SPEAKER_01 0:02

Let's talk about going all in. So if it seems like we weren't all in during the years of joyful sacrifice, which I think we were.

SPEAKER_02 0:10

There's always another next level.

SPEAKER_01 0:12

Exactly. I didn't know that back then. I know it now. And I know that it never stops. But at that point, I thought we were, you know, kind of at our max capacity. And, you know, joyful times, not sleeping much, building our careers, building our real estate portfolio, building our young family. And we realized, maybe realized is the wrong word. Um, through that evolution, you know, we we shared in episode three, we knew that those years of joyful sacrifice were not meant to last forever. I think that's what gives it a sprint.

SPEAKER_02 0:43

Yep.

SPEAKER_01 0:44

Exactly. That's what gives it meaning. You know, to the human mind, if there's unending suffering, that's really hard. That is really hard for any human to get through a period where they they don't know when the suffering will end. Um, so whatever it is, whether it's a a time of sprint in your, you know, career or your financial freedom or health or a relationship or whatever it is, knowing that there will at some point be an endpoint, even if it's amorphous and you don't know exactly what it is, knowing that that endpoint will eventually come is part of what makes it joyful. So we were, we were in this period for a number of years, growing our careers, growing our real estate portfolio, growing our young family, growing our marriage. We had we had not been married, you know, that many years at that point. We were in like, you know, years six, seven, eight, nine of our marriage. And we were coming to the realization that we were reaching financial freedom. And it probably made sense for Nick to step away from his career in technology to continue to grow the real estate portfolio. We shared in that past episode, Nick had his real estate license. We were servicing third-party clients, helping them to buy homes, fix up those homes, and then manage those homes. We were building our property management company as well. And this idea that we could work 24 hours a day, seven days a week for weeks and weeks and weeks on end was fun for a short period of time, joyful, crazy, exuberant. Just, you know, I just have this huge smile on my face, you know, looking back at those just absolutely crazy years. But we were ready for a transition. We were we were ready to solidify things. And so we went through about a year-long process making the decision for Nick to leave his traditional career in tech. And we want to share that story with you. Many of you have either already left your careers, you're thinking about it, maybe you're thinking about changing your careers. You know, many physicians might go from say traditional hospital or clinic-based employment to say locums or something else more flexible, going down to part-time. There's all sorts of arrangements, but it's a big, big, big transition that many people contemplate, have already gone through, want to go through in the future. So we'll walk through that journey. So to kind of set the stage, we're now in, so you know, as we're working through this, we're in like 2018. And then Nick ultimately left his career in technology in 2019. And that was really the next big milestone in this journey.

SPEAKER_02 3:18

One of the most common questions that we get is when is uh when is time for me to quit my job? And unfortunately, there's a lot of people out there who hate their job and see financial freedom as this like uh this panacea that's going to fix everything about their life. And in our experience, that's that's just not the case. You need to really just love your life. It should be a pull, not a push. It should be a pull, not a push to leave your day job. And I remember when, as Elaine was just saying, we were starting to serve real estate clients. We had at some points, I think, you know, five or seven of these single-family home deals going at a given time, and it was just so frenetic, like joyfully frenetic, but it was it was an extreme pace. And there's this feeling of like, man, I gotta go to my day job now, and I'm gonna lose money going to my day job. And I remember sitting down with our accountant, and we were we were eligible for real estate professional status because we were spending more time on real estate than we were on our day job, despite the fact that I had a you know a high-level, you know, six-figure W-2 job, and you know, our accountant was like, I I know that you're working 100 hours a week, but the IRS you know may not believe it. And you know, is this is this truly sustainable? And is this is this highest and best use of your time? Is this highest and best use of your time? And I remember that being just an incredibly uh salient conversation. You know, Elaine knew that she was potentially gonna need to take on a little burden, uh, and we wanted to hedge our bets, so she started doing some additional moonlighting. We tried to kind of time it with that. We tried to time it with some financing on different properties, so we sort of maxed out all of our conventional mortgages. We got our, you know, you can get you know 10 conventional mortgages per person. Theoretically, I don't know anyone who's ever actually achieved that though, because the paperwork gets too intense, you know, before them. But we got as many conventional mortgages as we could possibly qualify for, you know, before uh stepping back from the day job. Had a really beautiful kind of transition process with uh with my employer with Mayo Clinic. They were just so awesome to work with and they appreciate everything I had done. And you know, there's there's a million wrong ways to do this, but I was able to just slowly transition away and give them you know hand handoff. You know, there was probably a hundred million dollars a year of projects going through my through my management at that time, so they got a long-run way to do that. But I still remember the day I I was I was subletting the the cheapest office, you know, windowless office at the Keller Williams brokerage here. I think it was like 180 bucks a month or something. I'm like, man, can I afford this?

SPEAKER_00 5:43

Oh, I remember that. I remember us going back and forth, back and forth, back and forth on Do I work from home? Did that expense make sense?

SPEAKER_02 5:51

Yep. But uh, I really wanted to be where the energy was, where the action was. And the Keller Williams office, uh, you know, I I think my path is guided, but the Keller Williams office is literally across the street from my old uh office where I was, you know, in a technology role at Mayo Clinic. And I'm like, you know, this will this will help me a lot. I have this routine of I go into the office and I work these hours and I'm just gonna keep going into the office. But I do remember showing up and walking into this empty office with no windows, no no windows, no furniture, no nothing, and just this incredible weight on my shoulders in good and bad ways, that I needed to do something today. I needed to make something happen. I had to go win a client, do a deal, or my family may not eat. And that's that's like a little h hyperbolic, but uh, I think I think most people, you know, honestly, struggle with self-employment or owning a business or something like that, because either they they don't feel that kind of weight, that uh they they don't feel that fire, or they feel it too much and it and it kind of consumes them or burns them out. And we did a lot of deals. Part part of it was there happened to be a a Tony Robbins event the day after you know my my last day on the job that Elaine and I went to. You know, we we could we spent a long time talking about that experience, but in the uh in the you know, call it 72 hours of of self-employment, my my first 72 hours of self-employment, you know, we generated as many you know real estate commission transactions as we had in the in the prior two years combined. Just like when you have focus, you can do anything. I I still remember Elaine, you know, her number one concern was that there'd be uh no breaks when I left my day job. And I'm like, what are you talking about, baby? We're gonna have more time, we're gonna have maybe to take vacations and stuff. And she's like, no, dummy, not not no B-R-E-A-K-S, no B-R-A-K-E-S, no breaks. The you know, the W-2 was this anchor, this consistent income stream, and also a thing that consumed you know most of my time and uh made it where I couldn't go do you know so many deals that it would bankrupt us or something like that. And Elaine was gonna have to really step into her chief risk officer uh role even even more than before. But it's still you know one of the most uh you know potent inflection points of of our entire you know journey when you get that base level income. It wasn't a huge amount of income, it was you know 80,000 a year max, and that was with you know Elaine doing kind of all the office work, so to speak, associated with it, me personally resolving every maintenance ticket, doing every lease tour and and call and everything. You know, it was not it was not sexy. It was, I mean, it was a technically a significant step back in terms of salary income.

SPEAKER_01 8:35

And since since that time, you know, we've now had the pleasure of both you know formally and informally coaching, you know, probably hundreds of people through this process, through this thought process. And I want to share the algorithm that worked for us and offer it to you in the event that it works for you. You just heard you know, Nick and I go through the algorithm in narrative form, but let's lay it out. I believe that the first level of financial freedom is coming up with the number that keeps your life going. It keeps a roof over your head, food on the table, transportation, health insurance, clothing, you know, the basic things that you need, a simple vacation might be a you know, locally based, car-based vacation. But the very simplest things, and you might be thinking immediately, just even listening to that, but wait a second, Elaine. That's that's not the life that I live right now. I don't want to have a downgrade in my lifestyle. And I'll offer to you that that's just the first layer, but it's important psychologically. It's important psychologically. That is your freedom number, in my opinion. The number where you can wake up and you can participate safely in your life. You're not worried about hunger or homelessness or the car breaking down and leaving you stranded on the road. You have your very basic needs, Matt, but you do have to be honest with yourself and make them basic, right? So at that time, for example, you know, a typical metric in the United States is that you might spend, say, 30% of your income on housing. We were spending like 7% of our income on not just housing, but our utilities and our maintenance expense for our home combined. So we were living in a home that, you know, by outside metrics, you know, was much less nice than maybe we could afford, but it was a great home. We were safe, our children were safe, we had a backyard, we had a beautiful tree in our backyard. It was everything we needed. So come up with the number that is your bare bones. You can keep the lights on, you can keep showing up day to day, and that is your real freedom number. And the reason that's the most important number is because psychologically, that is when you have earned your freedom. That is when you have earned your freedom. And then from there, you get to decide, okay, what do I continue to earn on top of that through my traditional career, through my investment portfolio, through a side gig. And then all of that additional income that you're earning is to improve your lifestyle, whether it's to improve your living situation or take a bigger vacation or have nicer clothes or more clothes or, you know, whatever it is for each person. But that first level is so, so, so critical. In my coaching program, Freedom and Legacy, that's the first thing we teach in terms of our what we call our financial abundance series of what is that bare bones number? What is your true freedom number when you own yourself? No one else owns you. You own yourself and your time is yours. So we came up with that number and we were living that number for many years. I've talked, we talked in the previous episodes about keep your expenses as low as possible, drive your income as high as possible, and then invest the difference over and over and over and over and get that snowball going. And then we wanted more security. You'll hear as you get to know us through these episodes that I'm the much more conservative, risk-averse one. Nick is much more the visionary. Let's go out and do cool things and we balance each other really well. So we wanted, you know, more security than that. We had saved up a ton of money, but we were also investing most of our free cash. So I was at a stage in my career where I was able to moonlight. So I decided that it was a joyful sacrifice that I would sign up for as many moonlighting shifts as possible. So let's let's make sure we we understand what that means. So in residency, I was working about 80 hours a week in the hospital. I was actually in the outpatient clinic at that time, so it was a little bit easier. And then I was picking up as many moonlighting shifts as I was allowed to help with this transition of Nick leaving his traditional employment. And that gave us a buffer. So that's what I consider to be, let's call it like step one and step one and a half. Step one is what is your bare, bare, bare minimum amount of income that you need to keep the lights on month to month, get to that number, find a way to either have many months of that in savings, or for in our case, it was that that's how much was coming in from our real estate portfolio that we had built that we wholly owned. And then if there's a way to quickly easily supplement your income in the beginning, find a way to do that to give you an additional padding of security. And then the second piece, which is the I don't even have a quite a word for it, the very interesting piece, the metaphysical piece, I don't quite know. So I'll just explain it, is when you have that white space on the calendar, it creates this hunger and this curiosity and this interest and this drive and this pleasure that drives you then to go out and keep creating. So when we've worked with people over the years, or I've worked with my coaching clients, they'll, you know, kind of anchor on maybe they have a side gig or a real estate portfolio and they'll kind of anchor on, okay, well, this is where I am now. And then if I cut back at my W-2 job or maybe leave it all together, they think that it's linear progression. And I'm like, oh, no, no, no, no, no, no, no, no, no. That white space is just this beautiful gift to us as humans because we are driven to create. We are driven to do something, we are driven to create value. And when you get that white space, because you're living at your bare bones financial freedom number and you own your time, that's when those beautiful exponential things can come to be. And we saw it in our own lives, in what happened through 2018, 2019. And then in the next episode, we'll talk about 2020 and how 2020 was already poised to be an amazing year for us. And then the pandemic, you know, for for everyone listening, just completely changed everything in in our own individual lives and the collective lives in society. But that white space, that's when you really get to experience that freedom for the first time.

SPEAKER_02 14:48

This is something that we practice tactically. So, you know, right now today, I just have two blocks in my calendar. One is to get to hang out with my wife and chat about the good old days, and the other is to review marketing, uh, marketing budgets and outcomes and stuff like that. Very few recurring blocks on my calendar, and we try really hard to create a lot of a lot of white space. A lot of people are so concerned with being busy that they don't they don't give themselves that space. And maybe you've heard financial freedom described as like this this flywheel that accelerates money, but it's also a flywheel that accelerates time. How much of your time can you buy back? And the wealthiest people that we know are people who have a an open calendar that can drop everything, you know, anytime and go on a trip, can uh can can pursue an idea that they're that they're passionate about, and boy, oh boy, do we do we value our time. And when we were in that kind of 2019 year, uh we had this newfound kind of crazy amount of flexibility. So even though we were you know more busy than ever, suddenly there wasn't this block uh throughout the day. And I still remember, you know, to to this day, like the the turning point when um when Elaine knew that she had to you know go kind of full-time on our on our business and step back from her career, suddenly I was able to do tours during the day, during business hours, which is when commercial tours happen. So single family home tours, those happen on nights and weekends and can work around your day job. But if you want to go look at an apartment building for sale, you got to do that during business hours. And I was meeting with a broker about a very large transaction, and he's like, Well, you know, we we could just go look at it right now. And I'm like, Oh, really? That would be amazing. I mean, this is a huge deal. I don't know if we could buy it, but you know, we could raise the money. Like this, this could be a game changer. And Elaine had to had, you know, it was like a very early morning of coffee. We did a lot of like, you know, hey, let's meet at six in the morning for coffee type things. We'll we'll bring a kid or two with us. And uh and Elaine had to go and go see patients, and uh, and then that patient ultimately, you know, no no showed, and so she missed a tour to see a$10 million decision that we needed to make uh to show up for a patient who didn't show up for her. And when you start to feel those types of feelings, that's when you know that it's time to time to make a change. It should be a a pull, not a push.

SPEAKER_01 17:11

So there you have it. That that was a we'll call it a crazy kind of 18-month period, the the the preparation months, the preparation months financially, literally as we were making sure we had enough income coming in from our rental portfolio. We were saving up as much as we could, we were making plans for me to generate some additional income, but really the preparation months psychologically. And I hope that the algorithm that we shared there with getting to your bare bones, financial freedom number, having some extra liquidity is kind of what I call like step 1.5, but then believing in that white space and stepping into that white space with hopeful expectation, with a sense of creation and generation. If you're considering, you know, whether it's it doesn't even need to be, you know, leaving your traditional employment full time. For a lot of people, it might be going from a 1.0 FTE to a 0.8 FTE. And they're just not sure, you know, what exactly they would do with that time because they're still on the road to ultimate financial freedom. They're still on the road to the income level that they really want. So it's not quite where they're completely at financial freedom and are using all of that additional time, you know, for self-care and hobbies and families and those sorts of things. Of course, you need to spend you know some of that time on those things. That's what makes life worth living. But hopefully, this algorithm's been helpful for people. We will continue the journey in the next episode. We'll see you there.

SPEAKER_02 18:43

We're so glad you could join us for this episode of the Real Estate Real Life Podcast. Subscribe on the platform your choice today and catch us in the next episode.