Welcome to the prosperity gap where we discuss the financial gap that exists between where we are and where we should be. It's time to bridge that gap.
Hey , Prosperity Nation, Dave Hall, the Prosperity guy here. So excited to have you back on our show. So excited to help you bridge your prosperity gap between the life that you're currently living and the one that you should be. If you've not yet had a chance to subscribe to our show, please do so. We release a new show every Friday. We want to make sure you get to meet our latest guests as well as get the opportunity to gain the information and the insights that we share on these shows.
Today's show is being brought to you by Etrends Tax and Accounting. If you've not got your tax return filed yet this year, you're looking for some guidance, some help, please go to the website Etrendsgroup.com where they'll be able to help make sure that you get the advice and the information you need as well as the help that you need to be able to get your tax returns filed timely. So with that, let's go ahead and introduce our guest. Welcome her to the show.
We've got with us today, Sarah Brandenberger. Sarah , welcome to the show.
Hi, nice to meet you.
Great to have you on the show today. Sarah is a blogger/Instagrammer/wants to help the world with her nerds guide to wellness, correct?
Yeah, that sounds about right. I don't really ever know what to call myself. I've changed what like my profession is on my Instagram about 10 times, so I don't know how to classify myself.
It's always interesting in this space when we talk about financial independence, when we talk about financial literacy, because there are so many individuals that are out there trying to share their story, trying to help other people, but it is a process. We see this with many of our guests that it's been a process to get to the point where they are in the space that they exactly want to be in, where they're able to help the most amount of people that they can possibly help.
It sounds like you're kind of going through some of that process yourself right now.
It's always changing over here. We're never bored.
So your financial journey, as I understand it, started back in 2016 is that correct?
Yeah. We were newlyweds and that really pushes you to figure it out.
So talk a little bit bit about what was going on in 2016 with your own finances and this relationship of putting two people together called a marriage.
Right. So in January of 2016 we got married and we, my husband and I, had always talked about him joining, his family had a side business where they did like concrete asphalt, and poured driveways, and so my husband had talked a long time about leaving his like good paying job and transitioning into doing the family business full time.
And so we kind of went around and round on that for a while and we decided, okay, we're married and he's on my insurance because very risk _________ when you're on full time insurance and you're covered through my employer, we can go ahead and like give this family business a try. And so we had looked over like the financials and everything and so we're like, okay.
So May came around and he quits his job and he starts the family business and then we realized about like mid summer, like probably July was our like breaking point where we realize that the financial statements we had were like not representative of the entire year and that the business was maybe out of money probably by January, February. And so we would have no income through the winter.
And so were just kind of watching that and we're like, okay, great well we just quit a really nice paying job to do this and we bought new vehicles. My wedding ring was financed like everything. And we're sitting there in the summer where the money's good because it's a seasonal job and we live in Indiana and we're like, we're going to be out of money and we can't make our expensive vehicle payments. We had a motorcycle payment and then everything that could go wrong went wrong.
So my husband, his transmission blew on his truck and that was like two grand to fix. Then I was like, this truck is terrible and old lets buy you a brand new truck because that's like a good decision. So then we bought like a $43,000 truck. Financed that of course, and then I got like a promotion and changed jobs myself and then so I deserved, l ike the I deserves, I deserve an SUV. And then he nearly t otaled the brand new truck.
His l ike tire exploded going down the highway, just randomly total random event and then my vehicle had a flat tire. Our dog got hit by a car; just like emergency bills.
We went from the people that pay their credit card every month, the people that couldn't pay o ur credit card and we got into like $18,000 of credit card debt in about a three month span because of all these emergencies and things, and we just weren't paying attention to our spending and we w e re l ike, Oh let's re model o ur house on the side be cause w e 're n ewlyweds and that's what you do if you buy a house and then you remodel it.
So we just ra cked u p a heap of debt and so it was just horrible and so I ended up crying and finally found Dave Ramsey through a friend. So that's how we got debt free was ki nd o f t hrough that process.
So coming into the marriage, did either of you bring debt into the marriage or was all of this created after you got married in January?
He never used a credit card before we got married, like he didn't have them. I did, but I always auto paid them and so turning off my autopay was like mistake number one because I was like not really sure what we had spent. So obviously when you're not really budgeting, you don't really know what's going in and out. So I just knew we couldn't pay it all off that month and then it never got better. I mean the ring we had financed before and that was something he did.
We had the motorcycle before also.
Okay. So there were a few items that you were bringing in, but the reality of it was is over the short period of time, everything really started I guess snowballing the opposite way of what Dave Ramsey talks about where we snowball our debt and get everything paid down quickly or basically snowballing yourself into debt and the woes that come with all that.
Right. And then we talked a little bit earlier, I think we talked about side hustles.
So when we did our debt pay off , I started waitressing like that summer in addition to my full time job and I waitressed throughout our debt free journey and that's kind of how I got started on Instagram was just commiserating with a couple other people on Instagram about, Hey, I'm waitressing through debt and I work a 40 hour a week job plus and then I'd change literally in the car on the way to my job, sorry mom and dad, and then would get to the restaurant and waitress and that's how we paid
off my car.
Talk a little bit more about your husband's business. So did he take the whole thing over from his parents? Were the other family members still involved in the business at the time?
It's still up and running. We're just not in it. It just wasn't a good place to be. And I honestly think I'm a little too type A to handle the ups and downs of what we were going through, and so there was him, one of his other brothers, and then his parents.
We went into that business together and so, you know, it was something that they were really passionate about and they had done a business before and so they were used to like the really highs and lows, but we were just not prepared and not something we expected and so it was just not for us by the end.
I think that's one of the important things about business. It's really coming to an understanding of what is for you and what isn't for you.
Right and they still love it and we're just like bless you. My wife can't.
And what's your husband's take on it? Is he happy to be out and into a more steady job or does he some days you wish he were back there?
He really enjoyed the work, but it started to take away the enjoyment of like family gatherings because it was stressful to run a business together and we did a lot of like family time stuff. Like, we'd go over and do like campfires at his parents' house and do all this stuff and it kind of took away the fun aspect of it when you're in the trenches everyday together.
And so we're like, I think we'll enjoy working on our own goals and then enjoy family time and holidays again a little bit more when we don't, you know , have to make business decisions together. So we decided to not mix together quite as much. My husband's dream is actually the real estate, which I think we'll get into today, but that was his plan and I was never that interested in it, which is ironic.
So as he got out of the business, did he end up going back to the same job? Was he able to find a different job? What ended up happening on his side as you're doing this waitressing, changing in the car, getting from one job to the other.
Well, for about a year we kind of like hustled and did my Dave Ramsey stuff on my own and then I finally realized that we have to start communicating about our money issues and we can't just like pretend it's not there.
And so having a lot more conversations about it and where we wanted to go and so we decided that we would, my husband was like I really want to do rental properties and at that time we met with a financial advisor and he's like, you know that would really help move the needle for you guys with where you're at. And so he decided to go back to the RV industry f ull time, which is what he did before in a different type of job, but same industry, same o wners, pretty much.
And so he said, we decided to both work on getting like the highest paying jobs we could because that's how we can get as fast as we can into real estate, and so it was k ind o f like a necessary evil to get where we wanted to be.
The Prosperity Nation, I think what you're hearing from Sarah here is one of the most important aspects that you need to understand that many times the quickest way you can get where you want to be financially isn't just cutting costs. Sometimes we can't cut enough costs to get ourself there in a quick period of time.
That many times it requires extra income and as Sarah has shown here, you can do it for a year or maybe you have to do it five years, 10 years, or whatever it may be, whether it be coming to the point that you've earned the extra money you need, as long as you don't keep raising your lifestyle with it to where you can get yourself out of debt , you can get yourself back to where you need to be and you can finally be in a position where you feel comfortable again moving forward and don't have
this debt hanging over your head all the time.
And we're very bad at being frugal, to be honest. Like we're really bad at it. So we had to really work hard on our income because we're both spenders and so it's a fun budget to watch everything.
Talk a little bit about the communication. I talk about that all the time on this show. How important that is. So you said you started doing the Dave Ramsey process yourself and without him. What was going on? I mean was he managing his money okay during that period of time or did it really take the communication to get you guys to say, look we both got to get on the same page here.
I managed everything pretty much. Like I did our budgets and whatever and he would like rather not look at it, and so I used every dollar, which is like Dave Ramsey's budgeting platform and I'm like get this app on your phone and he's like, I'd rather not. I'm like, okay, but we realize like my idea of budgeting and money management will never be his and it took a really long time to figure out he's not going to look at this app or a spreadsheet and ever be excited.
And so I had a really hard time struggling with this actually because you watch Dave Ramsey and they always talk about like a couple's relationship with money and how you handle it and you guys come together monthly and doing a budget meeting and like my husband's brother died. This is not gonna work for us. And so what we started doing was started small and we're like, okay let's talk about our personal spending money because that's a happy thing. I'm like, what would help you on that end?
Because honestly the bills are on auto pay. Like we have our retirement automated. We pretty much automated everything else. Our grocery spending doesn't change that much every month. It's really our personal spending, Sarah and Justin's money where we struggle. And so he's like, I really like cash . I'm not going to check an app, but if you give me X amount of cash every month, we're going to do it. And I'm like, okay, but I don't want to choose what that is for you.
So you kind of pick, you know, if you want $300 this month, do you want $200 and so he chose his own amount and then he would get that and then it was up to him to do whatever, and then it was nice because he couldn't get mad at me because he chose the amount of money he got and then I would also not yell at him when he came home with like a soda from the gas station every day, which is like his thing and I just feel like it's ridiculous so it was a good win for us and we really kind of went
that way because we knew we were working towards saving goals, but really we knew how much we were trying to save and it was really the personal spending we really need to get a handle on and so that's where we started.
Look how different we all are. I am just the opposite. I cannot stand having cash and it's not necessarily because I don't like having money on me. In fact, that's been one of my challenges here in Puerto Rico is you have to carry cash all the time because many places don't take any other form of payment.
So if you want to get out of a parking garage, you want to be able to see a doctor or something, you're often times going to have to pay some type of cash, but I don't like to carry because I'm such a giving person. I always give it all away. My wife's like, I come home and she's like, where did all of our money go?
Somebody asked for money here and somebody asks for money there and I just found that if I used a card and I never had cash, I was much more disciplined and not that I don't still give substantial amounts of money to my church and other people and pay a tithe, but it's a reality that it's like I can't do cash all the time or I'm going to completely go broke.
Yeah , that's amazing. I also don't like cash. I'm with you. But it worked for him and that's kind of where we laid the foundation is we had to start somewhere and I like to always talk about that because I think people get overwhelmed with the idea of these very amazing family budget meetings and for a lot of couples it's not ever going to be like that.
No, and I think it's coming to the realization just like you did that you're not the same and it's not going to work the same for each side and the sooner you can come to understand that and then come to a middle ground, the sooner you're going to be able to make progress. Now everyone can make progress, everyone can commit to make progress. But just like as you guys talk about cash may be the way you do it on one side, it may be cards on the other side, vice versa.
These things are going to happen. But as you can talk about it, and I guess that's the biggest thing in Prosperity Nation is we continually mention on this show is you need to communicate with your spouse, significant other, whoever else that may be affected by your finances, and if you have kids, same thing with them.
You need to have communication with them very openly on what you're trying to accomplish and what you're doing so when the issues come up where you may not be able to do what you used to do or things may be handled differently, it's not a surprise.
I think one of the biggest issues that I say that creates most problems in marriages and life is unmet expectations that people expect something else than what they did, and so as we communicate and educate each other, pretty soon we don't have as many of those and therefore our relationships are better.
I would say like a common vision helps because when he made a very hard choice by going back to his high paying job, and so o ur long talks about that w ere probably like, he likes the big picture idea. We're very much on the same page but the day to day like m inutia of how we're going to get there he doesn't want to know.
But he knew when he went back to that job that we'd eventually get him back out again and he signed up for the vision, but he's like the day to day don't bore me give me my cash and I'm g ood.
Well and the way that you're doing that, as I understand it, is through rental properties. Talk a little bit about the first property. What got you started. Obviously it sounds like your husband had a big interest in this. How did you initially get started into your first property?
My husband has wanted real estate since high school, so we've been together since high school. That's like our fun fact. He's wanted them forever and I thought he was crazy, because I'm not handy at all. Like zero . I've learned things, he has taught me a bunch of stuff now that I can have some skills, but really that was something new for us.
And so we decided that that was really the fastest way we can scale up because we're not that great at saving and I don't do well with a pile of cash sitting there, and so doing the classic fire path where you can potentially r etire just through index funds was never exciting to me. I mean I like index funds, we have index funds, we still do retirement savings for each of us, but real estate was faster.
You could run the math, you could do a spreadsheet and you could really see it move the needle quicker, and so I'm a really impatient person so that was his big thing. Like he is r enovations. He could probably build a house from scratch from top to bottom and do all of it himself and I know nothing.
And so he houses for that aspect and I didn't think my sk ill s e t r eally matched with that until I realized that most of the money you make is on the buy and that's math and numbers and spreadsheets. And so it really ta pped b oth of our skills and it got a lot more exciting when I realized I could put together spreadsheets and fi gure o ut returns and kind of analyze it similar to retirement and investing. So that really got us rolling.
How did you come up the money for the first property? Where did that come from?
So we bought the house we were living at when we got married, we remodeled and so we bought it and it had a floral ceiling and floral wallpaper. It had green trim. The bathroom, every wall was dolphin murals, like as tall as I am. I'm 5'3" and the dolphins were taller than me on every wall in a very small bathroom and so it was just hideous.
So we remodeled that completely through and then we moved out of that house and then I think we left like $37,000 out of that and we bought two properties with that money. So w e moved i nto the house we currently live in that we're renovating, which we're pretty much done renovating now, and then we bought our first rental property with that. So h ouse one we're living in and then house t wo if you're on my Instagram ever is our first rental we ever bought.
And did you renovate it as well? Were both these properties renovated or just the one you're living in?
The one we're living in, we did a rental, it was more cosmetic. The bathroom was really bad. It just needed some paint and kind of freshened up. But overall it was like the bones were really good and it came with brand new appliances. The second rental was pretty much turnkey. It took less than a thousand dollars to get that one up and running. It needed two new floor joists because the floor was just like really squeaky and kind of bounced.
And so we just changed out the floor joists because my husband can do all that and it's really nice and amazingly his family, they do construction stuff on the side so his dad could bring over like all of his jacks and help us with it and so it's honestly amazing being a part of his family because they just know how to do everything and I'm sitting there like, I think we hired out changing light bulbs in my family . I don't know what we're doing, but I can paint.
House two is pretty much a turnkey property.
We talked about that a little before the show. Sarah and I did, and it was in regards to my own life. I actually started my married life buying a 15 unit apartment complex and it was very overwhelming. We got shown two units that were the best units of the 15 and we thought, okay, we can handle this. There are minor repairs. I knew how to do a lot of stuff just because we were so poor growing up that I had to do it in my own house growing up, helping my dad do stuff .
I thought , okay, I can handle this. Well then we got the unit closed, we saw all the other units and we realized we have a major problem here. We had some flooring that had to be redone, bathrooms that completely had to be torn apart. All the flooring had to be redone. The kitchens needed to be redone and I can tell you I learned way more about rental property than I ever cared to. Way more about construction than I ever cared to.
But as a CPA especially, it's been great because it's allowed me to use that knowledge to help other people and to be able to relate to other people as they're going down this journey and to better understand where they're at. So it's really cool here with Sarah and then doing what they are in renovating and Prosperity Nation, if you are looking at investing and you have the skills, then it can be a great way to build equity.
It can be a great way to really help yourself improve your financial position. So you guys get into these two units and then now you've got two more. Is that correct? How many other units do you have?
We have, we have four houses total, so the one we're living in and then we have three properties. One is a duplex and so it has two tenants. Obviously it is vacant right now and we're going to remodel that this spring in summer. So March starts. The duplex is we , we're slow because we do it all with cash fees. We can't break all of our Dave Ramsey habits, but we bought all of our properties 20% down though that we've fought so far.
How have you found being a landlord, is it something that you've enjoyed as far as working with tenants? Anything that you could recommend to the listeners that are looking at getting into rental properties?
So I'm very particular, shocking. So I do everything online and everything automated. And so when we're screening tenants, I ask them like , will you pay online? We'll use your leases electronically. Like a lady even asked me for our last property when we were running out, she's like, can you mail me a paper application?
And I said, no. So you just figure out, you know, we have a set of like standards and regulations and I'm learning that the main, you make money on the buy and then your next most important thing in real estate is screening your tenants. Well. And so we've , I feel like we've done a pretty good job so far. We'll see, I guess when they move out, that's like when the real magic happens. But so far we, I mean , honestly I found our first tenants off of Facebook.
They , like a friend of a friend heard that we bought a house in the right school district they wanted to be in. And so they reached out to us and then, well, they, their friend told them we bought a property, but they , um , we're confused because we also bought a house for ourselves at the same time. And then I saw them post like, Hey, me and my wife were looking for, you know , a home.
And I messaged him like, Hey, I just bought a house today and I saw you're looking do you want to move in this month? So ,
and you're exactly right on the screening process.
That's one thing for us very nation you've got to understand is that screening is so critical at taking a risk on a tenant if it's your first investment is not the wise thing to do because they can cost you so much money over time and not only unpaid rent but also any damage that's done to the home that for some reason you may not be able to get back from them and as you're saying, even in your own situation, if you have to remodel it can be months without rent.
Now you guys are planning on that. It's part of your budget as part of what you guys are doing, but if you've got to remodel a property, it could take you awhile to get that remodeled and be able to get it back on the market where you can start making money again. Right.
That fourth house we bought bought at the end of last year and it was actually like a really big stretch to buy that house. And we bought it because we found it really cheap. And then the rent off of the fourth house and the first house we'll cover all of our mortgage taxes and insurance on every property.
And so we bought house for and like drained all of our savings because we knew if we had the fourth house, our duplex could sit open for five months and we could renovate it with cash and we wouldn't have to [inaudible] kill ourselves. And so it was a very strategic plan to like have it sit for a little bit. So like right now we're cashflow is zero, but we're really proud of that zero because two of our units are empty and we still aren't bleeding money. So
reality of it is just part of the process and planning is part of the process. And I think that's the cool thing about what you and your husband are doing, Sarah , is you are planning in advance. You're looking at these things, looking out and saying, okay, where do we need to be? How do we get to where we need to be? What moves will allow us to get there? The more we can do that type of stuff and this ill stop this instant gratification, we're just going to make a decision now on the cough.
That's so hard to be able to make work out when if you plan now there may be times when you plan and it doesn't perfectly work out. That happens many times too and I'm sure it's happened in your guys's life, but that's just part of the process. Also,
not for the week either. Renovating was rough, like not the house for nearly killed us. I'm not going to lie, it's not great, but we made it. So
do you want to be a person that wants a lot of control because you're going to have a lot of that, but you're right. There are situations that it can be really tough on a marriage. It can be really strenuous and same thing with us. When we had our 15 units, it worked out in the end, but we spend a lot of weekends, a lot of nights over there doing repair work that we never expected we would ever have to do in our whole lifetime.
The game changer for us is we had a baby in June and so house four was the first house we had to renovate with a baby and like childcare and like I can't just like run up and paint because there's like naps and bottles and sleep and you're just like, my God, this is I . I was over confident that it would be fine and it was fine. It just was different than we expected.
What's next? Are you guys planning on getting additional properties? Where do you see yourselves in real estate?
First of all, we need to rebuild our savings [inaudible] bad now , so I guess we, yeah, we bought it for a strategic reason, house four but we're a little low on reserves so we need to get our reserves back up personally and for the business. We keep like an emergency fund in our business as well. After that we will probably not buy a house this year. The other thing is the house we're living in, it's done. So in theory we could move out of this and get something else.
So I think if we do anything this year or next year it'll be getting ourselves a new primary residence and running this property out. So that might be a move we may make this year . But the main, our 2020 is getting that duplex up and rolling because that'll be our big, that's probably our best, our best school district, highest running property and it's torn apart right now. So you want to see us here , a roof off a house and rebuild it like halfway up. Then you can watch those stories.
But yeah, I think the big thing is we just, we really have no idea what we're doing. We're just trying to figure it out and figuring out what works for us. And you know, I've, I've watched a lot of like, like these guys who have been real estate for like 30 years and like had been in like during recession and they're like, Oh, all these people are out there talking about their real estate and they don't know what they're doing. I'm like, that's me.
But I think it's nice to see the process and us figuring out as we go. And so that's why we talk about it. It's not to be an expert, it's to say everyday we don't know what's going to happen with our properties and we're figuring it out and we're trying to do a good job of [inaudible] managing debt versus scaling up. And I think our goal is to get to six houses. That would be our like retirement number house we need.
So we need [inaudible] actually five houses now we have a duplex, so just one more house really and then pay them all off.
Well that's great. Sounds like you've got a great plan. Sounds like you and your husband are working well together. Sounds like you're enjoying the fun parts of life and children.
The big concept things we get the day to day life with the baby. It's a whole new learning easier . We're making it.
Yeah, add five more to that and then we can talk. It's been great having you on the show today. I appreciate you not only sharing your story but talking about your relationship with your husband and how finances have come into that relationship. Some of your upcoming goals, you're exciting times that you have ahead of you with your family and being able to look forward to additional properties.
For those of our listeners who would like to get ahold of you and to start following the things that you're doing and your financial journey work and they go to do that.
My Instagram is probably the best place cause I'm on there. I don't want to talk about how much I'm on Instagram. Like it's probably way more like when you look at your phone and tells you how much screen time, like 99% of that is on Instagram. So I'm on Instagram all the time under my parent's guide to wellness is my handle, which I made because I really started paying off debt.
Is this like a more of a mental health journey and I talk about that sometimes it's just finances are a big like insecurity thing and like kind of an your whole life and so if you get 'em under control it kind of , you don't have that baseline worry all the time. Like you know where your meals are coming from, you know your bills are all going to be paid, you know you have a roof over your head.
Like just having like knowing you're stable [inaudible] important thing, like a security thing for me. So, but anyway, I digress. So Instagram is the best thing. You can email me as well but blinks on Instagram as well. It's just our guide to wellness@gmail.com and then I also have a blog, but it is getting migrated in the next month or so.
So right now we're in the process of like doing a full rebrand and a remodel and yeah, so hopefully I'll have a new blog up and rolling soon and have some new content on and do a lot more posts on the houses, so. Huh .
All right . Well, very exciting. Sarah , thank you so much for being on our show today.
Thank you for having me. This is exciting and I love your mind. The gap because it's so important is we went from no gap to our gap is a lot more comfortable now. So we're , we're working our way up.
Absolutely. It is definitely the prosperity gap that we all need to focus on. My name is Dave hall. I've been the host of the show. And remember, for those of you that have not yet subscribed, please take the opportunity to subscribe to our show so you can meet other amazing people like Sarah listened to their journeys, listened to their stories, and listen to the great advice that they share to help you bridge your gap between the life you're currently living and the one you should
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