Finance Friday: 250x-ing His Salary from Employee to Business Owner

Mindy:
Welcome to the BiggerPockets Money Podcast, show number 238, Finance Friday edition, where we talk to Joel Esparza about moving to a different country and what is this, Scott? 800X-ing his salary.

Scott:
250 times increase in his salary in seven years.

Mindy:
How did I get 800 from that? Math is hard.

Joel:
I’m self-employed in the asset taxes matter here in Spain. And on top of that I’m not even a taxpayer yet because up to a month ago I was just basically a refugee, a political refugee if you want to call it that, and so I’m just basically starting my economic life at 33 years old, basically.
(silence).

Mindy:
Hello, hello, hello. My name is Mindy Jensen and with me as always is my can-bench-press-way-more-than-I-can cohost, Scott Trench.

Scott:
Thank you as always for your uplifting introductions, Mindy.

Mindy:
Oh, that was a strong introduction. Look at this muscle.

Scott:
That’s right.

Mindy:
Scott and I are here to make financial independence less scary, less just for somebody else, to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you’re starting.

Scott:
That’s right. Whether you want to retire early and travel the world, going to make big time investments in assets like real estate, start your own business, 250 extra salary, or move across the world, we’ll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Mindy:
Scott, I love today’s guest. It is our video editor, who is somebody that we met apparently 100 years ago through Brandon Turner when he posted that he needed somebody to edit some videos, and through his very hard work he has moved from his home country of Venezuela to Spain where he is now living his absolutely best life. It’s actually the beginning of his best life because he has so much potential coming forward.

Scott:
Yeah. And this is just an incredible… We combine the money story and Finance Friday today because you have to share Joel’s money story with this. I mean, spoiler, he starts in Venezuela in the turbulent times that they experienced in the 2014, 2015, 2016 time range with that and overcomes a large number of obstacles to get into what I would say is a really strong financial foundation right now. This is the type of position that Mindy and I would typically regardless of who is on the show, where they live, say this is a strong position where the individual is ready to begin making meaningful investments with this. And Joel has his sights set even higher on building a sustainable business with that.
Oh, and by the way, Joel is the one who edits all of the video for BiggerPockets, so if you’re watching this on YouTube, it’s probably his handiwork on his own show today. If you watch any of our YouTube videos, it’s Joel. And in part due to his work and the great team we’ve got here we’ve been able to really change the amount of quality stuff that we’re releasing to our YouTube channel and seeing some really valuable stuff come out. So big, thanks to him as a huge contributor to that. With that, that’s my…

Mindy:
Pitch?

Scott:
Pouring it on of appreciation for Joel.

Mindy:
Joel. You make us look great, so thank you. Before we bring in Joel, I must tell you that the contents of this podcast are informational in nature and are not legal or tax advice and neither Scott, nor I, nor BiggerPockets are engaged in the provision of legal, tax, or any other advice. You should seek your own advice from professional advisors, including lawyers and accountants regarding the legal, tax, and financial implications of any financial decision you contemplate. Joel, welcome to the BiggerPockets Money Podcast. I’m so excited to talk to you today.

Joel:
Thank you, Mindy, it’s an honor to be here.

Mindy:
Joel, let’s jump right in. Let’s look at your balance sheet. What is coming in and where’s it going?

Joel:
Well, right now I’m making about 4,500 a month. And my expenses look a bit like this. I have around $600 in rent. I spend roughly 300 to 400 on food. I have an insurance, it’s about $75 and then give or take on hobbies and all other expenses including my cell phone, for example, which is $20. I have other expenses for 250 or so. I also have a son whom I send around $250 as well a month and I think those are pretty much all the money I spend a month.

Scott:
And, Joel, where do you live right now?

Joel:
I am now in Spain but I’m originally from Venezuela.

Scott:
Okay. You live in Spain, and we’re in Spain do you live?

Joel:
I am now in Madrid. I actually got here around two years ago. I came here and I applied for a residency which actually just got approved around a month and a half ago.

Scott:
Awesome. And should we be thinking about your financial picture in terms of dollars or should be using euros or what do you think is the right way to think about it here?

Joel:
Yeah. It’s okay to talk in dollars. I’m actually converted them and actually my income comes in dollars and I spend it in euros, which is a weird thing for the accounting because every day the rate changes and you don’t know how much are you paying for the dollar. It depends when the transaction actually lands on my account, but yeah, it’s fine.

Scott:
Okay.

Joel:
I speak in dollars.

Scott:
Well, great. And what’s coming in?

Joel:
Well, basically it’s just my salary. That money is just for the work I do as a contractor for BiggerPockets right now.

Scott:
Okay, great. And that’s averaging around 4,500 a month?

Joel:
Yeah. 4,500 a month, which spiked to 48 and then it can really vary but not by much, not by a lot.

Scott:
And what do you have in terms of cash savings or investments?

Joel:
In savings I’d say I have around $15,000 by now. I’d say for the last three or four months I managed to save half or more than half of my income. And as in investments there’s just one curious case that in my family’s house in Caracas, Venezuela, we built a room and rented as an Airbnb, which cost around $2,500 to put the furniture in and make a bathroom and all of that thing, have it ready to rent. But I’m not taking anything off that, if that makes sense. That’s sustenance for my parents back in Caracas.

Scott:
Okay, great. We’ve got 15,000 in cash and we’ve got a little bit of ownership in a property back in Venezuela, but essentially most of your wealth, most of the discussion will be around what to do with the cash at this point or additional cash going forward.

Joel:
There are no other incomes coming in at the time.

Scott:
Awesome. And is there any debt?

Joel:
There are no debts. No student loans, no debts to pay, no other… Yap.

Mindy:
Okay. Something, Scott, that we have not been doing is saying hooray and celebrating the fact that he has no debt and we haven’t been celebrating some of our other guests as well, so this is awesome that you’re starting off with no debt. That is fabulous. But is that more of a cultural thing because in America it’s the culture to have debt?

Joel:
Yeah. I know that in the States people have to get in debt. And in my case it’s curious because I would be in debt if I could, if that makes sense.

Mindy:
Oh.

Joel:
Yeah. I would be in debt because, I don’t know, I aspire to own my own home here in Europe. And with my income I actually could get a loan but in my current circumstances it’s tricky to when you have not been a taxpayer for at least two years. And I also am self-employed in the asset taxes matter here in Spain. And on top of that I’m not even a taxpayer yet because up to a month ago I was just basically a refugee, a political refugee, if you want to call it that. And so I’m just basically starting my economic life at 33 years old, basically.

Scott:
Well, I think it would be good at this point to take a step back, and we’ll get into goals and what we can do going forward. But I think it would be good to hear a synopsis of your money story here, because I think it will inform a lot of the remarkable journey that you’ve been through to get to this point and how we proceed going forward with this. Would that be okay?

Joel:
Yeah, yeah. We can do that. Where are you wanting to start? After school…

Scott:
We can after school, we can start wherever you like. Where do you think the journey begins from your perspective?

Joel:
I went to school in Argentina and while I was studying there I took a summer job editing video where, yeah, I basically I was studying film, and. And that was at the end the job that I aspired to have, to be an editor. I actually liked a lot photography and being a camera man and I did that throughout my school years. But then I saw this angle of I love computers. I’m a huge computer nerd, I love video games, and being in front of a computer seemed as an easy decision. And I already have a lot of those skills from before, so I took this job and, I don’t know, they were paying me around 300, $400 a month back then in Argentina, which was really good but that work only happened during the summer, three months of work and that’s it, and the rest of the year I was just a student.

Scott:
You’re not from Argentina, right? This was a move for you?

Joel:
Yeah, yeah. I am originally from Venezuela and I decided to go to Argentina because I could study there and I had this backup from my family for studying there. It’s not like my parents helped me pay it, ironically, it’s another crazy story of the family. But basically I received an inheritance of around $4,000 which propelled me to Argentina at 21. And I knew I was going to get that money since I was a kid. I guess I should tell this story fully.
This is an aunt of my dad, so it’s a great-aunt, I don’t know if you call her that. She didn’t have any kids, and it gets dramatic here. She got terminally ill with cancer. And she had a lot of money, she was a painter but she loved her nephews and her grandnephews. So she set it up in a way where all her grandnephews, which were seven, eight of us, would receive a portion of this inheritance that she had. And she decided to even she’s a champion, she decided even to not even really treat her affliction and just faced death like a champion.
And, well, and all of those seven nephews, I was, I don’t know, five, six years old when this happened and I was the youngest one at the time, I was the last one to receive this inheritance. And all my older brothers and some of my cousins received this as well, eight of us. And she set it up like a trust fund for when you’re 21. So as soon as I turned 21 I actually quit my career that I was studying in Caracas and I just decided to move to Argentina and I lived with that money for a really long time.

Scott:
Awesome. And what year is that?

Joel:
That’s 2009.

Scott:
So in 2009 you’re in Argentina. You’re studying film, you’re making three, $400 a month. What happens next?

Joel:
Well, after I graduated I returned to Venezuela where things were really, really bad. Economically, it was really hard to get an actual job. And I was going to have a son in… I don’t know, in an unplanned way, was not a conscious plan of having a child and we build that relationship or anything. And, well, that actually fueled me to start working again. But I was in Venezuela now and I had a partner. She was pregnant and we were going through all of this.
Up to that point my life was a fairy tale and then it came crashing down because the best paying job that you could get at that point was, I don’t know, very few amount of dollars a month, which turned out… For example, I ended up working for the mother of my child’s father. He had a company of taxis and he set up a car for me and I would go down to the airport and pick people up. And that was actually one of the highest paying jobs ironically that you could get at the time. I was getting, I don’t know, four going down to the airport and coming back at around $30 and I could get two or three of those a week. That actually put me in a very high percentile of income in Venezuela because I was making, I don’t know, $90 a week at that point, but that didn’t last for long because even that job started to fade out.

Scott:
And what year are we in right now we’re talking about this? You’re 21, you move to Argentina, what time period are we in right now?

Joel:
I stayed in Argentina for around four years and then I came back to Venezuela around 2014, 2015, yeah.

Scott:
Okay. And at this point you’re saying two to three $30 trips put you in a top income earner bracket?

Joel:
Yeah, because I was making dollars not the local currency. That actually, you would laugh at this anecdote. At the time my family has this house and it was not built. Half of it was not finished and they only recently before I came back from Argentina, they had put the roof on the top part. The whole foundation was built and without a roof we lived there for, now, 15 years or something. And when I came back from Argentina I come and I see this fantastic roof. And then when, well, you’re going to be a dad happened, well, we just have to put together around 500, $600 and we build a very nice place for us to live up there with just that money, which actually seemed like a bit, stuff that was very controversial. Building this place it took a lot of effort because, fine, sourcing $700 when you’re living in a place that minimum wage is, I don’t know, $2, $3 minimum wage. I’m not even kidding. It was a huge milestone to manage to build that home.

Scott:
What was the general… We’re getting a picture of it from the stories you’re talking about here, but what was it like to go from 300 or $400 a month to, I guess you’re earning around a similar amount with two to three trips, about 250 to $300 a month in Venezuela?

Joel:
Well, it’s really different because in Venezuela it was really hard to actually spend the money even so life was really, really harder than it was back in Argentina. In Argentina I had some government breaks. I could buy dollars at a cheaper price so that money that my aunt left me lasted me for literally four, five years throughout college. And then when I come I’m poor. I’m poor, I don’t have any money… I don’t have any money. You just you cannot pay things. You cannot afford basically anything. Even buying that house it came with loans and that I paid off as I did the trips and stuff like that.

Scott:
How long did this continue for? It sounds like this is 2014, 2015. How long does that continue for?

Joel:
For about a year. For about a year until my son was born. And a bit before he was born on October 2015, let’s say August, something like that, I landed a job at an agency that didn’t really pay me a lot. They paid me around $20 a month, $30 a month, but at least it was around my expertise and it would grow me. It was a really good agency and they had this Onion style of journalism was one of the angles. And it really excited me personally to work at that place and I just took it because it was stable and it was, actually I felt like it would take me somewhere else rather than drive a cab.

Scott:
And this is doing video editing?

Joel:
Yes. That was doing video editing.

Scott:
And how much did they pay you, one more time?

Joel:
They gave me something on… Actually they didn’t even pay me in dollars at the very beginning. I’d say in the local currency I was making around the equivalent of $20, even 15 at some points due to inflation and then we would cry and adjust the rates and take it back to 20 in local currency, of course.

Scott:
And this is $20 per month?

Joel:
Yeah, yeah. There you had it right. It’s per month. Is you wake up every day. You have to be at an office at 8:00 so you have to be at the subway at 7:00 or something, and you return home 7:30 PM. So it’s not that eight-hour shift, it’s a lie. It’s actually 11 hours of your day, basically, just between the whole thing, Monday through Friday, the whole month of pay $20 in local currency.

Scott:
Oh, my gosh.

Mindy:
Can you live off that?

Joel:
I’m telling you, I was one of the lucky ones. I had money to go buy a hamburger and watch Game of Thrones on Sunday and stuff like that that regular people couldn’t do because if you’re in Venezuela, if you’re working in a regular job you’re gaining, I don’t know, $5. That’s really up to me at the time. It has changed a lot since the economy there has dollarized and it’s really different now, but…

Scott:
So this is 2015, how long does this continue for, the $20 a month period?

Joel:
Around two years. Around two years. The job went well and I built relationships. And in Venezuela there’s… I guess everywhere, and in this industry, people, they all know each other and you start making friends with everyone that works there and their friends. And then somebody needs a video editor and they say, “Oh, well, hire Joel. He works at our agency, just call him.” And that was basically the key that started to make me step… I landed into this job with a lot of necessity, let’s call it, or I don’t know, drive to get that money and get to save money month after month.
But after a while then things started to cool down and I had this job and I started… Having that little money that you need was not the issue. I started lifting my head and I started looking for this little gigs online and accepting this recommendations. When I came back from work I would sit down and edit more for somebody else that paid me. In one CD you need a couple hours, two, three times that I would make in the whole month. That’s how eventually I shifted out of this job and became a freelancer online and a contractor and that’s how it evolves from there.

Scott:
And that shift is occurring in 2017?

Joel:
Yes. Around 2017, yeah.

Scott:
Okay. What happens next? You’re switching out, you’re in this path to get in freelancer. How does that evolve and how do you come to arrive in Spain?

Joel:
Well, one night I was playing video games and I met a dude that had a project and I told him I was pitching myself all over the place. And actually a guy that I randomly met online playing video games one day asked me, “Did you imagine yourself making $10,000 a year?” And I cried, dude. Man, it was so much to imagine making $10,000 a year. My best estimate at the time is not making 500. We started working together within a couple projects and he paid me, I don’t know, $150 for a video.
And so that shifted my whole perspective towards the agency, towards my fixed job because I said, “Well, I could just send that out the window and start making five times more.” And funny enough, it happened. I quit. And two weeks after I quit I’m focused on these new projects and these little things that actually pay me more, I have a lot more time on my hands. And the agency calls me and starts paying me per video that I did two a week or one a week, they started paying me $250 for each video.

Mindy:
The same company that was paying you $20 a month is now paying you $200 a week?

Scott:
200 per video.

Joel:
Yes.

Mindy:
$200 a video?

Scott:
250 per video.

Joel:
Yeah. The 50 is important, you caught on fast. Yeah, they started… Because they didn’t have anybody and I quit mid-project. It was a huge project. It was an animation project that needed a lot of attention. I had the hang of it and I quit midway and they were on the need. And who are they going to call? And they called me back and I gave them that rate and they accepted it. So now I’m… Yeah, I’m balling.

Scott:
I love it. All right. This is a huge turn of events. 2017 is… you’re not making 10 times more, you’re making 20 times more than you were previously, or you’re making even more than 20 times more than you were previously. You just thought you could make 10,000 a year with that. How did things go from there now that you’re balling?

Joel:
There’s one funny one that also happened right before quitting. One day my producer comes in and tells me, “Well, Joel, I know you’re really busy, dude. Do you think we can take this project?” And they brief me on this video that we need to do and I’m like, “Dude, you know how we are, I don’t have the time for this.” “Don’t worry about it. I’ll contract it off.” And then I’m home and I receive a phone call from some friends that have a production company, a audio video production company, and he tells me, “Look, I have this project.” And he briefed me on the project, and it’s the same project. And I asked him, “How much would you pay me for this, because I know which project this is, they pitched this to me this afternoon.” “Well, we can pay you $100.” And I was like, “Wait, what? The project that I rejected got contracted to you and you can pay me five months of salary for one video?”
I came on fire the next day and that’s the day basically that I quit, and that’s the story that I just told you. That was the final straw of my patience with that. And so, yeah, after that, and this is something that will be awesome for other freelancers or people that are hustling online for jobs and that kind of stuff. I went into two pages that really helped me, one is Fiverr and the other is Upwork. Both were recommended by this friend that I met online one night playing video games. He told me, “Man, you should really get into these pages and start advertising your job.”
And, well, I landed my first contract, big contract on Upwork. This is 2017 as well, this is October of 2017. This company named Nameless and they were paying me $15 an hour by October of that same year. So it all snowballed so fast during those four months and in March I’m making $20 and in October I’m making $15 an hour plus all the side gigs that I had already either accepted was midway or you name it.

Scott:
I love it. All right, so 2017, now you’re making 15, $20. Now, that’s 30 to 40,000 annualized. You’re probably not getting all of those hours filled up, but it’s still 10, 20, 30 times the amount that you were making just six months previously with that. What happens to your lifestyle and your day-to-day living during this period?

Mindy:
Well, you bought that chair.

Joel:
Yeah, part of it. Not a lot by now. I just, I have my family fix the cars and fix the house and paint the house and improve that my own little apartment inside the house. Got a 40-inch TV and a new couch and a nice mattress and a coffee machine for… I bought a coffee machine for myself and then my mom was like, “Oh, my God.” And I bought one for her. Yeah, nothing really crazy. It was just put into our lives that we really… And I saved a lot of it. I took a trip as well. Nothing too crazy. I only spend in, I guess that’s what you’re hearing, happy spending for me.

Scott:
Yeah. I mean, those things would be… Most people would call those needs or necessities here in the USA with that. So I think that makes perfect sense with that. Okay. We’re in this place in 2017, things have changed dramatically, what happens next? How does the story continue from there?

Joel:
Well, eventually me and the mother of my child separated and they moved to Belgium, and this is about year 2019 or beginning, January of 2019. And, well, that year actually coincided with me with that client, Nameless, which was paying me $15 an hour. They due to Facebook monetization issues stopped monetizing and, well, they had to fire everyone and the honeymoon lasted for four months then. And while it was a really hard month of that January, and my kid went to Belgium and I just stopped getting the payout. At first I thought, “Well, I can make that trip. Now it doesn’t really matter. I can make the trip.” But then it became like, “Oh, well, I lost the client.”
And I kept searching online, Upwork, applying to everything. And then I saw a post from this one guy, Brandon Turner, and he’s asking for these… He needs a small video edit thing. And I apply and I get a reply after a couple of weeks. And we started working together and then I got another client, Yoga People. And I like yoga and I saw it as a way of getting paid for going to yoga class rather than paying for the yoga classes, oh no.
I took those two jobs and both of them started growing really fast, especially the BiggerPockets one within a couple of weeks. Brandon got really annoyed by the constant messages that I send them, asking him details of what to do, what not to do. By then we were only working through sending direct messages to coordinate the task, it was hell. And then he tells me, “Now you’re going to talk to this guy.” To talk to Kevin. Kevin who’s watching is the senior producer now. “Talk to Kevin. He will handle everything.” And through Kevin-

Mindy:
We both know Brandon so this is pretty spot on for him.

Joel:
He puts me in contact with Kevin and we started working, building stuff up, doing a lot more video editing. At first they just needed videos for Instagram, and then they needed the whole podcast edited. And then they wanted to do a second podcast and then a third podcast and now we’re up to, I don’t know, eight podcasts. And then all their videos, we call them SEO videos. But I guess the videos were Mindy’s, for example, teaching people how to handle their finances. And it started to grow from there. And it started as a $100 a week job. And well, over the course of building the relationship with you guys, in three years it got up to, yeah, $4,000 a month, basically. And it’s gone up.

Scott:
As everyone I’m sure that is watching this video, I think you’ll edit your own video here most likely, Joel. As with any of the other videos that we do you just do a great job for us and it’s phenomenal and it’s been incredible to see the growth of our YouTube channel and all this other stuff since you’ve become a part of the organization here, so thank you for all you do for us with that. And then I think it’s well-deserved. We’re thrilled to have you helping us out with all this stuff, so thank you.

Joel:
Well, thank you guys for the opportunity. And thank you, Brandon, as well if you’re watching this.

Scott:
And just as a shout out, I had a chance to meet with you six months ago about just getting to know you and hear about some of the work you’ve been doing for us. And I got a chance to observe Joel at work, doing live video edits. It is incredibly impressive. It’s capping at four times speed, there’s all these things moving around. He’s making us look good. It’s just incredible to see you go to work on that kind of stuff. All right. Well, we have plenty of compliments there, Joel does a great job for us. Let’s go back to the Finance Friday part of this, though. How can we best help you? What are your goals today and how can we help you with your finances?

Joel:
Right now I find myself that I have this mattress where I put my money under, and then Mindy is going to hate me for this, but then we took-

Mindy:
No hate.

Joel:
… Going to correct me a lot about this next point. We put, I don’t know, $500 in crypto wishing that it would turn into millions of dollars at some point, which is not there now, something that has had any results at all. And I’m just piling this money up. And I have doubts about how to actually grow outside, working eight hours a day, and building the relationship with… You are my client, BiggerPockets is my client. And my relationship with BiggerPockets is growing but also the opportunity to get more clients and work for more people and put people under me has started to arise recently. Here at BiggerPockets as well you have had needs of finding assistance, getting more people in because the amount of work that we’re doing is increasing, so of course one person cannot handle everything.
Recently I started a partnership which has not yet come to full fruition, but it’s finalized in bearable terms of building… Yeah, this relationship with a partner that he has equipment and he has cash that he could use for hiring people or at least covering indirect expenses for employees or assistants or whatever you call it, subcontracts. And he can cover that. And I’m bringing in to this partnership this client, BiggerPockets, and the opportunity of keep using my reputation on this website. Well, I have very good reputation as a contractor throughout these years, building all this time, having these long-term contracts puts you in a really good position to get new clients.
I mean, this verge of I can now grow and instead of being that guy pushing bottoms like the cat from the meme smashing the virus, I can now have people and build the systems, which is something that I’ve been learning and start having more money and doing less work which is what I feel is going to be the first step towards me leveraging my money to get into a better position. So basically that’s my questions. It’s about building this partnership and how to use this money that is coming in and how to best invest it, maybe?

Scott:
It sounds like the biggest goal is you don’t really have… You’re not saying, “I want to be financially free in five years.” You’re saying, “I’m in a great spot right now, I want to build a business that becomes profitable and begin scaling my operation here. Is that the right way to frame your objective?

Joel:
Absolutely, yeah.

Scott:
Okay, awesome. How would you rate yourself in terms of the skill set of editing video with that? Would you think that you’re one of the best in the world or highly skilled at that? Do you feel you’re able to spot people who are as skilled or close to in skillset to you?

Joel:
I guess I’m capable of knowing if someone is better than me, absolutely, and I could easily spot somebody that does amazing work and I can appreciate a video well-edited. And as a video editor myself, I’d say, I am really fast which has always been my up side. And I have a good turnaround and I work cleanly. But I would not claim at all to be one of the top editors of the world at all. I’d say I’m a pretty skilled video editor but the skills that I find myself that I see that I would need are not something that I’ve trained as much as the shortcuts of Adobe Premiere or something like that. I find myself really lost of how to handle the whole thing and how to actually build a team or take the financial risk of paying them.

Scott:
So perfect. I think the first thing we got to start with is what’s the value proposition of your business? And your value proposition of your business it sounds it’s going to be on time, solid work, very fast, and you’re able to… Are those the two or three most important things are or what would you say you affirm? How would you articulate it in three bullet points?

Joel:
That you have confidence that the job is being handled and there is a responsible person on the other side of the screen. There’s something that I love doing in my day to day job that is making people know that I’m there and it might obnoxious for some people that are really busy or they don’t have time for that. But I think that’s how my relationship built with my previous clients and with you guys is just that I’m there and I exist even if I’m in another country, in another continent, in another time zone, your stuff is being taken care of. But I don’t know if that counts as a value proposition, responsibility, and then, yeah, a fast turnaround.

Scott:
What is a fast turnaround? What does that mean?

Joel:
Having the skill to work fast on video editing and to understand the… In any creative job, you have this back and forth thing, iteration where you send something and they give you back feedback and then you do that feedback on the video. And then the video goes back and just start being punked without video through a lot of time. But I guess after all this time, I guess I’m good at understanding the expectations of the client, and it’s not holding one every time but it can happen that you will feel understood when, at least with me personally, when you’re explaining your video needs and your stuff so I can really build a rapport with my client and go from there.

Mindy:
I will say that I am the perfect person to give you advice on this because I am your client. I need your services because I do not possess your skills and you have amazing skills. You make me look and sound like I know what I’m talking about, so hooray for Joel. What I need is-

Scott:
And me.

Mindy:
And, Scott. What I need from you as a video editor is a fast turnaround, or, even more than a fast turnaround I need an accurate turnaround. If you can’t do it for a week, that’s fine. I can adjust my recording schedule and get you more stuff so that I can be on your schedule for the next week. What I don’t need is somebody who says they can do it tomorrow and then, oh, sorry, you didn’t get to it the next day, the next day, the next day.
Right now, I think it’s globally there are shortages in supply chain and just in general, nobody wants to work and it’s really difficult to get any commitments right now. So having a commitment that you can keep is going to just move you to the top of everybody’s list because you are so awesome. Doing a great job, of course, is the best part but not only do you do a great job, you can do it when you say you’re going to do it. I trust you as the video editor to know that when I’m writing in… Oh, crud, cut that part out. I trust that you’ll just cut out that little bit. You seem to be really intuitive.

Scott:
Somebody says it’s crud.

Mindy:
Joel is like, “No, she does it, I’ve watched her videos.”

Scott:
Well, Joel liked that one.

Mindy:
Sometimes I also say shocks-

Scott:
Yeah, that’s right.

Mindy:
… and fudge.

Joel:
Sometimes we have to believe you, but that’s fine. We all need to be believed sometimes.

Mindy:
The fact that you aren’t on the same continent I am doesn’t matter, you know what you’re doing. I trust that you know what you’re doing. And I’m sure this is what Brandon did when he first started. He’s like, “Hey, can somebody edit a video for me?” “Oh, sure, I can.” “Here’s a sample video, can you edit that?” And then he sends you the video. He sees what you get give back. He watches it. “Oh, that’s good. Let me send you another one.” If he had watched your first video and he was like, “This is terrible. He cut out all the good parts.” He probably wouldn’t have sent you another one to do, so proving yourself over and over again.
And how do you prove yourself to a new client? You do it with testimonials. “Hey, this is Brandon Turner from BiggerPockets.” Anybody can google BiggerPockets they’ll be like, “Oh, that’s a big deal.” Here’s another… I don’t know all the other companies you work for, but having testimonials from people that you’ve done business with, here’s a list of all the videos. Here’s the BiggerPockets, YouTube channel, I did all of those. Or I did most of those. However much you’ve done, having samples is really, really important because I can watch a video and I don’t know how to edit it but I know it’s good. I know it’s not good based on the editing.

Scott:
Yeah. And what I’m trying to do with this line of questioning is, there is the value proposition of your business. And what I’m hearing you say is, “I’m going to acknowledge receipt of an email very quickly. I’m going to give you a clear timetable on when I’m going to get version one back to you, I’m going to reply back to your feedback quickly and iterate and that cycle time is going to be very important in to getting it in and out into production with that. I think that’s something that we really appreciate about you, Joel, in addition to your skill in editing. Then it’s going to be done at a high quality. And if you can articulate those one or two things, that’s what you’re looking for in an employee or someone you’re subcontracting to. And if you can go and find those things and say, “Great, our value proposition, what do you charge per video? What’s a good rate here.

Joel:
If you want a one-minute video edited, there’s a ton of questions to ask you about what graphics go in and how many hours of recording do you have? For when do you need this? Because if you need it for tomorrow I need to work tonight to finish. Even if it’s a one-minute video, people tend to overlook that a lot. And a one minute video… Advertisements for the Super Bowl halftime are 30 seconds and those things can take, I don’t know, weeks to finalize in post production. It really will depend on the level of detail that the project needs and when do you need it.

Scott:
Right now we’re your big client, BiggerPockets. You want to go out and get additional clients and you’ve got a great value proposition and good things to offer with this. With those additional clients, they’re not going to probably pay you by hour, they’re going to probably pay you per job or per video with that. And so with that you’re saying, “Scott and Mindy, my goal is to build a services business in the next couple of years here, a services business that provides the service of video editing for clients, probably similar in many ways to BiggerPockets.” Is that right?

Joel:
Yeah. It is right, and also increasing the relationship with BiggerPockets because now the needs of production that are coming soon and even right now make it so we need more hands. And some of that came through a recommendation from me five months ago and now it’s going to building up. This person that I recommended there we’re really good friends and we sat down one day and talked about it and we realized that we either have to partner it up, or he’s going to become my competition of sorts. And we want to partner it up because it’s going to take us further. Even with BiggerPockets, we want to keep up solving that but, yeah, keep having constant people that can work for different clients and how to shift myself from being the one pushing the keys to the one that’s building the relationship with the clients and bringing them in.

Scott:
The first thing you’d understand in this and we’re trying to build towards is the concept of unit economics. Okay, this is what do I make per job on these types of things? Suppose that you’re saying, “I have a set of videos or a video and the cost that I’m going to charge the client is going to be $250 for that work.” From there, you have to be able to gather the requirements that make sense for that client, and then hire somebody else to perform the actual work of editing the video. And you have to be left with a profit at the end of that job. So this would be a client that is not a BiggerPockets, that has endless amount of work. This would be somebody with a one-off job with that.
And so you say, “Okay, great. I’m going to charge $250 and I then need to have somebody else do that work. And what am I going to pay them? I’m probably going to pay them per hour.” You could theoretically say, “I’m going to pay per job.” But now you’re just doing what your old firm did and you know that you’re going to create an incentive for your team member to leave with that type of stuff. What you want to say is that you have to boil it down to unit economics here and you say, “Okay, great. If I could charge 250 and I can gather all the requirements and then get it produced for 150 by another editor, I make $100 in profit. Now, some of that’s going to be my time in gathering the requirements and sourcing the job and those types of things but there will be a profit between that arbitrage.”
You do that 10 times and there’s $1000 in profit. You do it 100 times there’s $10,000 in profit. But as you move towards 100 times, you have enough work to have somebody full time so you no longer have to pay them per unit of production, you can now pay them per hour as a full-time or part-time employee with this kind of stuff with a guaranteed rate. And that is where you begin to scale the business model, because many people cannot go out there and perform this model on their own because they can’t get enough $250 jobs to make a good living. So a full-time job is a better thing because they don’t have the reputation, for example, that you may have built on this platform or whatever with that.
And so I’m trying to introduce this, hey, you need to understand what your value proposition is. Find somebody who can deliver on that value proposition as a potential subcontractor. Understand the unit economics and start per job, and as quickly as possible, scale that into a situation where you feel comfortable having a full-time employee and there’s enough work where now you can make that jump where, “Okay, I know I’m going to get 50 jobs a month and that’s going to be plenty for one full-time person. And then the next person I’m going to begin finding person number two, and I’m going to also pay them per job on this.”
And that’s a lower risk for your clients in a lot of cases because they don’t have to do the risky work and the hard work of finding a good contractor fit like we did a few years ago with you. You’re just saying, “I’m going to guarantee this value proposition. You’re going to get what I deliver with that. I’m going to oversee it and make sure that the folks in my organization do that. And I’m going to move into that by thinking in terms of unit economics and then as soon as I have enough volume hiring somebody and then having the overflow go to the next person with unit economics, and then hiring them and then bringing the next.” It will never work out that cleanly in real life but that’s a framework from which to think about this. And that would not require you to have a lot of cash or capital, most likely, to do this. That would be my guess.

Joel:
Yeah. I think it makes me nervous to start trusting other people. I guess I’m so used to just doing the thing and getting paid out that there’s a comfort on it. And through all the study that I just told you as well, suddenly the idea of dividing my income and coordinating other people, it just it scares me, basically. I feel it will require a leap of faith, that I will have to invest possibly money into their salary. And I even think about this in what time will I have to… I have to work more to get those clients now while also delivering still to my current client. I’m seeing that I have to do also an investment of time which I’ve become really jealous about it because with all of this that I’ve done. I had the opportunity to grow on my hobbies in my free time a lot. I’ve started to just be confident then to find job of sorts, if that makes sense.

Scott:
Joel, if you came in and said, “My goal is to build wealth and build a couple hundred thousand dollars in net worth or $1 million in net worth and become financially free in the next 10 years,” we might not have been talking about this business model and having to trust us because you save a tremendous amount of money. You’ve got some savings. You can begin investing. According to the approach we talk about on BiggerPockets Money for a lot with index funds or buy a house hack or a home or those types of things, those are great approaches to build wealth.
You told us, “I want to build a business.” You want to build a business, you’re going to have to do this kind of stuff and it’s going to be hard. You’re going to have to trust somebody else to do that work. You’re going to have to coordinate those activities. And the first few times you do it, let’s say the first 10 jobs, if you could have done them yourself by just working a few extra hours and made the entire 250, if you believe my example with that, and instead you’re only going to make 100 on each of those jobs. And so you’re going to be working more than you work right now to train somebody up, at least in the initial stages, and making less for a time. But if you can get the model right then your business may be able to grow.
That is, you’re absolutely right. This is going to take you six months to a year to figure out and get right and tweak. But if you want to build a scalable business you have to apply a model to that effect or something else that will probably involve a similar amount of work to begin getting there. I think that’s exactly the right presentation to have there. You can get rich without doing this, but if you want to build a business, this is one way to… I think you’re not going to be able to have your hobbies and your free time and build a big business at the same time, at least in the early days, most likely.

Mindy:
Well, another point to make is that you don’t have to hire 47 people tomorrow. I think you should take a page from Brandon’s, how Brandon first met you and throw something up on Fiverr. Hey, can somebody edit a video for me? You don’t have to say you’re hiring for somebody, you can just ask if somebody can edit a video for you and see who’s good, see who could be good with a little bit of guidance from you, and see who is just complete garbage and you never want to hire them again.
And you said that you have… Did you say you have $15,000 saved up? Earmark 100 of that and see what you can find. And if you can find one really awesome Joel from 2015, who needs a little bit of guidance or who just needs jobs, then you can start to release your workload. And like Scott was saying, this is going to take some time. You’re going to have to actually give them the raw video, watch the raw video, watch their edit and see how you would have changed things. Oh, my goodness, this is almost exactly what I would have done, it’s probably not going to be the first response you have to the very first video that you hire, but maybe there’s something there.
And like you said, you can tell who’s good and who’s not good and who’s got some potential just because of your skill. And if you can hire somebody for $10 an hour from Venezuela who feels like they’re making a billion dollars a minute because they’re only making $20 a month or whatever, I know that that was in 2015, 2017 when Venezuela was a little less stable. They had rampant inflation if I recall correctly.

Joel:
You’re right, yeah.

Mindy:
That particular time when somebody said I’ll give you… What was it? $20 for a whole video, you’re like, “Really? That’s my whole month salary. Of course, I’m going to do that.” The people that you’re finding that have the skills, that are living in countries that may have a lower cost of living than where you’re at will be so excited at the money that you are giving them. It’s worth the chance to test it out and see if you can find somebody. Maybe you just find one person from that video, but now that person can come in and maybe they can do a raw edit and then you go down and do the final edit. That’ll still save you a lot of time. And I’m talking about this like I know what I’m talking about. I don’t edit videos ever so I have no idea how many times you go through it.

Scott:
Yeah, this is going to be an investment, so one way or another you’re going to have to invest. You make money with your time and any time you’re not spending editing is time that you’re not making money, that’s the nature of a contract role with these kinds of things. And so you’re going to have to invest time outside of that to train somebody else or to observe them, or to review their work, especially in the early days. And that investment may pay off or it may take 3, 4, 5 times before it does pay off with that kind of stuff. But I think that is the entry point to building a business.
The good news is that you have a niche that seems reasonably defendable. You’ve got a good skillset, you’ve got a good reputation on these websites that are the key to attracting business with that. You have some advantages that to me suggest that an experiment here may be worthwhile. Of course you don’t have to invest 15 grand to do this, you only have to invest probably a few hundred or a few thousand and a number of hours of your time.

Joel:
I first thought about that, was ideally finding somebody that would hone the clients for me, that would go and approach this client and get into the websites and actually filter the things. But now speaking to you I think that possibly what I need more is another editor who I can pass down the jobs to, and me building the relationships with the clients and me finding my… I was just being selfish with my time because, yeah, now that I’m doing okay with money I get to all the things about hobbies and free time that are so rewarding and going to sleep and just working a set amount of hours. But I guess if you want something you have to give something back. I have to invest my time which is my most valuable asset, as you are suggesting. So, yeah, that makes a lot of sense.

Scott:
I think that’s exactly the right way to think about it. And you are doing great right now. You’re saving a ton of money with that. I would also heavily encourage you to form an investing strategy because I don’t think you’re going to need a lot of cash to, at least at first, to really move some things here. You may, but you have a good emergency reserve. I’d encourage you to start thinking about how am I going to invest outside of my business in stocks, in real estate, or in other things that are interesting to you with that.
Because if you did not build this business I think you could still build a tremendous amount of wealth over the next five, 10 years by putting together a good investment approach and beginning to put that money to some risk, but with the chance of growing over here with that, like we talk about a lot on BP Money and BiggerPockets generally with that. I’d encourage you to do that as well even though that wasn’t a topic that you came stating as one of the goals here because you’re in perfect position to do that. Everything is going right to begin investing from what I’m seeing here.

Joel:
Well, I’ve thought about buying an investment property. And that’s one of my side plans, I guess, to use as I build a relationship with a bank. And I have this economic track in Spain and in a couple years I will be able to get a loan and get my first home and house-hack it or just put somebody in there that pays the mortgage and some change for me. And now even my rent is cheaper, whatever I rent, and now this home is paying itself. That’s also a plan but that’s not something that really excites me. I would like to talk to you about buying a house, which is something really exciting, to be honest, but I really like what I do so I want to grow that instead of that other plan which also will exist, for sure.

Scott:
Makes sense to me. But, yeah, I think the good or bad news, depending on what you’re thinking there is, I don’t think it’s a financial investment, I think it’s a time investment to grow your current business. And every moment you’re spending doing that is time that you’re not able to actually be generating dollars from an editing standpoint, but that may pay off huge for you over the next five, 10 years if you’re able to crack that code and willing to invest it. I think it will be harder than we’re making it to sound. I think it’ll take a few hundred or maybe a thousand or two hours to really crack the code and build a sustainable business with that. But that could be absolutely well worth it with that. Mindy, what do you think?

Mindy:
I’m seeing his brain as the main asset of the company. If he’s not able to do his editing, there’s not a lot… How do I say this without sounding mean? There’s not a lot else in the company right now. If you can take your brain and shift that to somebody else’s brain so they can do the editing, then you can be focusing on finding more clients, or once somebody can do the editing for you or the bulk of the editing for you, you can focus on finding somebody who can find you more clients. I think there’s a lot of opportunity for delegation and just hiring out sections of your brain to other people so you can focus on different things. And sometimes focusing on different things includes taking time off. And I think… Do you know Dave Messiah?

Joel:
Yeah, I know him.

Mindy:
Yeah. I would talk to Dave because he’s built a… Should we call it a fairly successful business? He’s got a-

Scott:
Fairly successful.

Mindy:
Yeah, he’s got a podcast-editing business himself, so he’s going to be a really good person to chat with about that. Plus he’s super giving, he’s so nice.

Joel:
Yeah. I work with him a lot and we chat a lot and that’s an advice that I would follow 100%.

Scott:
He’s done what you’re trying to do, yeah. Just for those listening, Dave Messiah has been a part of the BiggerPockets family for a long time, I would say over 10 years at this point or close to it. And he started out doing very similar types of work that Joel does for us but in editing our podcast audio with that. And he has built a large contracting business, editing audio for many podcasts at this point. And we remain probably one of his large clients today. And I think he’s been very, very successful. We should probably invite him on the show sometime if he would to share some of that success. But he would be a perfect person to talk to and somebody that you interact with already with that. And absolutely, and I’m sure to some degree, somehow he has articulated what I was trying to articulate in a much more professional and clear-cut way for that process.
But I want to highlight that word, though. Mindy is absolutely right. The primary asset of your business is your brain right now, and you need to translate that from your brain to your process. That’s the word. Is what is your process for editing video? What is your process for responding to clients? What is your process for making sure that those things get right? What is your process eventually for hiring? What is your process for getting business? That kind of stuff. You don’t have any of those processes documented, I bet, but it’s because of those processes that you do, is why we enjoy working with you with that. My advice would be process. What is it that you’re doing that… I’m responding. I’m on my computer lots of times, especially during business hours for the client.
And maybe I’m not even always working during those because it’s not part of my business day, but I’m there. I’m going to respond quickly with these types of things and turn these things around when there is an emergency request or whatever with that. I’m going to have, this is how I edit the video. I do it with this software, I do it at this pace. I do it in this style. I informed the client that they need to have a stop sign when we say shucks inappropriately in the middle of the video or a hand wave in front of the camera to make sure that’s a chance to stop and I know I can visually see the edit marks. All of those are your process that you’ve trained us on to a large extent over time with this. And putting that into a documented fashion and training somebody else on it, that translates the asset from your brain to your process, which is something that can scale.

Joel:
That’s fantastic. That’s really good advice. Yeah. I will 100% of the homework on this. I guess you just need to be brave as well to just take the leap. Sometimes you have to give it a shot, I guess.

Scott:
Well, spoiler alert. We plan to do a lot more video here at BiggerPockets, so I think we would love to the Joel process to continue-

Joel:
Yeah, we need more work.

Scott:
… at scale.

Joel:
Jokes aside, that’s part of the motivation. That’s how I came to know my partner. He’s best friend of my girlfriend. And at some point some months ago we needed some more people and I recommended him. And rather than subcontracting him and taking the step at the time I was thinking as BiggerPockets as my employer rather than my client. And that’s what I was aspiring that. And now that I see, actually, I was wrong in the main way was that I was shortcutting myself by doing that. I should have at that time done that, and thankfully I recommended someone that I know for a long time that we have tremendous trust. And then he came up to me as well and said, “Well, we should plan it up before we start competing, and instead of competing we can do so much more together.” And, wow, that’s how this whole idea started for me now. And… Yeah.

Scott:
One book recommendation I have for you is called The E-Myth Revisited, or The E-Myth. You can read the original but now it’s been updated with The E-Myth Revisited. It’s by Michael Gerber. And it’s been quoted by a number of guests over the years in the BiggerPockets Money and BiggerPockets Real Estate podcasts. And I think that would be a really helpful read to reinforce some of the things that we just talked about with this. It sounds like this was helpful for you, and this is what you were hoping… We were able to answer some of your questions today?

Joel:
Absolutely, Scott. Yeah, absolutely.

Scott:
Awesome. Well, Mindy, should we go ahead and wrap up here?

Mindy:
This was a lot of fun, Joel. I’m super excited that you were able to join us today because I am excited for your prospects. I think that it’s going to take a little bit of time to get going but once you get going it’s just going to snowball.

Scott:
We haven’t had anybody on the show who went from earning $20 a month to 4000 a month that we heard today, plus, and now opportunity to grow a business with this. This is our most… I think the biggest, most dramatic change in circumstance that we’ve ever had on the BiggerPockets Money Podcast. It’s a privilege to have you on the show and it’s been a privilege to work with you, Joel. Thank you for all you do and thank you for sharing.

Joel:
Wow, guys, I’m really flattered and I will not let it get to my head, I promise you that. I feel like I’m just beginning so I really thank you for your encouragement and for your trust and for all this opportunity and I’m sure this is going to be a turning point as well. So thank you a lot.

Mindy:
I think we’re right here on your hockey-stick growth. I think you’re about to go nuts, very crazy with the growth. Is that a phrase?

Joel:
Absolutely right.

Mindy:
Is that a phrase hockey-stick growth? Have you heard that before?

Joel:
There’s not a lot of hockey playing in the car at the end, I’m in a tropical country. I totally understand your point.

Mindy:
That’s fair.

Scott:
That’s awesome.

Mindy:
Okay. Well, Joel, I will talk to you in a few minutes when I send you more video, raw video to edit and believe out.

Joel:
You got it, Mindy. Count on it.

Mindy:
Okay. Thank you, Joel, we’ll talk to you soon. Okay, that was Joel, all the way from Spain. Thank you, Joel, for joining us today. Scott, what did you think of Joel’s story?

Scott:
After we were done recording we chatted for a few minutes and I’ll share this here. I think it reminds me of episode 21 in a strange way. The stories are not the same, the circumstances are different, but the magnitude of the change that Joel experienced in his journey going from $20 a month to 4,500 a month in a span of 5, 6, 7 years and completely over overhauling his lifestyle and his financial position. That magnitude of change reminds me of Tony Dayton back from episode 21, who was around 400, 450 pounds and had to weigh himself on the scale at Walmart in order to do that and had 25,000 in credit card debt and was able to knock off 260 pounds and rebuild a financial position of half a million, at least at that time.
I bet you he’s approaching a million by the time we’re chatting now, although we’ll have to catch up with him at some point. But that magnitude of change is pretty rare that we’ve heard on the show and it’s just unbelievable to a large extent and I’m just excited for what comes next for Joel, and obviously grateful for the great job he does for us.

Mindy:
I am super excited for what he’s doing. I think that he has a ton of potential. I think his first step is to hire somebody to take a lot of his mental bandwidth out of his head so he could focus on other things and growing those sections of his business to the point that he can then hire somebody to take that off his plate too. But I think he’s got a huge potential for growth. I mean, I don’t know if you know this, Scott, but there’s this little website called YouTube. That’s Y-O-U-T-U-B-E.com. And they host a couple of videos every once in a while, so what’s your take-

Scott:
There’s search bar there where you can type in BiggerPockets or Bigger-

Mindy:
Money.

Scott:
… Pockets Money and find some great content there.

Mindy:
How much content is uploaded? 52 years worth of content is uploaded every minute or something. I just made that up, I don’t know what the statistic is but it’s something enormous like that, every minute or every second that there’s stuff being uploaded. It’s more than you could ever, ever, ever watch. So video is going nowhere but up and so is Joel’s company. Okay, Scott, should we get out of here?

Scott:
Let’s do it.

Mindy:
From episode 238 of the BiggerPockets Money Podcast, he is Scott Trench and I am Mindy Jensen saying, carry on the slog, dog.