Tell me a bit about your employment history
I am an elementary Physical Education teacher and high school soccer coach. These occupations occupy most of my time, and account for the majority of my income. I am married to a wonderful, ambitious women, who is the most employable person I know. She works two separate part time Physical Therapist jobs, that allow her to largely set her own schedule. She also teaches, or works as a lab assistant for three different local colleges. She is the breadwinner. Most importantly, she is a great mother to our little boy, who is a big source of motivation for this blog, along with the rational of my wife choosing part time work. As a teenager, I worked for an Ice Cream shop, where I was poorly paid, but my mistakes were delicious. I also worked at Kmart, and co-owned a power washing, deck staining, and landscape company called S&S Power Washing, which was both fun and lucrative.
What other sources of income do you have?
In addition to our employer sponsored income, we also invest in real estate, currently renting 6 units, in which I assume the role of owner and property manager. We also invest mostly in index funds, or dividend paying stocks within our retirement accounts (IRA, 401k, 403b).
When did you become interested in investing / creating passive income streams?
I first became interested in investing during college. I convinced my roommates we should put 50 dollars towards the purchase of some stock in a company that I worked for over the summer. The company was Kmart, which soon declared bankruptcy, and our money went the way of the blue light special. Despite that stellar beginning, I again began to take an interest in investing during the first or second year of my professional employment. I opened my IRA at this time, and began funding it monthly, unfortunately, I haven’t fully funded it every year, but the balance has grown consistently.
Tell me a little about your real estate investments
In my area housing has remained relatively affordable, especially in comparison to rents. I purchased my first home with a friend in 2005, and bought out his interest in the property in 2009. I still own this property and maintain it as a rental. My wife an I bought our current home in 2012. Each of my other 5 rental properties have been purchased for between 40,000 – 55,000. I’ve done the majority of the repairs myself, learning as I worked, and they currently are renting for 650(1), 825(1), 850(2), and 950(1) per month.
Other then increasing income, what have you done to control expenses?
In order to ensure that we have invest-able income every month, we have made conscientious decisions to reduce our spending in certain areas. I spend 13$ per month on cell service through Republic Wireless, while my wife remains on her parents family plan (she still uses a flip phone so save the silver spoon comments). Our internet plan is the cheapest that Comcast offers at 50 per month, which includes the annoying router rental. We still own a 2004 Mazda 3 hatchback, which has 191,000 miles, and our second car is a 2012 Ford Focus hatchback. Both were bought used. If you are interested in how I maintain property with two small cars I have written a nice summary titled Little Car = Big Car.
What financial mistakes have you made, or would undo if you could?
I have made my fare share of financial blunders, otherwise, I’d potentially already be financially independent. As a teacher, I have off from usually the first week in June through the third week in August. As I mentioned before, I had owned my own power washing and landscape business during college. My co-owner buddy and I each made over 6,000 during our best summer. Instead of keeping the business alive, with its established costumer base, I have rested on my laurels and pretended to train like a professional athlete over the summers. My training has not resulted in me achieving professional status in any sport, therefore, I’ve walked away a minimum of 5,000 per summer for the past 12 years.
I also felt the need to drive a 4 wheel drive pickup truck, that was purchased brand new in 2004. I spent 17,000 dollars on a vehicle, when my starting salary was around 33,000. Interestingly, I had no need for a truck due to the fact that I mothballed my summer business. Lastly, I mentioned my fantasy athlete status, not only was this not earning me money, it was costing me boatloads. Triathlons are expensive. I raced 6-10 per year, spending over 1,000 per year on race fees alone. I also traveled to some destination races in NYC, Florida, Maryland, New York, and Idaho. Obviously, this meant I was spending on the gear, so I could at least look the part. I bought a 3,000 Cervelo time trial bike just so I could win some faux medal medallions, and pint glasses. Prize money was never offered to the amateurs. This obsession to exercise did at least cut down on my nightlife, so I’m sure I didn’t drink as many of my dollars as I would have otherwise. At least I had the for-site to pay cash for all this nonsense.
Financially, where do you see yourself in 5 years?
In the next five years I hope to have the remainder of our student loans paid off. I plan to do this either by paying down the balance (currently 49,000, down from 80,000+ a year ago) in a few large chunks, or I plan to invest, most likely in real estate and use the profits to pay off the loan. I am currently building our cash position and trying to decide which is the best option. I’d also like to have our primary residence be mortgage free, which would greatly decrease our monthly expenses, thus also decreasing our needed passive income.