Ali (The FI Couple) (03:26):
But then after that, I remember my mom went back to school to get a state job and security and pension and all of that. And I think that experience truly shaped me because now I am a state employee with a pension and that security, so I think that value was instilled in me from that.

Josh (The FI Couple) (03:45):
And for me, I come from like a polar opposite. So, very, very poor, a single mom with three kids. And money was never talked about, but we always knew we didn’t have any. So at a very early age, I learned that if there were things that I wanted in life, not because of my mom, she just couldn’t provide it.

Josh (The FI Couple) (04:04):
So as early as I could start working, I started working and had a bunch of odd and end jobs and everything like that because I became aware very quickly that our situation was not going to improve. And so, I started working, making money. And so, most of my life up until maybe the last few years was very much like a scarcity mindset, and that shaped a lot of the decisions that I used to make.

Josh (The FI Couple) (04:27):
Once I got that first full-time job, I was like, “Well, I need to have a really fancy car because that’s significant and that means that you’ve made it,” at least from where I come from. So when we first got together, we definitely weren’t talking money because money talks weren’t really a big part of our growing up, but it’s definitely something that’s evolved with time.

Robert Leonard (04:46):
If I understand your story correctly, you guys graduated with somewhere around $100,000 in student loan debt. Would you have gone about school differently had you known what you know now? And I’m not saying, would you have not gone altogether, unless maybe that is what you would have done, that’s fine. But would you have possibly applied for more scholarships or gone to a cheaper school or just looked for some other route to not graduate with as much student loan debt?

Ali (The FI Couple) (05:13):
Here’s the wild part about this, so I applied to private and public schools. We live in New York State, so the public school system is more affordable than a private university. We both went to public school. We went to state school, we got scholarships. Josh was in the ELP program for folks that came from disadvantaged backgrounds, so he had a very subsidized tuition, and even so … I mean, I did go back for my master’s, which was probably like $34,000 on its own, but I went to a state school again and I got scholarships.

Ali (The FI Couple) (05:42):
Even with that, we both had jobs full time. It still blows my mind that we graduated with that level of debt. I feel like I would do it differently. I maybe would have worked harder to pay it off as I was going. Part of me wonders, would I have gotten my master’s? I really love being a social worker, but I think that there could be other careers that I could pursue. Now, we want to pursue FI, I don’t even want to be a social worker for the next 30 years, it’s a little ironic. But what do you do think?

Josh (The FI Couple) (06:12):
I mean for me, again, growing up with less than no money, when I got to college and they were offering basically all the financial aid I could ask for way more than I needed, I was like, “Absolutely, I’ll take all that money.” Because at 18, you’re just like, “That’s a lot of money.” Knowing what I know today, I definitely wouldn’t take out as much student loans and I would have worked more.

Josh (The FI Couple) (06:35):
I worked all throughout college to earn money, but again, not really with the mindset of like, “I want to mitigate my student loans.” I didn’t think about student loans in college, I was just like, “I’m in college. This is crazy that I’m here. Coming from where I come from, no one makes it to college.”

Ali (The FI Couple) (06:50):
I’m going to buy beers and Taco Bell.

Josh (The FI Couple) (06:52):
Pretty much. And then I’ll figure out the debt stuff afterwards.

Robert Leonard (06:56):
Do you think both of you were impacted by not really having people in your family to rely on in terms of what to do for college? I know for me, that was a huge thing. I’m the first one in my family to ever go to college, so I didn’t have anybody. My dad was willing to help, but he didn’t know. He’d never done it, so nobody in my family had. There’s no real person that I can rely on.

Robert Leonard (07:16):
I mean I had my guidance counselor and stuff, but they don’t really understand money. They just want you to get into the school you want to go to and help you find out what you want to do with your life, not really the financial side of things. I didn’t really have that person to rely on. And I’m guessing you guys probably were in a similar situation?

Ali (The FI Couple) (07:30):
I know for Josh, he definitely did not-

Josh (The FI Couple) (07:32):
Zero.

Ali (The FI Couple) (07:33):
… at all. But for me, I mean, I remember my mom going through the FAFSA forms and the financial aid, and we were going through all of it. And I remember at 18, you’re saying, “Yeah, I’m going to take on this, like tens of thousands of dollars of debt.” But I think even if you had someone to guide you through it, one, I think there’s just this perception that everyone has to go to college. It’s just what you do if you want to be successful. And that’s obviously not true, but that was my schema at the time.

Ali (The FI Couple) (08:00):
And two, because everyone goes to college, everyone has debt, so who cares? I’m just going to have it, I’m going to have this great job, and I’m going to pay it all off before I’m 30. Because that’s what my 18-year-old brain said. So my mom was definitely supportive, but I don’t think I was critically thinking about the implications. I couldn’t.

Josh (The FI Couple) (08:17):
I honestly wasn’t even planning to necessarily go to college. I found out about an educational opportunity program for disadvantaged youth, and that was the only reason I got into college in the first place. So once I got the acceptance letter from my family, everyone was just like, “That’s amazing. Don’t think about the implications of it. Just be happy that you got into college.” So that’s what I did.

Robert Leonard (08:39):
There’s two pieces that I want to dive into about… or three actually, about that. One is the FAFSA, two is getting your master’s, and three is being successful without a college degree. I agree completely that nowadays you don’t need a college degree to be successful. But you guys are 30, 31-ish, if I remember correctly. I’m 26, I’m not too far behind. And we’re not old by any means. But even in college, when we entered, what? 18 years old, 19 years old, that’s 10, 12 years ago, say, roughly? It was very different. People weren’t as successful without college as they are today.

Robert Leonard (09:10):
If you’re going into college now, you can point to hundreds of people that are super successful without college. When we were going into college, it wasn’t like that. There was maybe a couple, a handful here and there, but really not many. So we didn’t really have that advantage of saying, “Hey, maybe we don’t need to go to college to get a good career or make money like these other people.” Instead what everybody did was go to college. So I think now is a little bit different from even when we went and it wasn’t even that long ago.

Josh (The FI Couple) (09:34):
I completely agree. When you think about the transformation of the internet, I think where it was back in 2008, 2009, to us then it probably felt like really advanced. But now, it seems almost like archaic in comparison to the level of information that you’re able to access now, readily access. And if I want to see someone who didn’t go to college but create an online business, I can literally just go on my phone and get 10 or 100 and not like, “Oh man, it’s some mysterious way.”

Josh (The FI Couple) (10:05):
People literally just give out the blueprint now, “This is how you can create an online business in a year or something like that.” So the level of information today far exceeds what was available back then.

Robert Leonard (10:16):
To your point, I podcast full-time now, and I do some consulting stuff and some other things. But for the most part, I’m podcasting. And if you had told me when I was going into college that I could go the corporate finance route, get my MBA or podcast full-time and those were like equals, I would have told you, you’re absolutely crazy.

Robert Leonard (10:32):
I don’t think podcast were even a thing back then. It’s just a lot has changed. And you mentioned getting your master’s, Ali, and whether you do that or not. And I often think about that because I graduated undergrad with about $20,000 in student loan debt, give or take, which really is not that bad, that’s pretty manageable.

Robert Leonard (10:48):
But when I graduated with my MBA, I graduated with a little under $60,000. And so I almost tripled my student loan debt just by getting my MBA, partially because of my fault, but partially just because it’s an expensive program. I looked back and now knowing what I know now, I’m like, “Would I have really gone back and got my MBA?”

Josh (The FI Couple) (11:04):
Well, exactly. And if you’re on that traditional career track for the next, whatever, 30 something years, it’s okay. It’s maybe a worthwhile investment. But if you’re looking to get out of the corporate world, which obviously you did in a very expedited time frame, now all of a sudden, there’s a real opportunity cost there. And I think for Ali, we had the conversation like, “Do we go back? Do we not go back?”

Ali (The FI Couple) (11:29):
But at the time, we didn’t even know what FI was-

Josh (The FI Couple) (11:30):
Well, that’s exactly right.

Ali (The FI Couple) (11:32):
So, I was like, “I am going to work a job for 30 years.” I want good benefits, I want a pension, I want civility, checking all those boxes, being a school employee. I do have an awesome schedule. But if I was, I’d have an even more awesome schedule. So a lot of things to consider.

Robert Leonard (11:48):
As you guys graduated school with debt and started to earn a salary, how did you approach the dynamic of investing versus paying off debt?

Ali (The FI Couple) (11:56):
I think I did not even think about investing really. And I think this is a thing for females, I do not think that as a society, we’re coming further on this with pushing math and sciences and investing for women. But I think investing still is a very male-dominated field and interest area. So I think as a female, it was not even on my radar.

Ali (The FI Couple) (12:16):
I remember I accepted my first job with the bachelor’s making $12 an hour at a domestic violence shelter. I was like, “Man, that’s not a lot of money for how much debt I have, but it is what it is.” And I think I was living at home with my folks. I was not even paying off my loans aggressively. I wasn’t thinking about it. What about you?

Josh (The FI Couple) (12:34):
Well, and the thing is too, so we’re both in human services. So when we graduated shortly prior to that, the public loan forgiveness program had just started. So in our mind, we’re like, “Holy smokes. That’s a silver bullet.” All we have to do is just enroll in this program and make minimum payments-

Ali (The FI Couple) (12:51):
For 10 years.

Josh (The FI Couple) (12:52):
… for 10 years, and then the government will just magically forgive our $102,000 in student loans. And so that’s what we did. We made minimum payments. And then I think it was right around 2016 or 2017, the first cohort of people who were supposed to be eligible started applying and the acceptance rate was super-duper low. As we were getting older and looking at that, we were kind of like, we really haven’t made a dent. We still had $102,000.

Ali (The FI Couple) (13:19):
We’re barely paying interest.

Josh (The FI Couple) (13:21):
Yeah. And so we need to do something very different, but investing was never … Again, it was just like we got the college degrees, the jobs would just take care of themselves. But then quickly the debt continued to grow and compound.

Robert Leonard (13:34):
I was going to ask you exactly that question. 10 years, it sucks to have to make payments for that long, but if you could just get it all forgiven and $100,000 worth in 10 years, why you even tried to pay it down quickly? But you guys answered the question. It’s not everybody gets and accepted.

Robert Leonard (13:47):
I think the general consensus there is that everybody who’s eligible will get it, but it sounds like that’s not the case. And I don’t know for certain, I never fell into that tracks. I never really looked into it. But based on what you said, it sounds like that’s the case in why you decided to continue to just pay them down?

Ali (The FI Couple) (14:02):
There is a lot of stipulations for the program. And I don’t want to knock it because we have a friend right now who’s about to get his loans forgiven because he’s supposed to. But he was very meticulous with his paperwork. He’s been in a qualifying employer for 10 years, great. But with that, I’m like, what if in 10 years, that’s a long time. What if I want to change my career field? What if I go on a three-year maternity leave? Well, guess what? That doesn’t count towards it.

Ali (The FI Couple) (14:27):
So for us, it was just, yeah, it could be great to have it forgiven, but we wanted to take more of the onus on us. And if we can really hammer out these loans and take charge, let’s just do it. Because as you know, the burden of student loans is so huge even if it doesn’t make physical sense to pay them off crazy aggressively, it does. But we wanted to do it.

Josh (The FI Couple) (14:48):
Yeah, as opposed to being like, “Well, hopefully we’ll get a decade from now,” and the government will be like, “No, we got you. We’re going to take care of them.” We wanted to put it into our own hands, and then that propelled us into the world of investments.

Robert Leonard (15:01):
How have you guys paid down your student loans so rapidly? Are you guys both working second jobs? Are you doing a side hustle? What do you guys got going on that’s allowing you to do that?

Ali (The FI Couple) (15:10):
We both have full-time jobs and we both have part-time jobs. We’re life coaches part-time. And back when we first started our student loan [inaudible 00:15:18], we were taking odd jobs. Josh was Ubering. He was shoveling driveways and we were doing some funky things, but really we were not making a dent in our student loans until we got our first house hack because we were paying $1,200 plus baseline in rent. And then with our first house hack, that went down to $600.

Ali (The FI Couple) (15:36):
So increasing that gap between income and expenses, that is really what did it for us.

Josh (The FI Couple) (15:43):
And that’s exactly it. We were working the odds and ends jobs, and combined, we make decent income, but it’s not six figures or finance or Silicon Valley or anything. So we tried to optimize as much as we could on the income front. Once we understood the power of house hacking and we were hearing testimonials, we were like, “Well, we’re doing a lot to say or make a couple extra 100 bucks here and there, but what could we do to save thousands of dollars?” And that’s where eliminating your housing expense is a great way to start.

Robert Leonard (16:11):
I want to talk about house hacking a lot, and I want to get into your story of investing and that part of the conversation. But before we do, I want to talk about this dynamic of trying to earn more money versus cutting your spending. So there’s two camps. Some people fall in the case of both, but basically there’s two camps.

Robert Leonard (16:32):
One says you need to save as much money as you can and live super frugally and not really worry about making more money. And then other people say, “Just got to keep your budget under wraps, make it reasonable and then just try and make as much money as you can to make up the difference.” Where do you guys fall on that?

Ali (The FI Couple) (16:47):
I think we fall a little bit in the middle, that gray area of let’s try to cut what is reasonable without radically impacting the quality of our life. And let’s try to increase our wages as much as possible without radically impacting the quality of our life. So I think at first, we were trying to earn as much money and that meant time away from each other. We’re burnt out, we’re miserable and our why for all of this is time together. So that is not aligned to our why.

Ali (The FI Couple) (17:16):
And then with reducing our cost of living, we initially relate, let’s get rid of takeout nights and the little Starbucks drink here and there. That wasn’t really putting a dent in it. And we were miserable. So we were like, what are things we don’t super value? “Well, we’re renting a tiny apartment. Why don’t we house hack one?” “Well we’re paying for these cars, but we don’t super care about cars. So why don’t we pay for cash and get used cars and drive those instead so we don’t have a car payment?”

Ali (The FI Couple) (17:40):
So I think for us, that nice gray in-between area of let’s make as much as we can without our life sucking, and let’s cut out as much as we need to, again, without hating our lives. So it took a while and some conversations and arguments, but we found that happy medium.

Josh (The FI Couple) (17:58):
Yeah, we stressed test. We started off by doing like Dave Ramsey’s approach and everything. And we cut out all the little things that we felt like brought us joy, and we were quickly feeling really burnt out because like Ali said, we were also working a crazy amount of hours. We’re burning the candle at both ends.

Josh (The FI Couple) (18:14):
So once we peeled back a little bit from work, and then once we brought back in to some of the simple pleasures in our life, we got a lot more clarity about, okay, what are those like really high impact items that we don’t really value like society says we should value, but we don’t really value that much? How can we knock those out and then grow from there?

Robert Leonard (18:34):
So rather than thinking of it saving more versus earning more, how do you think about, I just earned an extra dollar or I have an extra dollar here. Is it better to pay down debt, pay a bill, whatever the case is, or maybe do something fun with it? Once you’ve gotten past meeting all your required bills, you’ve made all your minimum payments, you’ve done everything you need to do, you have a little bit of extra money. How do you guys think about spending some money on things you enjoy versus really just going all in 100% on reaching your financial goals? How do you balance that?

Josh (The FI Couple) (19:07):
I’ve listened to enough testimonials of people who reached FI because they took that approach of all out, head down, just sacrifice all the joy to get to FI. And literally, 99% of the time, they’re like, “Knowing what I know today, I would have done it differently.” And so, learning from them, we are not necessarily an all-out approach. We started that way and that was not sustainable.

Josh (The FI Couple) (19:34):
So now it’s like if all of our bases are checked and we have our money going into investments and our emergency fund and all that kind of stuff, it’s like we are super happy to spend things that we value. If you follow Ramit Sethi, spend lavishly on the things that you love and then cut mercilessly on the things that you don’t value.

Josh (The FI Couple) (19:53):
And so things that we really value, we are happy to spend a good amount of money on those because they make us feel fulfilled. And then the other things we literally just cut out and then we save money, those arenas.

Robert Leonard (20:05):
You guys have mentioned house hacking, so let’s talk about that. First, what is house hacking and how did you guys even find out about this strategy?

Josh (The FI Couple) (20:13):
So house hacking is you can do it either in a single family home where you buy it and you rent out all the rooms, not including your own, and then use the rent from those roommates to pay all of the mortgage or most of the mortgage to lower your cost of living. Or in our case, we buy duplexes, which is really just two apartments, either on top of each other or next to each other. We live in one unit and the rent that we collect from the other apartment pays all of the mortgage. So we’re able to live rent free.

Ali (The FI Couple) (20:42):
And the beauty of house hacking is that you don’t need a ton of cash to get into a deal. You can do low down payments. If you’re a veteran, 0% down. For us, we used 3.5% down. We used 5% down, so you don’t need 20% down into a house hack. You’re going to live in it. So that’s a really nice way to dip your toes into the real estate investing pool.

Ali (The FI Couple) (21:02):
And we first heard about house hacking, I’ll let Josh tell that because he’s the one that first discovered house hacking.

Josh (The FI Couple) (21:08):
Yeah. So like I said, we started with Dave Ramsey and we’re like, “This is not sustainable.” And then, so to backtrack a little bit, Ali graduated with a master’s, 2017. We have six figures in student loan debt. I’m working full-time. She is working full-time. We’re doing all the side hustles, so on and so forth. I’m like, “This is not sustainable.”

Josh (The FI Couple) (21:26):
Right around the end of 2017, I found Scott Trench’s book, Set for Life. And I learned about BiggerPockets and stuff. So I was “Oh, wow. This is a happy medium where we don’t have to hate our lives and we can eliminate some of the biggest things and still achieve our goals.” So the goal was in 2018, we’re going to crush life. We’re going to pay off debt, we can buy a house hack, so on and so forth.

Josh (The FI Couple) (21:50):
And then I got fired January 2018. And suddenly, we went back down to just one income. And originally, all of our goals fell apart and we’re like, “Well, we’re not going to be able to do this.” But we trudged through. I started a consulting business. Ali paid the bills for a while. And then we were able to piece it all together and build momentum back and build our incomes back up. And we were getting married in 2018 too.

Josh (The FI Couple) (22:15):
So we’re like, “Well, we have a wedding and we want to buy a house hack.” So that’s how we got thrust into real estate investing.

Robert Leonard (22:24):
Do you think house hacking is the best way for somebody to get started in real estate investing?

Ali (The FI Couple) (22:29):
I’m biased because we’ve done it twice, but 100%. I don’t think we came up with this phrase. I think other people have said this before us, house hacking is like real estate investing with training wheels. It’s nothing sexy. It’s not exotic. It’s like, “Oh, you need a place to live? Buy a house. Oh, there’s additional rooms or apartments? Rent them out.” Every month, you get a rent check, you have to maintain the house anyway because you’re living there.

Ali (The FI Couple) (22:54):
So, it seemed so scary at the time buying a home. We’ve never taken on this much debt. Our first house was $155,000. We were freaking out like, “Oh, my gosh.” But now looking back, it’s like, “Yeah, if you want to get into real estate investing, even if you just want to buy your first home and you don’t want to have to pay your whole mortgage.” House hacking is awesome.

Josh (The FI Couple) (23:14):
When we talk, we love this kind of stuff all the time and there’s all kinds of objections of like, “Well, what if I’m a single person? What if I have a family?” And what’s cool is there are so many ways people can house hack. I was talking to someone the other day and they’re like, “Well, I really like my privacy.” And I’m like, “You can still have your privacy and we can find ways to get you a property where you have unlimited privacy. You won’t even know there’s a tenant there until you get your rent check overall.”

Josh (The FI Couple) (23:39):
So yeah, I think it’s a great way for especially a new investor or even … I mean I’ve spoken to people where they’re getting ready to retire and they’re mapping out their 401k or whatever. And they’re like, “How can I make my retirement plan last longer?” They buy a house hack, which lowers their cost of living, which actually then expands the lifespan of their retirement. So I think it’s really great across the whole spectrum.

Robert Leonard (24:04):
What we’re talking about is traditional house hacking, but there are so many alternatives to house hacking. The more I’ve been studying this up, the more I’m learning about it. You can Airbnb a unit that you have, which is even more income, generally speaking, than a traditional rental.

Robert Leonard (24:18):
Actually, I did a podcast interview with a guy this morning. He’s more in the commercial space, but when he started, what he did was he leased a commercial building, some office space. And what he did was he rented out desk space in there. He just needed a little bit of desk space, but he leased out all extra desk space that was in this office so that he could have desk space for free. And that’s house hacking.

Robert Leonard (24:41):
People do it with commercial real estate. They’ll buy a commercial property and have their business in one unit, rent out the other units to businesses. And then their business has no overhead or no rent. And they have a huge advantage as a business from a capital financing perspective. And so, house hacking can be traditional in the sense like where we live. There are so many other ways that you can take the strategy and implement it in your life.

Josh (The FI Couple) (25:03):
Without a doubt, yeah. And we traveled places. When we first got involved with real estate, we took a belated honeymoon out to California. And while we were out there, we stayed in Airbnb’s. And especially once you get into investing, you look at homes and assets completely different. And we were there and I was just like … I mean, they just either had a spare bedroom and we stayed in the spare bedroom, and we helped pay their mortgage or they had some basement. And some places they completely converted it. So there’s just so many ways to do it.

Robert Leonard (25:31):
I recently went to Denver and I was looking for an Airbnb and I forget how many, but there was 20, 30, 40 different Airbnb properties available. And every single one was a house hack. And I was like, man, I wonder if this is because BiggerPockets is headquartered in Denver or house hacking is really just sweeping the nation because what these people were doing is it’s very common in Denver area. There’d be single family homes with another unit in the basement typically, especially if you do a little bit of renovation.

Robert Leonard (25:59):
So that’s what people would do is they’d have a second entrance into the basement, rent that out on Airbnb and then live upstairs. And I forget exactly what we paid. We paid $500, $600, $700 for four or five nights. So not super cheap, but that’s a huge dent in their mortgage, I’m sure. And that’s just one person for four or five days, and there’s 30 days in a month on average. So, even Airbnb-ing is a way that you could take some extra space and cover your mortgage.

Josh (The FI Couple) (26:23):
To kind of go back on our time before, house hacking, it was a thing. We talked to investors all the time, who were older and they’re like, “Oh, that’s what you guys call it now? We just did that 30 years ago to live for cheap.” So the terminology wasn’t there, but with the rise of information, especially with the biggest resource in the country, BiggerPockets educating the population or more so.

Josh (The FI Couple) (26:45):
I think more and more people are starting to look at their home, not just as a place to live, but as a viable means of income. As college gets more expensive, as cost of living gets more expensive, people are having to think differently. Especially with everything that’s been going on, people are looking for additional streams of income.

Robert Leonard (27:03):
That’s how I fell into house hacking too. Almost like those people did 30 years ago, but I just didn’t know. I was ignorant. Really, I bought a condo, had two bedrooms in it, lived there for a little while, realized I’d never even opened the door to go in that second room. And I was like, “Man, I should do something with this.” And I ended up renting it out for $750 somewhere in that range.

Robert Leonard (27:20):
And my mortgage all-in, HOA, and everything was $1,000 or $1,100. So I get to live for 300, 400 bucks a month. Then I was like, “I’m not that smart. Somebody definitely has done this before me.” And so I started to look it up and that’s when I realized that house hacking was actually a strategy. And from there, I’ve done three of them now. I’m sitting in my third one right now.

Ali (The FI Couple) (27:40):
So it’s actually funny. You see that we were looking at a property the other day right on our street. And in some markets, duplexes are not plentiful, but we always say where we live in the capital district in New York, you could throw a stone and find 20 duplexes. They’re everywhere. Our street is lined with duplexes.

Ali (The FI Couple) (27:57):
And this guy literally bought the property in the ’70s. And he said, “Yeah, they used to make homes like this. So they were duplexes. So families would have one and then to generate extra income for their family, they would rent out the other unit. And I’m like, “No way, in the ’70s?” It wasn’t called house hacking, but right where we live. So it’s just multi-generational living maybe? Who knows, but it’s just that it’s cool for sure.

Josh (The FI Couple) (28:22):
It’s highly economical.

Ali (The FI Couple) (28:23):
Yeah.

Robert Leonard (28:25):
Yeah, it’s the same here. So there are certain towns. Let’s just say there’s a five, six-town radius around where I live. Two or three of them just have tons of duplexes everywhere. And then the other towns are single families traditionally or generally speaking, but there’s a couple of towns where they’re all duplexes and they’re all built in the ’80s.

Robert Leonard (28:41):
If you look at every single one, they’re built from ’80 to ’89 pretty much. Most of them in ’85, ’86, ’87. There was just a huge boom in this area for building duplexes and Ali, maybe that’s why. I don’t really know why. I just know that builders went in an absolute craze and there’s tons and tons of duplexes in this area.

Josh (The FI Couple) (29:00):
That could be a really cool exploratory because there must have been some macroeconomic things or maybe look at migration patterns or whatever. I’m sure you could have a field day to understand like connect the dots why were so many duplexes in that particular time pattern, because we actually-

Ali (The FI Couple) (29:14):
We should do that, Josh. We should research.

Josh (The FI Couple) (29:15):
We literally have the same exact thing.

Robert Leonard (29:18):
Yeah, it’s interesting. How did you guys even get aligned on all of these? You guys met in college, right? So you at least came through all of it together. I think that might make it a little bit easier than if you had met after college. But how do you guys make sure you’re aligned from a financial perspective, and what have been some of the challenges you guys have faced?

Ali (The FI Couple) (29:37):
Honestly, this was a huge challenge for us. But I know now, like we created our Instagram. And we talked to people about our experience and we’re very, very aligned but it’s not an accident and it’s not luck.

Ali (The FI Couple) (29:49):
When Josh first proposed the notion of house hacking to me, I thought he was insane. I was genuinely like, “This is going to ruin my life. I’m expecting a single family home and we’re going to have kids and we’re going to have that nice American life. That’s my future, not live in a duplex and be a landlord. And you want to be a real estate mogul? What is this? And don’t even talk to me about early retirement.”

Ali (The FI Couple) (30:11):
So it took such a massive mindset shift for me. I think it took a heck of a lot of trust in Josh that he was not ruining our lives, but it was honestly a lot of conversations about money. And I think, at first, it was really hard for him to get that buy-in from me. We were going to houses where they were really sketchy. They were in bad neighborhoods. The cash flow is great, but they were not safe areas.

Ali (The FI Couple) (30:35):
Once we worked towards a quality of life and like, “Yeah, you can house hack and it can still be great.” And also what we want our futures to look like? We want more time together. We want to travel more. All of these things and real estate can give us that. So, it took time but I’d say we love talking about money in real estate now. And it’s super important to our relationship to always stay on the same page with that.

Josh (The FI Couple) (31:01):
One of the things you would ask before, are you more in the like earn more or spend less camp? For us, we kind of are in a perpetual stereotype, trying to find a happy medium. Initially, I was like, I just want the most cash flow. I was like living in the Excel sheet.

Josh (The FI Couple) (31:16):
And the big thing we talked about is that’s not Ali’s language. She is not the Excel sheet, cash-on-cash, ROI, IR, anything like that. She’s just like, “Well, how is this thing that you want me to do? How is this going to help us,” and her achieve the things that she values most? So, I had to really take a step back of house hacking and real estate and something like that. And I was like, “Well, what do we want most out of life? What’s our why kind of thing?” I was so focused on the bridge, not the destination.

Josh (The FI Couple) (31:46):
And once we really started having those conversation, that was actually just like super transformative for us. Once I got her buy-in and I started speaking her language and showing her like, “This is how house hacking can help us get those things that we value most,” I noticed a real big shift. And then also on my end, when I stepped away from the Excel sheet and I was like, “What’s a win?” It doesn’t have to be like we live for free right away. It’s like as long as we lower cost of living and live in a nice area or a decent area, that’s a win. And that’s when we got our first deal.

Ali (The FI Couple) (32:21):
Yeah.

Robert Leonard (32:22):
What’s really interesting is I was in a very similar situation to what you guys were in, except you guys went down one path and eventually agreed. And we went down a different path and we didn’t agree, and ultimately, we decided to go our separate ways. And I’m very open about that, and I’m very happy to talk about it because she’s a great person. We just didn’t align necessarily on our financial goals and we decided it was best to go separate ways.

Robert Leonard (32:44):
But we were in the same boat. I was Josh in the situation and she was you, Ali. And it’s not always that way. Sometimes it’s the reverse, but for us it was the same. And I was trying to convince her of all these things and we could not get aligned. And we were in a serious relationship, so it was something that I had to take very seriously and decide what was best. But I decided that ultimately we needed to be more aligned on our financial goals. And I just didn’t see us getting there after years of trying to come to an agreement. And so, we ended up going our separate ways.

Robert Leonard (33:09):
But I wanted to provide that perspective because although you guys were able to do it successfully, it doesn’t always work out that way. And it’s hard. It’s a really hard situation.

Ali (The FI Couple) (33:18):
It’s really hard I think to consider, especially being in the human services therapy field ourselves. One of the number one reasons couples fight is finances. And I think we live in a society where we don’t talk about money. We talk about how much money we spend and the cool things we buy, but we don’t talk about budgeting and saving and investing nearly as much as we should. And that’s why we have such a huge consumer debt problem and all of these things.

Ali (The FI Couple) (33:44):
And I think for us, yeah, we were fighting about money. And if you just keep having that same argument and you’re butting heads, it’s exactly what you’re saying. You’re either going to figure it out and move forward or you’re going to say, “This is not jiving. This is not working. It’s not sustainable. And we need to kind of go separate ways and find someone in the future that’s more aligned with those values.”

Josh (The FI Couple) (34:04):
And I’ll say this, we’ve come a long way, still very much a work in progress.

Ali (The FI Couple) (34:09):
It is. I mean, yeah, I’m like, “Oh, I want this new jacket.” He’s like, “Really?” We verify purchases over a certain amount. We talk about it and it’s not always easy. I don’t like having to compromise with him over things. It’s annoying. Sometimes, I just want to decide what I’m going to do with my money. But it’s not my money. It’s our money. And that was one of the biggest mindset shifts too, like merging that finance, seeing that it’s our goals, it’s our money, it’s our future. And I think that helped us align a lot.

Robert Leonard (34:37):
Yeah. It’s really, really hard. The numbers is easy. I think from that perspective, Josh, you and I got it easy. We play with the spreadsheet a little bit. That’s easy. The psychological and emotional and relationship parts of money and investing is the hard part. What’s your, guys, current portfolio look like? Do you have any other rentals? What does that look like?

Josh (The FI Couple) (34:55):
Right now, we just have four units. We bought house hack number one in actually the week of Christmas 2018. And then in 2019 … Because our big goal in the beginning, like we talked about, was like we just don’t want to have as much student loan debt, so we bought that house hack 2018. And then 2019, A, we actually wanted to learn real estate and learn how to be landlords. But we paid off almost $52,000 in student loans just in 2019. That was like really priority one.

Josh (The FI Couple) (35:23):
And then, so we did that. We learned a ton. And then 2020, we started the year off paying off student loans with the intention of, sometime in the second half of 2020, buying a rental property. Obviously, everything shut down, so we really weren’t sure what was going to happen. So we just kind of like started saving money to see what would happen. Things started to open up a little bit and then we actually bought a second off-market duplex actually on the same street, September of 2020.

Josh (The FI Couple) (35:51):
Right now, we’re up to four units and we started this year kind of similar to 2020. We paid off a bunch of student loans the first part of this year. And now, we’re thinking probably sometime later in the summer or early fall that we’ll kind of scoop up another duplex.

Ali (The FI Couple) (36:05):
Our biggest goals have been like paying down debt, getting some real estate properties. Our goal is also to expand our investments in terms of broad-based index funds. But right now, we’re pretty real estate heavy and debt paid down heavy. And once debt is paid, we’ll be able to allocate more funds towards index funds as well.

Ali (The FI Couple) (36:26):
But this year, our big thing is we want to maybe either find another house hack or we partner with some private money and find some properties that way and maybe do the BRRRR method, but kind of exploring our options and always looking, but definitely looking to slowly scale our portfolio.

Josh (The FI Couple) (36:42):
We don’t really have aspirations of having 40, 50 units, anything that. Our goal, we’d love to live in a single family home one day, but live there for free because all of our rentals pay for that. And then use other investments to pay for other things, so that way we can still live a good quality life, just have our assets pay for it.

Robert Leonard (37:01):
That’s the piece of house hacking that I think people miss a lot, is that you don’t have to do it this way. I haven’t actually done it this way for various reasons, but you buy properties. If you buy a duplex and then you house hack it for a year, then you do it again. Now, when you’ve done that and you go buy a single family home, say you have four units at say $250 a unit. That’s a pretty good rental, but you could even do better. It could be $300, $400 a unit.

Robert Leonard (37:25):
Now, you’re looking at a thousand to $1,600, maybe $2,000 a month in cash flow from just those four units. And if that’s the case, now you have $2,000 to put towards your single family house that you buy. And maybe you’re not house hacking, but if your mortgage is $2,000, you have $2,000 coming in from your previous house hacks. It’s not really a house hack but it kind of is, right? You have your old properties that you’ve house hacked that are now paying for your mortgage. And so you still have no living expense.

Robert Leonard (37:52):
And that’s the piece of house hacking that I think a lot of people don’t focus on. They’d focus on the beginning part, like part A, but not as many people focus on after the hack, I guess you could call it, and see what happens then.

Ali (The FI Couple) (38:03):
I love that you’re bringing this up because this was really a big piece of how Josh got my buy-in, because I want that single family home. I want a home that we can raise children and all of these things.

Ali (The FI Couple) (38:14):
So with our debt situation and where we were financially, yeah, we could have bought a single family home. We could have done that, but we would have been making minimum payments. We wouldn’t have been able to save. We would have been living a relatively paycheck to paycheck life for the next 30 years. It would have been a lot harder to reach our goals.

Ali (The FI Couple) (38:33):
So, he said to me, “We’ll get that single family home. But this is the most financially responsible choice that we can make if we want to cut down our spending radically and get that single family home that have other people pay for it.” So that’s pretty much what we’re looking to do.

Josh (The FI Couple) (38:49):
And that’s the thing, it was like you can still have the thing that you want. And now, I used to not really care about single family home. I grew up in mobile homes all my life. So, I was just like anything that’s better than that is dope. But now I’m really excited. It’s just for the single family home because now I know the cash flow relatively speaking we have in our back pockets.

Josh (The FI Couple) (39:09):
And I’m like we’re going to live in that home and really be able to enjoy it because we’re not going to be so over leveraged. And other people, because of real estate, they’re going to pay for it. So we can actually be there versus the average person who’s just like super strapped. And they have the home but they can never be there because they have to work 60, 70 hours a week to afford that and the car and everything.

Robert Leonard (39:31):
If you sit down and think about it, theoretically, you could have cash flow in three years of about $3,000 a month or so just by house hacking three times. Now in practice, that’s a little bit harder because if you don’t sell the house hack that you’re in, you don’t get the equity. And so you don’t have that money to put into a down payment for the next property, and so you have to save up that money.

Robert Leonard (39:53):
So sometimes in practice, you can’t do it every single year, but in theory, you could house hack every year and generate cash flow and then use that to buy a property. So if you’re 22, say, 23, 24, 25 even, what’s waiting three years, four years, five years even? You’re 25, 26, 27 … Maybe you’re 30 by the end of the five years. Now you have the rest of your life still and your mortgage is covered in a beautiful single family house just because you sacrifice for a couple of years.

Robert Leonard (40:19):
And that’s kind of how I’m approaching it. I’m on my third house hack. For various reasons, I did not keep my first two house hacks. And I think looking back, that was the wise decision. But this one, I’m pretty much guaranteed going to keep it as a rental after I’m 26 to house hack until I’m 30. And then I’m going to buy a beautiful single family house that I’ve always dreamed of with a big motocross track in the backyard and everything I’ve ever wanted.

Robert Leonard (40:39):
But I’m going to sacrifice for the next four years to do that, and then I’m not going to have to worry about it. And I think a lot of people need to consider that.

Josh (The FI Couple) (40:46):
Right. Well, and the thing is, people won’t even scoff at the idea of four years of college or six years or what have you and they’ll work really hard for four years, five years, six years take out a bunch of debt. What we’re talking about is work hard, not that crazy, but work kind of hard for three or four years and be sensible. It’s like a season of sacrifice, but a lifetime of financial abundance.

Josh (The FI Couple) (41:11):
But I think sometimes people think like, “Well, that sounds too hard.” But a lot of times, because I think there’s misconceptions out there of like, “Oh, real estate is really scary. Oh, real estate is hard.” I’m like, “Yeah, there are some times when it’s hard,” but it’s mostly passive and ultimately, other people are paying for your housing costs and you can still have everything you want.

Josh (The FI Couple) (41:29):
I think either Brandon Turner or David Green, they say like, “Have the cereal before the marshmallows,” but everyone wants to just like jump to the marshmallow.

Ali (The FI Couple) (41:36):
But it is hard because we live in a society of instant gratification where you want something. I have a question, I can get my phone and I can Google the answer instantly and then I’m going to forget it five minutes later. That is the world we live in.

Ali (The FI Couple) (41:50):
For a lot of people, it’s like you grow up your entire life thinking, “I have made it when I get that single family home.” That is a token of adulthood. Here, you are now an adult. You got the keys for your single family home.

Ali (The FI Couple) (42:00):
And I remember that feeling of like comparing myself to my friends who all have that single family home. And I’m like, “Josh, I don’t feel like an adult. I’m living in an apartment.” That is so silly. I am an adult. I pay my bills. I pay my taxes, we’re adults. So, it really is just sacrificing now and making those choices that aren’t always fun. But future Josh and Ali are going to be really grateful that we did this for sure.

Josh (The FI Couple) (42:26):
Present Josh and Ali-

Ali (The FI Couple) (42:27):
Yeah, I’m grateful right now. I’m pumped we’re house hacking.

Robert Leonard (42:30):
Yeah. We really do live in an instant gratification world. That’s so hard about all of this. And I was looking at this a couple of weeks ago, and you have these two people, say, in two situations and one house hacks. And they maybe start a little bit lower. If you graph it, what they have from an outside perspective in terms of how they look like they’re doing, they’re a little bit lower and the other people are a little bit higher.

Robert Leonard (42:53):
And then as time goes on, those people that seemed a little bit higher at the beginning kind of plateau. And they can’t buy a nice car anymore. They can’t buy a bigger house anymore. They can’t do these things. And then these other people start to catch up, and they get a little bit nicer car and then they get a little bit nicer house.

Robert Leonard (43:08):
And then before you know it, they’re way past the other people and they’re like, “How did you do it?” And it’s like, “Well, you remember the last couple of years, you had a much nicer truck than me. You had a much nicer house than me and I was coming to your house for all the parties,” and whatever the situation is. “Well, now, I have the nice truck and I don’t owe anything on it. Now, I have the nice house,” and whatever the situation is.

Robert Leonard (43:26):
And that’s awesome because it’s my third house sack, I’ve been doing it for a while. I’m kind of getting to that point where I’m getting past those people a little bit. And it’s awesome because it’s really gratifying and it also solidifies that we’re doing the right thing. Sometimes it’s hard. You see your friends out there and you’re like, “I know they make less money than me. I know they don’t know what I know. They look like they’re doing so much better.”

Robert Leonard (43:46):
And so when you come across the other side, it just solidifies everything that you’ve been working for. And I encourage everybody listening to push through until you get to that point, and that point is worth it. And I know I’m sure Ali and Josh, you guys probably agree with that.

Josh (The FI Couple) (44:00):
Yeah. You hear about all the debt snowball. I forget which one it was as I was just listening to a podcast. And the guy talked about the income snowball. You get that first duplex, like our first duplex, I think we made $750 a month. Not life-changing money, but we were like that’s $750 more. And we’re not working 40 hours a week or anything that.

Ali (The FI Couple) (44:20):
To get it, right?

Josh (The FI Couple) (44:20):
And then you move out and then we rented that unit out for $1,350, and then you buy another one. Those rents, they don’t stay $750 and $1,350 forever. They go up periodically. It’s just like compounding works on anything as long as you stay consistent long enough. And so, those rents go up and the property values go up, and the debt goes down and it just takes time.

Josh (The FI Couple) (44:40):
But once that income snowball really starts ramping up, that’s when you kind of start getting that hockey stick effect. And that stuff we’re starting to experience ourselves.

Ali (The FI Couple) (44:49):
And I would say we’re still like in the trenches. And I think it’s because of our situation of having such a crazy amount of student loan debt. If we didn’t have our debt, I feel we would be ballers right now. But we have our debt, and we’re not. I think we’re still in a point where we’re like, “Yeah, we’re driving really old used cars and we live in a tiny little apartment. And our life is like not sexy or flashy by any means”. I think it’s a little sexy that we’re living in a duplex though, but by conventional standards, like really not.

Ali (The FI Couple) (45:16):
But I know that we’re going to get there because we didn’t invent this crazy thing. We’re doing something that tons of people have done and they’ve done it really well. And we see them on the other side and we’re like, “Hey, we’re using the same formula that all of these other successful people have used. We’re not trying something crazy or exotic. We’re buying real estate. We’re living in it. We’re paying off our debt.” So, I’m super pumped to like get to that other side and I know we’re close.

Josh (The FI Couple) (45:42):
Not to belabor the point over long [inaudible 00:45:44]. One of the questions you had asked earlier was like, well, how did you buy in from Ali? I stopped trying to be Jeff Bezos, Elon Musk. Instead of saying like, “Here’s some crazy, radical idea,” I said, “Here’s an entire really successful, smart people in this community. Here is all the testimonials that they’re sharing for why this is probably going to work out.” This isn’t Josh’s crazy idea. A lot of smart people said this could work and let’s do this. And so that was a real big thing too. It’s just don’t try to reinvent the wheel. Success leaves clues. Just do what successful people have done for generations.

Robert Leonard (46:20):
And if I could sum up everything from this whole interview, that’s probably what I want people to take away the most, is that you guys are awesome people. Josh, you and I have had conversations quite a bit in the past. Ali, you and I are just starting to get to know each other, but you guys are great. But you’re nothing special and neither am I, and I don’t mean that in any disrespect. But everybody listening can do the same thing you guys do. They can do the same thing I do.

Robert Leonard (46:44):
You guys work in careers that are very, I would say emotionally gratifying, but maybe not so much financially, yet you’re still doing it. And so there are people that make a lot more or even make what you guys made and they can do it too. So, that’s what I really want everybody to take away from this conversation and your guys situation.

Robert Leonard (47:02):
As we wrap up the show, when you think back to when you were just getting started on this personal finance journey, it could be about real estate, house hacking, debt, anything really, even life, managing money as a relationship, what do you know now that if you had known it back then would have just made everything so much easier or would have made you more money quickly? What do you think would have got you there?

Ali (The FI Couple) (47:24):
So I thought for me, we bought our first rental property when I was 20, he was 29. I wish we did it sooner. I know we’re still young but I feel like throughout my 20s, we worked our jobs. We spent money. We didn’t talk about money. If I could impress a golden nugget, it’s like start thinking about money and start thinking about your future because the choices that you make in your 20s can have profound ripple effects. And I wish we started those conversations sooner but I’m really grateful that we started them when we did and that we’re here.

Ali (The FI Couple) (47:55):
And also we are totally normal people who have pretty average salaries, and we don’t come from families with trust funds or real estate backgrounds or anything like that. We’re not crazy handy people. We knew nothing about owning homes and we are doing it, and we are hustling to get there. So, this path is attainable to you even if you feel like it’s not. So overcoming that mindset is huge. I just said 20 things but those are my golden nuggets.

Josh (The FI Couple) (48:21):
And the thing is too, something we didn’t talk about. I mean I personally probably spent over like $20,000 on cars. We made, relatively speaking, every financial mistake and yet here we are at a point where as long as we keep doing what we’re doing, we have a really big shot at financial independence in our mid-30s immediately if we wanted kind of take our time with it. We’re talking in our 30s and we’ve made all the mistakes kind of thing.

Josh (The FI Couple) (48:48):
So, yeah, wish we started when we were 26 or 22 or whatever, but you can’t reverse the hands of time. And the second thing is I spent so much time in my 20s being like, “Well, in order for me to be successful, I have to climb the corporate ladder and I have to create something that’s never been done before.”

Ali (The FI Couple) (49:06):
And trade time for money.

Josh (The FI Couple) (49:08):
Yeah, exactly. I had to get the mindset of like, “Well, if I need to earn more, I just have to work more.” So, yeah, I would just say like you don’t need to reinvent the wheel. Just find out what successful people have done. Figure out one that aligns with you and then just stick to that. That’s the thing too, it’s like you actually have to really stick to it and not get shiny object syndrome.

Robert Leonard (49:30):
I don’t know who said it but somebody said that success leaves clues, and it really does. With podcasts, with so many things out there today, anybody listening, you can find the information that you need. You don’t need to, like Josh has said, recreate the wheel and I believe in that so much. I’m a shameless cloner. If somebody is doing something that works, I do the same thing and I’ll just copy it and do it my own way and make it work for me. There’s no point in redoing it.

Robert Leonard (49:54):
So with everything that’s out there nowadays, the chance of you coming up with a new idea is so slim. So you might as well just focus on something that’s working, tweak it a little bit to fit your situation is and hit the ground running.

Robert Leonard (50:05):
Josh, Ali, The FI Couple, thank you guys so much for joining me today. This has been a long time coming and we will definitely be doing this again in the future. I really appreciate your guys time. For everybody that’s listening that wants to connect with you, learn more about your story, just chat with you, ask you some questions, where is the best place for them to go?

Ali (The FI Couple) (50:26):
Our main source is Instagram. So, you can find us on Instagram, @theficouple. We also have a website, theficouple.com. And we have a Twitter account, @theficouple. We have a Facebook page. You can find us on all major social media platforms.

Josh (The FI Couple) (50:41):
Yeah. And honestly, this is like such a cool experience for us. Honestly, I love your podcast for a really long time and so to be here now and be able to share our story is really cool. We just really appreciate the opportunity.

Robert Leonard (50:54):
I appreciate the kind words, guys. I just have to say I’m a little bit jealous that your handle is available on all social media channels. Mine was not, it’s driving my OCD a little bit crazy. But I appreciate you guys so much. Thanks for joining me.

Josh (The FI Couple) (51:05):
It’s a pleasure.

Ali (The FI Couple) (51:06):
Thank you.

Robert Leonard (51:07):
All right, guys. That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (51:13):
Thank you for listening to TIP. Make sure to subscribe to We Study Billionaires by The Investor’s Podcast Network. Every Wednesday, we teach you about Bitcoin and every Saturday, we study billionaires and the financial markets. To access our show notes, transcripts or courses, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decision, consult a professional. This show is copyrighted by The Investor’s Podcast Network. Written permission must be granted before syndication or rebroadcasting.