So. Hey, everybody, we're on with Rachel.
She's a TikTok star.
And her handle, I guess, is MoneyHoneyRachel
Is that right, Rachel?
Yes, that's correct.
Yeah. Welcome. Welcome to the show.
You know, I was really looking forward to doing this because, you know,
I talked to about you all guys all like, it seems like a lot of times.
You know, I read like Robert Dye
when we're together at all the advisors or whatever.
And so it's really exciting, you know, to talk to
somebody that's educating you know, our youth.
Rich Dad, poor dad
was a game changer for me as it was for, you know, millions of other people.
And I still push it really hard.
So I try to get all my people to read it as well.
But I first read it in high school,
and by then I was already very much a finance nerd.
So this was just another book that I was reading in my repertoire.
And but this one was different because it was the first book
that turned me on to real estate investing.
And that's
part of what lit the fire in me to pursue real estate investing at a later age.
So that's what I credit that books for doing so.
All right.
Well, I think everyone wants to know, like, what was it?
You know, because even I myself, I didn't have
I wasn't investing or studying like you in my twenties,
like I probably should have been.
I started later in my thirties
and obviously had have had good success from there.
But what was it in your twenties that made you like all of a sudden go,
you know what, this is what I'm going to do?
There are a few things, and really it started earlier on in my childhood.
I grew up in a really wealthy county.
It was a very unrealistic bubble to grow up in, in Kentucky.
And just to give you some context, some of the kids in my high school
got brand new BMW when they turned 16.
My family was not operating that way.
We were not going out to eat.
We weren't going out ever on family vacations.
Nothing like that.
So at a young age, I felt like I didn't fit in.
And that's not the way you want to feel in middle school and in high school.
I remember thinking to myself, at some point
that I didn't want to end up like everyone else struggling with money.
I didn't want to have to operate on a strict budget or borrow
money from my family and friends to make it to my next paycheck.
I wanted to be different, and I had this epiphany then that
what I did then would either set me up for wealth or for poverty.
So I started taking it very seriously, reading everything I possibly could.
You know, they say that fear can be a big motivator for you.
And I do think I had fears
growing up, just being in a household where money was very much a stressor
and living in an environment where there never was enough money.
So I inherited a lot of those limiting beliefs.
And that fear kind of drove me to become really ambitious
and want to pursue financial independence.
Now we're going to get into, you know, good debt and bad debt.
So, Rachel, let's talk about that, because I know especially your age,
I remember in college, you know, I was getting bombarded
with credit cards, you know, credit cards, like sign up for this, sign up for that.
And I had gas credit cards
and Visa cards and MasterCards and all that kind of stuff.
And I was running up debt and I didn't know anything about it.
And you talk a little bit about this.
Can you
can you explain what the difference between good debt and bad debt is?
Yes, absolutely.
And in my book, I talk about it in terms of bad debt and tolerable debt.
So that's how I kind of look at it.
Most debt is bad debt, and it's based it's just a waste of money.
It's a very inefficient use of money.
But when I think of tolerable debt or good debt,
that is really debt that backs
and appreciating or cash flowing assets. OK.
A great example of this is rental properties.
I have mortgages on all of my rental properties, and that's
because I'm using money to leverage money essentially to get a higher return.
So that's an example of tolerable debt.
An example of bad debt is almost everything else.
So consumer debt, car loans,
depending on how
you look at it, student debt could be or it might not be.
And credit card is a really big example of bad debt
because you're just paying such a high interest rate
for something that you're essentially consuming
and that's not going to have any future value.
So that's kind of the way I look at it.
You know, one of the things that I saw
in some of your videos was
you were talking a little about savings, you know, and,
you know, I think I think younger people are told to save money for investing.
I think they mean that, you know, you can't any longer have any fun.
You know, how can how can they balance saving having fun.
Money and fun are not mutually exclusive.
You don't need money to have fun.
So I really think it starts with living intentionally.
I did an exercise with my husband recently and we listed that
the top ten things that bring us fulfillment and that bring us happiness
and it was things like calling my parents, hanging out with friends,
going on a hike, you know, going on a walk together around the neighborhood,
playing with our dog.
Those were the top things that brought us fulfillment.
None of those things have anything to do with money.
And I think
it's a really powerful exercise list out the top ten things that make you happy
or that bring you joy.
Chances are most of them you don't need money to do them.
It's really about relationships and it's about love and it's about experiences.
So I think that's one thing to keep in mind.
And if you can just live intentionally in that way, you're going to realize that
you can sacrifice a lot easier
and you can make
your future self a priority because that's what needs to happen in order to become
wealthy, is you need to prioritize your future self over your present self.
That's a really, really hard thing to do.
But if you can just set your sights on that and not get distracted
you will be very successful and you'll you'll be able to have fun
now and have a very financially successful future.
OK, guys.
So next we're going to dove into
how Rachel and her husband were able to build a rental portfolio here.
This 40 houses by the age of 27 years old.
We're going to do that right after the break.
And for those of you guys who want to go out,
check this out, go to CNNMoney.com slash premium.
OK, so Rachel, can you explain to me the jury
that you and your husband took in order to build 40 houses by the age of 27?
I mean, a lot of people have to start with like one or two and,
you know, so 40 by the age of 27, had to start
with some serious attention and a lot of work. Yes.
And to clarify, it was 40 doors, 40 units, six buildings.
So we had several buildings that had a lot of units in them.
But yeah, there was a lot of things that went into our success there.
First was the fact that we both graduated without debt.
So I paid my way through school selling Cutco Cutlery.
Have you heard of Cutco Knives now?
Of course my son sold Cutco.
It's a great way to learn.
But it's a great company to work for.
So I paid my way through school doing that.
My husband's a veteran, so he used his military benefits
to pay for school, and that was a huge advantage for us because
even though I was only making $36,000
after graduating, I was saving half of my income.
So that's the other thing is that we were just very frugal you know,
I never made six figures in a career or in a job.
I was just able to be very, very frugal
and save money for the down payments for the houses.
Another thing that we had going for us is that we invested in Louisville, Kentucky,
which is a great place to invest, low cost of living
and housing prices are and were raised in a bowl.
So in 2017 this is when we started investing in real estate.
I was 24 years old at the time.
We in that year we found our first duplex in Louisville Kentucky.
It was $100,000.
So by then we had each saved up ten grand
of our own money to put towards the 20% down payment.
So that's how we started
and that's where the money for the first down payment came from.
And then I also get asked, well how did you scale so quickly?
Because we essentially went from zero to 40 units in a span of two years.
And, you know, a lot of people in our shoes would have done house hacking,
they would have done the Burr method, they would have done all these things.
We didn't have to do that because of all the reasons
already listed, but also because I had my real estate license
this was a game changer for me, and I never had it for helping clients.
It was only for my own purposes as an investor.
But basically we would fully deplete
our savings to further the down payment to purchase a property.
But then I would immediately get a commission check back for thousands
of dollars
because I was representing myself as the buyer's agent on every single deal.
Sometimes I'd get back ten grand in a commission check,
so we would save that for the next down payment.
And we were also saving 100% of the cash flow that we were generating.
And so that's how we were able to come up
with 20% down payments, one after the other and scale so quickly.
Yeah, guys, I hope you heard what she said.
So my sister does this Rachel, she's a real estate agent
and she does not necessarily represent a lot of clients.
He uses it to be in the system to get the information off of the MLS
and all the different services,
and then she uses it to go find assets for her and her husband and just like you,
they use their, their use their money that they've saved to put down.
And then the commissions come back and they, you know, they accumulate again
for the next year. Yeah, exactly.
And not only did it give me a financial advantage
having my real estate license, but it gave me a time advantage.
And for at least two of the buildings that we bought, we got in quickly
because I had my real estate license and I just had that slight
time advantage of being the first person to know when something was listed.
So there's a lot of benefits.
And the way I look at it is if you're going to close at least one
transaction per year, it normally more than pays for itself.
Well, great. Rachel, thank you so much.
I really appreciate what you and your husband have done
and congratulations on 40 Doors, you know, in just a few years and
and being financially free at such a young age
and of course, spreading the news and trying to help educate the world.
Appreciate it. Thank you so much. Same to you.
You bet.