What It’s REALLY Like to Build Wealth in the Military | Making a Millionaire

Summary

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Money Guy Show: "What It’s REALLY Like to Build Wealth in the Military | Making a Millionaire"

Hosts: Brian Preston & Bo Hanson
Guests: Matt and Alex
Release Date: September 1, 2025

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Overview

In this episode, Brian Preston and Bo Hanson sit down with Matt and Alex, a military family who, despite starting their marriage with a negative net worth, have built nearly $4 million in assets before turning 40. This deep-dive conversation covers the emotional, relational, and tactical journey from debt to financial independence, including their unique approach to saving, managing dual careers, investing in real estate (as military transplants), and planning for a fulfilling retirement. The hosts provide actionable insights on wealth building, goal setting, and the crucial "messy middle" of financial growth.

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Key Discussion Points & Insights

1. The Starting Point: Debt and Financial Stress

• Initial Circumstances (00:00-04:36)
  • 15 years ago, Matt and Alex had negative net worth (~$35K in debt) and no assets.
  • Debt comprised of car loans, student loans, and credit cards.
  • Monthly income was insufficient to cover even minimum debt payments.
  • Matt: “We had no assets. And I looked at all of our bills, and I was like, well, we can't even make all the payments on all these bills.” (00:05)
  • Alex took on 3 jobs to help bridge the income gap; Matt was in the Navy earning $18,000/year.
  • Memorable Quote:
    Alex: “I was working 9 to 5. I was working at a restaurant and I was bartending at night. So not, you know, seven days a week, but enough. … His income is finite. So it was up to me to try to make up for some of that.” (06:53)
• Frugality and Learning Personal Finance
  • Matt found financial inspiration from books like Rich Dad, Poor Dad and Dave Ramsey’s work, leading to strict budgeting and a 50% savings rate.

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2. Navigating Relationship and Money Tensions

• Money Differences and Communication (07:19-13:41)
  • Alex admits she was the bigger spender, while Matt was the natural saver.
  • They endured “a healthy mix of fights and really frank conversations.”
  • Matt pressed for strict budgeting—sometimes leading to disputes over small expenses (“the Thanksgiving pillows”).
  • Memorable Quote:
    Matt: “She is more of the spender of the two. And I'm… Obviously, I would spend zero money if she gave me the opportunity.” (11:08)
  • Over time, mutual education and clear roles in money management fostered teamwork.
  • “Fiscal fast” became a family phrase for periods of reduced spending.

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3. Leveraging Military Opportunities & Real Estate

• Buying Their First Home (15:15–16:46)

  • Used a VA loan to buy a first home with little to no down payment.
  • Each subsequent move (due to military relocations) became a real estate opportunity: buy a local house, live in it, then rent it after transfer.
  • Notable Strategy: Bought below their means to ensure rental profitability post-move.
  • Memorable Quote:
    Matt: “We're buying a lot less home than we can afford just because those are the homes that will be profitable when we leave.” (16:35)

• Learning Through Mistakes

  • Early mistakes, like inadequately vetting tenants, led to costly repairs (e.g., a $10k property rehab due to tenant issues).
  • Over time, Alex took over property management—leveraging her people skills and attention to legal detail.
  • Memorable Quote:
    Alex: "Being able to be hard on people is something that comes naturally to me, but also like having an ironclad lease, making sure that I'm educating myself on state laws, tenant landlord laws in my spare time." (19:38)

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4. Saving, Investing, & Maintaining Balance

• Extreme Savings & Asset Allocation (26:04–27:59)

  • Maintained a 50% savings rate as income grew.
  • Prioritized maxing out tax-advantaged accounts (401k, IRAs), invested aggressively in both real estate and the stock market.
  • Used after-tax bridge accounts for flexibility in funding new opportunities.

• Managing Debt Prudently

  • Maintained a “healthy fear” of debt; never took on more debt than they could handle on their own cash flow.
  • Memorable Quote:
    Matt: "We've always had a healthy fear of debt… Dave Ramsey's book scared the crap out of me in terms of debt." (26:15)

• Lifestyle Adjustments

  • Gradually loosened their tight grip as net worth grew.
  • Notable shift after a family trip to Italy, where Matt allowed himself some discreet spending.
  • Memorable Quote:
    Alex: “Lifestyle creep is very much right on. We as have continued to evolve and have gone on a little bit nicer vacations.” (32:10)

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5. Planning for Financial Independence (& Beyond)

• Defining the End Game (34:26–41:44)

  • Matt is passionate about FIRE (Financial Independence, Retire Early): "My plan is… I want financial independence as soon as possible so that, you know, we have the availability to do whatever we want whenever we want, both for me and for her.” (34:26)
  • Has concrete plans to retire from the military by September 2029, at roughly age 43.
  • Alex values stability and hopes for a “forever home,” continuity for their children, and possibly remaining in her flexible career.

• Dream Home Decisions

  • Considering a $2 million “forever home” post-retirement but hesitant to completely liquidate investment assets for a full-cash purchase.
  • Open to mortgages for flexibility, especially given high home prices and the rapidly accumulating portfolio.

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6. Looking Forward: Wealth, Purpose, and Fulfillment

• Transitioning from Builders to Enjoyers (48:24–54:18)
  • Hosts encourage Matt and Alex to be mindful of enjoying their wealth and not become “financial misers” after years of frugality.
  • Regular “annual meetings” suggested to align money with life goals—planning travel, philanthropy, and family experiences.
  • Memorable Quote:
    Brian Preston: “It's not just about getting to the goal. It's the journey. I know that sounds so cliche, but it really is the truth of life.” (49:30)
  • Planning for future legacy: focus on funding children’s education, setting up scholarships, and giving back.

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7. Unique Financial Planning Challenges

• Decumulation and the Next Transition (58:25–60:14)

  • Matt expresses uncertainty about how to shift from wealth accumulation to withdrawal and drawdown—an under-discussed but crucial topic.
  • Hosts note that decumulation is highly individualized and encourage seeking tailored advice as they approach retirement.

• The Importance of Flexibility

  • Advice to preserve “optionality” and flexibility when approaching big life changes (e.g., not locking too much into home equity prematurely).
  • Discussion of the psychological transition from saver to spender.

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8. Homework and Takeaways (63:49–65:18)

• Hosts' recommendations for Matt and Alex (and listeners):

  1. Keep going—what's working continues to work.
  2. Define what you’re retiring to, not just what you’re moving away from (focus on fulfillment, not just numbers).
  3. Clarify long-term life goals—use annual meetings and intentionality to enjoy wealth as you build it.

• Memorable Quote:
  Matt: “It's exciting now. That's why we're doing it so far in advance of it is because it's fun to kind of think about being financially independent because that has been a goal of mine and ours for so long now that I look forward to planning the fun part of it which is living the life after we built it.” (65:18)

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Notable Quotes & Moments With Timestamps

• “We can't even make all the payments on all these bills.” — Matt (00:05)
• “She is more the spender… I would spend zero money if she gave me the opportunity.” — Matt (11:08)
• “There was probably a healthy mix of fights and really frank conversations.” — Alex (10:47)
• “We called it fiscal fast. We still use that word. … Let's go on a fiscal fast for two weeks, not spend any money other than food and water.” — Matt (12:54)
• “We're buying a lot less home than we can afford just because those are the homes that will be profitable when we leave.” — Matt (16:35)
• “Being able to be hard on people is something that comes naturally to me, but also like having an ironclad lease, making sure that I'm educating myself on state laws, tenant landlord laws.” — Alex (19:38)
• “I want financial independence as soon as possible so that… we have the availability to do whatever we want.” — Matt (34:26)
• “It’s not just about getting to the goal. It’s the journey. … You get to the top of the mountain and check all the boxes, you’ll find that’s kind of empty if you don’t pack in the memories and life experiences.” — Brian Preston (49:30)

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Additional Context & Takeaways

• Military Flexibility and Real Estate:
  The military lifestyle, with its forced mobility, became a built-in real estate strategy. They used VA loan benefits, lived well below their means, and turned logistical challenges into investment assets.
• Financial Teamwork:
  Their story underscores the importance of partnership—leveraging each person's financial strengths, and maintaining open (sometimes difficult) communication about money.
• Balancing Act:
  As first-generation wealth builders, Matt and Alex are actively transitioning from a scarcity/accumulation mindset to a life of intentional enjoyment, generosity, and future planning.
• Role Modeling:
  Their journey models the value of discipline, learning from failure, adapting roles, and planning for changing seasons of life—particularly relevant to military and dual-career families.
• Next Steps:
  For them—and for listeners—the next challenge is psychological and strategic: learning to enjoy, spend, and share wealth wisely.

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Segment Timestamps

| Segment | Time | |---------------------------------------|-------------| | Starting In Debt | 00:00–04:36 | | Money Tensions & Early Sacrifices | 04:36–13:41 | | Real Estate Journey | 15:15–22:54 | | Mistakes & Lessons in Property Mgmt | 17:53–21:08 | | Balancing Investments | 26:04–27:59 | | FIRE and Defining Goals | 34:26–41:44 | | Planning for Drawdown & Retirement | 48:24–54:18 | | Advice on Using and Enjoying Wealth | 49:30–52:24 | | Final Homework & Takeaways | 63:49–65:18 |

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Conclusion

Matt and Alex’s story demonstrates that wealth building in the military (or any modest-salaried, high-churn environment) is possible through relentless learning, teamwork, leveraging unique opportunities, and balancing frugality with intentional spending. Their transition now focuses as much on life design and family fulfillment as on continued accumulation—a narrative both educational and inspiring for anyone on their own financial journey.

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Transcript

[Brian Preston]

15 years ago, you were $35,000 in debt, negative net worth.

[Matt]

Correct. We had no assets. And I looked at all of our bills, and I was like, well, we can't even make all the payments on all these bills.

[Brian Preston]

Like, we don't have enough money to even cover the minimum requirement to keep us afloat.

[Matt]

Correct.

[Alex]

I mean, there was probably a healthy mix of fights and really frank conversations.

[Matt]

She is more the spender of the two. And I'm. I'm. Obviously, I would spend zero money if she gave me the opportunity.

[Brian Preston]

You guys made some very hard decisions. Hey, we're going to start saving 50%. We're going to start building so we can get ourselves out of the hole. What's next? Where are you going towards? What was the reason for all those hard decisions you guys made to put you in the position you're at right now? All right, so from. From Tennessee, right? You are. You. You said you were here for one year. Where were you from before Tennessee?

[Alex]

The Chicago suburbs.

[Brian Preston]

Chicago. So Chicago, Tennessee, and then went to Florida. Graduated in Florida. But y' all started dating or y' all just met sophomore year.

[Alex]

We dated briefly, like high school, dating for just a few months, and then didn't.

[Matt]

Went our separate ways.

[Alex]

Went our separate ways.

[Brian Preston]

What was the thing that, like, brought you back together?

[Matt]

We always stayed in contact. So during college, so MySpace. Yeah. I did have my space.

[Alex]

More social media.

[Matt]

Really?

[Alex]

So it was like texting or whatever. And then my junior year in college or senior year in college, we just kind of rekindled and the rest is history.

[Brian Preston]

I love it.

[Matt]

That's awesome.

[Brian Preston]

And how. How long have you guys been married?

[Alex]

It was 15 years last month.

[Bo Hanson]

15.

[Brian Preston]

Happy anniversary.

[Matt]

Thank you.

[Alex]

Thank you.

[Brian Preston]

What about family situation? Any kiddos?

[Alex]

Oh, yes, two. Two girls.

[Brian Preston]

Oh, nice. Two girls. You know, a thing or two.

[Bo Hanson]

I do know you did, too, until you had a son.

[Brian Preston]

Yeah, I was on the two girl gang, and then we had a little boy.

[Matt]

What.

[Brian Preston]

How old are your girls?

[Alex]

Our oldest is 11, and our youngest will be three in September.

[Brian Preston]

Three in September. Oh, those are fun ages.

[Alex]

They are ages.

[Brian Preston]

They are.

[Matt]

They are.

[Brian Preston]

They are ages. Would you guys say that you are in the messy middle? You feel like you're at this stage of life where, man, life is just real busy, real crazy, real hectic all the time.

[Matt]

There's a lot going on. For sure.

[Alex]

There is.

[Matt]

There's a lot going on. Work, home life, all kinds of stuff.

[Brian Preston]

And what do you. What do you guys do professionally? What's your vocation?

[Matt]

So I'm in the Military. I'm a submarine officer, been in for about 16 years now.

[Bo Hanson]

Nice.

[Matt]

Yep.

[Alex]

And I run the operations and kind of back of house finance stuff for a large design build firm out of.

[Brian Preston]

Washington D.C. and so in finance, I like that.

[Alex]

I mean light. I am not a CFO by any very different.

[Matt]

I love that.

[Alex]

I just wear a very small finance hat now.

[Brian Preston]

Where do you, where do you guys live currently?

[Matt]

So we're in Fernandina Beach, Amelia Island. So Amelia island area. The base that my submarines at is in Kingston Bay, Georgia, right across the line.

[Brian Preston]

Gosh, you know how cool the sentence is the base where my submarine is something I've never even come almost close to saying in my entire life. Well, it's wild cuz, right? Like you guys shared a lot of your financial information with us. You sent us over a net worth statement and it was pretty crazy cuz how, how old are you guys?

[Matt]

So I'm 39.

[Alex]

38.

[Brian Preston]

38 and 39.

[Matt]

Thank God we got this in before 40.

[Bo Hanson]

Right, right.

[Brian Preston]

So still young.

[Bo Hanson]

Still young. In my eyes, the older, the older I get it, the younger everybody else is.

[Brian Preston]

Is kind of funny how true that is. So obviously you guys still young, but you sent us over the net worth statement. When we look at it, it is astounding. You guys are sitting here with a total net worth of nearly $4 million. Like you said, you haven't even hit 40 yet. But it sounds like this is not, it hasn't always been this way. Right. Is that a fair assessment?

[Matt]

For sure? So there was a lot of times I think I sent in some other information just about like what our incomes were early on. It's definitely been a long like building process where we had pretty high savings rate to start. Where I was pretty, pretty hard on her in terms of let's not, let's not spend so much money or not spend any money almost. So fortunately I've lightened up over the years. But yeah, we were, I enlisted in the Navy and so at the very beginning we started out with, I think we were about $35,000 in debt.

[Brian Preston]

And when was, when was that?

[Matt]

So like almost right when we got married. So in 2310. 10. Yeah, there you go.

[Bo Hanson]

We all been married 15 years. About 15 years ago.

[Matt]

Exactly.

[Bo Hanson]

So it started at zero.

[Brian Preston]

So hold on, you said 15 years ago you were $35,000 in debt, negative net worth.

[Matt]

Correct. We had no assets.

[Brian Preston]

And here we are 15 years in the future with $4 million net worth. There's a story there. Yeah, right there. There's Some. You got to walk us through how. How did this happen? How'd we get here?

[Bo Hanson]

Well, I need to know how bad it was, because, I mean, the air is pretty thin where you are right now. But I think a lot of people who are going to watch this, I want to. I want them to be able to see themselves and some of the struggles y' all had, and then let's. Then we'll get. Be able to expand and say, what changed? And, you know, what. What made you guys, like, wake up? And then what did you have to do to get yourself out?

[Matt]

Yeah. So when we first got married, the debt was car loan debt. Probably some bad decisions in terms of purchasing a car. Definitely not by the requirements that you guys have.

[Bo Hanson]

No.

[Brian Preston]

23.

[Bo Hanson]

Give us some color on this. What type of car are we talking about here? You went in the military. Military guys are notorious for buying.

[Matt]

Really? I did probably what everybody else does in the military as soon as you get your first paycheck. I think my first year, I made $18,000 total. And I bought a car like a used Lexus that was like 25,000.

[Brian Preston]

Oh, nice.

[Matt]

Of course, more than my. So we had that car loan. She had a car loan at the time, and then we had some student loan debt, and then she brought a decent amount of credit card debt into the. Into the marriage, too. So.

[Bo Hanson]

Struck your shelf.

[Matt]

So, yeah, so we start out there, and I think she moved up to where we were living in Charleston or where I was living in Charleston. And I looked at all of our bills, and I was like, well, we can't even make all the payments on all these bills.

[Brian Preston]

Like, the minimum payments?

[Matt]

Yeah, the minimum payments and our rent. And, like, we don't have, like, that's not even taking into account food at that point in time.

[Brian Preston]

Like, we don't have enough money to even cover the minimum requirement to keep us afloat.

[Matt]

Correct. So. And credit to her, like, she uprooted her life when we got married and moved up there to live with me. And I was like, hey, like, we need to make more money. And, like, right now. So she.

[Brian Preston]

Because you were making $18,000 at the time.

[Matt]

$18,000 a year at the time. And so she went out and got not one, not two, but three different jobs at that time. So she had, like, a 9 to 5 during the day. She also got a job working at a restaurant and got another job on top of that to at least get us to the point where we could pay off our bills. And then I started reading personal finance books, like, A crazy person.

[Brian Preston]

How long do you have to do that? How long do you have to do like the three job thing?

[Alex]

Several years, I would say. This was pre kids and we were 24, 25. It's like a different level of energy. But yes, I was working 9 to 5. I was working at a restaurant and I was bartending at night. So not, you know, seven days a week, but enough. And you know, his income is finite. Like it's fixed. There's no. He can't get a second job necessarily. So it was up to me to try to make up for some of that. I spent a lot.

[Brian Preston]

But obviously there were something. So like you made these car decisions and you had some credit card debt. Like I'm assuming credit. Just consumption, general consumption stuff. Did your behavior change or did you just start making enough money that you could pay for the stuff you wanted? Or do you start recognizing, oh, maybe we don't need to do the same consuming that we have been doing? Walk us through that.

[Matt]

Yeah, so. So once I started, I think I'm very lucky in that personal finance has always been very interesting to me. So I started reading. You know, I just started consuming as much knowledge as I possibly could, just trying to learn on my own. The first couple books that I read were Rich Dad, Poor dad, and then Dave Ramsey's book. So yeah, so we like from that I created a budget. Mint was still a thing back then. So I created a pretty strict budget back then and just kind of convinced her to get on board with it. And we like started out like a year later, probably. We created a savings rate of around 50% and then just maintained it for the last 15 years of our life. It was tough back then, and it's gotten easier as our incomes have grown, so.

[Brian Preston]

But you've maintained it like it was 50% when you were making 18 grand plus three jobs.

[Matt]

Yeah, once she got the three jobs and then we had that and we could cover our bills. Once we got to a point where that was possible, I think probably our combined incomes, my income obviously went up a little bit and then she was probably making around 50 once mine got to around the $50,000 a year and our combined incomes were around 100,000 a year, that's when we probably hit an actual 50% savings rate and then just maintained it as our incomes grew.

[Bo Hanson]

Were y' all on the same page from the get go? I mean, truthfully, for Alex to go take on three jobs, you must have, I mean, pretty confusing. You caught fire too. So how did that whole discussion I mean, there has to have been a conversation y' all had where you ought to sit down or something, because these are not like something you just come to and say, hey, by the way, I'm gonna need you to go get three jobs. By the way, we're only gonna live on 50% of what you make on those three jobs. There has to have been some pretty stark conversations that were had there.

[Alex]

Yeah, there were definitely some bumps in the road. I am certainly the spender of the two of us, and he is very much the saver. So there were a lot of, I would say, frank conversations. You know, I mean, I would do a trip to home goods and come home, and he'd say, you can't spend that kind of money. I mean, it's true. We were just. I. I came from. You know, I went from my parents home to college, and then I got married right after I graduated college, so I never lived on my own. I got married instantly. And so it was very much a learning experience for me as well. And there were definitely some tough conversations, some tears.

[Bo Hanson]

Were there fights, though? I mean, or did y' all just. Did y' all have very healthy. Because that's the. I just want people who watch this to know that there is a better way out and that you're. No matter how bad things seem when you're in the moment, if you'll just start making those small steps, there is a path out. So that's why, if you could share any guidance on the pain, but then also how you started getting traction through that, because I think people will learn from that. And that's what Bo and I were talking about when we looked at Jill's situation. Like, if we just showed are public, this is a $4 million attractive couple that, you know is under 40. People are gonna be like, they're gonna throw their hands up. And I think there's a story here that a lot of people can learn from, and I want y' all to be able to open up and be able to share that.

[Alex]

Yeah, I mean, there was probably a healthy mix of fights and really frank conversations. You know, it was, you know, education on my part, and I didn't get that education growing up. I'm an only child, so when I got married, my parents were like, well, she's your problem now. Go ahead.

[Matt]

Yeah, there's some. There's some good. We're good bouncing off of each other, because she. She is more of the spender of the two. And I'm. I'm. Obviously, I would spend zero money. If she gave me the opportunity, I'd save 100% of our income. But there are some. There are some instances where, you know, some arguments that we had. Early on after we purchased our first home, I very much pushed for the real estate journey that we went on to buy, like, rental properties in the military. I don't think she was fully on board at the beginning with that. There's. I mean, there's specific instances of arguments that we had. Maybe not arguments is the best word, but she bought pillows one time prior.

[Bo Hanson]

To talking to the man.

[Brian Preston]

They kill me, the pillows. Every time.

[Matt]

She spent, like, $100, I think, on pillows before Thanksgiving one year, where our family was.

[Bo Hanson]

Was that for all the pillows or just one pillow?

[Brian Preston]

It was like two pillows, but for, like, Thanksgiving pillows.

[Matt]

Right. Like, we're going on their couch.

[Brian Preston]

Like, these are, like, just three throw pillows.

[Matt]

They were going on our throwaway money. I mean, we had a pretty big argument over that because I was, like, strict on the budget. I was like, that's. We can't spend a hundred dollars. Why we spend a hundred dollars on pillows? Like, what do we need that for? So those are kind of the small things that happened, you know, as we were. As we were going through our journey, especially at the beginning. It definitely got easier after we set those initial, like, kind of guardrails up.

[Brian Preston]

So was it budgeting that y' all did? Hey, here's what we're gonna do.

[Matt]

Like, we were strict about budgeting back then.

[Brian Preston]

Walk us.

[Bo Hanson]

I mean, how did you meet weekly to discuss how? I mean, where's the accountability?

[Matt]

I was updating. I was updating the budget, and I was encouraging her kindly to update. Update the budget. Because you have to, like, categorize back then, like, all of the credit card, like, events that happened. And I was like, hey, we're two weeks in, and we're already going to be $50 over in shopping, so cut it out. We called it fiscal fast. We still use that word. I love that.

[Alex]

Yeah.

[Matt]

To this day. Like, hey, we spent too much so far this month. Let's go on a fiscal fast for two weeks, not spend any money other than food and water.

[Bo Hanson]

Were you on board or was there any resentment towards this?

[Alex]

Initially, I understood the why we would have to do that. Like, you know, there is a fixed amount of income. We don't. You know, I'm just very used to being able to put things on credit cards, and I just didn't really have that money. Education in high school or college. So it was. It was definitely difficult But I think that we don't argue too much. He's just very much an educator, and he presents the facts as they are on black and white.

[Bo Hanson]

Overwhelming arguments is what I'm hearing.

[Brian Preston]

We can't afford Thanksgiving pillows. Oh, thanks. That we can't afford.

[Alex]

Yes. So the budgeting was new for me, and I actually ended up enjoying part of it. It's very analytical, very logical. I didn't love seeing the numbers be so low, but it was just kind of where we were at that in our season of life. But.

[Bo Hanson]

And who came up with the idea that you should go get more jobs? I know Matt's kind of laid out he couldn't go get the job, but at some point, there was a eureka moment that we just need to go make more money. So who came up with that idea?

[Alex]

Well, I got my. So I graduated in 2009 right on the heels of Great Recession. Pretty intense economic downturn. So my 9 to 5 did not pay well.

[Bo Hanson]

Right.

[Alex]

And so there was, you know, an opportunity for me to get a job on base at a bar that paid very, very well for very, very little effort. Right, right. And I mean, it was. I feel like, mostly me, I was like, hey, here's an opportunity for me to. And he was working so much that it was either do that or be at home.

[Bo Hanson]

Right.

[Brian Preston]

And there's at least a productive use of time.

[Matt]

Yeah.

[Alex]

And I wanted the Thanksgiving pillow. So.

[Brian Preston]

So you guys went. So you had this. In 2010, you had this negative net worth. You said, hey, we bought our first. Like, how? Because I know there's a lot of people out there listening, thinking, okay, I'll never be able to buy a home. I'm not in a situation. How did you do that? You said you went on this real estate journey. Walk us through the process. We've been getting your very first home. Like, how did you save up for the down payment? Were you investing? What were the things that you guys were doing to allow you to just take that first step?

[Matt]

Yes. So the. The first home that we bought, and actually the first few homes that we bought, the military, has a pretty nice availability of something called a VA mortgage. VA mortgages, at least for your first home or even, I think your first couple homes, you don't have to make a down payment for them. You do have to Pay, like, the VA funding fee and things like that.

[Brian Preston]

So 0% down, but there are some fees.

[Matt]

Yeah. So it was probably. We probably had to put 3% max down on that first home. So we didn't really have to save that much money. And I. I waited until I did get, like, my first bonus once I completed all of my training for. Back then I was enlisted, so completed all the training pipeline. They give you a nice bonus if you. If you sign a contract to stay in for a little bit longer. So, yeah, we purchased our first home with only a fraction. And because I had read a couple of books about let's build some assets up, first home probably wasn't a great investment property, but we learned a lot from it.

[Brian Preston]

Now, we all living in this home or is this rental property?

[Alex]

We. Yeah, we've. We've lived in every home that we rent out now.

[Brian Preston]

Okay, so you're one of those. You buy a house and then when you go to buy the next house, you rent the house that you stay.

[Bo Hanson]

In it two years.

[Matt]

Uh, it's dependent on, you know, how long I'm stationed somewhere. Usually that averages out to be about three years at each. At each duty station. So approximately three years. And we, we purchase each one of them with the intent to rent it out in the future. So that's another sacrifice she's made because we're buying a lot, a lot less home than we can afford just because those are the homes that will be profitable when we leave.

[Brian Preston]

How do you feel about that? I mean, obviously, again, even that's attention for, hey, we're going to start our family and we're going to grow our family, and instead of buying our dream home or the home that really we love, we're going to just buy this other home. Just keep doing.

[Bo Hanson]

We're going to be able to.

[Brian Preston]

We're going to rinse and repeat.

[Alex]

Yeah.

[Brian Preston]

How did you guys get on the same page with that?

[Alex]

Well, the argument changed from Thanksgiving pillows to, you know, hundreds of thousands of dollars worth of homes. But the first. I mean, we have quite a bit in our portfolio now, and the first three, I would say, were pretty easy conversations because I wouldn't say it was less than we could afford. It was probably right where would be, like, normal. Now, our last house is a little bit different, but he's been more nimble in giving me some money to help renovate or make it somewhere where I am okay living for 36 months.

[Matt]

And I'm dangling the carrot of, hey, when we retire, we'll get the house that we want.

[Brian Preston]

Oh, it's coming.

[Bo Hanson]

We kind of resemble the area y' all think you're retiring to. So we kind of know what you're in for. You do, too, because y' all are from these Parts.

[Brian Preston]

So did you know? Because again, I think a lot of people here did you know real estate? Did you have a background in real estate? Because obviously now you have a real estate portfolio. How'd you figure out how to rent them? How'd you figure, like, how'd you figure out all those pieces and parts out?

[Matt]

So, so originally, and this has definitely changed over the years, originally, this was. It was my, like, push to do this. So I was kind of like, here, I'll do it all. I'll. I'll pick the house. I'll do all the work that's required to, like, find tenants and then, like, the maintenance of the properties. We found out pretty quickly after the first house that I'm good at the numbers portion of picking a good rental property and less good at the managing tenants and finding tenants. So that pretty quickly shifted over to her, I think our first rental property.

[Bo Hanson]

Give me some color on that, though. Does that mean you were having trouble with when they didn't pay their rent, being hard on them, or was it meaning you were having trouble with just the ongoing maintenance? Where was the struggle?

[Matt]

It was. So placing tenants was. Was one of the problems. I didn't do a very good job of doing, like, background checks and things like that. So we put a convicted felon in one of our properties and someone who had defaulted on their previous or got kicked out of their previous rental property that was the same, same family.

[Brian Preston]

There wasn't any sort of background process.

[Bo Hanson]

Our convicted felons, are they. Are they at least consistent with paying their rent?

[Matt]

So they left in the middle of the night, and we had something like a $10,000, like, repair to do to fix the home for the new.

[Brian Preston]

Was this the very first.

[Matt]

This is the first one.

[Brian Preston]

So you guys went through this experience and you had a bad tenant and it cost you a lot of money, and you still said, hey, you know what, let's keep this thing rolling.

[Matt]

Well, that was like. That was like an expensive seminar. So there's a lot of. Lot of things to learn there. But then we learn those things and then I transitioned that portion of it over to her, and she's done a much better job at managing, managing the tenants.

[Bo Hanson]

So what did you pick up and do? Because he's already giving you tremendous credit. So you obviously, first, first thing, we're not going to put felons in our houses anymore. So what did you.

[Alex]

While personal finance is something that's very interesting to him, I manage people all the time. And so being able to be hard, hard on people is something that comes naturally to me, but also like having an ironclad lease, making sure that I'm educating myself on state laws, tenant landlord laws in my spare time. And, you know, it really just took an evolving of that and the vetting process and really everything else comes pretty. We joke that when it rains, it pours. We don't hear from our tenants for like a year and then four of them have an issue. But so most of the time I'm just kind of smooth sailing. But for example, when he was on his last patrol, we were turning over two properties in a different state, and we don't use a property management company. It's me. And so that was actually probably the toughest time that I've had with the girls. And then also working because you're having.

[Brian Preston]

To like, go to the property to.

[Alex]

Go deal with or find somebody to go to the property and do walkthroughs and, you know, work with our tenants who are moving out and find new tenants to move in. And so that, that was probably the most difficult time, but we weathered it and it was, you know, the good thing is we are now have enough of a buffer that if it has to sit vacant for a month or two, it's not the end of the world. And so that is very reassuring. And, you know, a comfortable person is, you know, makes better decisions, I would say. So I wasn't super, you know, strict on finding the next tenant who was even remotely qualified to move in. We're just trying to find the best tenant.

[Matt]

That's right.

[Alex]

And so, you know, it. It has definitely been a learning process, but the, the lease education was probably something to fall back on for me to. We've never had to initiate eviction proceedings. Thank God.

[Brian Preston]

Well, they've been so kind. They just leave in the middle of the night. That makes it a lot easier.

[Matt]

Yeah, exactly.

[Brian Preston]

Did you have a real estate strategy? Like, hey, we know that one day we want to own five rental properties or we know that we're going to like, how did you approach or did it just kind of happen through time? Because again, I think a lot of people are curious about, hey, here's where I'm today and this where I want to be 10 years in the future. How strategic was your plan in terms of acquiring properties?

[Matt]

Yeah, so I. When I looked at or when I read the one of those first books about like building up assets and things like that, I felt like there were three. Three ways people made a lot of money in life. It was either through real estate, through Owning your own business or through the stock market. And so I try. I figured, well, let's try and do all three of those. I feel like real estate and managing properties is kind of like having your own business. So I wanted to build up those assets, but I had no idea what I was doing. And then also investing, you know, as much money as I could. So that's why we. We had the huge savings.

[Bo Hanson]

Right. Every one of your houses, ones that you all lived in. Because you said that. I think you all said that, Claire, because. So you kind of let life be the driver of.

[Matt]

Right. Exactly.

[Bo Hanson]

Got relocated.

[Matt]

And the, the. Probably the biggest mistake that I made, arguable that I was a mistake. We haven't purchased every place that we've gone. So I went to New York very early on when I was still in this and didn't make a lot of money. We could have purchased a home there, which would have been a great time to purchase. This is like 2012 or 2013 or something. I could have purchased an apartment there. And we didn't. So that's one of my bigger regrets. But it's usually just been, we either rent or buy and buy. If there's something that I can find that I think we can profit from when we. When we move again and have to rent it out.

[Brian Preston]

So you've never bought a speculative rental property, thinking, I'm gonna put a tenant in there tomorrow?

[Matt]

No.

[Brian Preston]

Okay.

[Bo Hanson]

This is kind of like a quasi. It's not like you hear house hacking and you hear about duplexes, quad plexes, and things like that. But in its own way, this is because we all know the government does have very good benefits for service members. For all the things that you don't make and pay, there are benefits and other things. And this is. You're basically, I was about to say exploit, but you're really taking advantage of a loophole in the system on purpose to kind of do a quasi house hack that you've been able to build wealth off of. Because the reason I say that, and I want to share is that. And I'll ask you this pointed question because you've broken some rules, but managing. Managing property out of state is one of the hardest things. I mean, you've already kind of explained some of it, Alex. And then also just getting into real estate at the beginning, like before you had. You were broke as a joke. And then your first endeavor into the wonderful world of finance is let's go take a levered product and put tenants in there, convicted felons. And see how we turn this. What could go wrong?

[Matt]

Right.

[Bo Hanson]

But you've come out on the other side. Is there something I just would. So people watching this, I'd love to know your insight on how is out of state property and then also looking because now you kind of have develop an expertise.

[Matt]

Right.

[Bo Hanson]

What do you see for people looking at the market now? Could they do what you've done or is are things changed in the landscape? To a degree.

[Matt]

It's definitely tougher now. But we did just purchase a rental property because we. I just moved down to Florida within the past year or so. So the home that we purchased was an assumed mortgage. An assumed VA mortgage.

[Bo Hanson]

Oh, that's great. Good for you.

[Matt]

The lowest.

[Brian Preston]

Hey, what's an assumed mortgage? Can you educate, educate our folks?

[Matt]

So I don't know all of the products. I know FHA loans and VA loans are typically assumable mortgages.

[Bo Hanson]

So what's the interest rate?

[Matt]

So it is the lowest interest rate that I have on any home is the home that we purchased a year ago. It's 2.625%.

[Brian Preston]

So for those who don't know, an assumable mortgage is one where someone is already in the house, they're gonna have a mortgage. And when you buy the house, you not only buy the house, but you take over their mortgage payments. You just pay them the difference in the equity they have in the home. So then they get to continue paying on that mortgage. So rather than having to buy a home at today's prevailing interest rate, you get to take it at whenever they bought the home. In this case when it was 2.65.

[Bo Hanson]

Did you have to pay a huge premium for that?

[Matt]

So yeah, the problem is you, you typically do have to bring some cash to that, especially if house housing prices go up. So that's the highest down payment we've had to make because you got to make them whole on the COVID You can get like another loan to cover that if you wanted to. I didn't really want to do that. So we had to pay like a hundred thousand dollar down payment to make up the difference. But still it's a $400,000 loan. That's a super low interest rate. That's amazing.

[Brian Preston]

That's amazing. And I'm so curious. So you have this like real estate portfolio, but you also, again, if we look at the net worth statement, you have a really healthy real estate portfolio, but you also have a very healthy liquid portfolio. So it's not like you did all real estate. How were you able to balance Both of those. Because a lot of times we see people who try to go headlong just into the real estate thing and they have no liquidity. How are you guys able to do both?

[Matt]

Yeah, so I, I still have, I mean we, there's a lot of loans up there and a lot of money and debt. It looks like a lot. I don't typically look at it nice and compactly like that. I feel like we've always had a healthy fear of debt. Like the, the Dave Ramsey's book scared the crap out of me in terms of debt. So when we started out, my plan was to never buy a house or enough homes that we couldn't cover just on our own. So I always wanted to make sure that we increased our, either our income or didn't purchase until we could cover all of that on our own. And then really it was the savings rate and then intentionally doing things that would help us increase our income later to where I could start saving more into, into the stock market.

[Brian Preston]

And so as you were saving for the down payment for these houses, did you cut off your like 401ks and your IRAs or did you figure out how budgetarily to do both of them? Hey, we're still going to save. I'm gonna use 25, 25 into the retirement portfolio. But we also save cash for the next down payment.

[Matt]

So we were, we were prioritizing saving into investing. So hitting up all of our tax advantage space and maxing that out as early as I could, that was like goal number one was max out those. And then real estate was kind of a secondary goal as, as we went. And again, those, those first few homes, I, I brought very little cash to the table. Sure. So the cash that we brought to the table here later on mostly just came from our investments. I would, I would take out money from that as necessary to pay down payments.

[Brian Preston]

I love it. So one of the things you were obviously doing is in addition to saving in the tax advantaged accounts, sounds like you were using a bridge account. You were saving into after tax brokerage accounts with the understanding that, hey, this can be retirement money, but this can also be intermediate term money. That's one of the things we talk about in step seven of the financial order of operations. When you are building up that bucket. It does give you flexibility when opportunities present themselves. Like going to assume a mortgage at 2.65%. You have capital where you can do that, which is awesome.

[Bo Hanson]

Yeah. A lot of people think cash is trash, but I've tried to, and I explained this in Millionaire Mission is that I have found cash to be a very valuable tool in wealth building when you have extra of it when everybody else is scarce in the resource. And that's exactly because I think a lot of people probably couldn't go take that assumable mortgage that easily. So you're able to step up. And that's what everybody says, hey man, you're so lucky. No luck is that intersection of preparation and opportunity. And that's why sometimes cash. Now I don't want you to do it. This is why it's a step seven, eight is where I tell people to start building up extra cash for opportunity. It's more of steps one and four to keep you out of the ditch. But it is one of those things where I think you guys have found some benefit in keeping extra cash around as well.

[Matt]

We wouldn't have been able to, I mean we are lucky in terms of where, where things were along the way, but we wouldn't have been able to do purchase this home and assume this loan 10 years ago because we wouldn't have had the, the, the access to that kind of money.

[Bo Hanson]

If you were given guidance to somebody who's starting fresh because we're. In a minute we're going to answer some of yalls questions. Is out of state real estate where you would start or do you think just because you had a unique opportunity being in the military?

[Matt]

Yeah, I think, I think that is more of a unique opportunity. I do think there you can learn a lot by just jumping in kind of and starting the process. Like if you do want to get into real estate, it's good to like read up and learn about things before you do it. But really the place that you learn a lot is that first home.

[Bo Hanson]

The failures.

[Matt]

Yeah, it's through the failures because like you learn all the mistakes that you make, you learn all the things that are going to cost money. The things that you weren't thinking about beforehand. So there was a pretty big gap between when we bought our first one to bought our fifth or our second home. It was like a five or six years worth of like figuring some stuff out, learning that I'm not the person to manage it. She is because she's way better at it. But yeah, that process jumping in. I don't know that out of state real estate is probably where I would start. That probably increased the difficulties for us at the beginning. Probably local areas, you know, the areas more, you know where people would like.

[Bo Hanson]

To stop by too.

[Matt]

Yeah, you can go like fix the, the toilet Clog on your own instead of paying 200 bucks to have a plumber come out and do it.

[Brian Preston]

I don't want to go fix the toilet clog.

[Alex]

We don't really do that too much now. But having, like, local. Local trades, people, like, you know, having your contacts. Our homes are mostly in the same area, so that actually is really beneficial for us because, you know, there's three homes that we have outside of Charleston, South Carolina, and we have the same plumber, we have the same H Vac person.

[Bo Hanson]

It's not a bad place to have property, too. Those are great areas to have real estate.

[Alex]

Yeah. But the out of state piece, we didn't really get a choice. Right. So we go where the Navy tells us to and when the Navy tells us to go there. So, yeah, it wouldn't be something I would necessarily tell somebody who wants to embark on. Being a landlord out of state is definitely more difficult, but we just. We didn't have that choice.

[Bo Hanson]

I do, and I know you probably have more questions, but I did want to talk about. Because y' all have done something so strict, meaning that you've only lived off of 50% of your money, but now we look at your net worth, it's big. Are y' all transitioning to where? Because, you know, there is a fine line between financial mutant versus financial miser. Do y' all feel like you're loosening up? Because, look, confessionally, I was a tightwad. We even tried to brand something, you know, where we are so proud of our tightwad lives. But as I've had more and more success, I've realized I had to give up my tightwad card because we were traveling nicer, we were doing things, and I felt like I was a hypocrite if I wasn't honest, that my lifestyle creep, it was still very healthy based upon income and everything else. But there was a transition that had happened in my life. Are y' all experiencing that or are y' all still in this? Like, you see how I look at him?

[Alex]

How y' all were you.

[Matt]

Are you guys the same person? She's probably. She. She's probably got a great story of where she thinks that I probably changed. Or at least that's where my sister thinks that I changed. But yes, definitely, I was a miser. She can talk about.

[Alex]

No, I mean, notoriously. You know, his friends and family know that he was a tightwad. Cheapskate, however you want to phrase it.

[Brian Preston]

Some say frugal, some say other words.

[Alex]

I don't feel frugal. I say he's like a chipmunk, right? He was like straight squirreling away for a rainy day. We already have on the table that I was the spender. So I was always trying to be like, we can do this.

[Bo Hanson]

I don't think, by the way, to live in this environment. I don't think you're truly a spender. I mean, just in relative terms, you're a spender.

[Alex]

I appreciate that. I will be using that later. No, but, you know, I think that you said lifestyle creep is very much right on. We as have continued to evolve and have gone on a little bit nicer vacations. I think that's probably what you're referencing is we went to Italy and he did some serious shopping and got a little taste for some of the finer things in life and was like, I bought two things. Yes, he bought two things. But we knew, you know, we made a plan before we went there. Like, okay, we're going there. This is what they're known for. This is what we'd like to buy. So it wasn't like, you know, just frivolous or anything. We had gone with intention. But I think he got a little taste of what that could look like and came back. And I wouldn't say that it's completely absolved, but he has. And the pendulum hasn't swung the other way.

[Brian Preston]

He's loosening.

[Matt]

In my mind, I've loosened up.

[Bo Hanson]

Does that mean there's a Ferrari or Lamborghini sitting in the garage?

[Brian Preston]

Oh, man, that was gonna be a lot.

[Bo Hanson]

I was not.

[Brian Preston]

I was thinking maybe a watch.

[Matt]

I bought some Florencian leather shoes. They were like a hundred bucks.

[Alex]

But for him, it was a pivotal change for us because he was very used to not spending any money. And so, you know, we would joke when we got our credit card statements that it was like 99.1percent, you know, but, yeah, that was probably where we started to see a little bit of a shift, maybe. But I would say most people would probably still categorize him as a little bit of a conservative when. I guess.

[Matt]

Yeah, I mean, I recognize a 50% savings rates higher than. Than even financial advisors recognize.

[Brian Preston]

Well, I'm curious about where we're going, right, because obviously 2010, we had a negative net worth. Right? You guys made some very hard decisions. Hey, we're going to start saving 50%. We're going to start building so we can get ourselves out of the hole. I would say that you have now gotten yourself out of the hole. Here. You are not even 40 years old. You have a $4 million net worth. What's next? Where are you going towards? What was the reason for all those hard decisions you guys made to put you in the position you're at right now?

[Matt]

Yeah, I've really been pushing the fire movement, especially to her. I really. I want to retire or at least have it to where I can do whatever I want. And if I make money at it, great. Or if I don't make money at it, great. Like my, my plan is once you want financial independence, I want financial independence as soon as possible so that, you know, we have the availability to do whatever we want whenever we want, both for me and for her. Like, we both worked very hard over the past 15 years and eventually when I retire, the 20 year career so far, and I want to be done and do something that's just enjoyable or fun and have the availability to spend more time with my family because I go away for months at a time and don't see or talk to anybody.

[Bo Hanson]

Refine that vision though, because how many more years do you have in the military before you have the option to retire?

[Matt]

So not that I'm counting down or anything, but I'm eligible for retirement September of 2029.

[Brian Preston]

Okay.

[Bo Hanson]

September 2029. And then do you think is that done done, or do you think that there's still a transition period even after that?

[Matt]

So done done in terms of like still being in the military?

[Bo Hanson]

No, just working.

[Matt]

So my goal is to be done done if I can. Like, again, if I find something that I truly enjoy, I'm okay to continue doing that. And then we might need to bridge the gap just between then and full retirement. But in my mind, I'm done in 2029 and we'll kind of shift roles and I'll be the person that, that maintains the, the home and the, and getting all the kids to practice.

[Brian Preston]

And so we're going to stagger retirement. It's not you, but you both are not planning on exiting in 2029.

[Alex]

Oh, I think that's what we're here to discuss.

[Matt]

Yeah, I mean, if she can retire and we can get everything that we want, then, you know, that's definitely on the table.

[Alex]

Yeah, I love my job. I have great flexibility within my work and I'm able to work remotely, so it works very well for our current life situation of moving quite frequently. So I'm actually not looking to retire when he does. And I think that where we kind of want this conversation to go is kind of what that end goal is, why we have been acquiring these properties and living how we have been living. For me, my end goal is to live in a quote, unquote, forever home. It might not be forever, but it will be for longer than we've ever lived in another home where our children can, you know, go through primary and elementary, middle, like in one location. That is not something that we're afforded currently. So that's my end goal, is that I'd like to just maybe put down roots somewhere. That doesn't necessarily mean I want to stop working, but it means that we don't have to move anymore.

[Brian Preston]

So when I'm here says even, even above even financial independence, immediately what you're looking for is foundation and roots. Like, how do we be in a place where we can be in our forever home? One of the. One of the things that would be required, I imagine, would you have to be out of the military, so that way you're not moving.

[Matt]

Right.

[Brian Preston]

So that's got to happen. Have you guys decided, like, this is the area we want to be or this is the type. Like, do you have parameters around what the forever home looks like?

[Alex]

We have toyed with several locations. I mean, we're fortunate in that the Navy has really beautiful places that they have sent us to up and down the East Coast. You know, we. I think we'd like to be in kind of the Nashville metro area, which is where we want to, you know, set down said routes. But like you said, we can't necessarily do that until 2029 or so. But, you know, we constantly are sending each other Zillow listings and looking.

[Brian Preston]

The good news about this area is if you're sending a Zillow listing now, odds are it'll be the exact same 40 years from now. That's right. It's not moving very much at all.

[Bo Hanson]

I do think it's leveled out to a degree. It's not. It's not doing what it was doing in 2021.

[Matt]

Right.

[Bo Hanson]

So I don't think it's going to continue to go up, but I don't think it's. It's not the crazy run up that we saw. I think that's in general for all of real estate is that we're not seeing these huge spikes in prices. Hopefully there's still going to probably be the inflationary run up. So.

[Matt]

Yeah. Right.

[Brian Preston]

So when we think about planning forward. Right. It sounds like. Because are you going to have to move more times the military, or is this last move to Florida the last one you're going to do?

[Matt]

Maybe. Probably one more time. My Current, My current job will be I'll transition in about early 2028, maybe mid-2028, and I'll still owe like a year and a half or so after that. So I could move one more time or maybe there's a job in the same base that I could, could try and get.

[Brian Preston]

And if we move one more time, I'm assuming current home that we're in, we're going to rent that and we'll go buy another house wherever we move to.

[Matt]

Right. I can do this process provided we can find one that, that I, that'll be profitable money wise.

[Brian Preston]

So we have maybe one more move, one more home.

[Matt]

Right.

[Brian Preston]

In terms of the home, just so we can get some context, when you guys look at homes to buy for this type of strategy, what's the price point? I know it depends on the area, but historically what, where are you guys at in terms of the price market value?

[Matt]

Right. My goal is typically the piti and the rent that I can expect from it having $1,000 delta between them.

[Brian Preston]

Okay.

[Matt]

So the home values that we purchased have gone up. So the home that we just purchased was about $500,000. Okay. It would probably be around that price point, but again, we'd have to find like an assumable mortgage or something to make the numbers work more than likely.

[Brian Preston]

Meaning like, hey, if we, if we have to go buy a house at six and a half, 7%, it's probably just not going to work.

[Matt]

It would be very difficult. Or we'd have to buy a house that's much cheaper. Like less than $200,000 would be the only way I could see that being possible.

[Alex]

Yeah. Based on the areas that we've lived.

[Matt]

In, what rent houses.

[Bo Hanson]

There are not, not that you want to, especially not your children and.

[Alex]

Right.

[Bo Hanson]

Yeah.

[Matt]

Especially on your major military bases too, because those are pretty built up areas usually.

[Alex]

Yeah.

[Brian Preston]

So as you guys think about 2029 and being you retired and you kind of setting down roots, when you think about, I mean, obviously you do have a lot of debt.

[Matt]

Right.

[Brian Preston]

I mean there's not a lot of folks out there that have a million plus dollars in debt. And you guys happen to fall into that camp when you retire, is that something that has to go away or are you comfortable having debt when you retire? And we haven't really talked about, you know, this dream home. Like is it 500,000 or is it something different?

[Matt]

Yes. So I'm, I'm okay with the debt that we have there just because the rental property, there's a, there's a delta there in terms of like how much money we're, we're profiting off of them and what the interest rates are on those. If we purchased a new home at like six to six and a half percent interest rates or whatever they are, to be honest, I'm not 100% sure because we haven't. I, I haven't purchased a home with that interest rate. I would be much more inclined to pay that down quickly and get rid of that, that debt. And that's kind of the plan. If we purchase a home. Like the range that we've been kind of talking about and kind of planning for on our own is around the $2 million range. And then her continuing to work and me maybe getting some, some side work and paying that down at least as much as we can and maybe resetting the loan so that we have a smaller, smaller monthly payment because the fixed expenses are going to be significant.

[Bo Hanson]

Is there any desire that you just pay cash for the $2 million home?

[Matt]

I've thought about makes me nervous to spend, you know, half of, well, half of what my portfolio might be in, in five years if we can continue on the saving train. Spending half of that immediately on it would make me more nervous than I would almost want to work longer just to pay it down with my, the money I make from a new job.

[Bo Hanson]

I like hearing you say that because there's some maturity in that answer. And the fact that I think a lot of people's emotional reaction is let's just pay cash for the house. We have resources. But I was telling BO when we were reviewing your situation is there's also a lot of value to being able to have access to your capital when you're making big life changes. When you, because when you leave the military, when you move to a new part of the country, there's just going to be a lot of moving parts that are going on that your life's not going to feel completely settled. And to basically take half of your capital, lock it into this house, it takes away a lot of flexibility. And there's a lot of decisions I've made in life where, yes, I pay a premium and I look at it as almost like an insurance policy where I'll pay a mortgage or I'll carry something, but it just gives me so much more flexibility for a time certain period. And then you can always go prepay a mortgage at some other times even. And I know on a $2 million house, I mean, this potentially could be $100,000 decision that you're paying interest on a mortgage for a year or two and you might incur some interest. But I think it would be worth it because you guys are the CEOs of 4 million. By this time, this will be well over $5 million. That seems like a small price to pay. I know on paper, $100,000 for interest seems crazy, but for a $5 million enterprise, it seems like an okay thing to give maximum flexibility because I still don't even know the thing. The way you gave your answer. Will you be happy being fully retired? I mean, that's what. That's why I think having access to capital is going to be a very valuable thing as you're trying to figure out a lot of those life things.

[Matt]

Yeah, I might. I see myself probably finding something to do with my time other than just, you know, sit at home and play golf all day. I mean, it could be anything. Like, I really do truly enjoy consuming information on personal finance. So I mean, I might try to, to get into that field. I, I kind of have planned beforehand and gotten my MBA while I was in, in school and started taking coursework towards getting a CFP accreditation.

[Brian Preston]

Let's go.

[Bo Hanson]

I wonder if there's any firms in.

[Brian Preston]

The area that they're trying to. You said you're thinking about Middle Tennessee, Nashville. I'll have to scroll through the Rolodex.

[Bo Hanson]

Military guys who were actually, actually clients that then transitioned into, into becoming financial advisors too.

[Matt]

So yeah, that's definitely.

[Bo Hanson]

There's precedent for that.

[Matt]

There's definitely interest in doing something like that. And I think I would really enjoy it because I'd get the opportunity to help people and, and kind of go down similar paths that I went down where I had some success from. From basically nothing and no true knowledge. So I think that would be interesting to me. But we'll see what happens. I got to survive the next, you know, sea tour here and, and get through all the. Of a pretty arduous lifestyle for the next few years.

[Brian Preston]

So. Okay, when you think about where you are today, you have cash flow rolling in from these rental properties. Are you, you're not. Are you using that cash flow to then satisfy the debt or are you building up that cash flow and just kind of letting the minimum mortgage payment happen on the rental properties?

[Matt]

So it's. We're making minimum mortgage.

[Brian Preston]

Minimum mortgage. So you have cash flow coming in at least $1,000 Delta was your goal per rental property coming in. You also have a 50% savings rate. So have you guys like played with. Hey, just from where we are now, if we think about the way that we're going to accumulate and the way that we're going to build just between 2025 and 2029, we're likely going to have a lot of Capital in 2029 to figure out how to make that housing decision.

[Matt]

Right.

[Brian Preston]

You projected that out at all?

[Matt]

Absolutely. So I actually went over it with her pretty recently. I think I listened to one of your shows where you did like an annual like meeting.

[Bo Hanson]

Off of work and actually turn it into a really fun event.

[Matt]

So every once in a while I'll like just show her like our net worth statement because I track it and update it and I'll just show it to her like, hey, we had a great year. But I listened to that and I was like, well, maybe I should have like an actual meeting where we sit down and I'm like, let's show her the numbers on like where I plan to be and give her a couple different ranges of options to where we show, you know, what's going to be possible when I retire in four years and how much money we're going to have. And that's where we kind of came up with the budget of $2 million. So we were st talking about a higher budget, but I was like, I don't, I don't think that we're gonna have enough money.

[Brian Preston]

He's like, I just bought the hundred dollar pair of shoes. Don't push me further.

[Matt]

Here. Here's what the numbers look like. Here's like the, the poor, the doo doo plan. Here's the, here's the, you know, down to earth. And then here's the like, probably best case scenario. And I showed her what those numbers would be with the different projections and how much we'll have. And that's kind of what we're basing our budget off of.

[Brian Preston]

So on your projection, are you going to have the ability to pay cash for the home and you're going to be able to make the decision either we pay cash for the home in 2029 or we do a mortgage. Are you, have you projected out that you'll have the flexibility to do that?

[Matt]

I do think that we'll have the flexibility to do that. The numbers that I came up with based on our savings rate and how much we save per year was that our actual like investable assets would have or our actual investments not including like the, the, the real estate that we'll have would be around four to four and a half million, depending on what kind of rate of return the stock market in our portfolio gets. So, yeah, we could pay that. Paid almost half of our investable assets down. To do that, there would be a pretty big tax liability. I feel like that would. That we'd incur if we did that. And I don't love that portion of it. And then that would put a lot of money into just our primary residence, which I, I don't love doing that either. So I think I'm leaning more towards taking out a loan and just making a down payment. But. But it'll be an option.

[Brian Preston]

Well, one of the difficult things to project is, is there's just so many variables that can change. I mean, obviously we have young children. You don't know exactly what your lifestyle is going to look, you're gonna have one other move. So you don't know exactly what 2029 is gonna do. But what you do know is, okay, we have this high probability of this outcome that we want to have. And I think you're doing the exact things necessary by taking the steps now to build towards that so that when you get there, you do have the choice to say, okay, well, then we have capital. We can either pay for this home or we can have a mortgage. Because what we've seen work with clients is that it's not an all or nothing one or the other. A lot of times we'll have clients who end up retiring or going into financial independence and it makes sense for them to liquidate portfolio assets and be completely debt free. In other scenarios, based on where interest rates are and based on where cash flow is, and based on where portfolio assets are, a mortgage makes a lot of sense.

[Bo Hanson]

Or even account structure or, yeah, even account structure. It made no sense to go gut the portfolio for the sake of paying taxes just so we could be debt free when there was probably a more balanced approach to let you, in a tax efficient way, make the decisions, still prioritize paying off the debt, but not just giving uncle more money for the sake of just being cash, you know, debt free right out of the gates.

[Matt]

Right.

[Brian Preston]

So the difficult question to answer is which was the right. What is the right move? And it's going to depend even more from now until the time that you get there. But you're doing the things necessary to position yourself to be able to make that decision at that time. Does that make sense?

[Matt]

Yep.

[Brian Preston]

Is that helpful? Is it helpful that our answer was it depends.

[Bo Hanson]

I would love to know if there's any specific questions you guys would love to get our input on, because I was, I Told Beau, when I saw y' all situation, I was like, you guys have done such an incredible job. It's commendable what you've done. But the things. If I was your advisor, I would love to kind of be your personal coach on how to maximize the life component, too, because I see. I see a lot of coachability here on that you've built tremendous assets, but you're probably trying to figure out how do you transition to where you're still saving or building. But also you're just maximizing your 30s, what's left of your 30s. But then you say, oh, don't say it that loud. No, but it's a guy my age. I just want everybody. And there is a balance there because you get to. The crazy thing is you get to the top of the mountain and you start checking off all the boxes of all the things you thought you wanted to do financially, you'll find that that's kind of empty if you don't build it. Pack into the memory category and the life experience category, all the stuff that lets you feel life well worth the live and fulfillment and all the other things. It's not just about getting to the goal. It's the journey. I know that sounds so cliche, but it really is the truth of life. And that's the biggest things that I was looking at. Y' all situation. They need a coach because y' all don't. Because y' all have done so good at developing and building. But who's making sure that y' all are actually saying it's okay to release? Because that's the hardest thing for most people like you. I bet y' all are going to have a very hard transition into spender or consumer of these resources because you've been so rewarded for being as tight as possible that there's just. There's a balance there.

[Matt]

Right? I mean, it's definitely something I'll need help for. Because I think that was one of my questions when. When we sent in our things was, you know, I'm already nervous that we're going to spend too much in retirement. See, and I'm. I'm concerned about, you know, things like sequence of return risk, and, like, what's going to happen? Like, are we going to spend too much money immediately? I think I'll need to be pushed to spend money. I'm like, if we can live on what we got right now from the rental properties and just my pension alone, let's just let everything else grow. We'll be fine.

[Brian Preston]

How does that make you feel when he says that, when he says, let's just live. Let me retire, and let's live as small and as tight as we can, how does that make you feel?

[Alex]

Well, I mean, the Pendulum has really. We do live a very comfortable life now. Our children want for nothing. You know, we have, I feel, a good amount of discretionary income. We go on fun trips. We fly the way that we want to fly, and, you know, I don't think that we are missing out on anything. The. The military is probably what limits us the most, just based on, like, what we can do and when we can do it. So I am very excited for when that limitation is off and we can book a trip, you know, six months. We can't do that right now. And so I am, you know, I trust Matt inherently. Know he's certainly led us on this journey and been very, very successful. We certainly had some bumps in the road in the very beginning, but I feel now we are well into our groove and feel very comfortable with how we manage money together as a team. It's always been a very, very team effort. And so I. I mean, you know, I. I listen to what he has to say. It's his passion. He really, really enjoys it much more than I do, if I'm being very honest. And, you know, I. We have lanes within our marriage, and this is his lane, and so I know that he wants what's best for his family, and so I would, I don't know, follow him.

[Matt]

So I'm usually the green light. She says she's been. However much we'll spend, however much I want. Sounds good to me. I love it. I love it. So something.

[Brian Preston]

I'm a pretty good place with that, but is your desire okay. Hey, we're just gonna live off the rental income, and we're gonna live off the.

[Bo Hanson]

You also got a pension that will be coming in, right?

[Matt]

Well, it's not my desire, so I'm planning on, like, once I retire, having a 3% withdrawal rate just because I am retiring so early and using that as necessary. If she does decide to continue working, even if that's an option or not for her to stop, I may delay that, you know, a few years. Probably don't need to. We probably could start withdrawing that, but we would use that money to pay down the house that we purchase, if that's what we decide to do. But she. She does push us to do. To do more. I mean, we flew southwest when we came up here, so it's not like we were flying first class.

[Brian Preston]

When we came first class.

[Matt]

We used.

[Bo Hanson]

To be Delta boys coming from Atlanta. But Nashville, you very quickly become accustomed to flying Southwest.

[Matt]

Yeah, that's right. Yeah. It was the only direction correct. So that's great. We got a two year old on.

[Brian Preston]

The plane because you've probably done this exercise. But if you've gone to moneyguy.com resource, we have this little wealth multiplier tool. We even have like a compound interest calculator. And if you just like fast forward to what your assets are going to be in 2029, you just to drop that in there and said, hey, if we just left these assets and let them grow and we have a 3% withdrawal rate, they get really big, right? Like it, you know, you're, it's gonna.

[Bo Hanson]

Be over $10,000 a month.

[Brian Preston]

I mean, it's gonna be, it's just gonna be big, big, big numbers. And so I guess, I guess my question is, is what's the, when you look 40 years into the future, what's the long term goal with these resources that you've built? Like, I know your goal immediately is to survive, but what's your goal at the end of the line?

[Matt]

I mean, that's probably some joint stuff. Like I, I would like to not leave just like a enormous, you know, estate to our kids.

[Brian Preston]

You're picking up exactly where I'm going. You picked up what I'm saying.

[Bo Hanson]

50% of your money is going to lead to a lot of money.

[Brian Preston]

And we're not suggesting that you spend more money needlessly, but we also don't want you to not do the things that you really care about doing and you really value doing. Just because you can. Just because you can live on this like, small lifestyle doesn't mean that you should. And that's where I do think, having these like annual meetings. My wife and I do it at the beginning of the year. We said, hey, what trips do we want to go on this year? And let's plan all the trips out. Big ones, little ones, quick ones, long ones. And we do that and we make sure we stay calibrated around, making sure we're doing the things now that we really find value in, really create memories in, while also still planning for the future. Because I'm just, I don't want to say worried. I'm never worried about somebody having too much money. But like, you guys are very much in that camp that it could happen if you stay so, so tight forever. Does that make sense?

[Matt]

Right? So, I mean, traveling is something that we do love to do. So we'll definitely do more of that when it's, when it's available. So I think our travel budget will definitely grow. It'll probably take some pushing though for, from, from her or maybe my sister's pretty good at pushing me. She likes to travel with us too. We, we enjoy some time as a family, so. So that'll be a big expense. I love to play golf. Don't have the opportunity to do it as much. We'll probably join some type of club to where I can play a little more golf and be part of that environment.

[Alex]

And I think, you know our, our children's education. Right. So you know, colleges, we want that to be something that, you know, they might not have to incur debt to do so they can start. We don't. We had planned to not leave them a ton of money in our estate so. But we want to be able to cover their education expenses to get them kind of on the right path and any potentially like additional schooling that they would want to do. So that would probably be another large expense that we would have to incur several years and then we have the road.

[Matt]

I think we have some philanthropic ideas and thoughts that we, we wanted to do. One of the biggest benefits I had, even though we, we did have a decent amount of debt when we got married is I didn't have any real school loan debt. And that's a pretty big aid and starting out your life. So maybe creating a scholarship somewhere and the places that I've been, the places that she's been for people that you know, you want to be a submarine officer, great, here's, here's free tuition. So maybe I could, we could fund something like that. I think to use some of our wealth to kind of give back and give people some of the same benefits that I had when I started out.

[Brian Preston]

Did you always know you wanted to go in the military? How'd that, how'd that come to be?

[Matt]

No. So I thought that I was going to be a professional baseball player.

[Bo Hanson]

I know somebody else on this group.

[Matt]

Um, yeah, as a 511 right handed pitcher that throws like in the mid-80s, I thought for sure MLB was sign him up going to be. Um. So yeah, I got through college, used up all my eligibility. Nobody called unfortunately. And so that was a pretty big like drastic life event where I was like, man, I don't know what I'm going to do now. And then that's when I enlisted in the military. Just kind of off of a whim, I literally went down to the recruiter's office walked in and the first person that talked to me was a Navy recruiter. And so that's the reason.

[Brian Preston]

That's how you decided.

[Matt]

That's how I decided.

[Bo Hanson]

Wow.

[Matt]

Yeah. Which best thing that happens, man, how.

[Brian Preston]

Luck is he didn't walk into the rodeo clowns were the very first ones that were sitting there.

[Bo Hanson]

Holy cow.

[Matt]

Yeah. It was very, very fortunate.

[Bo Hanson]

Which branch of the military is the radio cons?

[Matt]

Oh, well, I was.

[Brian Preston]

It was that joke doesn't hold water if you. If you really play it out.

[Bo Hanson]

The branch of the service love picking on each other. So I was going to make you put you on the.

[Matt]

Yeah. I'm not going to say that.

[Brian Preston]

You guys are in a fantastic spot. You guys are doing all the right stuff. Are there any other things that we can speak to anything else that we can answer for? Anything you're curious about as you do plan for. You're still a number of years away from this next transition. But as you move towards it, are there any questions we can answer that'd be helpful for you?

[Matt]

I mean, I'm most concerned about. I'm. I felt very comfortable and did a lot of research on building wealth. I have not done. And there's really not that much out there. I feel there's not like a ton of people writing books about like, here's how to, you know, draw down your retirement assets. That's what I'm concerned about. I like. I know I should build some different buckets of money to have different options, but in terms of like actually planning that portion out, no clue. I. I have some ideas in my mind, but I don't know what the most efficient ways to get that done are going to be.

[Brian Preston]

Do you know why there's not a lot of literature read on that?

[Bo Hanson]

It immediately popped in my brain too.

[Brian Preston]

Because it's pretty individualized.

[Bo Hanson]

It's pretty. Everybody's different.

[Brian Preston]

If you even just think here in the past couple months, even the way that our tax policy operates is different today than it was last year, you know, just based on legislation. And so how you're going to draw down your assets is going to depend specifically on your unique situation. I mean there's some like general rules of thumb when we talk about the financial order of operations. You know, you fill up your tax free first and then your tax deferred and then you do your after tax. Well, in distribution, you kind of move in reverse order, sorta. You pull out after tax and then tax deferred and then tax free. Unless there's a reason to do it a different way. Right. And so there are things where, when you get into this, you guys are going to have a huge planning window from 2029, early 40s, all the way out until age 75, when you have to start taking RMDs or age 65 when you are eligible for Medicare. So there's tons of planning that you're going to be able to do that. How you draw down your assets will likely change year to year. Or even if you draw down with a pension coming in and with rental property income coming in, you may not be drawing down. It may be, how do I shift my buckets? But that's where it gets so unique that there's not literature on it, because it's not a one size fits all. It's a one size fits one in most circumstances.

[Bo Hanson]

Yeah, I had. We had a gentleman who reached out to us who's, you know, trying to get his cfa. I was asking for some life insight, and one of his questions, it kind of made me chuckle because I think a lot of people, he was like, if y' all use passive investments, how do you add value to your clients? And because, I mean, we're. We're very transparent. We love index funds, you know, and if you're hiring a financial planner for just investments, you're going to be woefully disappointed. Because I feel like commodity, you know, investments has been commoditized in a lot of ways because of how efficient index funds work. But what I tell you are gravy. And I'll even say the biscuits and gravy of what we do is really the financial planning for clients. Just like, you know, somebody like yourself who doesn't. Because everybody's journey is so different. You really do need somebody that kind of holds you accountable. Both in the good wave, I think people are shocked. They think of Suze Orman, who told everybody no, no, no on everything they did. If you were around in the 90s and you remember those shows, we're the exact opposite. I'm like, go, go, go. Because, well, it's just because so many people are so rewarded for being disciplined. And I'm all about it. But at some point, you have to ask yourself, what's the why and what do I enjoy? And so that I don't have regrets. Because that's the thing, like I said, you get top of the mountain. You just don't want to have regrets because you realize how precious life is. And talking about the kids. My oldest is a senior in college. She. And it's so cruel. And I've talked about this a lot of times. If you've done your job right, your child gets more and more independent, which rips your heart out, because the older you get, the more sentimental you get. So I just try to make sure every one of my clients understands that money is just a tool. And we have to take this tool and figure out how we get as much life to where you come out the other side. Not just to give your kids money so that they're entitled and they don't want to go work, but so that they get the best life and the memories so they hopefully come around more and you get to really feel like you've checked the box on everything in the best version of yourself. And that's the part that I think that we're never going away as financial planners. That's why we can do this abundance cycle where we give away so much free advice because we know at the end of the day, the complexities of life and success is going to bring more and more people through the doors. I didn't mean to turn it into an infomercial, but it's just. But it is one of those things where I think a lot of people go, what do financial planners do it? And this is exactly why I love that we get to do this show. Because Making a Millionaire opens up that curtain and lets people kind of walk in and have these discussions. And because I love analytical couples like yourselves. Because I would have loved if I could have met y' all in your 22 and 23 year old versions. Because y' all now you'll have so much confidence. You, you were very humble about what you do. But. But between you running the analytics of understanding the lease terms and of each state, I mean, it just made me smile internally. It's like, oh my God, she's become an expert on le and then you're obviously, you have an aptitude towards personal finance. And it's just fun for me to see people as they grow and develop this expertise that there's also another transition that's in your future on how you become the CEO of this enterprise to just navigate the fun parts, the analytical parts, and just build a life that you're very happy with.

[Matt]

Yeah, we were definitely throwing darts at a wall there to start out. So I do feel more confident.

[Brian Preston]

Some of those darts hit.

[Bo Hanson]

Y' all have done well. This show was completely different because I'm curious to see where BO goes because normally we give homework at this time and I haven't heard us I mean we've really been putting on, this has been like a TED Talk. Thank you for the TED Talk on how do you build wealth incredibly well starting from zero. Hopefully a lot of people are going to learn a lot from this.

[Brian Preston]

Here's what we know. You guys in 2010 had a negative net worth. You said literally our debt payments were so much that we didn't have enough money to cover the minimum payments. And here we are 15 years in the future with a 4 million dollar net worth. So when I think about homework items for you guys, homework item number one, keep going, keep doing the things that you're doing. What has given you success with the same that it takes you through this next transition as you move towards 2029 for potentially your first retirement and figure out where your retirement lies. The second thing is this is the time to begin thinking about what am I actually retiring to. I know what I want to move away from. I know that I want all this freedom once I have it. What are the things that I'm going to do? What are the things? Because I'm still going to be pretty young as a retired dude. How am I going to navigate that? And then the third thing I think will be so valuable for you guys is figure out what are the goals, like the long term life goals you have that you want your money to allow you to accomplish. You had a goal a number of years ago that hey, we want to be financially independent. It is very likely that the next couple of years you will have checked that box. We are indeed financially independent. Okay, then what's the next goal? What are the outcomes you want your money to allow you to be able to do and begin dreaming about those things because that's when you actually move into that abundance level of wealth where life is about more just doing what you want, when you want, how you want. It's about doing what you, knowing what you value and doing what gives you purpose on a daily basis.

[Matt]

Yeah, that sounds good. Thanks for having us on. I look forward to planning out the rest of it. It's exciting now. That's why we're doing it so far in advance of it is because it's fun to kind of think about being financially independent because that has been a goal of mine and ours for so long now that I look forward to planning the fun part of it which is living the life after we built it.

[Bo Hanson]

Matt, Alex, you've been a joy. I mean this really has been fun. I feel like we've learned a lot. Hopefully the audience has learned a lot. If others want to apply for Making a Millionaire, where do they go?

[Brian Preston]

Yeah, if you'd love to be a guest on Making a Millionaire, you can go to moneyguy.com apply or if you want to check out any of our tools and resources, you can go to moneyguy.com resources.

[Bo Hanson]

So, guys, thank you for tuning in. Matt thank you, Alex. It's been a pleasure. I'm your host, Brian Preston, joined by Mr. Bo Hanson. MoneyGuy Team Out Making a Millionaire is.

[Brian Preston]

Hosted by Bryan Preston and Bo Hansen. Brian and Bo are partners at Abound Wealth Management. Abound Wealth Management is a registered investment advisory firm regulated by the securities and Exchange Commission. In accordance and compliance with the securities laws and regulations, Abound Wealth Management does not render or offer to render personalized investment or tax advice through Making A Millionaire. The information provided is for informational purposes only, may not be suitable for all investors, and does not constitute financial, tax, investment or legal advice. All investments involve a degree of risk, including the risk of loss. The guests featured on Making a Millionaire are not clients of Abound Wealth Management at the time of recording. Their participation should not be considered a testimonial or endorsement of Abound Wealth Management.