have access to here as teachers? Where can we start putting the money away and getting it to work?

4:45That's so cool. So yeah, I think it goes way back to episode 13 with the millionaire educator. So we're talking at the beginning of 2017 and it was essentially saying, okay, I think a lot of public servants do these incredible jobs, but what you hear is they're at a financial disadvantage. And I think the counter argument was, oh, but wait, we actually have access to some tools that other people don't. And there might be, I think it was like the unfair advantage of dot, dot, dot, and like teachers or public servants. And I just thought that was such an interesting rethink on it. And I mean, you have done this.

5:28I mean, if you wanted to pick hard mode, Chris, you would pick hard mode for most people. I'm a public school teacher in New York city as a single guy. And I'm kind of putting you back in 26 year old. I mean, that, that sounds like hard mode, but yet you have thrived. I mean, walk us through this, like, tell us about the advantages. Tell us what you tell your teacher friends? Because I think a lot of people bemoan how difficult it is, but yet you did it the hard way. So the advantages that the teachers have is obviously the 403B and everyone knew about that. In New York City, it's called the TDA plan.

6:01So they told me right away, put all your money into that as much as you can, try to max it out each year is the goal. Through my own research and things like that, what they don't tell teachers is you have access to a Roth IRA and probably one of the most important investment accounts. But a teacher wouldn't know that because not directly through teaching profession. So that's something you have to open up on your own. So I was able to do that as well. And then through my own research, I was maxing out the TDA and you get to a point where I want to max out more. I want to do more. Is there anything else I could do?

6:31And I'm just learning and trying to fill up all those baskets. And I eventually researched enough and found out about the 457 plan. Boom, we have another access to another account where you could put another, at the time, 22 ,000 or whatever it was at that time away. And we just kept building from there. So tell me about that. So I guess you were informed or it was at least in the conversation about the 403B or the New York City version of that, but the 457B was not talked about, but yet it's still through the school and or teaching profession. Yeah, it's not discussed among teachers. And I find the vast majority don't even know they have access to it.

7:09I think this is because it's reserved for all New York City employees. So teachers, firefighters, police officers, anyone who's a city employee has access to this account. So since it's not directly like the 403B, the TDA program is directly for the teachers. They don't really know too much about it unless you do your own research about what you have access to in New York City as an employee. Oh, that is super interesting. Okay. So yeah, we've just helped a lot of New York City employees generally just saying, hey, you might not hear about, and it's not just teachers, right? You might not hear about the 457B because it might not be program specific to whatever part of the New York City government, et cetera, that you're involved in.

7:51But it sounds like it is available to all New York City employees. Is that what I'm hearing? Correct. Yep. Okay. So that's interesting. And now that 457B has the same contribution limits as the 403B? Is that generally how that works? Yep. And you could argue it's an even better account than the 403B because you could take your money out penalty free upon separation of service. So if you're not planning on teaching your full 30 years and you want to switch careers at separation of service, you could withdraw all your 457 money penalty free as opposed to the 403B where you cannot. That is huge. And it's funny because I often forget about that, but now it's seared in my head.

8:31So there is a significant advantage to the 457B. Now, you have an option right now. I believe, and I'd love to hear you say, but I believe you max currently both of those out, which is extraordinary. So fill in the blanks on that. But you are able to pick either one. It's not like you have to max out, because I think some people, again, who aren't aware that they have availability of both just hear about the TDA or 403B, whatever it's called, wherever you are. And they would think, oh, I have to max that out before I can even put into the 457B. So talk to me about both those things. Yeah, that's a great question.

9:07So that's not a requirement. And you could easily put 10 % in each account, 10 % in your 403B and 10 % in the 457 if you like. You don't have to max out one to start contributing to the other. And there's pros and cons of each. The 403B plan we have here at New York City is pretty amazing. There's a guaranteed fixed return of 7%. So I don't know many accounts where you get a guaranteed fixed rate of 7 % no matter what. So a lot of teachers... to stop you there. So a guaranteed return. So is that like a floor or is it just, Hey, you put your money in the four or three B or TDA. You're not actually investing in anything specifically, but they're doing it on your behalf and you get a 7 % return.

9:49Or is it like, Hey, I'm putting into the market in a certain fund. I'm setting up kind of a ridiculous question, but I genuinely don't know what the answer is. How does that work? Yeah, it's just backed by the TDA where there's a fixed fund. You pick fixed as your investment option, right? You have options for US equity index fund, international equity index fund, or the fixed fund. And at fixed, you're guaranteed currently 7 % return on the money. So people who are risk averse, this is a great option. People who don't want to worry about the ups and downs of the market. And a lot of the older teachers are just very happy to not worry about a thing and have it maxed out and all their retirement in that fixed fund.

10:28Yeah, I mean, I get it. I mean, that's an interesting thought experiment for anybody, regardless of how old you are, is if you could get... So I think in the back of the envelope we use is, okay, maybe an 8 % annualized return in the market. And it's just rough. Nobody's guaranteeing anything, obviously. In some years, you're up 25%. Some years, you're down 25%. But on average, 8 % is what I use. But man, if you could guarantee me 7%, I don't know if I pass that up. Yeah. Yeah, it's great. So that's one of the big advantages of that 403B. Now, the 457 doesn't have an option similar to that. Gotcha.

11:05Okay, that's interesting. All right. So, right, you have access to those things. Now, are there any other accounts that public service workers have access to or anything else that like, hey, if you were telling a new colleague, hey, you might not hear about this from HR? Or is it really, is the main thing that 457B? Yeah, those two things, the 403B and the 457B are the two main things that I would tell a new colleague. And I would also touch on the Roth IRA and doing that separately on your own. Gotcha. Okay. And now, and I did the cardinal sin of podcasting as I asked you two questions at once before.

11:42And so the first question, and I will double back to it is at 26, when you were starting your job or 27, whatever it may be, how much money were you putting into those accounts? Like, was this just, Hey, you hit full speed, like don't look back from the beginning, maxing these things out? Or did you eventually ramp up to that? Yeah, it's a long story about by the time I was 26, I made sure after I got my first full-time job, I didn't move out of the house right away. I saved. I stayed home. I think that's really good advice. If you have people or you have kids that are going to college, a lot of my friends, the first thing they wanted to do was go into the city and live paycheck to paycheck in an apartment.

12:20I always thought short-term sacrifice, long-term success. Let's just barrel down a couple of years because I'm not going to be making a lot of money my first couple of years out of school, save what you can. And then once I get out of the house, I know I'm not going to have to come back later in life. I know I'm not going to have to be paycheck to paycheck again. So based on your question, I had a good amount of money saved by the time I figured out it's time to start investing in the 403B. So I had a cushion where I could just right off the bat, start maxing it out. And let's keep going from there and see what else I can max out and keep pushing the limits.

12:53Oh, wow. Okay. That's very cool. And I love that quote, the short-term sacrifice, long-term success. It reminds me of the one I've mentioned on the show a bunch of times from Jersey Gregorick, which is hard choices, easy life, easy choices, hard life. And I think, yeah, those are so complimentary. And I think that's really important for people to understand. I think a lot of us in the FI community, we've internalized that, but it never hurts to just hear it again, right? Like this is a long-term game. This is truly get rich slowly. Like you said, there's no easy, quick answer to this. Yeah. I saw too many friends that left home too early, paycheck to paycheck, and had to come back home five or six years later to start saving up to get whatever they needed to do.

13:33I knew if I buckled down those two or three years, saved what I could, and now I hit the ground running and I'm out there maxing out accounts, hustling, doing what I can to keep increasing my net worth. Yeah, I hear you, man. And it's funny because we are definitely kindred spirits because as you probably know, I lived on Long Island most of my life, grew up in a high cost of living area. Obviously it's not Manhattan, but it's, you know, Long Island's pretty expensive. And yeah, I mean, when I graduated from college, a lot of my friends moved out. And like, like you said, they didn't exactly explicitly want to live paycheck to paycheck.

14:08I know you were kind of a little tongue in cheek, but that's the reality. And I think this is part of like five one-on-one is there is a finite pot of money, right? And like frugality is important. And I think in the modern five world, which, you know, choose a five has, has been a large part of shaping the narrative. Like a lot of us talk about earning more money, which is wonderful. We talk about being a value is we talk about die with zero, but at the heart of it, frugality is really, really important, you know? And that's where it starts is a finite amount of money. And when you make 40, 50, 60 grand, which is a great salary to start off.

14:46If you go and rent an apartment in Long Island or New York city, that money's going to go real quick. It just is. And yeah, I mean, the biggest thing that propelled me on my way was also like you living at home for a couple of years. And when you save 90 % of your income, it's pretty easy to stockpile a big pot of money, right? Yep. Exactly. That's cool. thanks for listening to choose a fi and for all your support of our mission here the absolute best way to support choose a fi is when you sign up for your next rewards credit card to use our cards page at choose a bi.com slash cards i keep this page constantly updated so it should always be the top resource for you thanks for being part of our community and for your support so chris i guess let's just keep going sequentially i think people hear school teacher and they hear New York City.

15:37And I think the vast majority of people who don't live in New York City or have any sense of salaries or cost of living, I mean, they would think that's almost impossible to save money. But yet you have managed to thrive. I mean, talk me through the concrete steps. Like, okay, you lived at home for a couple of years and you saved money, but that was just for a couple of years. What do you do then? How do you afford to do that? How can you afford to max out retirement vehicles on a school teacher's salary? How is that possible? Yeah. So the first thing was living at home for a couple of years, saving my income.

16:12And then when it was time to move out, my first instinct wasn't to get apartment by myself. I found a roommate. I found someone I could get along with. I found someone who would split the rent with me. And for Queens, New York, we paid about$1 ,800 a month. So we split$900 a month each at the time. So again, I was still able to save a large amount of my money. Besides being a teacher, I'm a certified athletic trainer. That's what I have my bachelor's degree in. That's where my passion is as well. And if I'm not teaching, I was basically hustling, doing any kind of sporting event I could provide services for, tournaments on the weekend, football games.

16:49If they needed medical coverage, they needed an athletic trainer. I was that person. So I was building my network. I was side hustling and starting to build that business, a side business, active athletic training. Oh, that's cool. Okay. So during the week, you're a teacher, and then you're also supplementing that on weekends and maybe even nights at sporting events and such as an athletic trainer. So is that something, like you said, networking, talk me through how significant that, like, how do you break into that in an area where presumably there are a lot of athletic trainers? Yeah. You would be surprised because I graduated my athletic training program with only about 10 people in my class.

17:26So there are not as many board certified athletic trainers as you would think. We get confused with personal trainers in the gym a lot. Athletic trainers are healthcare professionals. They're on the sidelines diagnosing injuries for athletes, making sure, first responder, all those kinds of things. So it's kind of a smaller community than you would think. So just by doing these events and tournaments, I'm getting to know coaches, different athletic trainers in the area. And little by little, I just built it up where they were starting to reach out to me when they had new tournaments coming up.

17:55Can you provide services? And the tournaments got bigger. The events got bigger where I couldn't personally work them anymore. I needed to hire four or five athletic trainers and place them at these different sites on the weekends, soccer tournaments, four to five different locations. And it just started growing from there. So you actually went up building a business of other athletic trainers as well? Yeah. So as my story goes, yeah, at the beginning, it was just me hustling and personally working those events. And now I've grown up to the point where I have my clients in tournaments and I don't physically work those events.

18:27And I place the athletic trainers at those tournaments. So I built my network of athletic trainers and clients of tournaments and coaches, and I place them at all different events, tournaments throughout New York City, Long Island. That is really cool. Is that something that you plan on? Like, is that infinitely scalable? Not infinitely, but is that something that you plan to keep growing? Like, is it something, I guess, what are the steps? Is it to find the athletic trainers? Is there more demand than there is supply? Where's the constraint right now, ultimately? Yeah, there's a lot of hoops to jump through to get a certified athletic trainer.

19:00And the quantity that these tournaments need, if you have a bigger tournament that needs four or five on the weekend, they need a specific network of athletic trainers that are going to be available. So I build that up where I know who could work for me and who's available on those weekends. Most of those athletic trainers already have full-time jobs. So they're also doing their own side hustle too. covering extra events. So I know who wants to hustle a little bit and do some extra events. And they've been reaching out to me and I've been able to build it up so far. That's really neat. So right.

19:28In essence, you're doing all the logistical work and then just taking a percentage, but not actually physically working on site. Yeah. It's so interesting to hear all these different side hustles and like how people, how they evolve, because I don't think, I don't want to put words in your mouth, but probably when you first started, I don't know that that like you envision yourself not being on the field, but yet here you are and it's still going 10 plus years later. Yeah, exactly. I didn't imagine it to be like this. And it's very cool that I'm able to basically stay at home for the most part and place these athletic trainers.

20:03And it's rewarding because you want an athletic trainer at all these, there's too many sporting events going on. There's no medical professional, there's concussions, there are different injuries, and there's no one there to say that this kid can't go back in the game. It's dangerous if they go back in the game. So it's very rewarding that, no, I'm keeping these kids safe throughout the community, placing these athletic trainers. And I love it. It's not always so easy. You know, I've had athletic trainers call out last second. So if they call out, I have to go to the event and cover what they weren't able to do.

20:31So I have to be willing and able to put down my plans when something happens and work also. So there's ups and downs, but I do truly enjoy it. Yeah, that's really cool. Yeah. I think anybody who manages people knows it's not always the easiest thing in the world. But yeah, it's just cool to have that flexibility. And then again, you've built this network and you've built connections and you've built relationships with different events. And yeah, I mean, if you can provide and help people, I think back to like the wild, wild west days when I was a kid and like, you know, how many kids went back onto a soccer field with a concussion or something like it's crazy.

21:06So it's nice to see it really mature to the point where health is just is so important. So yeah, that's really neat. Because I guess let's talk about cost of living. Because like you said, you're in Queens. So it's not for anybody who knows New York City, it's clearly not Manhattan, but it's also clearly not a low cost of living area by any stretch. How much does your life cost roughly? Do you have a sense of what the breakdown is? I'm not sure if you're still in an apartment that costs$900 a month or whatnot. Talk us through what does life look like for Chris in terms of annual budget? I've never been a super strict budgeter.

21:44I was always good with saving and it just came natural to me. I knew I was making more and saving more and I wasn't spending as much. I knew if I was filling up my buckets and my Roth IRA was fully covered, my 403B, my 457, and I had a little extra to contribute every month to my individual brokerage, then I was okay. I don't live in that apartment anymore. I'm in a house now, still renting. That's another whole topic because New York City cost of purchasing is a little crazy and almost makes more sense for me personally to rent this house that I live here in Queens as opposed to paying for a mortgage.

22:17But yeah, no strict budgeting, just maxing out those retirement accounts, making sure I'm getting all those buckets filled and whatever's left I have to spend. Oh, I like that. So yeah, it's like a reverse, just pay yourself first. And listen, if you're maxing out all those things and you're putting money into a taxable brokerage, you're obviously doing okay as evidenced by the million dollar net worth. So yeah, it sounds like you have to figure it out. But let's talk about the housing because you said, I don't want to parse your words, but something to the effect of it almost makes more sense for me to rent.

22:46And in my head, I'm screaming, it probably definitively makes more sense. And I'm sure you know that. And I can see the smile on your face. I think what I'd love to talk about is, as we've discussed here before, the cult of homeownership. I think Christy and Bryce have been on the show from Millennial Revolution talking about that. And I think most people reflexively think it's an absolute slam dunk. Owning is better than renting. But that's not always the case by any means. And there's a lot of factors. And I would love to dispel that myth that it really is just very personal. Could you talk through, did you think about that on just a quantitative basis?

23:25Is this purely numbers? Is it lifestyle? Is it flexibility? Like talk us through that, because this is something we've touched on a handful of times, but just not enough here on the podcast. And I'd love to hear just another perspective. So specifically for Queens, that cost of living is pretty insane. The house that three houses down from where I live now, the house is on sale for one point two million. And it's the same exact size of a house that I'm currently renting. Same exact everything. I actually went and checked it out. And I currently pay thirty seven hundred now for I live in this house.