What It’s REALLY Like to Build Wealth in the Military | Making a Millionaire

22:50Um, I felt like there were three P three ways people made a lot of money in life. Uh, it was either through real estate, uh, through owning your own business or, um, or through the stock market. And so I try, I, I figured, well, let's try and do all three of those. I feel like real estate and managing, uh, properties, uh, is kind of like having your own business. Uh, so I wanted to build up those assets. Um, but I had no idea what I was doing. Um, and then also investing, you know, as much money as I could. So that's why we had the huge savings rate. Every one of your houses, ones that y 'all lived in, because you said that, I think y 'all said that, so you kind of let life be the driver of each time you got relocated.

23:25And probably the biggest mistake that I made, arguable that it was a mistake, we haven't purchased every place that we've gone. So I went to New York very early on when I was still enlist and didn't make a lot of money. We could have purchased a home there, which would have been a great time to purchase. This was like 2012 or 2013 or something I could have purchased in an apartment there and we didn't. So that's one of my bigger regrets, but it's usually just been, we either rent or buy and buy if there's something that I can find that I think we can profit from when we, when we move again and have to rent it out.

23:54So you've never bought a speculative rental property thinking I'm going to put a tenant in there tomorrow. No. Okay. No. This is kind of like a quasi. It's, it's not like you hear house hacking and you hear about duplexes, quadplexes and things like that. But in its own way, this is because we all know the government does have very good benefits for service members. For all the things that you don't make them pay, there are benefits and other things. And this is you're basically, I was about to say exploit, but you're really taking advantage of a loophole in the system on purpose to kind of do a quasi house hack that you've been able to build wealth off of.

24:31Because the reason I say that and I want to share is that, and I'll ask you this pointed question because you've broken some rules, But managing property out of state is one of the hardest things. I mean, you've already kind of explained some of it, Alex. And then also just getting into real estate at the beginning. Like before you had it, you were broke as a joke. And then your first endeavor into the wonderful world of finance is let's go take a levered product and put tenants in there, convicted felons, and see how we turn this, what could go wrong. But you've come out on the other side. But is there something – I just would – so people watching this, I'd love to know your insight on how is out-of-state property and then also looking – because now you kind of have developed an expertise.

25:16Right. What do you see for people looking at the market now? Could they do what you've done or have things changed in the landscape to a degree? It's definitely tougher now, but we did just purchase a rental property because I just moved down to Florida within the past year or so. So the home that we purchased was an assumed mortgage, an assumed VA mortgage. Oh, that's great. Good for you. Hey, what's an assumed mortgage? Can you educate our folks on what that is? So I don't know all of the products. I know FHA loans and VA loans are typically assumable mortgages. So what's the interest rate? So it is the lowest interest rate that I have on any home.

25:54It's the home that we purchased a year ago. It's 2.65%. So for those who don't know, an assumable mortgage is one where someone is already in the house, they're going to have a mortgage. And when you buy the house, you don't only buy the house, but you take over their mortgage payments. You just pay them the difference and the equity they have in the home. So then they get to continue paying on that mortgage. So rather than having to buy a home at today's prevailing interest rate, you get to take it at whenever they bought the home. In this case, when it was 2.65. Did you have to pay a huge premium for that?

26:20So, yeah, the problem is you typically do have to bring some cash to that, especially if housing prices go up. So that's the highest down payment we've had to make. Because you've got to make them whole on the rent. You have to cover the difference. You can get like another loan to cover that if you wanted to. I didn't really want to do that. So we had to pay like a hundred thousand dollar down payment to make up the difference, but still it's a$400 ,000 loan. That's a super low interest rate. That's amazing. That's amazing. And I'm so curious. So you have this like real estate portfolio, but you also, again, if we look at the net worth statement, you have a really healthy real estate portfolio, but you also have a very healthy liquid portfolio.

26:53So it's not like you did all real estate. How, how were you able to balance both of those? Cause a lot of times we see people who try to go headlong just into the real estate thing and they have no liquidity. How are you guys able to do both? Yeah. So I still have, I mean, there's a lot of loans up there and a lot of money and debt. It looks like a lot. I don't typically look at it nice and compactly like that. I feel like we've always had a healthy fear of debt. Like the Dave Ramsey's book scared the crap out of me in terms of debt. So when we started out, my plan was to never buy a house or enough homes that we couldn't cover just on our own.

27:27So I always wanted to make sure that we increased our, either our income or didn't purchase until we could cover all of that on our own. And then really it was the savings rate and then intentionally doing things that would help us increase our income later to where I could start saving more into, into the stock market. So as you were saving for the down payment for these houses, did you cut off your like 401ks and your IRAs or did you figure out how budgetarily to do both of them. Hey, we're still going to save, I'm going to use 25%, 25 % into the retirement portfolio, but we also save cash for the next down payment.

28:02So we were, we were prioritizing saving into investing. So hitting up all of our tax advantage space and maxing that out as early as I could. That was like goal. Number one was max out those. And then real estate was kind of a secondary goal as, as we went. And again, those, those first few homes, I brought very little cash to the table. So the cash that we brought to the table here later on mostly just came from our investments. I would take out money from that as necessary to pay down payments. I love it. So one of the things you were obviously doing is in addition to saving in the tax advantage accounts, it sounds like you were using a bridge account.

28:38You were saving into after-tax brokerage accounts with the understanding that, hey, this can be retirement money, but this can also be intermediate term money. That's one of the things we talk about in step seven of the financial order of operations. When you are building up that bucket, it does give you flexibility when opportunities present themselves, like going to assume a mortgage at 2.65%. You have capital where you can do that, which is awesome. Yeah. A lot of people think cash is trash, but I've tried to, and I explained this in Millionaire Mission, is that I have found cash to be a very valuable tool in wealth building when you have extra of it when everybody else is scarce in the resource.

29:14And that's exactly, because I think a lot of people probably couldn't go take that assumable mortgage that easily. So you're able to step up. And that's what everybody says, hey, man, you're so lucky. No, luck is that intersection of preparation and opportunity. And that's why sometimes cash. Now, I don't want you to do it. This is why it's a step seven, eight is where I tell people to start building up extra cash for opportunity. It's more of steps one and four to keep you out of the ditch. But it is one of those things where I think you guys have found some benefit in keeping extra cash around as well.

29:44We wouldn't have been able to, I mean, we are lucky in terms of where things were along the way, but we wouldn't have been able to purchase this home and assume this loan 10 years ago because we wouldn't have had the access to that kind of money. If you were giving guidance to somebody who's starting fresh, because in a minute we're going to answer some of y 'all's questions, is out-of-state real estate where you would start, or do you think just because you had a unique opportunity being in the military? Yeah, I think that is more of a unique opportunity. I do think you can learn a lot by just jumping in kind of and starting the process.

30:15Like if you do want to get into real estate, it's good to like read up and learn about things before you do it. But really the place that you learn a lot is that first home. Through the failures. Yeah, it's through the failures. Like you learn all the mistakes that you make. You learn all the things that are going to cost money, the things that you weren't thinking about beforehand. So there was a pretty big gap between when we bought our first one to our fifth or our second home. It was like a five or six years worth of like figuring some stuff out, learning that I'm not the person to manage it.

30:40She is. She's way better at it. But yeah, that process jumping in. I don't know that out of state real estate is probably where I would start. That probably increased the difficulties for us at the beginning. Probably local areas. You know the areas more, you know, where people would like to live. You can stop by too. Yeah. Keep an eye on the property. You can go like fix the toilet clog on your own instead of paying 200 bucks to have a plumber come out and do it. I don't want to go fix the toilet clog. We don't really do that too much now, but having like local trades people, like, you know. Having your contacts that you can help.

31:12Our homes are mostly in the same area. So that actually is really beneficial for us because, you know, there's three homes that we have outside of Charleston, South Carolina, and we have the same plumber. We have the same HVAC person. It's not a bad place to have property, too. It's not. Those are great areas to have real estate. Yeah. But the out-of-state piece, we didn't really get a choice, right? So we go where the Navy tells us to and when the Navy tells us to go there. So yeah, it wouldn't be something I would necessarily tell somebody who wants to embark on being a landlord. Out of state is definitely more difficult, but we just, we didn't have that choice.

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32:37sponsored job credit at indeed.com slash podcast. That's indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed sponsored jobs. And I know you probably have more questions, but I did want to talk about because y 'all have done something so strict, meaning that you've only lived off of 50 % of your money. But now we look at your net worth. It's big. Are y 'all transitioning to where because, you know, there is a fine line between financial mutant versus financial miser. Do y 'all feel like you're loosening up because look confessionally I was a tightwad we even tried to brand something you know where we are so proud of our tightwad lives but as I've had more and more success I've realized I had to give up my tightwad card because I we were traveling nicer we were doing things and I felt like I was a hypocrite if I wasn't honest that my lifestyle creep it was still very healthy based upon income and everything else but there was a transition that had happened in my life.

33:34Are y 'all experiencing that? Are y 'all still in this lock and down? Are you guys the same person? She's probably got a great story of where she thinks that I probably changed, or at least that's where my sister thinks that I changed. But yes, definitely. I was a miser. She can talk about that. No, I mean, notoriously, his friends and family know that he was a tightwad cheapskate, however you want to phrase it. Some say frugal. Exactly. I say he's like a chipmunk, right? He was like swirling away for a rainy day. We already have on the table that I was the spender. So I was always trying to be like, we can do this.

34:10I don't think by the way to live in this environment, I don't think you're truly a spender. I think just in relative terms, you're a spender to him. I appreciate that. I will be using that later. No, but I think that you said lifestyle creep is very much right on. We have continued to evolve and have gone on a little bit nicer vacations. I think that's probably what you're referencing is we went to Italy and he did some serious shopping and got a little taste for some of the finer things in life and was like, okay. I think I bought two things. Yes, you bought two things. But we knew, you know, we made a plan before we went there, like, okay, we're going there.

34:48This is what they're known for. This is what we'd like to buy. So it wasn't like, you know, just frivolous or anything. We had gone with intention, but I think he got a little taste of what that could look like and came back. And I wouldn't say that it's completely absolved, but he has – the pendulum hasn't swung the other way, if you will. He's loosening. He has quite a bit. In my mind, I've loosened up. Is that going to be the Ferrari or Lamborghini sitting in the garage at home? No. I was thinking maybe a watch. That's probably what he's going to say. We can talk about Italian. I bought some Florencian leather shoes.

35:21Oh, nice. They were like$100. But for him, it was a – He went out there. It was a pivotal change for us because he was very used to not spending any money. And so, you know, we would joke when we got our credit card statements that it was like 99, 1%, you know. But yeah, that was probably where we started to see a little bit of a shift maybe. But I would say most people would probably still categorize him as a little bit of a conservative when it comes to that. I mean, I recognize a 50 % savings rates higher than even financial advisors. Sure. Yeah. Well, I'm curious about where we're going, right?

36:00Because obviously 2010, we had a negative net worth, right? You guys made some very hard decisions. Hey, we're going to start saving 50%. We're going to start building so we can get ourselves out of the hole. I would say that you have now gotten yourself out of the hole. Here you are, not even 40 years old. You have a$4 million net worth. What's next? Where are you going towards? What was the reason for all those hard decisions you guys made to put you in the position you're at right now? Yeah, I've really been pushing the FIRE movement, especially to her. I really, I want to retire or at least have it to where I can do whatever I want.

36:36And if I make money at it, great. Or if I don't make money at it, great. Like my plan is once I'm done with them. You want financial independence. I want financial independence as soon as possible so that, you know, we have the availability to do whatever we want, whenever we want. Both for me and for her. Like we both worked very hard. over the past 15 years and eventually when I retire, the 20-year career so far. And I want to be done and do something that's just enjoyable or fun and have the availability to spend more time with my family because I go away for months at a time and don't see or talk to anybody.

37:07Refine that vision, though, because how many more years do you have in the military before you have the option to retire? So not that I'm counting down or anything, but I'm eligible for retirement September of 2029. Okay. September of 2029. And then do you think, is that done done? Or do you think that there's still a transition period even after that? So done done in terms of like still being in the military? No, just working. So my goal is to be done done if I can. Like if I find something that I truly enjoy, I'm okay to continue doing that. And then we might need to bridge the gap just between then and full retirement.

37:40But in my mind, I'm done in 2029 and we'll kind of shift roles. and I'll be the person that maintains the home and getting all the kids to practice. So we're going to stagger retirement. You both are not planning on exiting in 2029. Oh, I think that's what we're here to discuss. Yeah, exactly. I mean, if she can retire and we can get everything that we want, then that's definitely on the table. Yeah, I love my job. I have great flexibility within my work and I'm able to work remotely. So it works very well for our current life situation of moving quite frequently. So I'm actually not looking to retire when he does.

38:16And I think that where we kind of want this conversation to go is kind of what that end goal is, why we have been acquiring these properties and living how we have been living. For me, my end goal is to live in a quote unquote forever home. It might not be forever, but it will be for longer than we've ever lived in another home where our children can, you know, go through primary and, you know, elementary, middle, like in one location. That is not something that we're afforded currently. So that's my end goal is that I'd like to just maybe put down roots somewhere. That doesn't necessarily mean I want to stop working, but it means that we don't have to move anymore.

38:56So when I'm here, you say this, even above even financial independence immediately, what you're looking for is foundation and roots. Like how do we be in a place where we can be in our forever home? One of the things that would be required, I imagine would you have to be out of the military. So that way you're not moving. Right. So that's got to happen. Have you guys decided like this is the area we want to be or this is the type? Like do you have parameters around what the forever home looks like? We have toyed with several locations. I mean, we're fortunate in that the Navy has really beautiful places that they have sent us to up and down the East Coast.

39:30You know, we I think we'd like to be in kind of the Nashville metro area, which is where we want to set down said routes. but like you said, we can't necessarily do that until 2029 or so. But, you know, we constantly are sending each other Zillow listings and looking at - Well, the good news about this area is if you're sending a Zillow listing now, odds are it'll be the exact same four years from now. That's right. It's not moving very much at all around here. I do think it's leveled out to a degree. It's not doing what it was doing in 2021. Right. So I don't think it's going to continue to go up, But I don't think it's – it's not the crazy run-up that we saw.

40:12I think that's in general for all of real estate is that we're not seeing these huge spikes in prices, hopefully. There's still going to probably be the inflationary run-up. Right. So when we think about planning forward, right, it sounds like – because are you going to have to move more times the military? Is this last move to Florida the last one you're going to do? Maybe, probably one more time. My current job will be, I'll transition in about early 2028, maybe mid-2028, and I'll still owe like a year and a half or so after that. So I could move one more time or maybe there's a job in the same base that I could try and get.

40:45And if we move one more time, I'm assuming current home that we're in, we're going to rent that and we'll go buy another house wherever we move to. Right. We're going to continue this process. Provided we can find one that'll be profitable money-wise. We have maybe one more move, one more home. Right. But in terms of the home, just so we can get some context, when you guys look at homes to buy for this type of strategy, what's the price point? I know it depends on the area, but historically, where are you guys at in terms of the price of homes that you buy? To use today's market value. Right. My goal is typically the PITI and the rent that I can expect from it, having a$1 ,000 delta between that.

41:21So the home values that we purchased have to go up. So the home that we just purchased was about$500 ,000. Okay. It would probably be around that price point. But again, we'd have to find like an assumable mortgage or something to make the numbers work more than likely. Meaning like, hey, if we have to go buy a house at 6.5%, 7%, it's probably just not going to work. It's not going to work. It would be very difficult or we'd have to buy a house that's much cheaper. Like less than$200 ,000 would be the only way I could see that being possible. Based on the areas that we've lived in, what rental potential.

41:50There's not a lot of houses in that place. There are not. Not that you want to have your two children in. Right. Especially on your major military bases too because those are pretty built up areas usually. So as you guys think about a 2029 and being you retired and you kind of setting down roots, when you think about, I mean, obviously you do have a lot of debt, right? I mean, there's not a lot of folks out there that have a million plus dollars in debt. You guys happen to fall into that camp when you retire. Is that something that has to go away or are you comfortable having debt when you retire?

42:23and we haven't really talked about, you know, this dream home, like, is it 500 ,000 or is it something different? Yeah. So I'm, I'm okay with the debt that we have there just because the rental property, there's a, there's a delta there in terms of like how much money we're, we're profiting off of them and what the interest rates are on those. If we purchased a new home at like six to six and a half percent interest rates or whatever they are, um, to be honest, I'm not a hundred percent sure. Cause we haven't, I haven't purchased a home with that interest I would be much more inclined to pay that down quickly and get rid of that debt.

42:57And that's kind of the plan if we purchase a home, like the range that we've been kind of talking about and kind of planning for on our own is around the$2 million range. And then her continuing to work and me maybe getting some side work and paying that down at least as much as we can and maybe resetting the loan so that we have a smaller monthly payment. Because the fixed expenses are going to be significant. Is there any desire that you just pay cash for the$2 million home? I've thought about it. It makes me nervous to spend half of what my portfolio might be in five years if we can continue on the saving train.

43:35Spending half of that immediately on it would make me more nervous than I would almost want to work longer just to pay it down with the money I make from a new job. I like hearing you say that because there's some maturity in that answer and And the fact that I think a lot of people's emotional reaction is let's just pay cash for the house. We have resources. But I was telling Bo when we were reviewing your situation is there's also a lot of value to being able to have access to your capital when you're making big life changes. Because when you leave the military, when you move to a new part of the country, there's just going to be a lot of moving parts that are going on that your life's not going to feel completely settled.

44:12and to basically take half of your capital, lock it into this house, it takes away a lot of flexibility. And there's a lot of decisions I've made in life where, yes, I pay a premium, and I look at it as almost like an insurance policy where I'll pay a mortgage or I'll carry something, but it just gives me so much more flexibility for a time certain period. And then you can always go prepay a mortgage at some other times. And I know on a$2 million house, I mean, this potentially could be $100 ,000 decision that you're paying interest on a mortgage for a year or two, and you might incur some interest.

44:49But I think it would be worth it because you guys are the CEOs of a$4 million. By this time, this will be well over$5 million. That seems like a small price to pay. I know on paper,$100 ,000 for the interest seems crazy. But for a$5 million enterprise, it seems like an okay thing to give maximum flexibility because I still don't even know the thing, the way you gave your answer, will you be happy being fully retired? I mean, that's what, that's why I think having access to capital is going to be a very valuable thing as you're trying to figure out a lot of those life things. Yeah. I might, I see myself probably finding something to do with my time other than just, you know, sit at home and play golf all day.

45:29I mean, it could be anything. Like I, I really do truly enjoy consuming information on personal finance. So, I mean, I might try to get into that field. I kind of have planned beforehand and gotten my MBA while I was in school and started taking coursework towards getting a CFP accreditation. Let's go. I wonder if there's any firms in the area that they're trying to move to. You said you're thinking about Middle Tennessee, Nashville. I'll have to scroll through the Rolodex to see if I know anybody. We're actually clients that then transitioned into becoming financial advisors too. So yeah, that's definitely precedent for that.

46:08There's definitely interest, um, in doing something like that. And I think I would really enjoy it because I'd get the opportunity to help people, um, and, and kind of go down similar paths that I went down where, where I had some success from, from basically nothing and no true knowledge. Um, so I think that would be interesting to me, but, uh, we'll see what happens. I got to survive in the next, you know, sea tour here and, and, and get through all the, of a pretty arduous lifestyle for the next few years. So, okay. When you think about where you are today, you have cashflow rolling in from these rental properties.

46:40Are you, you're not, are you using that cashflow to then satisfy the debt? Or are you building up that cashflow and just kind of letting the minimum mortgage payment happen on the rental properties? So it's, we're making minimum mortgage, minimum mortgage. So you have cashflow coming in at least a thousand dollar Delta was your goal per rental property coming in. You also have a 50 % savings rate. So have you guys like played with, Hey, just from where we are now, if we think about the way that we're going to accumulate and the way that we're going to build just between 2025 and 2029, we're likely going to have a lot of capital in 2029 to figure out how to make that housing decision.

47:13Right. Have you projected that out at all? Absolutely. So I actually went over it with her pretty recently. I think I listened to one of your shows where you did like an annual like meeting. Yeah, that's right. We took a day off of work and actually turned it into a really fun event. So every once in a while, I'll like just show her like our net worth statement. Cause I track it, um, and update it. Um, and I'll just show it to her like, Hey, we had a great year. Um, but I listened to that and I was like, well, maybe I should have like an actual meeting where we sit down and I'm like, let's show her the numbers on like where I plan to be and give her a couple of different ranges of options, uh, to where we show, um, you know, what's going to be possible when I retire in, in four years and how much money we're going to have.

47:51And that's where we kind of came up with the budget of$2 million. So we weren't talking about a higher budget, but I was like, I don't, I don't think that we're going to have enough money. He's like, I just bought the$100 pair of shoes. Don't push me further than this. Here's what the numbers look like. Here's like the, the poor, the do-do plan. Here's the, here's the, you know, down to earth. And then here's the like probably best case scenario. And I showed her what those numbers would be with the different projections and how much we'll have. Um, and that's kind of what we're basing our budget off of.

48:18So on your projection, are you going to have the ability to pay cash for the home and you're going to be able to make the decision? Either we pay cash for the home in 2029, or we do a mortgage. Are you, have you projected it out that you'll have the flexibility to do that? I do think that we'll have the flexibility to do that. The numbers that I came up with based on our savings rate and how much we save per year was that our actual like investable assets would have, or our actual investments, not including like the real estate that we'll have would be around four to four and a half million, depending on what kind of rate of return the stock market in our portfolio gets.

48:49Sure. So yeah, we could pay that, pay almost half of our investable assets down to do that. There would be a pretty big tax liability, I feel like, that we'd incur if we did that. And I don't love that portion of it. And then that would put a lot of money into just our primary residence, which I don't love doing that either. So I think I'm leaning more towards taking out a loan and just making a down payment, but it'll be an option. Well, one of the difficult things to project is there's just so many variables that can change. I mean, obviously, you have young children. You don't know exactly what your lifestyle is going to look.

49:18You're going to have one other move. So you don't know exactly what 2029 is going to do. But what you do know is, okay, we have this high probability of this outcome that we want to have. And I think you're doing the exact things necessary by taking the steps now to build towards that. So that when you get there, you do have the choice to say, okay, well, now we have capital. We can either pay for this home or we can have a mortgage. Because what we've seen work with clients is that it's not an all or nothing, one or the other. A lot of times we'll have clients who end up retiring or going into financial independence.

49:48And it makes sense for them to liquidate portfolio assets and be completely debt free. In other scenarios, based on where interest rates are and based on where cash flow is and based on where portfolio assets are, a mortgage makes a lot of sense. Or even account structure. Or, yeah, even account structure. It made no sense to go gut the portfolio for the sake of paying taxes just so we could be debt-free when there was probably a more balanced approach to let you, in a tax-efficient way, make the decision, still prioritize paying off the debt, but not just giving uncle more money for the sake of just being cash, you know, debt-free right out of the gates.

50:24Right. So the difficult question to answer is what is the right move? It depends. And it's going to depend even more from now until the time that you get there, but you're doing the things necessary to position yourself to be able to make that decision at that time. Does that make sense? Yep. Is that helpful? Is it helpful that our answer was it depends? I would love to know if there's any specific questions. you guys would love to get our input on. Because I told Bo when I saw y 'all's situation, I was like, you guys have done such an incredible job. It's commendable what you've done. But the things, if I was your advisor, I would love to kind of be your personal coach on how to maximize the life component too.

51:08Because I see a lot of coachability here on that you've built tremendous assets, but you're probably trying to figure out How do you transition to where you're still saving or building, but also you're just maximizing your 30s, what's left of your 30s? Oh, don't say that. No, but as a guy my age, I just want everybody. And there is a balance there because you get to the crazy thing is you get to the top of the mountain and you get you start checking off to all the boxes of all the things you thought you want to do financially. You'll find that that's kind of empty. if you don't build it pack into into the the memory category and the life experience category all the stuff that lets you feel life well worth the live you know and fulfillment and all the other things it's not just about getting to the goal it's the journey i know that sounds so cliche but it really is the truth of life and that's the biggest things that i was looking at y 'all situation they go they need a coach because y 'all don't because y 'all have done so good at developing and building, but who's making sure that y 'all are actually saying it's okay to release?

52:12Because that's the hardest thing for most people like you. I bet y 'all are going to have a very hard transition into spender or consumer of these resources because you've been so rewarded for being as tight as possible that there's just, there's a balance there. Right. I mean, it's definitely something I'll need help for. Because I think that was one of my questions when we sent in our things was, you know, I'm already nervous that we're going to spend too much in retirement. And I'm, I'm concerned about, you know, things like sequence of return risk and like, what's going to happen. Like, are we going to spend too much money immediately?

52:43I think I will, I'll, I'll need to be pushed to spend money. I'm going to be like, if we can live on what we, what we're, what we got right now from the rental properties and just my pension alone, let's just let everything else grow. We'll be fine. How's that make you feel when he says that, when he says, let's just live, let's, let me, let me retire and let's live as small and as tight as we can. How does that make you feel? Well, I mean, the pendulum has really, we do live a very comfortable life now. Our children want for nothing. We have, I feel, a good amount of discretionary income. We go on fun trips.

53:16We fly the way that we want to fly. And I don't think that we are missing out on anything. The military is probably what limits us the most just based on like what we can do and when we can do it. So I am very excited for when that limitation is off and we can book a trip, you know, six months. We can't do that right now. And so I am, you know, I trust Matt inherently and, you know, he's certainly led us on this journey and been very, very successful. We certainly had some bumps in the road in the very beginning, but I feel now we are well into our groove and feel very comfortable with how we manage money together as a team.

54:00It's always been a very, very team effort. And so I, I mean, you know, I, I listened to what he has to say. It's, it's, it's passion. He really, really enjoys it much more than I do, if I'm being very honest. And, you know, I, we have lanes within our marriage and this is his lane. And so I know that he wants what's best for his family. And so I would, I don't know, follow him. I'm usually the green light. We'll spend however much I want. Sounds good to me. I love it. I love it. So it sounds like you're in a pretty good place with that. But is your desire, okay, hey, we're just going to live off the real income.

54:38We're going to live off the - You also got a pension that will be coming in. Right. Well, it's not my desire. So I'm planning on like once I retire having a 3 % withdrawal rate just because I am retiring so early and using that as necessary. If she does decide to continue working, even if that's an option or not for her to stop, I may delay that, you know, a few years. Probably don't need to. We probably could start withdrawing that. But we would use that money to pay down the house that we purchase if that's what we decide to do. But she does push us to do more. I mean, we flew Southwest when we came up here.

55:14So it's not like we were flying first class when we came up here. Oh, every seat on first class. Oh, very true, very true. We used to be Delta boys coming from Atlanta, but you moved to Nashville, you very quickly become accustomed to flying Southwest. Yeah, that's fair. Yeah, it was the only direct, so that's great. We've got a two-year-old on the plane. Because you've probably done this exercise, but if you've gone to moneyguy.com slash resource, we have this little wealth multiplier tool. we even have like a compound interest calculator. And if you just like fast forward to what your assets are going to be in 2029, you just drop that in there and said, hey, if we just left these assets and let them grow and we have a 3 % withdrawal rate, they get really big, right?

55:58Like it, you know, you're - Well, it's going to be over$10 ,000 a month. I mean, it's going to be, it's just going to be big, big, big numbers. And so I guess my question is, is what's the, when you look 40 years into the future, What's the long-term goal with these resources that you've built? Like I know your goal immediately is to survive, but what's your goal at the end of the line? I mean that's probably some joint stuff. Like I would like to not leave just like an enormous estate to our kids. You're picking up exactly where I'm going. You better start thinking about that now. You picked up what I'm saying.

56:32Because living off of 50 % of your money is going to lead to a lot of money. And we're not suggesting that you spend more money needlessly, but we also don't want you to not do the things that you really care about doing and you really value doing just because you can. Just because you can live on this like small lifestyle doesn't mean that you should. And that's where I do think having these like annual meetings, my wife and I do it. At the beginning of the year, we said, hey, what trips we want to go on this year? And let's plan all the trips out, big ones, little ones, quick ones, long ones.

57:00And we do that and we make sure we stay calibrated around making sure we're doing the things now that we really find value in, really create memories in while also still planning for the future. Cause I'm just, I don't want to say worried. I'm never worried about somebody having too much money, but like you guys are very much in that camp that it could happen if you stay so, so tight forever. Does that make sense? Right. So, I mean, traveling is something that we do love to do. So we'll definitely do more of that when it's, when it's available. So I think our travel budget will definitely grow.

57:32So it'll probably take some pushing from her or maybe my sister's pretty good at pushing me. She likes to travel with us too. We enjoy some time as a family. So that'll be a big expense. I love to play golf, don't have the opportunity to do it as much. We'll probably join some type of club to where I can play a little more golf and be part of that environment. And I think our children's education, right? So colleges, we want that to be something that they might not have to incur debt to do. So they can start – we had planned to not leave them a ton of money in our estate. But we want to be able to cover their education expenses to get them kind of on the right path and any potentially like additional schooling that they would want to do.

58:20So that would probably be another large expense that we would have to incur several dollars. I think we have some philanthropic ideas and thoughts that we wanted to do. One of the biggest benefits I had, even though we did have a decent amount of debt when we got married, is I didn't have any real school loan debt. And that's a pretty big aid in starting out your life. So maybe creating a scholarship somewhere in the places that I've been, in the places that she's been for people that, you know, you want to be a submarine officer, great. Here's free tuition. So maybe we could fund something like that, I think, to use some of our wealth to kind of give back and give people some of the same benefits that I had when I started out.

58:58Did you always know you wanted to go in the military? How'd that come to be? No. So I thought that I was going to be a professional baseball player. I know somebody else on this ground who thought that. Yeah, it was a 5 '11 right-handed pitcher that throws like in the mid-'80s. I thought for sure MLB was where I was going to be. So, yeah, I got through college, used up all my eligibility. Nobody called, unfortunately. And so that was a pretty big, like, drastic life event where I was like, man, I don't know what I'm going to do now. And that's when I enlisted in the military, just kind of off of a whim.

59:30I literally went down to the recruiter's office, walked in, and the first person that talked to me was a Navy recruiter. And so that's the reason I joined. That's how you decided. That's how I decided. Wow. Yeah. Which, honestly. A little serendipity of what life happens. Best decision, the best thing that happens. Man, how long has he didn't walk in the rodeo clowns or the very first ones that were sitting there? Holy cow. Yeah, it was very fortunate. Which branch of the military is the radio cons? Well, that joke doesn't hold water if you really play it out. Oh, gosh. Because those guys in the branch of the service love picking on each other.

1:00:04Oh, yeah. So I was going to put you on the – Yeah, I'm not going to say that one. You guys are in a fantastic spot. You guys are doing all the right stuff. Are there any other things that we can speak to? Anything else that we can answer for? Anything you're curious about as you do plan for? You're still a number of years away from this next transition, but as you move towards it, are there any questions we can answer to be helpful for you? I mean, I'm most concerned about, I felt very comfortable and did a lot of research on building wealth. I have not done, and there's really not that much out there.

1:00:34I feel there's not like a ton of people writing books about like, here's how to draw down your retirement assets. That's what I'm concerned about. I like, I know I should build some different buckets of money to have different options, but in terms of like actually planning that portion out, no clue. I have some ideas in my mind, but I don't know what the most efficient ways to get that done are going to be. Do you know why there's not a lot of literature written on that? It immediately popped in my brain too. Because it's pretty individualized. It's pretty specific, right? I mean, if you even just think here in the past couple of months, even the way that our tax policy operates is different today than it was last year, you know, just based on legislation.

1:01:12And so how you're going to draw down your assets is going to depend specifically on your unique situation. I mean, there's some like general rules of thumb. When we talk about the financial order of operations, you know, you fill up your tax-free first and then your tax-deferred and then you do your after-tax. Well, in distribution, you kind of move in reverse order, sort of, you pull out after-tax and then tax-deferred and then tax-free, unless there's a reason to do it a different way, right? And so there are things where when you get into this, you guys are going to have a huge planning window from 2029, early 40s, all the way out until age 75 when you have to start taking RMDs or age 65 when you are eligible for Medicare.

1:01:50So there's tons of planning that you're going to be able to do that how you draw down your assets will likely change year to year. Or even if you draw down with a pension coming in and with rental property income coming in, you may not be drawing down. It may be how do I shift my buckets, but that's where it gets so unique that there's not literature on it because it's not a one size fits all. It's a one size fits one in most circumstances. Yeah. I had, um, we had a gentleman who reached out to us who's, you know, trying to get a CFA. I was asking for some life insight and, uh, and one of his questions, it kind of made me chuckle because I think a lot of people, he was like, if y 'all use passive investments, how do you add value to your clients?

1:02:32And because I mean, we're, we're, we're very transparent. We love index funds, you know, And if you're hiring a financial planner for just investments, you're going to be woefully disappointed because I feel like, you know, investments has been commoditized in a lot of ways because of how efficient index funds work. But what I tell you are our gravy and I'll even say the biscuits and gravy of what we do is really the financial planning for clients, just like, you know, somebody like yourself who doesn't because everybody's journey is so different. You really do need somebody that kind of holds you accountable, both in the good way.

1:03:04I think people are shocked. They think of Susie Orman who told everybody no, no, no on everything they did. If you were around in the 90s and you remember those shows, we're the exact opposite. I'm like, go, go, go. Because, well, it's just because so many people are so rewarded for being disciplined. And I'm all about it. But at some point, you have to ask yourself, what's the why? And what do I enjoy? And so I don't have regrets. Because that's the thing. Like I said, you get top of the mountain. You just don't want to have regrets because you realize how precious life is. And talking about the kids, my oldest is a senior in college.

1:03:39And it's so cruel, and I've talked about this a lot of times. If you've done your job right, your child gets more and more independent, which rips your heart out because the older you get, the more sentimental you get. So I just try to make sure every one of my clients understands that money is just a tool, and we have to take this tool and figure out how we get as much life to where you come out the other side, not just to give your kids money so that they're entitled and they don't want to go work, but so that they get the best life and the memories so they hopefully come around more. And you get to really feel like you've checked the box on everything in the best version of yourself.

1:04:14And that's the part that I think that we're never going away as financial planners. That's why we can do this abundance cycle where we give away so much free advice because we know at the end of the day the complexities of life and success is going to bring more and more people through the doors. I didn't mean to turn it into an infomercial, but it is one of those things where I think a lot of people go, what do financial planners do? And this is exactly why I love that we get to do this show because making a millionaire opens up that curtain and lets people kind of walk in and have these discussions.

1:04:42And because I love analytical couples like yourselves, because I would have loved if I could have met y 'all in your 22 and 23 year old versions, because y 'all now y 'all have so much confidence. You were very humble about what you do, but between you running the analytics of understanding the lease terms of each state, I mean, it just made me smile internally. It's like, oh, my God, she's become an expert on lease terms. And then you're obviously you have an aptitude towards personal finance. And it's just fun for me to see people as they grow and develop this expertise that there's also another transition that's in your future on how you become the CEO of this enterprise to just navigate the fun parts, the analytical parts, and just build a life that you're very happy with.

1:05:24Yeah. We were definitely throwing darts at a wall there to start out. So I took some work on that. Man, some of those darts hit. Yeah, y 'all have done well. This show was completely different because I'm curious to see where Beau goes because normally we give homework at this time. and I haven't heard us. I mean, we've really been putting on, this has been like a TED talk. Thank you for the TED talk on how you build wealth incredibly well, starting from zero. Hopefully a lot of people are gonna learn a lot from this. Here's what we know. You guys in 2010 had a negative net worth. You said literally our debt payments were so much that we didn't have enough money to cover the minimum payments.

1:05:58And here we are 15 years in the future with a$4 million net worth. So when I think about homework items for you guys, homework item number one, keep going. Keep doing the things that you're doing. What has given you success with the same thing that takes you through this next transition as you move towards 2029 for potentially your first retirement and figure out where your retirement lies. The second thing is this is the time to begin thinking about what am I actually retiring to? I know what I want to move away from. I know that I want all this freedom. Once I have it, what are the things that I'm going to do?

1:06:31What are the things, because I'm still going to be pretty young as a retired dude, how am I going to navigate that? And then the third thing I think will be so valuable for you guys is figure out what are the goals, like the long-term life goals you have that you want your money to allow you to accomplish. You had a goal a number of years ago that, hey, we want to be financially independent. It is very likely that the next couple of years, you will have checked that box. We are indeed financially independent. Okay, then what's the next goal? What are the outcomes you want your money to allow you to be able to do and begin dreaming about those things?

1:07:04Because that's when you actually move into that abundance level of wealth where life is about more just doing what you want, when you want, how you want. It's about doing what you've been, knowing what you value and doing what gives you purpose on a daily basis. Yeah, that sounds good. Thanks for having us on. I look forward to planning out the rest of it. it's exciting now. That's why we're doing it so far in advance of it is because it's fun to kind of think about being financially independent because that has been a goal of mine and ours for so long now that I look forward to planning the fun part of it, which is living the life after we built it.

1:07:40Matt, Alex, you've been a joy. I mean, this really has been fun. I feel like we've learned a lot. Hopefully the audience has learned a lot. If others want to apply for Making a Millionaire, where do they go? Yeah, if you'd love to be a guest on Making a Millionaire, you can go to moneyguide.com slash apply. Or if you want to check out any of our tools and resources, you can go to moneyguide.com slash resources. So guys, thank you for tuning in, Matt. Thank you. Alex, it's been a pleasure. I'm your host, Brian Preston, joined by Mr. Bo Hanson. Money Guy team out. Making a Millionaire is hosted by Brian Preston and Bo Hanson.

1:08:12Brian and Bo are partners at 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.

1:08:42The 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.

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