Starting From $0 at Age 35 as a Teacher and Becoming ‘The Millionaire Educator’

Gerry:
You don’t have to have a reason just save money. You’ll find it when you have money behind you, couple with the awesome frugal lifestyle. So, I always describe it, hey, your life has a lot of options.

Mindy:
Hello. Hello. Hello and welcome to the BiggerPockets Money Podcast Episode 124. My name is Mindy Jensen and with me as always is my early starting co-host Scott Trench.

Scott:
Early starting, Mindy, I actually wake up at 8:50 on the dot every single day. It turns out this is actually a condition called 10-to-9-tis.

Mindy:
Oh my goodness. Okay.

Scott:
Okay. Go ahead and look that one up.

Mindy:
Scott is a well-documented not early riser but you did start early on your path to financial independence.

Scott:
Ah. Okay. Well, in that case, I’ll take it.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else and show you that by following the proven steps, you can put yourself on the road to early financial freedom and get money out of the way so you can live your best life.

Scott:
That’s right. Whether you want to retire early and travel the world, go on to make big-time investments in assets like real estate or we’re just getting started and later on the road to financial freedom, we’ll help you build a position capable of launching yourself towards [inaudible 00:01:13].

Mindy:
Scot, I am super charged for today’s show. Gerry is a teacher who is married to a teacher and you know how much teachers make, right? He is rolling in dough, right? They also started a little bit later on their journey to financial independence, a little bit later than people we normally hear from. They didn’t start until he was 33 and to add on to that they started off with $45,000 in student loan debt and 2 broken down cars.

Scott:
Yeah. When we launch into the podcast here, but there’s a couple of terms I want to share with you right before we get started with the interview with Gerry just because they’re central to his approach. He’s got a really sophisticated tax-advantaged approach to saving. He uses four accounts in that approach, right? Those four accounts are an IRA, an HSA, a 457 and a 403B.

Scott:
Now, most of you listening are probably familiar with an IRA, just an individual retirement account, and an HSA, a health savings accounts, which we’ve talked about those on past episodes. If you’re not, we’ll link to those in the show notes our episodes that discussed those in depth in the show notes, you can go check them out.

Scott:
The 403B and the 457, you might not be as familiar with because they’re specific to teachers or certain government employees, in particular. The 403B think of as the teacher equivalent of an employer 401K. That’s it. It’s just their vehicle for achieving that tax deferred advantage, and the 457 is a little bit of an interesting account in a sense that it’s a tax deferred account but it doesn’t really have the long-term investing advantages and opportunities that a traditional 401K, 403B or IRA might have, and so Gerry really uses it as an account where he can put, save money, tax deferred, and then withdrawal from it penalty free but it still generates taxable income.

Scott:
When he’s perhaps taking a year off of teaching or not working for a year, has a low income year, right? So, again, those four counts are IRA, HSA, 403B and 457, and I think you’re going to be blown away by how Gerry and his wife used these accounts to achieve a really low taxable income and build massive, massive wealth in two teacher incomes.

Mindy:
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Mindy:
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Scott:
Gerry, aka the millionaire educator. Welcome to the BiggerPockets Money Podcast. We’re super pumped to have you. So, Gerry, let’s get right to it. How did you retire early on a teacher’s salary at all let alone as a millionaire?

Gerry:
Well, I wish I could tell you, I’m super smart or I had some magic but the reality is it’s good old hardcore savings. I will shoot for filling all the buckets and ideally, 100% savings rate.

Mindy:
Wait, what? 100% savings rate?

Gerry:
That’s what I start with. That’s my mental vision.

Mindy:
Okay. Explain that.

Scott:
How do you live for free?

Gerry:
Oh, well, I have some funds and an IRA that I use as 72T distribution from, which means I’m able to access that money without penalties. You get about 18,000 a year out of that. We also use money from 457 funds because they do not have a pre-59-1/2 year penalty. So, from there, we just kind of piecemeal that we live on what we have and we save as much money as we can.

Scott:
When you say 100% savings rate, someone might listening might think, “Hey, that means that this person is not spending any money at all and is living for zero dollars in cost.” Is that true? What are your kind of fixed expenses for your lifestyle?

Gerry:
That would be magical, wouldn’t it? Live on zero. No. I would say our structural costs are really low. Our house we paid it for it was $68,000. We live in a low-cost area of the United States. I don’t budget, we just spend our money but I would say we live on 2000 to 2500 maybe 3000 a month and depending on what we need, but a good lifestyle is very economical here in this part of the United States. We have one car. I live a hundred yards, maybe 110 yards from my job.

Gerry:
So, I walk down there every day with my son. He goes to school there. I teach there. My wife, the last two years has also taught there, but she’s not going to be teaching next year. But we’ve got in a car once, twice a week so we don’t have any transportation cost. So, our overhead is pretty low.

Scott:
So, when you say you’re at 100% savings rate, what are you… Are you saying that your investments cover your entire lifestyles? Meaning that your wage income can cover your spending?

Gerry:
Yeah. That’s probably not true. In my case the way I view it is I try to fill up all our tax advantage buckets, namely the 457, 403B, IRA, and HSA. Then, I might live from the remains of my paycheck. Now, if I was really flush with money like say I have a side hustle kicking in some good money and thus far that’s not the case. I would probably take the remains of my paycheck and just put it in index funds or even been thinking about a rental property. But I always try to make sure I fund those pre-tax, those tax advantage buckets. That’s been the secret sauce for us.

Mindy:
Okay. You mentioned the 457 plan, which is something that we heard way back on the [inaudible 00:09:13] Show, Scott, if you remember that. She mentioned casually that her husband had this 457 plan. That was the first time I’d ever heard of this where he could put in the same… It has the same limit as the 401K contributions every year, but when he left the 457 plan job, he could take all the money out of their tax-free, penalty free. Is it tax-free or just penalty-free?

Gerry:
No. Just penalty-free. It comes in as income.

Mindy:
Okay. You are putting money into your 457 plan, is that correct?

Gerry:
Yes. I always max that one first. To give you examples of January through April, I’ve done 5200 every month to my 457.

Mindy:
Then, you can instantly turn around and withdraw that if you choose and just pay taxes on that?

Gerry:
When I separate service, meaning quit my job, then I can access that money and it comes in as regular income with no penalty. So, you want to do some basic tax planning, you got to know what your income is for the year, and then you can assess what you’re going to owe. So, anytime I take money from that, it’s kind of strategic, and then when I get to the next tax year, I can start doing it again within a certain, I call it my tax pain threshold.

Gerry:
I try not to go, I don’t know, too far deep into the 12% bracket. Let me give you an example and this is a post, probably my most requested post every year. It’s kind of ironic because I’m not a tax expert. It’s called 2020 free money and basically I just reverse engineer my taxes and show how much money I can earn before I owe any money and I know off the top of my head right now 2020 about $45,000 for our family of three, and then after $45,000, I’m in the 12% bracket.

Gerry:
So, right off the bat I’m making informed tax decisions as opposed to many people just fly blind, scream April 15th and talk about how everything is not fair. Just that little bit of planning helps me, it goes a long way for us.

Scott:
I love that. Your tax advantaged accounts, just for folks that are not following here, are the HSA, the IRA, the 457 and the 403B, right?

Gerry:
Correct.

Scott:
I think that most of our listeners are probably familiar with IRAs and HSAs because we’ve discussed them a lot and Mindy asked a great question or had a great commentary, the 457. Could you recap the 403B for us?

Gerry:
Yes. A 403B is pretty much the teacher and public service job sectors of 401K. It has the same limits as a 401K, has the same catch-up contribution limits, just exactly the same. Now, I would say this, just be aware 403Bs, there’s a wide range of product out there. They’re kind of infamous for very high fees. You just know that going in and ask questions.

Gerry:
The beauty of the 403B than 457 is that you can max both of them out. So, essentially, I have 2 401K plans. Then, like we just said the 457’s even more special and that when you separate service, you can pull from that account without pre-59-1/2 penalties.

Scott:
Okay. You have all four of these buckets that you’re playing with here and your goal is to get below that $45,000 income and adjusted gross income mark that you’re in that 12% or less tax bracket, is that right?

Gerry:
Yes.

Scott:
You’re not even in the 12% tax bracket until that point, right?

Gerry:
Correct.

Scott:
Nice. I love it. So, this is a very tax advantaged approach. Which order do you approach these four buckets in and why?

Gerry:
I always go 457 first because of that little special wrinkle, when I leave a job, I want that account to be as big as possible because I… I refer to it as a freedom fund. I don’t have an emergency fund because if I ever lost my job, I’m going to have access to those funds. I always go 457, and then I go 403B because I can only contribute those 12 months.

Gerry:
Then, the IRA and the HSA to me, that’s a wash either way because I’ve got to April of the following year to stuff money in those accounts, but you can’t go back in time on your 403B or 457.

Scott:
Got it. So, in most years, are you able to max out all of those accounts or do you cop short for some of them or how do you kind of handle that?

Gerry:
Oh, yeah. Well, let’s see, when I first started doing this about 2003, I was just doing the 403B and the IRA and the least we ever saved since 2003 is $30,000. Then, later I learned about the 457 and I have to admit, we couldn’t fund all the accounts back then. Just didn’t have the cash flow. We had too much house in LaGrange, Georgia, but we got that account up to about $90,000 and I kept going through my mind, “How can I blast all these accounts and fill all the buckets?”

Gerry:
But then I realized, “Wait, you probably in a job where it starts to feel a little stale and you’re looking for another place to go. So, we were kind of in that mood and we realized, “Well, wait, if we took another job, we could access our $90,000 in the 457 account and kind of pull from that strategically, and then our new job, we could fill all the buckets.”

Gerry:
So, in 2009-2010, we took a job here in [inaudible 00:14:55] County. It’s the first time we came through here and for three years, we pulled about 30,000 a year out of that 457, and then at the same time, we were maxing out all of our accounts. I wrote a post on that, it’s called how we saved $250,000 by taking crappy jobs because no one understood why we’d moved to this really rural spot.

Gerry:
Well, it turns out, it was perfect for us. We loved it here. We actually like I said bought a house here now. But people just thought, “Why would you leave and go there?” Then, when they saw what we did they’re like, “Oh. Now…” Because I didn’t know anybody saving 250,000 bucks in 3 years. We were always willing to leave a job, and then access that 457 as needed and that allows us ever since then to fill all the buckets.

Scott:
Awesome. Well, that’s the story here I think. I love your approach to this and how you’re so tax advantaged with it. But let’s kind of hear the whole story arc here and get back to this point where you’re at right now. Where does the journey begin for you? Maybe starting in college or high school or even back that far.

Gerry:
I’m from the pre-internet generation. So, all we ever did was play sports and read sports books it seems, and I grew up in Ringgold, Georgia and being that I grew to 6’7, I like basketball. That’s what my focus was on and I became a basketball player at Davidson College, got a scholarship there and I went there. I was pretty aimless, not that I’m a dumb person but I just was rudderless academically for many years, and so didn’t really burn it up there academically, didn’t know what I wanted to do and what I’m getting at here is I think, I played basketball in Argentina and El Salvador and I traveled to learn Spanish, but I didn’t have any money saved up.

Gerry:
I had no idea what I was shooting forward, I was aiming for. Then, I took my first teaching job around 2007, I think I got paid 18,000 a year. I thought, “Wow. There’s no real prospects in this.” I met my wife that summer and we were madly in love and inseparable from then on but my plan was to go get an MBA. She and I, we went out to Texas and did that and I also did another degree at Southern Miss in Hattiesburg for Spanish education and ESL.

Gerry:
So, I got skills all of a sudden that were very marketable. That was really a good decision on my part, however, the downside was we were $45,000 in the hole, never had in debt my life up to that point. One way or the other, I didn’t have wealth or debt.

Scott:
This is at age 27 or 2 years after that between-

Gerry:
No. I guess by the time I graduated from grad school I was 31 and my wife would have been 29. So, with my new found degrees, I got a job in Saudi Arabia being an ESL teacher at their Naval Academy. I just remember thinking, man, I have to buy my freedom back and I just started sending whole checks in on the student loans. I guess after 18 months, 2 years, I can’t remember specifically, we had our debts paid off and we’re at zero. So, what was that? I was 33, net worth is zero. Yes, Mindy.

Mindy:
I feel like I have to raise my hand when I’m talking to a teacher but did you just say you went to Saudi Arabia?

Gerry:
Yes. I went there on a, I guess it was a contract that was another contract with the Navy. So, it’s not real easy to get in there but all that paperwork was taken care of and it was… I think I made 39,000 the first year and all housing paid for. The only thing I had to pay for was phone, internet, and food. That wasn’t very bad.

Mindy:
Okay. Wait. Were you in the Navy? Are you-

Gerry:
No. I’m not. A lot of people think I am military because I generally have short hair but I’m not. But I was on a military contract and at first at their Naval Academy, the first thing they do is give you a year of English. So, I was there to teach them English. Yeah. It was quite an experience.

Mindy:
Okay. Now, I’m confused. You were working for the Saudi Arabian Navy?

Gerry:
Technically, I work for Booz Allen Hamilton out of Washington DC, a big concession firm and they in turn had a contract with the US Navy who had one with the Saudi Navy and that’s how it all works out.

Mindy:
Okay. But you’re teaching people from Saudi Arabia how to speak English?

Gerry:
Yes. Yeah, basically, Annapolis.

Mindy:
Okay.

Gerry:
Yes. It’s a three-year program they have and the first year is all English. Some of them came in they have been world travelers, they already spoke really nice English, some people were fresh out off the camel literally, they were Bedouin tribesmen [inaudible 00:19:37] fresh off the boat so to speak. So, we really had our hands full trying to get them to learn some basic English.

Scott:
So with this, you’re 33 years old and you just paid off a bunch of debt, and I love the fact that it sounds like you just went all out paying off the debt. You lived fairly bare-bones it sounds like and put the whole paycheck towards it.

Gerry:
Yes. Correct. I think my first paycheck I got was like for a month and a partial month and I think it was like 4000 bucks and I think I held like a thousand back, and then I would just sent the rest in, and then… Now, I think my next check and get through that. So, I think I may be held 500 back or something like and then just like 2500, and then I wasn’t super frugal back then. I probably would have gotten it a lot faster had I really known about frugality in general.

Gerry:
But keep in mind, this is pre-fire, there’s no internet in Saudi Arabia at that time. So, I mean we’re just flying blind trying to figure it out.

Scott:
Okay. Got it. So, I love just the mental approach of, “Hey, I’m going to pay this thing down really aggressively.” Was financial freedom, and you mentioned freedom earlier, was the concept of financial freedom, building wealth on your mind at that point or was it mostly just to get out of debt?

Gerry:
Well, that’s a good question because, at first, it was just I wanted to get up to zero and the way I thought, I realized when I was in debt, my salary was not mine. I mean people had dibs on it and that just didn’t sit well with me and even today, so many people are so accustomed to debt, I think that’s insane. I was like wanted to get up to zero and be a free man for all practical purposes, and so when I would go earn money, it’d be my money, but I don’t hear people talk like that in the fire community.

Gerry:
So , that was it but there was a shift there, I was in New Orleans working with my dad, the contract fell through for a while so we were sent home for about, I think eight, nine months, and I found a book in Saudi at the public library, it was Paul Terhorst book. It’s my favorite book, Cashing in on the American Dream, How to Retire at 35. I bought many copy on Amazon.

Gerry:
It gave me a vision about, “Wow. If I had a certain amount of money, I could just live from the money,” and being that I was a Spanish teacher, up been to Brazil and I like traveling. I always liked that lifestyle. Got a little bit of a wanderer. I’ve some wanderlust in me. If I had enough money I could just kind of go do my thing. That was just revolutionary to me thinking like that.

Scott:
So, that moment, that’s a critical part. We always try to hone in on it, when that moment occurs for anybody that comes on the show here. When was that relative to you journey? Was that after you paid off your debt? Was that while you’re in the process of paying off your debt? Was that after you started to accumulate a little bit?

Gerry:
I think my student loan was done and my wife’s was partially done so this will be about 1990, toward the end of ’97, ’98 right there, but then I remember when our contract got restarted and went back over there. Man, I was a man on a mission. At that point, we stayed until 9/11 and we had zero debt and $100,000 saved.

Scott:
So right around that inflection point it sounds like where you’re approaching zero is where you discovered this?

Gerry:
Yes. Yes. See, all of a sudden I knew what to do with my money. Now, I’ve also read some of the Bogle books. Bogle Mutual Funds, I learned about index investing and keeping your eye on costs, and then diversification and you know what’s really ironic about all this is I had an MBA but I never had any money because I didn’t really know anything about money because I know, it’s very theoretical if you have none, and then, but I remember having like $3000 and $5000 in my bank account, I was like, “Wow.” It was just mind-blowing, and then I started with some index funds.

Scott:
Nice. So, what did that look like? Well, 1998, 1999 is when you discovered this concept, and then 2001 you’re worth six figures in this. Can you walk us through that time I was just consistently applying it to index funds and you find yourself in that position? Was there strategy behind that or asset allocation that you’re playing with?

Gerry:
Well, I was always very big on the KIS style funds, keep it simple. I really like the life strategy funds. I think one of my funds was the life strategy growths because they had low fees and US stock, international stocks, some bonds and the inflation index bond. So, I didn’t have to do any thinking or monitoring. I love products like that. So, that was I think where most of my money was.

Gerry:
I had about $30,000 with my 401K that isn’t in that number because I was technically employed by a US firm. So, I guess I had $70,000, and then that 30, but, yeah, you’re right. It was $100,000 and that was… I just thought I’m the richest guy in the world. It’s all relative, right?

Scott:
Absolutely. That first 100,000 is the hardest. It’s the [inaudible 00:24:43] or the grind that gets you to that I think, and then it’s the… I think that I’m foreshadowing here, I don’t know if I’m right or wrong, but I bet you that low-cost, keep it simple stupid index fund thing made the next $900,000 not too much more difficult that 100,000.

Gerry:
Yeah. It’s not very sexy when you’re using those type of funds but they sure work. You got to take your lumps with the market gyrations but if you’re patient and being that I became frugal over the years more so, I don’t need a lot of money to live on. So, I can just kind of wait it out.

Mindy:
Okay. So, you said that you were there until 9/11, you were in Saudi Arabia until 9/11, where did you go after that?

Gerry:
My wife and I thought we’d go back to South Texas. We went there and that just didn’t work out. I got a teaching job there and it just, I don’t knows. I didn’t like the school. I didn’t like the setup so went back to Georgia. We went to a job fair. Our big plan was we were getting my wife certified to teach, and then we were going the international school circuit, see the world teaching American schools or international schools.

Gerry:
When we went to a job fair in Georgia and we found a job in LaGrange, Georgia. They had a job for her to basically teach technology ed. She has a degree in architecture from Georgia Tech and I was a Spanish teacher. We ended up taking it because it was half way from my home town of Ringgold and her hometown of Tifton, Georgia. We thought we were going to do a year there, get her certified, and then blow out of there.

Gerry:
Well, one year led to seven years and along the way, we got comfortable there. That’s where we started really learning about 403Bs and we did our IRAs. Those seven years we went from about a 100,000 to $450,000. It’s funny because I kept thinking, “We just got to save more.” Kind of felt like I don’t know… I knew I had buckets that weren’t filled, that’s kind of driving me crazy and that’s where we went to that phase I described earlier where we separated service and use the 457 money.

Gerry:
Then, since 2010, it’s just been we fill all the buckets anytime we can, anytime we work.

Mindy:
You said you thought you should be saving more but I’m going to go ahead and give you a little bit of applause for saving $350,000 on two teacher salaries in 7 years. Is that a common teacher salary occurrence?

Gerry:
No. No. No. Anytime you’re going to do something like this, you’re just going to be out of step and offbeat. I didn’t know… Me, personally, it was watching my net worth grows, it’s kind of a way of keeping score. I realized how easy it was to do in those pre-tax funds. But my friends would ask me, some of my coaching buddy is like, “What are you doing? Why are you doing this?”

Gerry:
I didn’t really have an answer to tell them. I had no fire number in mind because that wasn’t on the radar yet. I guess the point is you don’t have to have a reason, just save money. You’ll find it when you have money behind you, couple with a awesome frugal lifestyle, it’s the way I always describe it. Man, your life has a lot of options, tons.

Scott:
So, over this period, from 2001 until the present basically, I’m gathering is, was there an acceleration trend, in general, where you’re saving more and more each year as you’re optimizing your lifestyle or earning more? Was it pretty even the whole time?

Gerry:
No. No. It really got accelerated 2010. That was the first year we maxed next to everything and that year was 75. I think 2011 was 75 again, and 76 the following year plus I’m counting my number to 250,000, also my son’s education accounts. Then, as we got over 50, my wife and I, I’m 56 now. My wife’s 53, and we got those catch-up contributions and that really pushed the numbers higher. To give you an example, I believe it was year 2015, we saved 106,000 that year.

Scott:
Oh my gosh.

Gerry:
Yeah. Then, we worked through to 2016 finished out the year so that’s January through May, but it’s eight paychecks, we saved all of those, and so basically for working five months, we saved I think 88,000. It’s ten thousand a month I mean all day long.

Scott:
Now, I know that as teachers I believe the salary increases every year fairly predictable and begin to stack up over the course of a career. So, I imagine that’s a contributing factor to your, on the income front, but were you also… Well, first of all, can you confirm or deny that? Then, second, were you doing any work on the side like after hours or in the summers?

Gerry:
Oh. Let’s see. As far as the pay scale, yeah, it is very predictable. I’m maxed out. After 21 years that you can’t go any higher, but I also after grad school, we had our master’s degrees, and then my wife and I went about 2005, 2006, we did our educational specialist degrees, and that was worth $6000 more a year each for doing the same job. I call that income maximization just doing all I could to get a pay bump.

Gerry:
Then, my seven years at Lagrange, every year I did what they call extended day, I had no planning period. So, I probably, I would usually do that during my lunch period like make copies and things. So, I got 25% more by teaching an extra class both semesters. But I did that seven straight years and most of my co-workers said, “I would never do that.” I used to say, “Are you nuts? 25%, I’m here the same time you are.” I have to stay a little extra my coaching duties.

Gerry:
I think the most I ever made coaching was like 2500, 3000 at that job. Now, I coach here so that’s like I get, I don’t know, probably ends up being $8000, $9000 for that. What this other question you had?

Scott:
Were you working in the summers or in the off time?

Gerry:
Yeah. I wish I had a really good side hustle story to tell you but in the summer is that generally we do like I go to teen camp with them and that was just expected. I just took my summers to myself. Go hang out with my brother. He’d run a beach place, we go hang out there for a week or two and go see family. We both have big families. We go see people and we just do some low-cost vacations. We had a great time.

Scott:
But this is impossible.

Mindy:
You have a great side hustle story because you made 25% more by not having a planning period and what does the planning period do? I mean when I’m at work, I’m working the whole time. I don’t get any planning periods and I’m not talking smack about teachers at all, I have been doing their job for the last six weeks and it sucks and you deserve a 50,000% raise. I mean, you don’t need it clearly but all the other teachers. But, no. So, what do you do at a planning period?

Gerry:
Well, yeah, I mean if you’re disciplined, unlike me, you would get a lot of work done. I’ll print out some things, go make my copies, and maybe do a little planning, but it’s very easy to get down the rabbit hole on the internet and start reading stuff. Yeah. I mean I’m not the most prolific planner, I can tell you that. So, in my case, I just rather have the students and it was a good decision for me.

Gerry:
I know there’s a lot of school districts don’t like to give that, especially the 25% bump because a lot of times the teachers will be making more than the principal.

Mindy:
Well, then the principal can go teach full-time and not have a planning period.

Gerry:
That’s true.

Mindy:
I didn’t know about that 25%. I’m going to talk to my sister.

Gerry:
Yeah. That [crosstalk 00:32:19] by district too. Some districts it’s like 10% and I just thought, “Man, I don’t know if it’s worth all that to me. I got to keep my sanity to a degree.”

Scott:
Well, the theme here is income maximization while at the job, you looked for the opportunities that will give you that boost, and then you took advantage of them and that’s something that everybody regardless whether you’re a teacher or not can take advantage of. How people are out there-

Mindy:
And tax advantages.

Scott:
Yeah. Of course. I think that’s the big, the overall theme to this entire podcast is your incredible tax advantage approach to this. But I just think from the income side what we can learn is, hey, there’s always that raise to go after if you’re not a teacher or that chance to go after a new job opportunity or kind of just know your market value and what options are on the table. Can I get that extra $6000 a year by getting this degree stacked in at my corporation?

Scott:
You just knew your market. You did your homework and you took advantage of every opportunity that was available to you it sounds like.

Gerry:
Yeah. I noticed why my co-workers didn’t really seek out the pay bumps, I knew one person who’s my department had for many years, very bright individual, didn’t go back for graduate degree. I thought, “Man, you’re just leaving $6000 a year on the table.” This person could easily have a specialist degree, that’s $12,000 a year. You can probably get those degrees for, I don’t know, back then 5000, 6000 bucks. So, it pay for themselves in a year.

Gerry:
But, yeah, like now my current job there’s like a weightlifting, a little inside 20 bucks if you cover the weight room for an hour and it’s still like on the clock where I have to be at school anyway. I’ll take that anytime anybody wants to give it to me. I noticed my last paycheck it was for a couple of months, it was 300 bucks. I like to work out. As I go in there and [inaudible 00:34:08] for them, did push-ups and kettlebell swings and all that but I’m getting paid [inaudible 00:34:12] people.

Gerry:
I was like, “Okay. I’m going to be in the weight room anyway, you’re going to pay me to be here. Deal. I’ll take it.”

Scott:
Yeah. This reminds me. I got my first job they offered an employee stock purchase plan. Sorry. I’m going to slight tangent here. I’ll be one minute I promise, guys. But basically the rules were this, if you buy the stock, you could get the company stock at a 15% discount publicly traded company. Stocks, [inaudible 00:34:35] a quarter, and then you can sell it right away and you incur capital gains, you do that or you can hold it and deferred it but nobody did this, not a single person in my department, which is the Finance Department, as far as I know was buying any stock.

Scott:
I thought I discovered this big secret. So, I put my entire paycheck into the Employee Stock Purchase Plan, bought the stock, and then sold it immediately and realized my capital gain. Then, I explained this to everybody and I was like, “Look, not only did I tell you about it last quarter, I did it and I collect it. Now, you’re doing, right?” Nope.

Scott:
There’s this free money, this opportunity for income all around us that for some reason it seems people just aren’t willing to go and take the little effort to go out, reach, and grab, and claim it for themselves and I don’t know why, it’s just that your story reminds me of that and I think it’s just such an applicable lesson for anybody who’s trying to go toward financial freedom. Just go after those little things.

Mindy:
You’re saying it’s a little effort, it’s a little effort, Gerry is actually in the weight room already. He’d be there for free but he knows they’re looking for somebody and they’ll pay him 20 bucks. I will take $20-

Scott:
But high school, they’re kind of stinky.

Mindy:
Well, okay. I guess it’s been a while since I was in high school but, yeah, I remember those gym rooms didn’t smell so pretty but I will take $20 for something I was going to do for free anyway all day long. Scott, I’m about to take a drink of Diet Coke, will you give me 20 bucks for it? I’m going to do it anyway. It seems so silly that people won’t seek these opportunities out. What is that quote? Live like nobody else now so you can live like nobody else in the future [crosstalk 00:36:08], but this is just… I mean it doesn’t make sense to me why people don’t take advantage of this.

Gerry:
Well, that’s part of the reason why I still blog off and on and I put my updates. Now, that I’ve got seven-figure net worth, I’m feeling kind of weird about putting those numbers out there but there’s a lot of narratives in society about how everything is impossible now and that we’re going to have some guru come take care of us, and that’s not the way I view things but at the same time, I figured, “Well, they need an example.” That’s why I just lay it all out there because I was a 2.0 student at Davidson, did graduate early though.

Gerry:
I just want to get out of there so bad. I screwed up forever a day, didn’t know what I was doing, I’m teaching public school, which is supposedly like economic wasteland according to everything I ever hear. I’m like, “Well, let’s flip the script. Let’s turn this on his head and show people how you do it.” You can do this with many jobs. Okay. Let’s say you don’t have a 457, you still got a 401K, probably got an IRA, probably got an HSA, fill those buckets, get your debt in check, start filling buckets, and when you start seeing, hardcore savings is the fast-forward button on net worth building.

Gerry:
When you start saving 50, $100,000 a year, hey, man, that’s real money and you get from zero to something substantial very quickly.

Scott:
Yeah. If you could do it on two teacher salaries, a lot of people should be able to do it I think.

Mindy:
You know what? That’s exactly it and one of the most popular episodes of the Real Estate Podcast was show number 238 with Michael Swanee Swan. He is a teacher. He lives in San Diego. So, of course, he has no money, and no, he’s a millionaire because he started investing in real estate in San Diego where it’s really, really expensive and he did something unusual and he’s living a better life because of it.

Gerry:
Yeah, and just to give you an idea what that means. Since 2012, I’ve taken three and a half years off from work where I didn’t work at all. Took a half year, and then we took the 2013-14 year as a family, we homeschooled our son, went to Mexico for two or three months, and then we taught two years in Douglas, Georgia, saved all the money. It’s like, I don’t know, we saved 260 in 2 years.

Gerry:
Then, we took two school years off, and now we’re back here and this is the end of our second year. I don’t have to work but when I do work, my wife and I, we save all our money or we fill all the buckets and we can easily get a 100K. We did 130,000. We saved 130,000 last year.

Scott:
That’s amazing.

Mindy:
I can hear people driving in their cars right now saying, “But what about all the growth that he’s missing out on by taking his money out of the 457 plan?” So, can you shed some light on that because you were investing but then you pulled money out? You’re not taking out all the money in the 457 plans, right?

Gerry:
Well, let’s see. The 457 and public schools here in Georgia, generally, they have veritable annuity products. They have high fees that I don’t like investing in high fee plans. So, I keep everything in cash and when I separate service, I pulled that money. I have rolled money from that to an IRA before. So, my money is not really invested. It’s kind of an opportunity cost when I’m saving in those buckets because I don’t think they’re very good for investing.

Gerry:
So, part of the plan is always to quit so I can move my money to greener pastures.

Mindy:
Okay.

Gerry:
Give you example. My wife’s not going to teach at the end of this year, she’s going to be done. So, we already know when we’re done here, September, we’re going to roll her money to banker.

Mindy:
Okay. So, you have a high salary now, technically, you have a zero salary because you would invest it all, nice for you. But you have a high salary now so when you are, you’re reducing your current taxable income, and then you’ve got terrible options so you’re reducing, you’re not even investing in the 457 plan, you’re just putting it there to hold, you’re not paying the high taxes, then you pull it out at the below 12%?

Gerry:
Yeah. Yeah. In my range I’m comfortable with the taxation rate, which is that first 45 for sure. I get that 18,000 in that account, and then since I pulled that being like 27,000, okay, I’m at 45. I don’t owe anything, and if I want some more, I just know I’m going to pay 12% on it. Okay? So, yeah, there’s always that. It’s kind of frustrating times. I wish I could invest in my 403B for example, and actually I did for the first time, I put $18,000 into some funds in that 403B because the market dropped, what 35%, 40%?

Gerry:
So, I put some money in and I’ve made 2000 or 3000 on it. But still, at the end of the day I’ve got like way more in fees than I would ever pay if I was out getting my first choice products.

Mindy:
I’m understanding what Gerry’s saying and I’m trying to explain it so other people get it too. Those annuities are crap. Annuity only benefits the person who’s selling it. It never benefits the person who’s actually investing in it.

Gerry:
Average fee is 2.25% nationally.

Mindy:
That’s ridiculous.

Gerry:
My index fund is 130 basis points or S&P 500 basically.

Scott:
That’s common in a lot of these retirement accounts, which is why you stock the money away, tax advantaged, and then you move it at the first opportunity, which is exactly what you’re doing which is-

Mindy:
Which is still a benefit.

Scott:
Yeah.

Gerry:
Yeah.

Scott:
Somebody has finagled their way and extracting a large fee from you in order for, your access to that tax advantage.

Gerry:
Oh, and the count I’m talking about is one of the better ones. I mean they don’t have surrender charges. I mean some of these products are just, I call them wealth extraction devices. I mean it’s just a transfer mechanism from the saver’s money to the intermediary.

Scott:
All right. Hope you’re enjoying the show. We’ll be right back after a word from today’s show sponsor.

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Scott:
So, over the last 15 years, you have been largely… I guess 18, 19 years largely you’ve been a teacher with a couple of years breaks in between, you saved an increasingly large amount of money, you’ve build massive net worth mostly in tax advantaged accounts. Have you also built a pension? Are you eligible for pension as part of that?

Gerry:
At age 60, I will get a pension, I think mine’s going to be roughly $30,000 to $32,000 because I’m not going to do 30 years and my wife’s going to get about 20,000, 25,000 I believe and I believe that has a 3% cost of living adjustment or at least it has. We’ll see what’s going to happen going forward. The Georgia Pension Plan is, the TRS is in pretty good shape compared to many states but we’ll see what Mr. Arithmetic says about all that.

Scott:
Fantastic. Then, you’re going also be eligible for Social Security, right?

Gerry:
Yes. But I found out that… Well, I don’t pay Social Security in this district so I’m going to be subject to the… What is it? The windfall offset or… So, I’m not going to get full benefits. I mean there’s a chance I might get something. I will probably get something. I don’t really know what that number will be. But, yeah, I mean if I get it. It’ll be gravy. I don’t really talk about my pension in my blog because that’s… But I’m 56, so that’s right down the road.

Scott:
Yeah. So, you’ve got a very conservative, very strong financial fortress that you’ve constructed for yourself and your family over the years here. Are we missing any parts of that? Is there anything outside of the retirement accounts or the… Do you have real estate [inaudible 00:46:36] real estate those kinds of things?

Gerry:
I know I’m going to disappoint the BiggerPockets crowd. I have a house. Like I mentioned before I paid 68,000 [inaudible 00:46:45] brick owned by one family. I mean we really like this place and we’re probably just going to be here. We don’t have any rentals or anything. I’ll be honest, I played basketball my whole life and I conjugate verbs for a living. I might as well turn in my man card. I am so unhandy around the house, it’s embarrassing. Sorry, Mindy.

Mindy:
You can come to my house and I will teach you everything.

Gerry:
I know.

Mindy:
[crosstalk 00:47:08] job to do so.

Gerry:
[crosstalk 00:47:10]

Scott:
It’s the unmanly professional former basketball player and coach. Yeah. That’s it.

Gerry:
I don’t know anything about cars. It’s just pathetic.

Mindy:
No. It is not pathetic. You don’t have to know about that just because you’re a man. But if you want to learn, you can come to my house and I’ll teach you.

Gerry:
As far as taxable accounts, we have like $11,000 in a taxable mutual fund. We’re all pretty taxed and what I’ve been doing over the last couple years is moving some over… I’ve been doing Roth conversions and when the market took that big dip, I think we got $40,000 dollars over. So, I know I’m going to pay some tax on that but I think future me will be happy with that is the hope.

Gerry:
So, it’s funny because that’s a lot of our income on the taxable year. Last year, we did, I think I did $20,000 of conversion. But as far as having other things out there, no. We’ve just done it from those four buckets we talked about before.

Mindy:
Well, what about geographic arbitrage? Where do you live?

Gerry:
I live in Statenville, Georgia. A one-stoplight town in Echols County about 20 country miles from Valdosta, Georgia, which is a university town. So, if we need stuff, we drive there and go to Walmart, Sam’s and get a bite to eat if we like. So, it’s not like I live in the middle of nowhere. I’m 20 miles from real shopping. I’m also about 2 hours, 2 hours and 15 minutes from Jekyll Island Beach for beach trips. A little less than two hours from Jacksonville at the same distance from… I’m actually about 140 from Tallahassee.

Gerry:
So, if we want to go to Costco and stuff, we drive over there and we go to all the restaurants. We can also get to some really nice beaches from here. I’m just far enough away where I don’t have to worry about hurricanes so like people on the coast too. But, man, the Florida Coast are just beautiful. We love Jekyll Island as well. So, I think we’re in a real sweet spot. Low-cost living, good day trips, we do travel rewards.

Gerry:
So, I’ve got lots of rooms. Let’s say country ensuite, we’ll go stay there, go to beach, stay there at night, get up, have a beach day, and then drive home. It’s a great two days at the beach. What else? Oh, the other thing I was going to mention is we took those two years off, but one of those years we lived in Mexico. So, our son could go to school. He did his sixth grade year at bilingual private school and Merida, Mexico, colonial town. I don’t know, 800,000 people more or less.

Gerry:
I’m not really a city person but I love it there because it’s very walkable. People are incredibly friendly, so much to do. But for the whole year, apartment, tuition, meals out, groceries, the whole kit and caboodle, $23,000 the whole year.

Mindy:
So, are you going to go back there?

Gerry:
Oh.

Scott:
[crosstalk 00:50:05] Spanish class too. [crosstalk 00:50:06]

Gerry:
Oh, yeah. Well, we are permanent residents in Mexico now. We went to the consulate in Atlanta and we did all our paperwork. Yeah. We’re still US citizens, always will be but we can stay in Mexico as long as we want. The whole process, I didn’t use a lawyer or anything. It cost about a thousand or $1100 for all three of us total. I love Mexico. That part of Mexico, the Yucatan, it’s really nice because it’s … Something like a 2-hour and 15-minute flight from Atlanta.

Gerry:
So, in the time zone for the most part. It might be Central. It goes back and forth. But, “Oh, you’re so far in Mexico.” Actually, we’re not that far. My brother-in-law did come see us and he was just blown away. He was like… Everyone’s got their image of Mexico, which is generally like some back alley in Tijuana. You can find all that stuff if you want but where we live is awesome, beautiful place.

Mindy:
Okay. I just looked it up. I was like, “Wait. What are you talking about? It’s on the Pacific Ocean.” But it isn’t. I guess my American education didn’t show me where Mexico is or how it looks. It kind of curves around and you’re at the very top of the curve.

Gerry:
Oh, yeah. We’re at the top of the Yucatan Peninsula there and the thing is that part of Mexico is very different. It’s almost like Alaska is to the states. You don’t just happen across it, you got to be going there, and the people, they’re very proud. They’re almost like Texans in a sense. They’re very proud of being Yucatecos. It really comes through at times and a lot of people have a lot of expats there now and a lot of Mexicans from other parts have come there because it’s very safe.

Gerry:
They’re quick to tell everybody if they ever say something negative about the region, particularly the other Mexicans about, “Well, don’t forget, you moved here for a reason.” Basically where you live isn’t safe. I mean they’re many parts of Mexico they’re totally fine but if you watch the news all time and I don’t watch the news, I’m scared to go out the door anywhere.

Scott:
Let me ask you this. You have just outlined a masterful approach to handling your taxes, income, spending, building wealth, you’ve got a financial fortress with all these different things. You don’t even think about your pension because you’re self-sufficient without that it sounds like for the most part. I just love the overall approach. Which class do you teach in at your high school?

Gerry:
I teach a Spanish one and two in a middle school class. They had me do an ESL last year but I found out this year they’re going to have me doing personal finance class and a weightlifting class so…

Scott:
Yes.

Mindy:
Yey.

Scott:
All right.

Mindy:
Oh, I wish that we could show-

Scott:
I love it.

Mindy:
… both Scott and I were raising our arms, yey. When he said that. I’m so pleased.

Gerry:
We’re going to have Fi-day Friday.

Scott:
All right.

Mindy:
Oh, I love it.

Gerry:
Yeah, because at the end of the day, what is it about? It’s about having your financial independence as Mr. Money Mustache always points out so that you’re happy. If you’re in debt your whole life, you don’t get to live your life and it’s amazing how bad this is almost revolutionary to people but it’s a big world, I have a lot of interests, and now that we have some money and frugal lifestyle, we can probably go anywhere. I want to share that message with my students.

Gerry:
I get a lot of money questions even in my Spanish class. Some kids have read my blog and they’re like, “Mr. [Bourne 00:53:24], he’s got a lot of money.” Well, it’s all in my retirement accounts. It’s not like I can’t access it. But they’ll ask me stuff. What should I do? I pull them aside and show them things.

Scott:
That’s awesome. That’s changing lives forever. That’s just dramatic impact. So, really, I love to hear that that’s being taught at your school and you’re passing it along.

Gerry:
One of the kids I pulled aside had a lot of questions, I pointed him to your book, Set for Life, and he just got a big job with the Navy. He’s going to be I believe a nuclear engineer [crosstalk 00:53:55] big package. But he knows what he’s going to do with his money. He’s not going for a Mercedes and a motorcycle. That kid is like so far ahead of people his age just because of reading your book and him seeking me out and asking me questions.

Scott:
Well, thank you, Gerry, for the very nice compliment. That kid must be very outstanding because only the top scores on that entry exams in the Navy going to be the Navy nukes, is that right? They got that big fat signing bonus. So, I know that’s a big draw.

Gerry:
Yeah. We were very proud of him. I mean coming out of a small… I mean we have 4500 people in our whole county, right? 4500.

Mindy:
Oh, in the county.

Gerry:
In county. There’s a thousand people in my town. I’m a towney. I’m a city person [crosstalk 00:54:38]. For a guy to go from a small town like that onto a job like that is very impressive. We’re very proud of him.

Scott:
That’s awesome. Yeah. Well, very good. It’s a wonderful to hear that. Well, that’s a good stuff is going on at the school there. Do you have anything else that we should be talking about or asking or thinking about before we move on to our famous four that we didn’t get in the interview?

Gerry:
Let me just talk about this briefly. Now, that I have more time-wealth, I have a different outlook on work. I can do things that like normal employees won’t do. Everyone can tell I’m very relaxed at work. If they ask me something, I’m just going to tell them what I think. I’m not going to be rude or obnoxious, but I’ll give them my honest opinion. But a big focus of my life now has been a lot of working out, just kind of being an old athlete, my weight got high at a point, but I just wanted to mention, with my time, I’ve started a jogging streak.

Gerry:
Today, I did jog number 1397, that many days without missing. I’ve not missed a jog.

Scott:
That’s awesome.

Gerry:
I’ve done 9105 push-ups in 2020. I do push-ups everyday.

Mindy:
90, wait. How many? 91-

Gerry:
Yeah. 9105. So, I track those. I need to put those in my blog. Just have a Google Calendar where I mark them every day. It’s amazing I’m 56 and my mom always have this conversation, she’s 78 and she’s like, she can’t believe how well she feels. I’m like, yeah, I feel athletic. Now, I don’t have the next gear, I could still jog 33 minutes.

Gerry:
That just blows my mind because once again there are these narratives out there. “Oh, you get older, you just, you break down and you become type two diabetic.” One of those things are lifestyle, and at one time, I probably was pre-metabolic syndrome. I had a big gut, even though I wasn’t drinking a lot of beer or anything but now I feel athletic. It’s just a lot of that is mindset and habits and having the time to do it. It’s very important to me.

Scott:
No. I think it speaks to a lot of these things seem to go together. Wealth building habits are often coupled with good lifestyle, eating, exercise, relationship, those types of other habits as well. So, I think it speaks to the well-roundedness kind of helps contribute to all those things.

Gerry:
Yeah. When you have time, you can work on those things, right?

Scott:
Yeah.

Gerry:
But if you’re under the gun, now all that stuff is impossible.

Mindy:
That’s completely true. Okay. Well, it’s now time for the famous four questions. These are the same questions we ask of all of our guests. Gerry, are you ready?

Gerry:
Yes. Lay it on me.

Mindy:
What is your favorite finance book?

Gerry:
Well, I’ve already referenced Paul Terhorst, Cash in on the American Dream. So, I’m going to give a plug for another one, that’s a good nuts and bolts. This one Paul Terhorst was more for mindset and that gave me aspirations. I thought Eric Tyson’s Personal Finance for Dummies is where I learned about pre-tax accounts and regular accounts and I didn’t know that stuff.

Gerry:
That really kind of gave me the framework in my mind. It was after my MBA that I learned all this. It’s so embarrassing to admit that. But I’m really glad I read that book. I think you can get it for like 15 bucks.

Mindy:
You should not be embarrassed to admit that because there’s a lot of people who don’t know that even after they’ve got their MBA. That is something that people, lots of people never learn.

Gerry:
True.

Scott:
Even people who understand a lot of those things, don’t have a good framework about which to use and which to apply and why. They’re just kind of doing it to defer taxes generally, even if they’re going to have a low income year or whatever it is. But not knowing the differences there I think is costly.

Gerry:
It was worth the 15 bucks. That’s for sure.

Scott:
What would you consider to be your biggest money mistake?

Gerry:
There were a couple things where I missed on that I would have been better financially, but I think my biggest mistake was just not having any financial knowledge or financial awareness. I mean let’s face the facts, from 22 to 33, 31, I was just clueless.

Gerry:
I call it the lost decade and there’s guys that fire in the amount of time. I was just wandering the desert. I don’t know. I didn’t really learn this stuff from my parents. I didn’t really have an example in that regard, how to do something really efficiently. I just thought you go work, you get money and spend it. That’s just a terrible way to roll through life because there’s people will give you a job, will give you money and I don’t care what your job is, at a certain point, you get tired of it.

Gerry:
I just didn’t have purpose financially. But once I got that, it just, everything just got easier. I knew where my money was going to go and just to give you example real quick. I played basketball, I think I had maybe 5000, 6000, 7000 bucks cash saved. It should have been invested or something, at least part of it. No. Well, I did use it for something good. I went to Brazil for three months. Learned some Portuguese but I could have put half of that away in an IRA or an index, anything or rental property, who knows? But no. No clue. Just live for the moment and that was probably my biggest thing is going so many years knowing nothing eventually.

Mindy:
What is your best piece of advice for people who are just starting out?

Gerry:
I used to think it was the nuts and bolts things but now I realize it’s more mindset. You got to get your mind ready for what you’re going to do and realize that first, it’s possible to build wealth. I mean there’s so many counter narratives in our society now. I mean in America, you can’t make money in America. What’s the other option?

Gerry:
You can do it, it’s going to be rocky, it’s not going to be always pretty and smooth, you’ll be viewed as a freak by many of your contemporaries and your friends. It’s going to take time and passing in stages. You can’t like jump the stages. You don’t. I mean you go wake up and you’re fine. But at the same time as you’re, you got to realize you’re going to have to have some fun on that 5 to 15-year journey. It can’t all be about money and just… You don’t want to come 10 years down the road and you’re like, “Man, I hit five but god that sucked.”

Gerry:
It’s no way to live. You got to have fun. I always tell people cultivate your hobbies, low-cost hobbies, take vacations, go see things, but do it frugally, have a lot of fun. Yeah. It’s a mindset issue and just a belief. You got to view that you can do things.

Scott:
Yeah. I think some people struggle with this. When you start out and you’re trying to go on this journey, if you want to start saving money or begin approaching the $50,000 you’re putting away every year, that you said was kind of the milestone where you begin making that rapid progress. In order to get to that point, you’ve got to live below your means and that means that you’re living a different lifestyle than the colleagues that you’re working with or maybe your friend.

Gerry:
Yeah.

Scott:
That is unrelatable to them in a lot of cases. They don’t understand why are you living in that half duplex, why are you driving that car, why are you bringing lunch every day instead of buying it with us or whatever it is, right? They can’t relate. Then, a couple years go by, and all of a sudden you have 100 grand to put down towards a rental property for example or 50 grand in your IRA or whatever and that equally to those same people is an unrelatable amount of money. It doesn’t make sense.

Scott:
Yeah. How did you buy this 400,000 rental? I put 100 grand down. Where did you get a 100 grand? Well, I’ve been driving that car [crosstalk 01:02:24] and that’s the problem here is those two sides, that people can’t understand either one of them, I think at either point in time… That’s what I thought of when you were making this comment and your advice there.

Gerry:
We had two used cars for 12 years and we drove them. Everyone kept waiting to see us get a new car. Now, I know as long as those things are rolling because I like funding my accounts. But that makes you an odd bird. You got money, spend it.

Mindy:
I’m very thankful that my dad drove a 1970 AMC Hornet for 20 years. I was embarrassed of that car, nobody else had that car. Do you know what AMC is? American Motor Company. They made the Gremlin and the Pacer and the Hornet is like the nice version but still not beautiful and-

Scott:
20 years.

Mindy:
20 years he drove that car. He bought me and my sister and I are the same age, he bought us a car to share when we turned 16 because we had different jobs and two cars wasn’t going to work anymore so we have three. He bought us a Chevette, which is not the pinnacle of American motor quality. But he would work on them for us and he would do these things for us. I’ve never been really into cars except once, because I don’t care. It gets me from A to B and we’re driving two cars that we bought new now, but they’re the only two cars that we’ve ever bought new. Everything else has always been used and what kind of car does Scott drive? Does it make him less of a person because he drives some older… What is it a Corolla, a Camry?

Scott:
A Corolla. Yeah.

Mindy:
Yeah. Why does it matter that he drives that car? He’s still a nice guy. Gerry, what kind of car do you drive right now?

Gerry:
A Toyota Prius 2014. We bought that when we moved back from Mexico for a little less than 14,000. I went and sell my hatchback in four-door so we can do beach trips, get groceries, and we don’t drive a lot. It’s funny because some kids think it’s a cool car but we have a lot of truck culture here. I’m 6’7 and I get in this little Prius. Some people are just like, “Oh, man, you’re not a manly-man.”

Gerry:
I’m the same with you guys as far as like cars. I’m not a car person. I’ve had nice cars and I can’t fix. It costs a lot of money. We had a Beamer back in the day, take that in. It’d be $800 for regular maintenance. So, the heck with that.

Scott:
All right. What is your, the most challenging question you’re famous here. What is your favorite joke to tell at parties?

Gerry:
I had to confirm with my son on this one and I do a lot of bad jokes and bad jokes in the classroom.

Scott:
Perfect.

Gerry:
My son, he said, “I have to tell this one.” What did the fish say when he swam into the wall? Dam.

Scott:
I like it. That’s a good one.

Gerry:
I love that one. I like pirate jokes, how much does it cost for a pirate to get his ears pierced? A Buccaneer.

Scott:
Ah, I like it.

Mindy:
Oh, nice-

Scott:
What did the pirate say when you went to the golf course?

Mindy:
Oh god.

Gerry:
Wait. I got to hear.

Scott:
I matey.

Mindy:
On a tee.

Scott:
Wait for it.

Gerry:
Oh gosh. Yeah. Matey. That’s so bad. It’s awesome.

Scott:
I once got into a pirate jokes battle. It was a real pirate at Jimmy Buffett’s Margaritaville. So, that was a fun night.

Gerry:
Well, I thought about-

Mindy:
What about the joke?

Scott:
[inaudible 01:06:07]

Gerry:
A fight with the pirate?

Mindy:
No. A pirate joke fight.

Scott:
He would tell me a pirate joke and I would one up him and then he would one up me, and then I got humiliated in front of everyone.

Gerry:
Oh, wow. Yeah. He’s probably got a lot of practice [inaudible 01:06:22]

Scott:
Yeah.

Mindy:
So does Scott.

Gerry:
Well, all my students they learned the, I call it the auntie joke and I’ll just let you hear it, and then I’ll explain it after. There’s two guys in a bathtub and one guy says, “Hey, you mind passing the soap?” The other guy says, “Hey, what do you think I am, a radio?” There’s got a great hook, there’s no punch line. So, I told the students, you can use this when people are dropping jokes and you jump in and you drop that and it’s just an absolute mood killer, causes confusion.

Gerry:
So, one of my favorite students and basketball players at LaGrange, he sends me an email one day and he says, “Hey, coach, I was… It was Rush Week, I’m at this fraternity party and I think I want to pledge with them. The guys are telling these jokes and I realized, “Oh my god. This is my opportunity to use it.” He said, “I laid this day out there, everyone there, and no one talked to me the rest of the party. I was the biggest weirdo and loser.” [crosstalk 01:07:21]. Yeah. Any joke, feel free to use it, everybody.

Mindy:
I love it. Okay, Gerry, where can people find out more about you?

Scott:
Those are great jokes, by the way.

Gerry:
Thank you. My blog is millionaireeducator.com and I blog frequently. I got some things in the hopper here. I always will do my tax post and mid-year net worth updates things like that. Let’s see. I also am on Twitter @ed_mills_. That’s my old alias, millionaire educator Ed Mills [inaudible 01:07:59] that name was too good, no one ever saw that. They thought my name was Ed.

Gerry:
I’m there and I have a small Facebook presence where I just drop my articles but feel free to reach out to me, ask me a question. I’m not a financial planner. I’m not a tax expert but I’ll give you my two cents on your scenarios.

Mindy:
I don’t know, you’re pretty good at those taxes or pretty good at not paying those taxes.

Gerry:
Well, yeah, I reverse engineer and remember it’s like you start asking about depreciation tables and all that… Oh, no.

Mindy:
Well, but that’s-

Gerry:
[inaudible 01:08:31]

Mindy:
That’s fantastic. Okay. We will link to your everything at the show notes for this episode, which can be found at biggerpockets.com/moneyshowonetofour. Gerry, this was fantastic. I love your story. I love that you’re taking advantage of all the things that you can take advantage of. You are living like nobody else so you can live like nobody else. You have a pretty awesome life.

Gerry:
Yeah. I didn’t think I’d be here at this point. I would just tell everybody on the way here is that really who do you go work for every day? To pay bills? To pay taxes? You’re always going to pay bills and taxes but it should not be the vast majority of your paycheck. So, do your best to get money on your side of the ledger and keep your taxes in check and grow your wealth so you can live the life you’re supposed to live.

Scott:
Awesome. Awesome advice.

Mindy:
That’s awesome. Okay. We will talk to you soon. Thanks, Gerry.

Gerry:
Thank you, all. I had a great time.

Mindy:
We had a great time too. This is an awesome story.

Scott:
Yes. It’s really fantastic.

Mindy:
Okay, Scott, I could ask this question actually kind of frequently and this episode was inspired by a question that Nastasia posted in our Facebook group. It says, “Is anybody just starting out? After years of struggling as a freelancer, I finally got a great job at age 35. First time to have health insurance, retirement benefits, and the like. I have a million questions but really they all come down to, how can I catch up?”

Scott:
Yeah. This is a common issue because a lot of our guests and even some of our hosts like myself, we got started pretty early as you alluded to in the intro with my terrible attempted pun response, but basically, yeah, it’s harder, right? The rules of money don’t change. You got to spend less than you earn, you’ve got to try to increase your income, you’ve got to invest for the long run and you’ve got to allow time to compound your investments.

Scott:
Those advantages do accrue to the younger people that are getting started but I think Gerry really just showed us, “Hey, if two teachers can catch up when they’re starting from zero at age 33 and 35.” He actually clarified with us after the show that he got back to zero officially at the age of 35, not 33 as he mentioned in the show.

Scott:
But he got back to zero at 35 and was able to become a multi-millionaire and is known at that town, amongst his students about that, that he’s the guy who is good with money there. So, I think it’s certainly possible for a lot of people to play catch-up here and like he mentioned, if you can fire just in your 20s by doing this right, you can certainly catch up between 35 and 55 to an astounding degree without having to do anything Herculean.

Mindy:
I completely agree. So, if you are listening and you’re not a member of our Facebook group, go join today. Its facebook.com/groups/bpmoney. Please, answer the questions because we can’t let you in if you don’t and if you don’t agree to our rules too. But it’s a great group. You can… Sorry, Scott.

Scott:
Mindy is just notorious for kicking people out who break the rules or spam things so-

Mindy:
I’m sorry.

Scott:
… we have a spam free Facebook. One guy posted a comment, he was like, “Wow. There’s a spam.” It was gone within three minutes.

Mindy:
Yes. This is my group. I don’t enjoy going to other groups and all this spam and garbage in there. You don’t have to worry about it in my group because I kick it out. You are not welcome if you just want to spam, however, if you’d like to talk to like-minded people, fellow frugal weirdos about your journey to financial independence, you have questions about money or really anything else as long as it’s not gold and Bitcoin, unless it’s a respectful question, if you’re not trying to sell me some garbage, please join our Facebook group because we are open to everybody who isn’t going to spam.

Mindy:
Okay. From episode 100-

Scott:
A resounding endorsement of a Facebook group.

Mindy:
I want to create a place where people can ask questions safely and comfortably and not get spammed.

Scott:
Love it. Yes.

Mindy:
[crosstalk 01:12:29]

Scott:
We hang out there. It’s fun.

Mindy:
Yes. From episode 124 of the BiggerPockets Money Podcast, he is Scott Trench and I am Mindy Jensen and we will see you on Facebook.