← Action Academy | Millionaire Mentorship For Your Life & Business
Action Academy | Millionaire Mentorship For Your Life & Business
How He Saved 95% of His Income and Retired at 25 w/ Cody Berman
00:39:19
Loading summary
Transcript65 lines
- [00:01]
A
All right, all right. We got the man, the myth, the Cody Berman on Action Academy round two, buddy. What is going on, man? How you doing?
- [00:10]
B
A lot is going on. I am doing incredibly well. Very excited for our conversation today. And we can talk about all things financial independence, retiring early, and, you know, the things we jive on.
- [00:19]
A
Yeah, I'm super excited. So for anybody that's checking in, tuning in for the first time, Cody and I have been friends for four or five years now, and you're one of my buddies that we made that. Because you also traveled around the world like you were somebody that was young, you were in shape, you cared about health, you cared about wealth. You're traveling. We haven't even gone and traveled together yet, which we should. We should absolutely do that. So it sounds like we're about to do that in Iceland here in October. But, man, so tell people, like, who you are, what you are, what your story is, and why we're here today.
- [00:50]
B
All right, SparkNotes version. I went into corporate America for seven months, quit, went all in entrepreneurship, scaled my income like crazy while being extremely frugal. Created a massive gap between my income, my expenses, invested said massive gap into the stock market, into real estate, built a small business, and by the time I was 25, I had 11 rental units that were bringing in $3,700 a month. My digital products business was bringing in $10,000 a month, and I had 500k in the stock market. And it was at that point I was like, I don't really need to work for money anymore. That was when I reached my financial freedom number.
- [01:26]
A
Yeah. And then now, here we are today, 30 years old. You are launching a book today. As people are listening to this, the book is live on Amazon. Retire by 30 by Cody Berman. So where are we at today? If that was you at 25, what transpired over the last five years to get us to this book today?
- [01:42]
B
No, it's funny. A lot of people have asked me this question, like, what happened when you hit fi? Honestly, nothing. Because I had this deep, ingrained scarcity mindset. And it really didn't set in, like, what that money had done for me until I was maybe 28 or 29 years old. Like, I didn't fully appreciate it. I just kind of kept earning more money blindly. Cause I just felt like I needed to. And there was pressure from society to just make more money, make more money. I was so scared that I wasn't gonna have enough. Even though all the spreadsheets in the world said, cody, you're gonna be completely fine. You're actually probably gonna have too much money when you retire. Like, you need to spend more. But I just could not kick that frugal bug, that, like, scarcity mindset that was just ingrained for me from childhood. I mean, nobody. Nobody talks about this stuff. That's why podcasts like ours are so rare. Nobody talks about financial independence or building cash flow for freedom. It's just. It's so foreign to most people, myself included. So it took me a long time to unlearn those lessons, even multiple years after I hit that financial freedom number.
- [02:39]
A
Yeah, what I think is funny, too, and worth noting, is there's. There's two sides to the same coin when it comes to, like, flavors of money and, like, views of money and relationships with money. It's like you have the savers and you have the spenders, and both sides can be equally unhealthy. And so I want to talk about each part of your journey and kind of how you've been able to change, you know, what side of the coin that you're kind of landing on, because I think that there's very much. So what got you here? Is it going to take you there? Eventually, you have to stop holding on with such a tight fist, kind of let it flow a little bit. But in the very beginning, that's not. That's not what gets you to the initial success. And so talk to me about. So before we go back into the journey really quickly, talk to me about the significance of this book. You know, what created this book. So retire by 30. That was the same thing that I was thinking of in my head, too. Throughout my 20s, I was able to pull it off as well. What's the significance of retiring by 30? You know, where do you think this even came? Because all of a sudden, I think over the last five, six years, everybody was like, well, I want to be a millionaire by the time I'm 30. I want to be retired by the time I'm 30. Where do you think that came from? And where do you think that that kind of stands today?
- [03:48]
B
Well, one, I like to redefine. If I like to redefine retirement, meaning you can just do whatever you want. You have enough money that you can work or you could sit on the beach, you can do X, Y or Z, or you could do A, B or C, like, it doesn't matter. Retirement is just, you have enough money. Retirement is a number, not an age very much unlike what the government and companies want you to think they want you to stay working till 65. Because retirement age is 65. But it's truly a number. Like, it's just simple math. But the reason why retire by 30. I had this note in my phone, dude, from September 2021, with the idea for this book. And life just happened. I kept working on businesses that were making me money, and, like, I just kept prioritizing kind of things that were making me money. And this book just fell to the wayside because, as you know, books aren't. Aren't things that typically make you a ton of money. Like, you make a couple of bucks per book sale. It's a great brand awareness play. But books themselves don't make a ton of money. So I just kept pushing it to the side. And then my 30th birthday was coming up, and it was April of my 29th year, and I was like, oh, if I publish this book when I'm like 31 or 32, this is going to be so lame. And this is the title that I've had in my notes for five years. Like, I got to get this thing out. So hired a book coach, hired a publishing company, the same one you use, self publishing.com, shout out.
- [05:03]
A
Self publishing dot com.
- [05:04]
B
Shout out.
- [05:05]
A
Chandler.
- [05:05]
B
Chandler.
- [05:06]
A
Yeah.
- [05:06]
B
Yeah, they were awesome. But, like, I needed that accountability. And so I was meeting with a book coach, like, every other week. And I'm the type of guy who I don't want to show up and tell my coach that I didn't do the thing. So I'd show up, I'd be like, all right, hey, I, you know, I did chapter seven, and then, you know, the next week I did chapter eight. And so finally I got through the whole book, you know, send it in, whole bunch of revisions. You know, how crazy, crazy the writing process is thousands of hours in total. And yeah, man. Got the thing after edit number nine to where I was like, okay, I feel comfortable publishing this thing. Had a whole awesome group of beta readers shout out to you if you're one of them. And, yeah, I'm just super pumped to kind of finally get this thing out into the world after being in my notes for five years.
- [05:46]
A
Yeah, dude, it's a. It's a journey. And I think that books come out when they're finally ready to come out. Like, you can't write a book or launch a book or release a book until it's ready to actually sing. And so whenever it gets into your head, it gets into your heart, you gotta let it go. So I think every single human that listens to this should write a book at some point in their life because it gives you a further appreciation for all things artistic. People that create music, people that create books. Like, as soon as you write a book for the first time, it's like you look at other authors with this newfound respect, and you look at their books with a newfound respect because you're like, man, I know what goes into this now, and it's substantial. So I want to take us back a little bit to the safer side of the coin. Because in the very beginning, I think this is a necessity. And you talk a lot about this in your book, about the, the impact of margin. Right. And so I want to preface this with this. Just like, it doesn't matter if you make ten thousand dollars, a hundred thousand dollars, a million dollars, it matters about the margin that you keep. So talk to us a little bit about the significance of saving in the beginning of your journey and how you are able to apply it to your financial freedom journey.
- [06:51]
B
Yeah, this is huge. And I think so often overlooked because people will see people like you, people will see Alex Hormozi and they love talking about the now. They're like, oh, I had a friend actually who follows you and we were talking about frugality because I told him I was coming on this podcast and he's like, oh, isn't that the guy with like the yachts and stuff? I'm like, that's now like, Brian, at the beginning, you were house hacking. You were living in was like a four unit.
- [07:13]
A
You were like, what people need to know is I spend 13 of my income.
- [07:16]
B
Yeah.
- [07:17]
A
It's still to this day, like, it's all percentage based. Exactly. Like, like me and my girlfriend. So to, to use some simple math, like, we want a big house, we want a $5 million house in, in Austin, Texas. So for us to do that, that monthly payment for a $5 million house, $42,000 a month, that is insane. And I'm not going to sugarcoat that. Like, that is insane to me. And so we reverse engineer that and I say, okay, babe, we want that house. That's great, we can get that house. Now let's reverse engineer. How much do we need to bring home per year in order for that house payment to be 10% of our take home income? So that means that we're like, we need to be bringing home about $5 million a year to be able to reasonably afford that house within our means. And so it's just like, that's why margin matters so much. Can you Talk about the importance of margin in like doing percentage based allocations versus like dollar signs.
- [08:12]
B
Yeah, yeah, absolutely. So during my entire financial freedom journey, I was never spending more than 20% of my income. During the very early years when I first started with entrepreneurship, I was making 96k and living on less than around 20k, less than 24k, 2k a month. Ish. I was house hacking. So similar to you, I was living in one unit. I had another unit next door. Four bed, two bath apartment with 600 square feet of office space. Me and my then girlfriend, now wife Lauren, lived in this unit. I'm actually recording from the same unit. And instead of many of our friends who are spending like 2,500 bucks a month for an apartment in Boston, like a studio apartment in Boston, we were actually taking in $800 a month. So there's like a multi thousand per month swing. Instead of getting a flashy new car, I just drove the same paid off truck. Still drive that same paid off truck to this day. 2015 Nissan Frontier. When it came to going out to eat and traveling, like going out to eat, we were very intentional. Like we'd still go out with friends and stuff, but we'd just like share an app and an entree and friends would get like an app, entree, dessert, and a bunch of drinks. We'd maybe get one or two drinks. You know, we'd travel hack with credit cards. Like from the outside, our lives didn't look that different. Again, we were living in a nice apartment. It's one bed, one bath, we're driving a fine enough car. It's not like the thing was falling apart. We were still going out and doing stuff. Like we're still going out to restaurants and bars, hanging with friends, traveling the world, just doing it like a little bit smarter. And so to answer your question, yeah, that was, that's what allowed the margin to stay so big. And the dollars that I'm spending per month have increased significantly, but so has my income. So that margin has stayed the same. And even today, I still spend probably like 10% of my income. So the whole journey I was spending anywhere between 10 to 20% of my income and investing 80 to 90%, which is why I was able to hit financial freedom in like three years.
- [09:59]
A
So somebody, somebody's listening to this. They've got car payments, house payments, daycare for two kids, you know, student loans, all these different things to pay off. Because I think that this is awesome advice and I want to inject this podcast into the veins of everybody that's in their early 20s because I did the same thing. I didn't have student loans. I went to an affordable school that I could pay off in cash and I DJed. I built a DJ company to pay off that while I was working through school. I bought, had a $5,000 car that I bought in cash and I lived in the basement of my own rental properties for four years while I was making a quarter million dollars a year. So it's like that was a four year period of life. Right. So we were, me, you and I are friends because we both got that early before all the debt. What's some advice you can give to somebody that's already kind of signed on those dotted lines? How do they kind of begin to unravel that and right size the ship a little bit.
- [10:56]
B
I think it's a question of how bad do you want it? I hear this all the time. People say, I have kids, I can't house hack. I'm like, okay, you definitely can house hack. Is it uncomfortable? Absolutely. Is it maybe abnormal? And all your friends have white picket fences and huge yards and multiple acre lots. Maybe. And it might be weird for you to move into a multi family that shares a wall with someone else, but you know how many people there are in the world who share a wall with another family. It's like so many people, we're so fortunate in the United States to be able to have these 4,000 square foot houses with multiple acres and you can't even hear your neighbors because you're so far away. But like you don't need that, especially during the early years. So like I urge people, even if it is uncomfortable during those couple, like the few years, the very beginning years of your financial freedom journey, make the sacrifices. It's going to be worth it. If you really, really don't want to do that, then you are going to have to figure out the income side of the equation because you do need that margin one way or another. So if you're like, Cody, I'm spending 100k, I really don't want to cut on any of my expenses. I'm just not doing it like, okay, well if you're making 100k and spending 100k like you need to then hit the income side of the equation and scale your income way, way up so you have a fat gap between what you're earning and what you're spending.
- [12:05]
A
Yep. I mean it's just the money math. Like we talk about money math all the time. So I mean it's exactly like we just said there, where, where we created a vision. We sat and created a three year vision for our life. And like, financially, what does that look like? What do we want for the wedding? What do we want for travel? Do we want a live in nanny? Do we want to live in Chef? Like, stuff that's crazy stuff that you're like, I can't even fathom doing that. But like, that's in the future. How much would it actually cost? So did you and Lauren create anything like that as well when you were going through your journey? And did you have kind of a North Star that you were aiming for? Because I think a lot of people find it difficult to cut back because they don't know why they're doing it.
- [12:43]
B
This is such a good question and just such good framing. So this is actually pretty much the entire last chapter of my book. I call it Life in Retirement. And so what Lauren and I did, we both independently wrote down a list of the top 10 things we value. And it's like, you know, working out travel time with each other, time with family and friends. And then we took a hard, honest look at our bank accounts, credit card statements and calendar. And if there was any misalignment whatsoever, we're like, what the, like, why are we doing this thing that does not line up with any of these values that we just wrote down? And so we ruthlessly cut things, added things to our schedules, we to our spending for the next couple of years. And today, like, I'd like to think that we're living like our perfect day almost every single day because we were so intentional about mapping those out and to go a step farther. Like, it might sound nerdy, but every month we have what we call like our monthly money meetings. And we talk about like kind of, you know, what's come in, where we're investing that money, our real estate. We talk about our health and wellness, we talk about travel, we talk about relationships, we talk about goals for next month. So this is an ongoing thing. It's not like we just set it, set it and forget it. Like we're constantly revisiting our list, revisiting those values. And then if our life ever feels out of alignment, we're like, what the heck? Why are we doing this thing? And then we cut it, or if there's something that we want to add, then we add it in. So, yeah, great question.
- [13:57]
A
So I'm assuming that this has been conversations and topics that you guys have been focused on since the beginning of your relationship. This isn't probably something that's evolved that's just now started now that you've quote unquote made it. So what were these initial conversations that you guys had as a couple? Because a lot of people that are, you know, watching this or listening to this, they're, they have a boyfriend, girlfriend, husband, wife, significant other. And maybe they're the one listening to this podcast and then their significant other, their partner, they just don't get it. Or they have a completely different view of money in retirement. And it's very difficult to. For men, like in social media, how it's portrayed is that the women spend all the men's money. Like, oh, I have my girlfriend home and she's going to go spend all the money. That's just simply not true. So like, how have you guys thought about these money meetings? I think that's an awesome topic to hit on. It's like, how have you guys done that? And how has that meeting evolved over time?
- [14:52]
B
I think the very first most important thing was just getting alignment on goals. And I approached this the complete wrong way. I remember the first time I found out about financial independence and like all these numbers, I'm like, oh, babe, if we hit this monthly passive cash flow and it covers our expenses, we never have to work again. Or if we save up 25x our expenses and invest that in the stock market, we never have to work again. I was literally showing her spreadsheets and she's like, I don't even know what this means.
- [15:14]
A
And it didn't turn her on.
- [15:16]
B
Didn't turn her on. She's like, I don't care. These are spreadsheets. I was like, okay, what if Once we turn 30, neither of us have to work again and we can travel as much as we want, we can hang out with our future kids as much as we want. We can take a Tuesday and go on a hike with our families. We can play pickleball in the middle of the day. Like, how does that sound? And that did turn her on. And she's like, that sounds awesome. I'm like, okay, then all we have to do is save 80 plus percent of our income for this number of years, invest the gap between what we're making and what we're spending into cash flowing assets and boom, in a couple of years we'll have financial freedom and we can do all that stuff. So after I pitched her to that, I sold the destination, not the math. I sold the Aruba trip, not how the plane ride's gonna be. Then she was all on board And I mean, ever since then, that was back when we were like, I think I was like 20 or 21 and she was 18 or 19. We have, we have a two year gap. We've been dating for 10 years at this point. But ever since then, dude, we've been aligned. And so it's just been a constant rechecking, like I said before, of whether or not we're living within the alignment of our values.
- [16:17]
A
I think that's a million dollar piece of advice that people don't pay attention to. And we just did the same thing. So, like my girlfriend, who's off camera over to the left of me, Nat, when we did our money meeting and our vision retreat, you know, we didn't spend much time, if any at all, talking about business strategy. That's not what we were there to do. We were there to create our dream life. And we were supposed to be what she calls Delulu. And she said she's like, she's Delulu until it's Trelulu, man. So, like, man, if anything is possible like this, we're not talking about, oh, I would like, you know, a nice Mercedes. It's like, if you could, money wasn't an object. And you start going down the list and you're like, man, like, what would a chef cost? What would that cost? Like, you know what, dude, it's like 1500 bucks, two grand a month plus groceries. It's like not a crazy amount of spend. But to go back to your point and, and to put this on a bumper sticker, it's just, you need to create a shared vision that then the finances crescendo into the shared vision. I think that's a wonderful piece of advice. Now let's say that you have your spouse on board. Let's say that your partner's on board. And now you're like, okay, cool, time to start saving money. We're about to deploy. How do you decide what assets to deploy into? Stocks, real estate, business? How do you go about it?
- [17:42]
B
I'm actually curious if we're going to butt heads on this. So I am in the camp that,
- [17:47]
A
well, I like you, man. I don't think there's a. I don't think there's a wrong answer. So.
- [17:50]
B
Okay, okay. I know you've kind of thrown some shade at me before for having a lot of money in the stock market
- [17:55]
A
as opposed to, I've changed my. I've changed my thoughts. So share your position. I think that you'll be surprised. Okay.
- [18:01]
B
So I think way too many People at the beginning of their financial freedom journey focus on the what to invest in. Our friend. You're probably friends with them as well. Jeremy Schneider from Personal Finance Club, he had this pie chart that he posted and it was like, what things matter on your journey to financial freedom? It was like 49% of it was how much money you're making, 49% was how much you're spending. The other tiny sliver was what you're investing in. So the point there is if you are making a hundred thousand dollars a year or $500,000 a year and you're only spending a fraction of that, you're going to vastly outperform the person who's like saving way less money, even if they have the best investment opportunity. Like, oh, this person's making 13% over here, I'm only making 10. Well, it's like if you're saving 10 times the amount of that person, you're going to absolutely bury them on your journey to financial freedom. So like, just maximize that gap. Don't worry about what you're investing in at the beginning. Now if you're Warren Buffett and you have billions of dollars, those percentage points matter a lot. It matters a lot if you're making 8% versus 12%. But if you only have a couple hundred thousand or even a couple million bucks, those percentage points are not going to move the needle nearly as much as how much you're saving and plowing into investments every month.
- [19:13]
A
Yeah. So if you, so what you invested back in was the stock market s and P500 index funds, I believe. And then you did cash flowing single family real estate. So knowing what you know today, what percentage was your allocation back in the day and how would you change it today with what you know now?
- [19:32]
B
So my allocation actually hasn't changed too much in the past five plus years. I guess now I have a little bit more business equity. Like I've started to diversify a little bit more what I'm holding my money in. But now my rental properties are more in the form of syndications. I just, I'm, I have much higher leverage in my digital products, my online businesses. So I pour a lot more of my time and energy and effort into that and then I'll just take the excess and invest it. I still have real estate exposure. It's just not me buying a duplex that I then have to, you know, get the property manager for and tenant it and make sure that all the stuff's up the snuff. So yeah, I still have like A pretty equal. I think I just recently did a net worth calculation for a podcast and it was like, I think it was like 43% real estate and like 41% stocks. And then I have like business equity, I have some crypto, I have some angel investments. But yeah, honestly it hasn't changed too, too much.
- [20:24]
A
So just S&P 500 sit in and forget it.
- [20:27]
B
I mean, part of my money. Yeah, like 40%.
- [20:30]
A
Yeah. So yeah, about half. I actually don't disagree with that. All right. Yeah. So here's what happens, right? So in Action Academy we teach business acquisition and we teach. And we teach commercial real estate. Right. And yeah, that's awesome. And I've done all of it. All of it. I've done everything, man. I've been in syndications, I've been gp, I've been lp, I've invested passively in businesses, actively in businesses, I've started businesses, bought businesses, the whole shebang. And what I can pretty confidently say now, and there's a massive asterisk. Asterisk with what you just said, though not in a bad way, but in a good way, is you have your digital products business, which you make millions of dollars a year doing Etsy, like Etsy Shops, which is like super cool. And I want to talk about it so badly, but we already did a full podcast on it. So if you guys want to hear about like what Cody does with that, it's really cool. And, and I'll link the podcast episode below. You focus most of your attention on your business. That's your business that you run to make more money. And then you don't put your attention into investing because you are a business owner. You are not a full time investor. And I think that most people are trying to be a full time investor to get out of corporate and to be retired by 30. Whereas I think that you should instead focus on being a business owner and something that you either buy or build. Like you have and you redeploy all of the excess profit. Passive vehicles. I'm actually the same as you right now. I have a maybe 10 to 15% of my net worth in real estate and I think that I'm back up to about like 60 to 70%. No, I'd say 50, 40, 50% in stocks and cash. So high yield savings account. Yeah, yeah. So I've got like Turl Schwab, like divot is like, I forget what the ticker is, but it's like a 4% yield, basically a high yield savings account, 24 hour liquidity and then the rest of my net worth is in equity and all the businesses that I invest in. So I agree with you. I've done the. Even the Airbnbs, like, STR loopholes, all the tax savings vehicles. I find that the juice isn't necessarily worth the squeeze when it comes down to your attention, kind of divided where. What's your, what's your opinion on all that?
- [22:52]
B
I am shocked. We're so aligned. Like, it's like we're the same person. Dude, it's awesome.
- [22:57]
A
I mean, I think, I think we have all of these ideas that you're like. I mean, even commercial real estate, right? So let's use this as an example. Yeah, I love commercial real estate. Like, we raise money for you to have no money, no savings, and to scale into commercial real estate as a, as a, like, baby gp. Here's the process. I mean, you literally have to go from I'm anchoring to a bigger GP and I'm taking a tiny percentage of this deal. Then you're doing a slightly larger one. A larger one. And then maybe after, you know, four years and 500 or 600 units, you have to, you start to get something meaningful from it. But, like, it takes a long time to do that versus just increasing your income with what you're doing. Massive income, not passive income. Yeah, I love that.
- [23:42]
B
Yeah. I think people try to get too fancy with it. People are like, spending half their time in Puerto Rico, even though they don't like it that much. And maybe they're spending time away from their family, like, just to pay less in taxes or like, people just go to the craziest length and it's how well it's. It's just like, how about you focus on making more money and then none of that stuff matters. If people just try to get too cute, I think with the tax loopholes and like, finding the perfect investments where if they just focus on making more money in their business and whatever they have going on, they'd be so much better off in the long run.
- [24:11]
A
Can you talk quickly about that side of the equation? Because now I think people understand, you know, kind of pillar, one of this is margin matters, like, save a large percentage, majority percentage of your income and don't change that percentage. Now can we talk a little bit about making more. Making more income, increasing your income. Massive income, not passive income. So when you're working this job, you're investing on the side, and then you start this Etsy business, like, so give some advice about kind of like side hustles. Or starting your own thing on top of your corporate job.
- [24:43]
B
Yeah, so I like to split side hustles into four different buckets. And I think a lot of people focus on the wrong buckets and that's why they can't really make more money with their side hustle or their day job for that matter. So the first type is just trading time for money. And yes, you can trade your time for money and you can make decent money, but at some point, like you're going to run out of time to trade, you can keep increasing your prices, increasing your prices, and you might be the best in the world. You can get that, you know, dollars per hour pretty high. But I like to focus on scalable, passive or scalable side hustles, which is the second type of side hustle. Something where you put the effort in once and you can reap the benefit of that effort for years or decades to come. So that's something like investing in real estate, building a business, creating digital products, even something like creating a YouTube video or creating a podcast episode. Like I have podcast episodes that recorded from 2018 that still get listens. And if there's a sponsor on that podcast episode from selling something in that podcast episode, like, that's passive income seven, eight years later now. So like Scalable side Hustles three is another one I know you're familiar with, Brian, is the sharing economy. So this is just like renting out things that you own. I think people sleep on this way too much. Like, if you have a place and you're traveling a lot, or if you have like a nice little garage unit, you can turn into an Airbnb. My God, if, if you don't have a gap right now between your income and your expenses, like do all the sharing economy stuff. You can rent out your car on Turo, rent your place in Airbnb, rent your friggin power tools if you can. Like there's all these crazy sharing economy opportunities now, and people just let their car sit in the driveway or they go on vacation for a month and their house just sits vacant. Like, I have a friend, Justin, who he'll literally leave. And he lives in Austin as well. He'll leave for the month of October because you guys have like ACL and South by Southwest. All craziness happens in October in Austin, and he'll make like 10 grand that month from his house and go to Mexico, live for like two grand or three grand and come back and have this like seven grand delta. Like it's not that crazy. And he's actually having a great time in Mexico. And then the fourth one is kind of scaling, taking those like freelance side hustles and building them and turning them into a business. So if you are someone who is trading your time for money, like let's say you're, I don't know, you're a freelance writer or you're a dog walker, like there is a way to turn that into a business. You can create an agency, you can hire people under you. There is a way to kind of scale yourself out of that. But yeah, those are the four types of side hustles for me. I focused all on side hustle number two pretty much exclusively with the exception of some sharing economy stuff. But it was all scalable stuff. So I wanted stuff where I could put in the effort once, I could spend the dollar once, I could, you know, spend my energy, my time, my money once and then reap the benefit of that for years to come. So that's how I was able to scale my income from it doubled from year over year. Dudes from like my first year in entrepreneurship made 96k. I lived on about 24k. My second year I made 198k. So it doubled. Still lives on 24k. The third year I made 403k in entrepreneurship, still lives on 24k. The year after that is when I crossed my first take home seven figure year and my expenses inflated a little bit. But I, I was, I think I spent like 50 or 60k that year. So still like I was, yeah, I was saving 95 of my income.
- [27:49]
A
Crazy. Crazy dude. I think, I think it's, I think it's super interesting, man, because it's just like there really is, there really is no like silver bullet. It really is that like, because the people that I know that are spenders versus the people that are sabers, it's like everyone is still like as happy as they can be. You know, you just need to figure out like what matters to you. So like for you guys, I mean, just to kind of like set the frame here, like we, we do like spending buckets for, for our household to where we're like, okay, and I'll give a shout out to Ramit Sethi. I will teach you to be rich. He has money buckets. So he talks about where he categorizes his expenses into like shopping, travel, hotels, food, you know, whatever, have you pets or whatever. And he says whatever bucket brings you the most joy. Spend ruthlessly. Like spend lavishly in that bucket and cut ruthlessly from all the others. And so for me, like my T shirts, Target, you know, my clothes, I wear the same shirt just about every day. My clothes are not expensive. But man, I will spend a lot of money on hotels. Cause I just love it. So I'm curious, do you guys have any categories that you do spend money on now and like, what category? How has that kind of shifted over time?
- [29:11]
B
Yeah, I think we're eerily similar. We actually just did a roundup at the end of the year. So we do our monthly meetings. We also do an annual review. And usually this is in the form of like a 30 minute video where we have all these different subjects, different topics that we cover. Yeah, I don't, I don't want to make them public. We haven't even watched back to any of our previous videos. We've been doing this since 2019. Wow. But so we go over this every single year. And this year we were like, okay, we, we still really value travel and we still really value experience. Dining out, going to clubs, going to bars, just doing fun stuff. And what were our top two spending categories? It was travel and it was just going out and doing stuff. So we're like, okay, that is perfect. We're in perfect alignment. But yeah, I mean, our, our spending has increased like 20 fold since those early five years when I was spending like $2,000 a month. I think when I crossed that, well, I crossed that million dollar mark and we spent like only 60k that year. But I think last year, and this is probably still, I could still be spending more. But last year I spent like 220 or 230k or something like that, which felt like a lot to me. But I'm still, I'm still unlearning that, that frugal muscle ruthlessly on traveling experience.
- [30:17]
A
Was it in the same categories?
- [30:19]
B
Yeah, yeah, it's pretty much exclusively in those categories. I mean, like I said, I'm still house hacking. Like we are building our forever home right now, which is going to be expensive. But as of right now, like the housing, the transportation, those categories are super low because we don't value them. Like, we're perfectly happy where we are right now.
- [30:35]
A
Dude, I, I think it's wonderful. I think it's cool that you guys have like had audits too, like every single year. Say, hey, how has this changed for us? You know, because for us over here, like travel has changed materially. Like it's like 3x the amount and it's like as soon as you start traveling, like in Ritz Carlton's and all this. Like, then you start getting really addicted to it and you fre love it. And so I mean that. And you start figuring out, well, how do I build a business around this and how do I use this as a business expense? Right, but that's a whole other part. But it's just like. So for us it's that. And then it's like, yeah, when you find like what you enjoy spending money on and then you just ruthlessly cut from everything else. Like, we don't eat out a lot. Like we just cook our own groceries and stuff. And. And now, I mean, we've been able to save a lot of money, but it's. I mean, dude, sometimes people think view me as a big spirit spender, but like, dude, there's a lot of times that I, you know, feel guilty for spending money because I'm like, man, that money could have made me money, you know?
- [31:33]
B
Yeah, it's hard, dude, unlearning that frugal muscle. Like, I for so many years felt so guilty about every dollar I was spending because I knew how compound interest works. I'm like, you know, I'm 25 right now. If I invest this hundred dollars, by the time I'm 65, it's going to be multiple thousands. Or I can spend this hundred dollars on a fun night out with my wife. It's like, it doesn't always have to be an optimization equation.
- [31:55]
A
Yeah. Gotta tell you something insane. I just did. I'm curious if you have any similar stories. Yeah, I know, I know you won't have a similar story to this one, but like, just similar categories. So we just did the most expensive purchase that we've ever done ever, ever. Like by a multitude of like 10 times. So we're chartering a yacht in the Mediterranean this summer. And the reason I did it was because we crushed in business. We hit a massive milestone. And I was like, well, that's a large amount of money that I can invest and I'll make a return on that and then later on I will have that money from my returns and my dividends to then do this thing. But then I was like, well, I also have it in cash here now, today. And I don't really know if I want to do this when I'm 62. I think I'll have a lot of fun doing it now at 31. I'm just gonna do it now. And that was the first time that I've done that. I don't do that normally. I'm curious, has there Been any, any experiences or any specific situations or circumstances where you're like, you know what? This money can make me a little bit more money, but today I'm just gonna spend it.
- [33:05]
B
Yeah, I have one from this year actually. So my mom's turning 60. Her mom is 100% Swedish. My mom has never been to Sweden. Me and Lauren are already going to be over in Europe. We have a couple European weddings this summer. And I was like, screw it. Like, I'm going to bring my mom, my brother and Lauren. We're going to stay in a super nice hotel downtown Sweden. Just do the full Stockholm experience. And so I spent way more money than I'd typically be comfortable with. But I'm like, this might be a once in a lifetime thing that like, my mom's going to talk about forever. Forever. Like, when are we ever going to take a family heritage trip to Sweden? But it felt so good. Like, obviously at first I'm like, oh, maybe we could just stay in the cheaper place or, you know, maybe we don't have to do XYZ excursion. Like we could just save the money and we could probably just have fun on that free hike. But it's like, screw it. Like, you never know, tomorrow isn't promised. And so I try to live, live it up today, like, get as many experiences I can under my belt because I know you never know when those experiences might stop for whatever reason.
- [34:00]
A
I think that it's a, it's a cool point to make because once you find stuff like that to spend money on, it becomes really, really easy to save everywhere else. Yeah. And you actually don't spend more money, you spend less money because you're like, man, no, all my money is just going to this thing. Dude, that's freaking awesome. So in closing, let's head back to all the way where we began here, which is what does retirement mean to you today? So what did retirement mean to you? And like to do what you want when you wanted, went with who you wanted back five years ago. And then how has that changed today and evolved? And then how do you think it's going to evolve in the future in your next three to five years?
- [34:39]
B
I wouldn't say my definition has changed too much over the last five years, but I think how I feel about my freedom has changed a lot. And I just, I used to always make like decisions based on money. It's like I'm making this business decision because it's going to make me want more money or I'm staying in this hotel because it's less money. It's going to save me money. I'll. I'll have a bigger gap. But now I'm really trying to pry my decisions away from money. Like, really trying to make, you know, don't look at the price on the menu, just select the thing. And that's just a metaphor. I actually don't do that at restaurants anymore, which is great. But even just in life, like, pick the hotel that you want to stay at, do the experience you want to do. Like, try not to make decisions solely based on money. And I've gotten a lot better about that over the years. In terms of what that's going to look like in the future. I think it's just going to be an honest assessment every month. Like, Lauren and I already do our monthly meetings, our yearly meetings. Are we living true to the values that we set out to live? And if we're not, then we're going to have to pivot and change things around. If we are awesome, we'll keep doubling down and doing the things we're doing.
- [35:38]
A
I freaking love it, man. And at the end of the day, it's the same thing that we say. It's like, whether your goal is to travel the world or just travel to pick your kids up from school every day, it's like, you got to figure out what your rich life is, your financially free life, your retired life. What does that look like for you? Um, any last piece. So if you had one last piece of closing advice to somebody from your book, somebody that is like, okay, cool. Like, I gotta. I gotta learn more about this guy. Gotta read the book. What's one last closing piece of advice you can get from the book to somebody that's listening?
- [36:09]
B
Something we didn't really hit on today, and I think we align on this big time, is spending money on personal development or getting into the right rooms. I mean, you don't necessarily have to spend money, but a lot of times it makes it a lot easier getting in rooms with people who are doing things that you think are impossible and will just force you to level up. Like, I remember the first time I saw someone who made like, $50,000 in a day, and I'm like, what the hell? Like, I never learned about this growing up. And it was like, from a couple of blog posts, they signed a contract with the company. And this was back in 2019, a mentor of mine. And it just blew my mind. And since then, I've had my mind blown multiple times. And so, like, I constantly try to surround myself with people who are doing things that I find inspirational, whether that's in money, whether that's in health, whether that's in business relationships, whatever. I just try to surround myself with people who are doing what I previously might have thought impossible. So I urge people, whatever that means to you, go out, find your tribe, find people doing stuff that seems really incredibly difficult or borderline impossible and you'll just slowly start to gravitate toward them and you'll, your life will slowly start to align.
- [37:12]
A
Yeah, immersion yields conversion. I love that. We just did a YouTube video on it where I spent $889,000 on personal development. And so we did, we did it like item by item, year by year. Like, okay, what was worth it, what wasn't worth it? And for me it was like all the in person events and masterminds were the most worth it. And for me it was like the courses and agencies were like 50, 50. So yeah, I mean that completely validates your point. And because I mean, at the end of the day, man, it's like it accomplishes two things. Number one is it allows you to realize that you're not like, you're not special and the person that's a hundred times beyond you is not special. It's like they just have recognized different patterns and are just doing things in a different pattern than you and you just need to adopt their pattern and you'll snap right up into it. And then, I mean that's the second thing is just realizing what's possible. It's like once you start getting around million dollar a month people, you're like, oh, okay, well yeah, let's do that.
- [38:11]
B
Yeah, I can do that.
- [38:13]
A
Yeah, that sounds fun, but that's awesome, man. So if people want to find out more about you and they want to get the book, where can they go to find you? Where can they go to find the book?
- [38:23]
B
All right, I am everywhere. Social media. Odyd Berman. The book is @retireby30book.com. Have some fun giveaways going on. I'm giving away an iPhone to one lucky book buyer and a bunch of other fun stuff that are freebies if you buy the book. So check it out.
- [38:38]
A
And that's retireby30book.com.
- [38:41]
B
That is correct.
- [38:42]
A
Beautiful. So ladies and gentlemen, that will be in the show description as always. Go there, click the link, go get the book. And also Cody's not going to ask you so I will. When you get the book, please leave him a five star review on Amazon. There's nothing that matters more to a new author than having a five star review on Amazon. So if you guys could please go leave him a review, that would be greatly appreciated. It helps for new people that are looking to get the book, helps with the credibility. So thanks, man.
- [39:10]
B
Dude.
- [39:10]
A
Always man. So guys, this has been Brian and Cody with the Action Academy podcast signing off. Go get the book. See ya.