From Broke in Their 30s to Millionaires in Their 50s | Making a Millionaire

19:03It was$280 ,000. And we sold that with a self-directed IRA. We sold that in December for$549 ,000. So we did well on that. However, there's trust rate taxes on that 50 % on that non-recourse debt. So we've got a tax bill sitting out there about$40 ,000. Yeah. Now I said aside the money, I mean, it's fine. And we did still did well on the investment, but that's one of those things, right? That can trip people up. It hurt.

19:31Brian Preston:I was going to ask, having invested inside the self-directed IRA, but then also invested outside where you can take advantage of depreciation and you can have long-term capital gains rates and those sorts of things. Which one do you like better? Have you decided like, oh, when it comes to real estate investing, I would do it this way. What do you like? Oh, no, hands down. I mean, just with outside of the IRA. This is not a brochure for doing self-directed investing. But I think a lot of people. But it's an option. Like we've learned a lot from it. And so I would recommend it from that point. Yeah, definitely.

20:01But you know, the problem with real, we love real estate too. But we take a bad rap sometimes because people say they just don't like real estate. We love real estate, but we like real estate when you truly can do real estate. Right. And sometimes I feel like the self-directed IRA feels like it's a bridge. Very much, it's not like a credit card, but it is in some ways. is that sometimes debt is used as a bridge to do things earlier than you should. I feel like self-directed IRA investing into real estate is one of those things where, hey, you got a big pot of money left over from a former employer.

20:30Let us help you get into this. And you just don't know what you're getting into. It's true. I think that's true. But it's timing. And the way I think about it is timing. Like at that point of our lives, real estate was a smart move for us to do. Gatlinburg was booming at the time. It's a little different right now. But Gatlinburg was booming at the time. We had the money. We went for it. But that's where luck does come into play. It does. I think about my – like I was one of those people back during the collapse of housing in Georgia. I was on an interest-only loan for my primary residence. I mean – Yeah.

21:05But it worked out great for me in the long term because, I mean, I didn't treat it like an interest-only. I've made – if you read the book, I talk about all the negative equity I prepaid. negative because the house got crushed. And I didn't walk from it like a lot of my neighbors. But it was one of those things where I look back, though, and this was a tool that was probably too aggressive in the market. But I was able to use it just like you have been able to use this and now leverage it. And you can educate people to know, don't get too greedy with some of these products. And I would agree. I think it was a little bit aggressive.

21:44Looking back on where we're at today, when we used the self-directed IRA funds to buy that second, it was probably a little aggressive at that time for us too. You ever heard the saying, the Lord takes care of fools and babies? That's right. I love it. That was us. There you go.

22:00Brian Preston:So here we are, and we're thinking about, okay, in the next five years, we're going to look at some sort of transition. We want to transition to part-time or less time traveling. Walk us through what things change. When that happens, because one of the things we don't know, are these rental properties, are they cash flowing? Are they break and even? Are they an income source? You said you want to, I think the word you used was simplify a little bit. Walk us through when you paint the vision of what five years from now looks like, what's that look like sort of in the perfect scenario for you guys?

22:30For me, it's simplification. Because I think you always say that it becomes complex, right? You don't mean for it to. And it's complex right now. And I feel that. I feel that way. So I feel as though when I transition to retirement, I don't want to feel that. I want things to be simple. I still love real estate and I still want to have the ability to do a deal here or there that pops up and keep that very small portfolio perhaps, but I need to simplify everything else.

23:00Brian Preston:So what is a very small portfolio? Is that a dollar size or is that like a number of property size in your mind? In my mind, it's a number of properties. Like we already kind of have them earmarked sort of what we would like to keep. So we own some townhouses in Northeast Gainesville, Georgia. So in Gainesville, Georgia. So right now we have four, we've got one under contract. So we'll have five there and I'd like to keep those because they're all in one. Now think about diversification, maybe not the greatest strategy, but simplification, it's a good strategy. And I feel like in that they're all within the same area and they're easily managed and their townhouses with low HOA that do allow rentals.

23:41And we've had the four of them for a while now. And they do well. They cashflow really well. They're small. They're easy to maintain. Do you know off the top of your head

23:49Brian Preston:which ones they are on the list? Long-term, one, two, three, and four that have the$225 ,000 value. And those rates are not super crazy. It looks like it's from 3.375 up to 5.125. Not horrible rates. and you said all of those cash flow correct and you're acquiring one more one more and i'm paying cash for that we're paying cash for that one for that fifth one when you look at all five of those how much will they generate net cash flow to you guys right now i'd have to do the math with the debt so my other thought is that we maybe pay them off oh okay yeah for retirement so because then they'll cash flow about a thousand a month and i feel like five thousand a month of free cash flow would be really nice in retirement.

24:35Right, right. Because I would like to retire before I'm eligible for Social Security. So I think that would be nice.

24:43Brian Preston:So that each cash flow, about$1 ,000 a month, if there were no debt on them. Correct. Perfect. Yes. The other question, because you have a mix here. You've got long-term, and for those who aren't real estate investors, that means that you're typically signing year leases beyond nine months or so. Right. Whereas short-term is like, that's your VRBOs, your Airbnb's. Yes. How have those been? Because I'm also, when I see the interest rates. Because people get really excited about short-term. They do. They do. Until you get into it. Well, there's some great, there's, because everybody, you know how they do.

25:17They use cost segregation. They do the appreciation. They do all these things. There are a lot of cool things in the brochure for why this is awesome. But I know from my own experience, and that's why I wanted to hear from you guys, because now y 'all have got a mix of both long-term, short-term. It's no different than like a rental car. People, you know, they're going to slam on the accelerator. They're going to skid on the brakes. They ride it hard. Look at this story. They're going to drop it like they'd rent it.

25:39Brian Preston:That's right. I remember when we had a beach rental, I tried to put nice mattress pads on the houses. I had nice pillows. That was so sweet. I did that too. You know, because you're trying to create the best experience. Next time you go down there, you're like, what happened to my mattress pad? What happened to the pillows? We had a place in Memphis. Loved it. What I tell you, people would pee in the bed. Just awful. Yeah, you have to replace mattresses every two years. We had a beach rental and we had to replace couches, it seemed like, every two years. Mattresses every two years. You couldn't do nice stuff.

26:14Nope. Because people just either steal it or break it. Steal it or break it. That's right. So it's just had a lot of transient replacement of everything. So when you talk about simplification, I'm like, are y 'all enjoying the short terms? Well, we do use property management companies. There's no way that we could do that with our W-tubes. So we do have property management. And then also going back to the self-directed IRA, you have to have property management, right? Because to your point, you can't do it yourself. So what's your take on short-term rentals moving forward? This is my take. Of course, time is everything.

26:50You know, when we first got into the Gatlinburg market, it was great. Right now, you know, everything is just so overbuilt that, you know, they're not renting like they used to. Having a great management company is key, particularly when you're long distance. And, you know, and you have to get used to, you know, you can't have nice stuff in these places. I'm the kind that, like I said, my parents were in the military and they took pride. And we had people come over that had their, they made their favorite meal. They had, you know, all that good stuff. And that's how I handle our short-term rentals.

27:25You can't do that. You just can't. I have a great example because this is another lesson learned. I've got a lot of lessons from a lot of mistakes. Do you remember when I did the soap? Oh, yeah. So I bought these amber glass shampoo bottles. And I branded one of the short-term rentals. This is one I've sold. So it was called Hello Sunshine.

27:46Brian Preston:Okay. So I got custom soaps and labels for the shampoo. But all this, you know, like really, I had a hell of a sunshine throw pillows. Yeah, that didn't last at all. It didn't work. All this stuff, you know what I did? I didn't say a word. She was quiet. I knew it wasn't going to work. I knew it wasn't going to work. She knew I was wasting my money. I love it. But again, lessons learned, right? Preparing you for the next one. Absolutely. So, okay. So when you think about simplifying, right? You want to get down to these five townhouses in Gainesville. Are there others you want to keep on the list, or is it just that, really?

28:21Brian Preston:Everything else you're looking to probably liquidate? Just that. Not even? Oh, yes. Yes, sorry. There's one long-term rental in northern Michigan we plan to keep as well. Okay, which one is that? It's a number eight. Number eight. Number eight. Yeah. So that one cash flows really well. That's a 7.5 % interest rate on that one, right? It does, but I'll refi it. It's got a five-year note on it anyway. As you started selling some of these other ones, you could probably come up with some proceeds also to pay down that debt. Absolutely. That or just flat out refi, it's a commercial loan because it's a mixed-use building.

28:58So there's like an attorney's office on the first floor, and then there's three long-term rental units. And it's a really great, cool building. And we like owning it. We love the tenants there. It's only worth$425 ,000? I know. I know. Northern Michigan. Northern Michigan Valley. Don't tell everybody. Oh, yeah. Too late. Cut too late.

29:17Brian Preston:Property values just went up. Okay, so we're going to simplify. So that's one of the goals when we get there. Yeah, absolutely. What else? Like when we think about like, have you guys figured out? Because you mentioned I want to travel. When it comes to living the life you want to live and doing the things you want to do, how much does it cost to do that? Like what's the burn rate you guys are going to have when you're doing those things? Yeah, so in my mind, I have what I call quarterly living. Okay. And I like to go somewhere. I say I. I would like for my husband to go with me. Okay, I'm coming along.

29:48You're going to come too. Awesome. Every three months, I want to go someplace different if we can. Okay.

29:54Brian Preston:Like live someplace different or like visit? Live. I want to live in Vietnam for three months. I want to live in Paris for three months. I want to live in Mexico for three months. Does that freak you out or is that exciting? No, I'm ready. Oh, that sounds exciting. This sounds great. I love it. I love it. Yes. What that's going to cost, we're hoping that you'll tell us. No. No. You know, in my mind, yeah, I think we would like to have$10 ,000 a month and not that we would spend that. Let's firm this up a little bit. All right. So if you're living somewhere three months, you're not going from that three months to another three.

30:26Are we saying out of 12 months, three months away or six months away? Give us some plans so we can actually build something around this. I think in my mind, if I want to go to at least two places in a year. Okay. For at least three months. Yeah. For three months. So six months a year living somewhere else. And then six months a year here, of course. Now, I know, look, you've given out too broad. We're all over the place. We're all over the place. Because you can go to Asia and some of those areas, like you said, Vietnam. The cost of living in those areas is very affordable. So you might actually, as long as you cash flow, you might actually have a cash flow pickup.

31:04Right, right. We might stay there six months instead of three. But Paris, it's completely different. So we probably need to balance some type of assumptions into that. That's a good idea. But that's exactly what I was thinking is balancing it just like you said. So if we're going to go to Paris, then we need to go somewhere else that's a lot less expensive. So we've got some surplus. So you wouldn't go Paris, Singapore. Exactly. Those two wouldn't go in the same year. Precisely. It's Paris and then come home. I think the budget's going to kind of dictate where we go and how long we stay and that sort of thing.

31:38Brian Preston:So is the question not, okay, do we have enough to live X lifestyle? And it's more, okay, based on what we have, what lifestyle will that support? Which one of those questions are we trying to answer? Gosh, I think the question is, as I visualize this, I don't see us living in the most expensive place. place i see us living in the cheapest place but being able to have experiences in the places that we're in like the countryside outside of paris is what you're saying i'm sorry what was the original question what i was trying to figure i thought you were going to say hey we figured out it's going to cost us fifteen thousand dollars a month to live to be able to do the things we want to do and live the life we want to live but what i'm hearing you say now is hey the actually the language is hey the budget is going to dictate so it's what you're looking for us to say is okay Based on what you've accumulated and based on where you'll be five years from now, we think that that amount of money, that portfolio can sustain$11 ,000 a month.

32:35Brian Preston:Part B, yeah. And then you're going to figure out how to fit your retirement into that. That's exactly it. Okay. That helps us with the planning assumptions because we want to be able to give you parameters and essentially guardrails and then you'll structure it. Live your best life and have fun with it. So we want to simplify. We're going to figure out this sort of living thing. You said your work can be done virtually. So in terms of this quarterly living, you can do it anywhere, anyhow, right? That's it. In terms of income sources. So we have to make some sort of assumption around like income from working and real estate and that sort of thing.

33:08Brian Preston:Or do we want to figure out, okay, will the portfolio pay for all of your living expenses? And we pretend like there's no other income coming in. Or can we use some number for working income? And like what do we want to assume is a base level of income that will be coming in for you guys in that stage? Like post-selling properties? Well, you're looking at going part-time, right? So it'd be your part-time wages, maybe the 5K cash flow from the townhouses. And that would probably be it, the bridge, well, in whatever our investments earn, right? So whatever the investments earn, we could use some of that to supplement.

33:43And then probably the thought was 62, she would do Social Security. I would postpone mine until later for spousal benefit purposes. So, yeah. So there might be a little bridge there between whatever it is, 59 and a half, let's say, and 62. And I think we want to be mindful of Irma too. How about health insurance? What are you all thinking about for retirement on health insurance? Yeah, we would switch to mine. So right now we're on my health plan from my W-2, so we would switch over to hers. And getting some benefits out of you keeping this thing rolling. You know, when we got married, he said, what am I getting out in this marriage?

34:20I was like, here's a AAA membership.

34:24She keeps that renewed every year. 21 years.

34:29Brian Preston:We're going to potentially sell some of the properties. We're going to take the proceeds, satisfy the debt, right? But there's likely, even once we simplify these properties, it'll be a big chunk of assets. We've got to figure out something to do with. And he said, hey, I've been a real estate guy. I'm not, I haven't done stocks and bonds and mutual funds. But is the idea you're going to just be sitting on a bunch of cash to look for additional real estate opportunities? or is it, hey, I'm going to take that money and we're going to deploy it to a diversified portfolio that can grow for us into the future?

34:56Brian Preston:The latter. He's shaking his head, but I know him better than he knows himself. He's going to want to buy something. Okay, so I need a little bit of play money. I need a little bit of play money, but yes, the remainder of it, we want to invest. We just want to invest in the market, whatever makes sense, just so I'm more hands-off and kind of have the freedom that I'm looking for. But yes, right now we set a little bit of cash aside where it says real estate fund. And it's 160 right now. We don't have the list up. How many houses y 'all have right now? If y 'all don't know off the top of your head.

35:29Well, we've sold a few recently. What's future primary? What's that? Oh, that is, we already own that. That's in East Tennessee.

35:37Brian Preston:Okay. Got it. So it looks like there's about 12 here. 12, yeah. I mean, we, yeah. And we, we've sold four in the last year. Okay. So you've already begun this wind down. Correct. Yes. Yeah. Not acquired anymore in the last year. But when you say you want to have some play money, you're not trying to get back to 12 properties again. No. Okay. No, but I like to have, so, you know, it's kind of the Warren Buffett thing, invest in what you know, right? And I know, I feel like I've got a good grasp of real estate and in particular markets, right? And so I'd like a little bit, like that 160 that's for real estate fund.

36:13That's what we're going to buy that other, that fifth townhouse with. I want to ask on the townhomes, you're not using a management company on that though, are you? No. So that is, I'm just pushing back a little bit. Yeah. Because you guys are going to be living over in Vietnam or Paris, living your best life. Yeah. And then all of a sudden. Toilet breaks. Yeah. They're going to start telling you, hey, we got water. We need somebody out. And you're going, oh my gosh. And the time zone difference is, we just need to probably build some realistic expectations. I'm okay with you dabbling in the real estate.

36:43But let's be honest with ourselves is that if we want true passive living in retirement, you're not going to be wanting to be the Roto-Rooter and the... Oh, no. I don't want to be the Roto-Rooter and everything else. But we do have my mom that lives in one of those townhouses, and she's fantastic. She's a real estate broker, and she oversees those for us. So he has a management company.

37:09Brian Preston:It's just a mom management company. What do you got? You got the mom management. The mom management. Mom management. Mom management. Mom management. So that love turns into the consideration instead of paying a property management fee. That's it. It's love. It's consideration. She's going to see this and she's going to be like, look, I love you, son. I know too much now. But now I know way too much. Maybe we ought to add a little fee to this. That's right. She's awesome. We've worked together for a number of years, aside from her being my mom. We've done some fix and flips together and things like that.

37:42She's fantastic. So she does oversee those for us right now. So she's kind of the point person. I'm still the decision maker, and we collaborate with her. That helps. That definitely helps. Long-term rental, so it's usually a one-off thing like that is much easier. Yeah. But to that point, she won't be able to do that forever, though, either. And I don't want to burden her with that for however many years. But the big takeaway, I don't want to go too far into the weeds on this. You are okay if some of this isn't like index funds and diversified portfolio because that way we can simplify this thing as much as possible.

38:16I want the bulk of it to be there.

38:18Brian Preston:So right now you have – I'm doing some mental math here. About$3 million of equity in your real estate portfolio. Correct. You know what it feels like to have$3 million invested in real estate. You've only got about a little under$1 million invested in the liquid markets. have you thought through this is going to be sort of a significant shift to where now the vast majority of your wealth is going to be in liquid markets and you're going to see the values go up and down up and down every single day any reservations, hesitations with that or like okay no that's what we want we're comfortable with that I think having the short term rentals probably helped us with that a little bit like the toilet is out okay oh you got a new AC like it's still up and down It's just a different type of up and down when you're investing differently.

39:08And I'd rather be a little bit nervous about the market than knowing that, okay, their shower isn't working. To me, that's worse. Like I want, I would not, and I stand by this. I do not put people in places that I wouldn't live in. If someone's shower's not working, I'm up all night thinking about that. I love that.

39:24Brian Preston:Yeah, we fix it. That makes you a great landlord is what that makes you. That's awesome. Sometimes. But it does work against you as a real estate because that's the problem I have with too far on real estate. You're too nice. Well, also, there's a reason. When Bo and I buy real estate, he knows he has to kind of be the super on some of this stuff. I'm worried every pipe's freezing. I'm worried. I'm a worrywart on all this stuff. That's why we're a good balance with each other is because he handles a lot of that stuff. Sometimes he even says, there's something that happened. Do you want to know or do you want to just write a check?

39:54I was like, I'll just write the check. Don't tell me. We kind of play good cop, bad cop with the same guiding principle that if we wouldn't live in it, we wouldn't have someone else live in it. And so, but she's really, really great with tenant relations. And I handle the money and the bills and the, you know, this and that and the leases and stuff. So, I'm, you know, we, I think we make a really good team. Yeah, we do well in that aspect. So, to me, it's just trading off a different risk, like up and down, up and down. So, I'm okay. Yeah. And I think we expect market fluctuations. He just can't look at it.

40:28I just don't look at it daily, you know? I love it. And what we always, for retirees, I mean, what we try to structure, I know with our own clients, we try to set up what's coming from the portfolio, treat it like a direct deposit. So it's like you're getting a pension payment in retirement. We just have an automatic amount of money that shows up in retirees. That way, when you are overseas, the money just is automatically replenishing. And then behind the scenes, the rebalancing and the restructuring of the portfolio should be happening automatically if you're doing this right. That sounds great to me.

41:00All right.

41:00Brian Preston:So our timeline, is it five years? Is it 60 months? Because I want to have a timeline that we're working on as we put together the plan. Because you just kind of said, we've said a few different things. We did. What's the actual timeline that, hey, I want to know that by this date, we can move in this direction and begin living this life. So it's a great question. And I'm not sure how to answer that. I think I like the peace of mind knowing that it could be tomorrow. But realistically, we've got a lot of moves to make with the divestiture of these assets and moving money around and that's going to take time.

41:33Two years? Three years? I don't know. I think it takes as long as it's going to take. I like the peace of mind knowing, are we good right now? If we're good right now, I like my job. I love the people I work with and everything's going well, so I don't need to. Let's say five years just to make it fun.

41:54Brian Preston:What's the end of year this year? What could it look like two years in the future? What could it look like five years in the future? All right, that's great. If you're going to continue working, all three of those scenarios look different, right? Oh, yeah. So we can kind of build all three of those out. And I think it'll probably take us realistically, you know, knowing our properties and markets, it'll probably take us through next year to be able to devise. Consolidated. Correct. I think you're going to find, it's interesting, when I sold my tax practice, I thought I was going to miss doing some of the taxes.

42:22And Bo knows the rest of the story. I didn't miss doing taxes. Because you're still going to have your foot still in the shallow end of the pool. I think you're going to enjoy going more traditional in the long term on this because it will really free you up from some of the headaches that you probably just are ingrained in you right now. Oh, yeah. Well, I think about my situation a couple years ago. I was stressed out. I mean, we had a lot going on. We had construction projects going on and buying and selling and my job and her job and everything else. It was a lot. And I think that's when I mentally started to shift.

42:58Like, you know, I need to think about what's the end goal here and maybe start working toward that instead of going, going, going because it started to become a little too much. I was juggling a lot of things. That's something to think about, particularly with some of your viewers may be younger and kind of, you know, building their career. And it's great to be able to, you know, go, go, go while you're young. But think about your stress level. One thing that I feel like millennials and what's the next generation after that? Gen Z. Gen Z. I really am proud of them for taking their mental health seriously because my generation will work until we can't work anymore.

43:36Brian Preston:You just put it deep down inside. That's it. You bury it and keep rolling. And so thinking about him during that time, and he was very stressed, it's important to keep that in mind as you're building your career. Go for what you know, but keep your mental health and your physical health. I talk to Bo about this all the time because I think achievers, we all just go, go, and trying to always check the box. And there's nothing wrong with being in that warrior phase of life where you are trying to conquer the world essentially. But y 'all know because we're all kind of in the same. Bo, I'm sorry.

44:08You can sit this way. But I mean there is something about when you get older, you don't want to have to carry so much. So much, yeah. stress manifests itself in weird sleep issues. It shows up in what you can do in your 20s, 30s, and even early 40s with no struggle, all of a sudden will show up if you don't take care of yourself. And then you're going to find out as you get in your 50s and 60s, health is wealth. Absolutely. Better make sure that, you know, and if you don't think your mental, you know, happiness is not impacting all the physical sides of it, it does. It's some weird dynamics come into play.

44:46So I had this conversation with somebody I was on the phone with yesterday who was talking about – because he's in that conquer the world phase. And I was like, I promise you, take it from the older guy. You have to start building margin into your life now so that you can actually enjoy this. Because maximizing and optimizing every transaction of your life works great in your 30s and 40s. It is not sustainable. But it's okay when you're 40s and late 40s and early 50s and even 60s, you don't have to maximize every dollar. Now it's okay to let some of your army of dollars just be there for you for simplicity, for happiness, so you live your best life.

45:29And that's something we balance and talk to people about all the time. We got to click glasses on that. It's true. It's so true. I'm the young guy. I'm the young guy. I'm still covering the world. I mean, because he still brings deals to me, and he's like, hey, what do you think about this? I'm like, Bo. Come on, man. I still need processing time for that. Right. That's my last one. Bo, conquer the world. Pull it back. You got kids, Bo?

45:55Brian Preston:I have three, yeah. Okay. All right. Conquer it now, but think about it. Uh-huh. Think about it. All right. I've got some homework for you guys. You ready? Yeah. Because I feel like we've got some good marching orders. Oh, I'm excited. There's a plan that we can put together. Obviously, you've already begun the process of selling the properties that you don't want to hold on to long term. I encourage you to continue doing that. As you begin selling those properties, I think one of the things you're going to be able to do is consolidate the accounts. Even on the liquid side, you have a bunch of different accounts.

46:19Brian Preston:You may not need all the self-directed IRA pieces. You might be able to consolidate those into IRAs and when you retire 401ks. So that way, really, you can have a pretty simplified account structure. Because then you'll start doing stuff like maybe we should be looking at Roth conversions or those sorts of things. So that will be available for you. I do think it would be helpful for you guys to really dial in your timeline. It could be five, could be two. But you ought to talk about what you really, really want. Because from a logistical standpoint, retiring at 55 for you has different implications than retiring at 59 and a half or post 60 or post 62.

46:54Brian Preston:And then the people who have said they want to do like really fun travel, like really exciting travel, but it's sort of like out there in the ether. I want to do this. I tell them, hey, go and figure out the first places you're going to go. whenever you retire, whether it's end of this year, two years from now, five years, is Paris going to be the first one you try to tackle? Or are we going to go spend three months in Mexico or in Canada? Figure out what that looks like. And the more clear you can have that defined, the easier the transition is going to be. Because a lot of people just say, oh, I want to travel, want to travel, want to travel.

47:23Brian Preston:They put in their notice, they stop working, and then they're like, oh, what do I do now? So if you can have a plan of not only what you're retiring from, but know pretty clearly what you're retiring to, at least in that first 24 to 36 months, I think that's going to help. I think Candy's got that covered. Maybe I got you. She's already said, get novice on the list. That's early on. That's early on. Awesome. Man, you guys are great. This is going to be fun. I'm excited to put some numbers down and see what we come up with. Brian, what an awesome conversation we got to have with Jason and Candy.

47:54I absolutely love Jason and Candy because, look, I think a lot of people are going to get lost in how big their numbers are. Sure. But let's level set and bring this back into context is that they didn't start when they were in their early 20s, even mid-20s, or even right at 30. I mean, this is a couple that started thinking about finances in their early 30s and they started at negative, meaning they actually had some debt built in the background, but yet they still built their great, big, beautiful tomorrow.

48:20Brian Preston:Yeah, and it's really interesting. They used real estate to do that. That was the way that they built their wealth. But now, as they're sort of entering into this next phase, as they're going into retirement, they've said, hey, we really want to simplify. They kind of acknowledge to us, you know, real estate is not a passive endeavor, and it's not something that's super simple. And they want to simplify their lives as they think about what this next season and phase looks like. And I think a lot of people are going to watch their story and say, ooh, I want what they have. I want to be where they are.

48:48And another thing that I like about Jason and Candy is when we do a lot of making millionaires, we have to project out where we think things are going to be. What's unique about them, because, look, I resemble them in a lot of ways because we're in that same age group. Sure. We're actually going to look at their actual assets. We're not having to project where they're going to be. We're saying, hey, how do we land the plane with the success that they've already created?

49:09Brian Preston:So as a reminder, when we look at the real estate holdings, they had about$5 million in current real estate and about$2.3 million of debt. But they let us know, hey, there's a lot of these properties that we're not really planning on holding. We're actually going to be okay selling and unwinding these. We said, okay, let's put together a plan to get these down to just the holdings that we want to continue to have. And then what we're going to do is with the ones that we sell off, we're actually going to satisfy the debt. Now, we wanted to be pretty conservative. So we just kind of took the values that they gave us.

49:42Brian Preston:We added a 6 % real estate commission. We assumed 1.5 % for closing costs. And we came up with sort of a net number. So selling down all of the properties they no longer want to keep was going to net them about$1.7 million, which is awesome. So they're going to sell, simplify, net down 1.7. And then we said, okay, for all of the remaining debt, for the properties that we do want to keep, let's take a chunk of that 1.7 and let's have you guys be completely debt-free. So wiping the slate clean on the liability side. And that still left it with about$1.1 million to invest and grow for the future.

50:21Yeah, I mean, this is fascinating to me because not only are they going to be debt-free, but they're also going to have a little mini pension plan. That's right. If you think about it, because they're going to have five properties that are completely paid for, they're going to probably yield somewhere around$5 ,000 a month. Yep, 1 ,000 each property. That's going to be a quite nice retirement they're going to get to work through as well.

50:42Brian Preston:And then on top of that, they had sort of this mixed-use building, which they're unclear if they're going to pay off the debt on that. But for our analysis, we said, hey, yeah, just if you pay that off, that's going to generate free and clear about$3 ,000 per month in free cash flows. You're talking about$8 ,000 a month coming from these real estate holdings that they plan on holding anyways. When we reframe their net worth statement, after they go back through this, you can see that they're going to have about$180 ,000 in cash, emergency fund, liquid investments, a portfolio, liquid portfolio of just under about$2.1 million.

51:17Brian Preston:And they're going to have a real portfolio with about$1.7 million. So their total net worth is right there at$4 million as they ease into this next stage of life. But I don't think it's, we can't minimize the value that just 1.1 of that is going to come from these real estate proceeds. That's really going to firm up the liquidity of this portfolio. So now they really will have$2.1 million kind of working for them in the liquid assets. Whereas if we didn't do the simplification, it would have been a lot less of liquid assets and counting on a lot more from the illiquid real estate side of things.

51:50Brian Preston:So as they think about retirement, the question becomes, okay, well, what can$2 million do for us? And we said, okay, if we just said that, okay, we're going to wind down these properties and retire at the end of this year. So you got that 2.1 million, that 2.1 million plus the$8 ,000 a month coming in from the real estate portfolio could generate about$180 ,000 a year in today's right now. So that's like$15 ,000 a month if they wanted to retire right now. But they were unclear on exactly the timeline of when they wanted to leave the workforce. So we said, okay, what happens if we wait one year longer?

52:25Brian Preston:So now the portfolio grows and we just assumed a six and a half percent rate of return. Well, now instead of almost 2.1 million, they could have a little over 2.2 million a year from now, kind of letting the real estate stuff settle. And then we said, okay, what if we wanted to wait five years into the future? What if we got all the way out to age 59? What could the portfolio grow to if you decided you didn't want to fully leave the workforce? And the portfolio could grow to almost$2.9 million five years from now. And again, if we just think about$8 ,000 from the rental portfolio, we didn't even like grow it with inflation or adjust it.

53:00Brian Preston:$8 ,000 from there plus 4 % on a$2.9 million portfolio is almost$200 ,000 a year retirement income. What I love about this plan is that we really have Goldilocks there. Because if they were, if they stayed in their present format, Jason and Candy were going to deal with a very complicated real estate portfolio. And it was just because they might not know it now, they do realize it, but I'm just telling it for the people who just think they're going to do real estate only, is that it's going to be illiquid in a lot of ways. You're also, it's very active. It's not going to be simplified. So that doesn't fit in my Goldilocks formula.

53:37if they just, Apple cart sold it all. I don't know that that's a great thing either. I think they'd miss it a little bit. Plus they got some great equity and some good holdings that really could be not fully mailbox money, but it's definitely more of the passive side of real estate with these townhomes and the free cashflow. So that's why I say it is the perfect mix of they're going to have investments that are going to be working for them. They're going to have real estate income that's going to be flowing in. So they have multiple streams. This is going to be the best of all things and give them their best version of retirement.

54:10And here's what the crazy thing is. If you want to say, well, this is a pretty rosy situation. No, we left this still somewhat conservative. Doesn't even include Social Security.

54:19Brian Preston:We didn't increase the rental income. We didn't factor in Social Security. We gave them a conservative rate of return. You were asking me, is this sort of the dream plan, the down-to-earth plan, or the doo-doo plan? I'd argue it's somewhere between doo-doo and down-to-earth. This seems very, very reasonable. I think this is what their future could look like. Well, and it had to be somewhat passive because if you remember, Candy said, hey, we want to be traveling. I think, was it as crazy of a goal as six months out of the year? Six months, yeah, different places for a quarter. So it definitely needs to be mailbox money, but I got to tell Jason, now that we've actually run the numbers, I think you've got to be prepared that we got Candy going to Paris.

54:56Brian Preston:She's ready. Paris better be ready for Candy. So this is going to be awesome. Awesome. Guys, you were wonderful. Thank you so much for getting Hangouts. We love that you were willing to even open up your financial life and let us be part of it. Yeah, they were phenomenal people. Crazy goals that they're going to actually be able to accomplish. And it was just fun being kind of part of the story and getting to witness it. Bo, for others who want to go on Making a Millionaire, if they want to share their story, what can they do? Yeah, if you'd like to be a guest on Making a Millionaire, go to moneyguide.com slash apply.

55:26Brian Preston:Or if you want to play with any of our tools or resources, you can go to moneyguide.com slash resources. Jason Candy, we really did have a blast. Y 'all were so fun to hang out with. I don't like it. If y 'all wish y 'all were next door neighbors, I think we would have a lot of fun hanging out. And I love that you were so transparent to share your journey. There are going to be some financial mutants that actually learn something from this, but also probably see some of themselves. And we thank you for coming on and joining us. I'm your host, Brian, joined by Mr. Bo. Money Guy team, out. The Money Guy Show is hosted by Brian Preston and Bo Hanson.

56:01Brian and Bo are partners with Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the Securities and Exchange Commission in accordance and compliance with the securities, laws, and regulations. Abound Wealth Management does not render or offer to render personalized investment or tax advice through making a millionaire. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment, or legal advice. All investments involve a degree of risk, including the risk of loss.

56:32The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.