From Debt to Financial Freedom While Active Duty Military with Stuart Grazier

Welcome to the BiggerPockets Money podcast show number 33 where we interview Stuart Grazier with the Military Investor Network.

Stuart: It kills me when I see like you know this young like 21 year old that just got into the Navy, you know got his first paycheck and he goes out and buys like a brand new like Escalade. It just kills me. Getting that top of education early on so you know the guys that work for me and work with me like it’s a lot of fun.

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Scott: How’s it going everybody. I’m Scott Trench. I’m here with my co-host Ms. Mindy Jensen. How you doing today Mindy?

Mindy: Scott I’m doing fantastic. I have been traveling pretty extensively over the past month and I’m now home for extended period of time and I’m really excited to be home. You know, it’s nice to travel, but it’s really nice to be home. I feel like I haven’t seen you in forever. How are you doing?

Scott: I’m doing great. I just got a haircut and glasses so, I’m not wearing them right now. I don’t need them for like this type of thing, but I now have glasses that I need to go and wear whatever I’m driving or anything like that.

Mindy: Oh my goodness! Wow! A lot has changed!

Scott: I was in hardcore denial when I was going through that vision test. I was like, “I can see it I just… I can’t.”

Mindy: I can’t. No, it’s tough. I’ve had glasses since I was five.

Scott: Yes.

Mindy: Yes. It’s getting over that hump. I now need new glasses. I need stronger glasses because my arms aren’t long enough to hold things out far enough so that I can read them. Instead of getting arm lengthening surgery, I’m just going to go get stronger glasses.

Scott: I see. Sorry that was terrible.

Mindy: That was awful.

Scott: Moving past that. Today, we’ve got Stuart Grazier on the show and what a fantastic episode. What a great guy. What a quality set of all-around decisions that you know he used his opportunities that the military, kept his expenses low house hacked, and just built a really kind of cool investment portfolio over the years that is going to allow him to have an unbelievable retirement in the next three or four years.

Mindy: Right, but what is even more interesting is that he started out in a position of debt. He joined with the Navy and immediately went out and bought a $30,000 car and then found himself in $10,000 worth of credit card debt and then discovered this concept where you don’t maybe have to work for the rest of your life and you can you know get yourself out of debt and live a more comfortable life. He doesn’t start out from a huge position of debt, but he starts out from a fairly significant position of debt compared to his initial income.

Scott: Yes. I think this episode really highlights the advantages of using a simple approach like Dave Ramsey’s right. Specifically Dave Ramsey’s Financial Peace University to get yourself out of debt in a strong position where you have a high savings rate and the ability to begin making other types of investments.

Then Stu has a really good example of how he actually shifts a little bit from that Dave Ramsey thinking and begins exploring his hand in other types of investments using leverage and that kind of stuff and why he had good rationale for doing that. I think this is a really good look at it. I think there’s a lot of merit in doing one of these simple all-out approaches like Dave Ramsey to get as you say from negative to zero net-worth and then reframing that thinking at that point to maybe lurking for a way to build net-worth more efficiently through other types of investment approaches.

Mindy: Right, Stu first came into this whole financial epiphany through the Financial Peace University. We do cover that a little bit more detail at the end of the show. To give you an idea of what we’re talking about it’s a really, really great program from Dave Ramsey and it really is for anybody who just doesn’t know what they’re doing with their money which is a lot of people because it’s not taught anywhere.

Scott: Yes absolutely. Well should we bring Stu in?

Mindy: We should, but first we should hear from today’s sponsor.

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Scott: Stu welcome to the BiggerPockets Money podcast. How’s it going today?

Stuart: I’m doing good man thank you for having me I feel humbled and blessed to be here. This is awesome.

Scott: Awesome.

Mindy: Thanks for coming on!

Stuart: Yes.

Scott: Yes, what’s going on? Let’s jump right into it and I start from the beginning. Where do you kind of consider your journey with money to have begun?

Stuart: Yes, so I think the first kind of intro to you know financial independence and really kind of taking a hard look at my money and finances was I went on a deployment to Iraq so I’m active duty Navy, active duty military and I went on a long deployment to Iraq in 2008 and 2009 so I spent 10 months overseas there. There was an Army Chaplain on the base in Iraq and he had offered for us to take the class to Dave Ramsey’s Financial Peace University. It was a 13 week course and we would meet at night for 13 weeks. It’s once a week and we would go over the lessons. That really just kind of opened my mind and changed my mindset to you know financial independence, budgeting and kind of setting yourself up for financial independence.

Scott: Awesome, so what was your kind of position going into that? Were you a good saver already what was kind of your background with money going into that course?

Stuart: Yes, not really. You know, I was pretty young and graduated college came right into the Navy with a pretty decent paycheck and was living in San Diego and just spending money with no plan whatsoever. I just bought a brand new truck that was you know a $30,000 truck. I had quite a bit of credit card debt. It was probably about $10,000 of credit card debt. I really didn’t have a plan going in. Taking that class really kind of opened my mind up and the idea of becoming debt-free and budgeting and looking at my finances was kind of a new concept to me.

Scott: Awesome, so what actions… After you took this course, what actions did you take? What kind of changed about your relationship with money following that?

Stuart: Yes, I mean the biggest one was was trying to come debt-free as fast as possible. Luckily, I was afforded you know quite a bit of extra income coming in while I was deployed you know being an Iraq you get you know tax-free hazardous duty pay. It bumps up your income quite a bit when you’re deployed like that. I was just taking all of that money and trying to knock out all my debt as fast as possible.

I ended up on that deployment, basically becoming debt-free and we paid off my entire truck and it was a brand-new truck we’re literally at prod it like by two months before I went on deployment. I’m pay that off. Paid off all my credit card debt and then came back from that deployment and really started. We were newly married, I just got married to my wife before I left as well. Got to sit down with her and really talk through our finances and start coming up with the plan of you know monthly budget meetings and really taking a look at how much income we have what our expenses are and really kind of setting a goal for us.

Mindy: Okay, so I have a question about this. There are some people who discover financial independence and it you know turns on the light bulb. When they talk to their spouse, their spouse may not be as receptive or as excited about this. What did your wife feel when you first talked to her about this and when did you start talking to her about this? Was it like as soon as you took Financial Peace University? Was it like after you ended it? Like did you wait till you got back?

Stuart: No, yes. We weren’t able to talk a ton while I was on deployment, but I’d be able to call her every now and then kind of fill her in with what we had going on and what I was learning. We talked about a little bit, but we really didn’t sit down as a couple until I got back and really took a look at our finances and created that budget. She was totally on-board. The course talks a lot about you know, you got spenders and savers, you got people that are the nerd of the family and I’m definitely the nerd of the family like my Excel spreadsheets and I got graphs and pie charts and all kinds of different stuff.

She’s a spender, but she’s thrifty as well so they called her the free spirit you know in the class. It was good to sit down with her and really set long-term goals and it clicked for her too and you know she jumped on-board. It was really good.

Scott: You came in with this kind of more all-out aggressive approach while you’re on deployment and then brought that home with you. Sounds like…

Stuart: Yes.

Scott: What was that conversation like and what did your kind of goals financially become once you sat down and talked about them?

Stuart: Yes, so like I said I came back and we were pretty much debt-free at the time. Once we became debt-free, we started talking about goals of creating more income for ourselves and maintaining that budget trying to save as much as possible to put that into long-term investments. Dave Ramsey has this opportunity where you can kind of meet with financial planners locally wherever you are. We ended up setting an appointment to meet with a local financial advisor in San Diego. We started setting up you know the Roth IRAs for both of us. We did some mutual fund investing, doing kind of just the standard mutual fund. What he recommends, putting in to diversify putting in to like five different types of mutual funds.

We started doing that stuff right when I got back and we set you know long-term goals of where we want to be five years, ten years and even when I decided to get out of the Navy in a couple years.

Scott: Also can you walk us through that mutual fund strategy. What’s the thought process behind that? Here on BiggerPockets Money, we’ve had a lot of guests talk about just throw it all into one index fund basically. What’s…

Stuart: Yes.

Scott: What’s the strategy behind this?

Stuart: Yes, so he suggests diversify and so you have some money, you kind of split up. I think it’s four different ways. You have like Small Cap Mutual Funds, Large Cap International and I’m blanking on the other one right now, but basically it’s just kind of diversifying between four different styles and types of mutual funds to where you’re not you know all into one pot of a mutual fund. If you know one goes up another one might go down you’re still kind of diversify there.

Scott: All right these actively managed or passive funds?

Stuart: Active, yes. Most of them were active.

Scott: Got you.

Stuart: Yes.

Mindy: What year did you start investing in the stock market?

Stuart: It was as right when I got back from the deployment, so it was probably the end of 2009.

Mindy: Okay and you.. Are you still in the mutual funds in the stock market?

Stuart: A few of them. Some of them, we just kept our money in. Once also I got back I’ve always been interested in real estate, and so I started learning more about that. We had still some money saved up from the deployment and I went home on leave to visit family in Dallas-Fort Worth which is where I’m from. I went to a local meet-up, a Real Estate Investor meet-up in Dallas and you know started networking meeting with people. I ran into a guy there and we kind of hit it off and he had been flipping houses local there in Dallas and he was looking for private lenders.

That’s kind of where I learned how to become a private lender and learn kind of the mortgage note business. I ended up doing a first deal with them. We had about $25,000 saved up. I did my first private lending deal with him and lent him $25,000 for a flip. That kind of just started down the road of you know doing more real estate deals and being private lender.

Mindy: Okay, so for people who aren’t familiar with this, what is a private lender?

Stuart: Yes, so you know this guy was flipping houses and he needed money to do the flips. Instead of you know going to a bank and trying to get like a traditional loan which most banks probably won’t lend to you on a house that you know is in shambles you know it needs a lot of work and so they reached out to guys like me who has some extra money and they draw up a contract. In this case they were first trust deeds where you know have a first lien position so if you have collateral on the house and they use your money to do the flip and they offer you a specific return on your money.

Scott: What kind of return are you looking at as a private lender here?

Stuart: On those deals, it was around 12% interest. Interest only on my money.

Scott: Awesome. Yes, so there’s opportunity for a lot higher returns there, but then of course you’re the lender so if they default then your collateral is you’re going to have to foreclose on this property and complete the deal yourself right?

Stuart: Exactly.

Scott: I take it that this deal went well and you didn’t need to…

Stuart: It did.

Scott: Go to this process.

Stuart: Yes it did and I continued to do these type of deals with him for the next couple of years. As you increased cash it kind of snowballs and you know you start with $25,000 and then it becomes 30 and then it becomes 50 and then you know at $100,000 lending money at 12% and I found it just as a great return on our money. Anytime we would try to minimize our expenses as we’re doing in this budgeting every month and trying to increase our savings rate. All that money would go into investing and doing these private lending deals.

Mindy: How much money did you make on that first deal? You gave this guy $25,000 for a first position lien on his house, did he have another loan as well or did he buy a house for $25,000?

Stuart: Yes, he bought a house for $25,000. He’s in Dallas Texas and you know 2010 so it was still pretty cheap to buy there.

Mindy: All of my money was tied up in 2010 and I’m so sad that I didn’t get to take advantage of some of these things.

Stuart: Yes.

Mindy: You know, I got other things instead.

Stuart: Yes.

Scott: You get home from your deployment of ten months and you’re set free and then you begin accumulating money at what seems to be a fairly rapid rate right? That was in 09… 08 or 09 was your deployment and then in 2010, you’re lending $25,000 through a private lender. This does sounds like it’s after you’ve maxed out your Roth IRA and begun investing these other mutual funds.

Stuart: Yes.

Scott: What was your savings rate like and how are you generating the income to sustain that savings rate?

Stuart: Yes so before I left on deployment, I had bought a house in San Diego in 2005 with a good friend of mine. We basically split it 50/50 buying the house. We had roommates that were renting out the other rooms. That really helped us with our mortgage payment every month. The coin phrase house hacking which is what we were doing. Basically, we had roommates rented out two of the rooms and we actually had another friend of ours who was living in our basement/garage and basically had a mattress on the floor and was renting out our garage space as well.

Then I got married and my wife moved in with us like right before I left on the deployment. She ended up staying in the house and continued to have our roommates live there and help her manage the house and do chores and pay rent which was basically covering our mortgage for us. Then I got back from my deployment and we just decided to keep our roommates.

That was interesting you know being newly married and living in a house with three other roommates was challenging at times and we did that for three years while we lived in San Diego, but it helped us so much increase our savings rate because they were basically paying our mortgage for us in our house.

Scott: That’s awesome. That keeps your expenses extremely low. Then were you and your wife both working as well when you got back from deployment?

Stuart: Yes, we were. Obviously, I had my Navy job and my wife is a graphic designer. She was working full-time at a graphic design firm there in San Diego. Yes, we both had full incomes and you know basically all of her paycheck was going into savings for investing and my paycheck from the Navy was covering all of our living expenses.

Mindy: Okay, so I think we’ve glossed over this, you were in San Diego at the time right?

Scott: Right correct.

Mindy: How much was your mortgage?

Stuart: It was about $3,000 a month.

Mindy: Okay.

Stuart: We bought a really expensive house and…

Mindy: Well at San Diego?

Stuart: A young, yes. A young dumb like 25 year old probably looking back on it wasn’t the smartest move, but house hacking and doing all these extra things like really helped us. Our renters were covering our mortgage of $3,000 a month.

Mindy: Okay so you basically had no housing expense?

Stuart: Correct.

Mindy: In a very expensive city, so this is not insignificant.

Stuart: Yes.

Mindy: I just want to say good job. I mean if you, so if you had not bought that house then you would have been paying rent, you would have had significantly higher expenses so while you may think this was a bad choice it was actually a pretty good choice. When did you buy that house? What year was that?

Stuart: We bought it in 2005.

Mindy: Oh.

Stuart: Yes.

Mindy: Okay. Oh, I see that okay yes we…

Stuart: Yes.

Mindy: We take notes in this document and I see 2005. Okay so you paid like a lot.

Stuart: We did, we pretty much bought it like the top of the market in San Diego so good lesson learned there for sure.

Scott: Even still you know, I don’t know well I’m sure we’ll get the story in a minute here but without knowing the information if you hold that house through today you’re doing extremely well and your downside is okay you’re underwater at the bottom of the market but you still are getting your mortgage your entire housing expense covered in 2008, 2009, 2010 at the bottom of this.

Mindy: When people are losing their houses.

Scott: Yes I can’t have been that big at that big of a problem in it’s because you made the smart decision to go through the challenge of having a couple roommates in this first few years of your marriage.

Mindy: Also, I want to say you know you it’s real easy to beat yourself up now. “Oh I bought it at the top of the market.” Well, but did you know the market was going to crash because I also bought right at the top of the market.

Stuart: Yes.

Mindy: Literally wrote the check and the next day the housing market like we went through the floor so.

Stuart: Yes.

Mindy: My house that was going to be you know $300,000 and my pocket was only a $100,000 in my pocket, but that’s still fortunate because there were people who lost a ton of money.

Stuart: Right.

Mindy: You don’t know when the markets going to crash.

Stuart: Right.

Mindy: You just buy it for the right price and I mean, you did a great job. That was way better choice than just renting.

Stuart: I mean yes it definitely helped. Like we said, like the house hacking and living below our means it helped tremendously boost our savings rate.

Scott: All right, so you’re in this great position when you come back from deployment where you’re saving tons of money you’re maxing out your Roth and investing it with this kind of balanced approach and mutual funds, you have excess savings that you’re meaning to deploy in private debt, why did you go into this investing approach rather than paying down your mortgage? My understanding is that Dave Ramsey talks about paying down your mortgage is one of your next steps. What was your kind of mentality there?

Stuart: Yes, he does and that’s one of the challenges with being in the military is you’re probably going to move in three years or so. San Diego is a big navy hub so I could probably try to stay there, but more than likely I was planning on moving. Paying off a house that I’m might not live in for the rest of my life didn’t make sense you know I would have much rather taken the extra money and put it towards investing instead of trying to pay off the debt. Who knows how long we were going to keep that house at the time. It just way more sense to start investing with it instead.

Scott: Okay, yes. That makes sense. You know, it’s not really you’re not considering this your permanent forever home so therefore…

Stuart: Correct.

Scott: Not going to pay it off immediately. You already had it prior to learning about Financial Peace University and all that.

Stuart: Right, yes. Absolutely. I mean I knew for a fact I was going to move in like probably three or four more times in my Navy career so this was definitely not going to be my permanent home for the rest of my life.

Scott: Okay, well let’s pick up the story then back from where we were where you just made this first private investment. What happens next?

Stuart: Yes, so it continued to go down that road of investing with the individual and learning more about the mortgage note business, learning about private lending. It was all going well until the guy I was investing with probably got a little too big for his britches and started you know kind of going downhill and making too many promises and he started making some like fake mortgage notes, some fake paper. I got kind of caught up in it and he had quite a few other investors that were doing the same thing that I was doing and you know getting sued for a lot of money and he ended up going to jail for doing all the fake paperwork.

I ended up losing quite a bit of money on overall, but what it did for me was it; one, it forced me to really learn the business. I ended up trying to find some people who knew it. I reached out to some local real estate attorney and asked him for advice and he kind of brought me under his wing and showed me how to do mortgage and not investing correctly. Kind of started introducing me to his network and over time I started saving up again and then learned how to invest correctly and started buying long-term mortgage notes at a safer rate. It’s probably a lower interest, it was a lower interest rate, but they were like long-term like 30-year mortgage notes through you know owner financing deals where I became the bank for long term. I started buying those.

Scott: You lose a $130,000 to this. Did you make that money prior to this or did that wipe out all the gains you would experience prior to going to that loss?

Stuart: Yes, that pretty much wiped out all the gains that I had because basically I was kind of rolling my money over and over again doing more deals. Ended up losing all of those gains once he started doing some fraudulent stuff.

Scott: Okay and then what did you… I mean maybe we can go into this for a couple minutes here. What’s the correct way to kind of do this? What did you learn from that attorney about how to kind of optimize your business a little better?

Stuart: Yes, I mean the biggest thing was just the paperwork involved. He was basically you know taking a first trust deed paperwork, sign-in it and you know scan it and send it to me in an email and calling it good. You know the real way is to go through a title company, make sure it gets recorded at the county courthouse using the proper correct ways of recording the deed, recording the first liens to where like I actually have collateral. It really was just all like fake paperwork that he was doing so you know that was the biggest point for me.

Scott: Okay, so you’re saying basically that this guy was like giving you paperwork and went well for a period of years, but it didn’t have the T’s crossed and the I’s dotted and therefore when it came time and he defaulted you weren’t able to foreclose and get your money back and so you lost more of your investment than you would have…

Stuart: Correct.

Scott: Without having that correct.

Stuart: Yes, correct. Yes, none of the paperwork he was actually recording and so I had no true real collateral to go to the you know and foreclose on the property and take over the property.

Scott: Okay, so you change your strategy as well so in addition to getting better collateralized with by making sure that the liens are recorded and you’re able to go after these properties and get your money back, you also seem to change strategies from short to long term investing at this point in time as well. What facilitated that shift in mindset as well?

Stuart: Yes. I think just I liked the passivity of the long-term investment. The shorter deals although still very passive it required more work, it required more communication, more due diligence and I really like the idea of just investing for long-term passive income to where you’re basically just receiving a paycheck you know every single month for you know 30 years if it goes that long. Being an active duty military guy, having a full-time job as I’m gaining rank I’m having more responsibilities and it just made more sense to just do the long-term passive income in the long-term mortgage notes.

Scott: Okay, so let’s walk through your first long-term mortgage that you get. You see you say I’m assuming you save up some cash or have some cash just based from your frugal lifestyle and what you’ve been doing. Are you still living in San Diego?

Stuart: No, we ended up moving to Fort Worth, Texas which was our next duty station. It was perfect because that’s where most of the mortgage note investing that was taking place was there in Dallas-Fort Worth.

Scott: Okay so was your first mortgage in Dallas-Fort Worth to another to local…

Stuart: It was, yes.

Mindy: How did you connect with this person? Did you know them or was it just I’m giving out mortgages?

Stuart: It was through the real estate attorney that I initially reached out to try to figure out what I was going to do with the fraudulent investor. He coincidentally was doing mortgage notes himself and had a large network of investors in the market. He actually was the first one that sold me a mortgage note that he had on his books. Then from there he introduced me to the third party servicing company that services all the mortgages and then they introduced me to another investor who was creating the mortgages through owner financed deals. It was just kind of a big circle of networking to get me to where I am today.

Scott: Okay so you bought a mortgage from your attorney. How much was the mortgage and what was the interest rate on?

Stuart: Yes so the first one was actually I bought it for $5,000. They had a principal of about $40,000 and the interest rate was about 9% interest. I got like a huge discount on the mortgage. He had held on to it for quite a long time and he was ready to move on and do some more deals so he gave me like a huge discount on the first mortgage note. I mean it was a great return.

Mindy: Was that a performing note? Performing means that they’re currently active and paying on the note every month they’re not in default.

Stuart: It was. Yes, these are all performing notes.

Scott: For five grand, you bought a mortgage that had a $40,000 balance…

Mindy: With 9% interest.

Stuart: Correct.

Scott: Paying 9% a year.

Stuart: Correct.

Mindy: You won’t going to sell that?

Scott: From your attorney.

Stuart: It’s sold, yes.

Scott? What was the hourly rate?

Stuart: Yes, it was a fantastic deal and that’s why I loved getting into the business. Fortunately for me, the owner of the house that had the mortgage sold it about a year later and so it cashed me out. You know I got 35,000 in cash to go do it again and buy my mortgage notes.

Mindy: Well, okay. I’ve not done any long-term mortgage notes, but now I’ve got to go check that.

Scott: Yes that’s amazing. You go on and you make 30 grand in a year plus interest you know sell this thing for a huge gain and then go and repeat this. What were the next couple of years like from there?

Stuart: Yes so they introduced me to another investor there in Dallas. He was the one that was actually creating the mortgage notes so they would go and find a house that needed a lot of work; buy it, rehab it and then they would sell the house after it’s fixed-up through owner financing. They would sell you know creating a mortgage note and then they would sell off that mortgage note to an investor like me who just wanted to buy the paper and become the bank.

I started learning that business and where I could buy the first and the second position notes and he would give me a discount because I would buy the package that the first day in the second position. He would normally give me about a 15% discount on the package of first and second position notes. You know I would now just hold onto those. Then another creative strategy from that would be selling off the first position note at the full balance because I got that discount on the package I would hold on to the second position note and because I got the major discount it would be like very minimal amount of cash into the second position lien which would boost up the total yield up into like the high teens and low 20s on a second position mortgage note.

Scott: I mean this is just a mind-blowing like new way to approach like just note investing it. I think when investors think of note investing they think you got to have hundreds of thousands of dollars and it’s this really sophisticated, difficult to break into market. Here you are talking about buying notes you make a connection through an attorney, I assume you’re good customer and then all the sudden you can buy things first a little bit of money and then you can arbitrage them.

You know sell them to somebody else that’s got a bigger balance sheet or something and keep the best ones or keep a good portion of that for yourself.

Stuart: Yes I mean it really is really creative and an awesome strategy to get some high yields on your money. What I love about is how passive it is. Again as an active duty guy just basically make one wire transfer and then you know after you do your due diligence of course then you’re done. I mean it goes to a third party servicing company and you basically just get an ACH wire transfer into your account every single month.

Scott: Awesome.

Mindy: Okay so let’s transition to the next phase. You were in the mortgage business. Are you still in the mortgage business? Do you still make these notes or buy these notes?

Stuart: Yes every now and then. What I have learned through the business is I was doing all of these in an LOC and what I’ve learned after kind of building up the portfolio mortgage notes was there’s not a ton of tax advantages to just holding the paper. You can’t really depreciate a mortgage note, you can’t write off maintenance expenses so what I’ve kind of found is at the end of the year come tax season all it does is it just boosts up your total income and increases your tax rate. We were starting to get pretty decent-sized tax bills at the end of the year.

I’ll continue to do them, but I’m going to do them through a self-directed IRA now. We opened up a self-directed IRA and we’ll now be buying mortgage notes through the self-directed IRA. Then all the income that is still producing what we’ve done is built up our cash and we’ve started to buy rental properties to where hopefully that over time if we get enough rental properties it will offset the income from the mortgage notes.

Mindy: Okay and how many doors do you have in your rental property portfolio?

Stuart: Just last year, we bought four rental properties in Birmingham, Alabama and that’s all we have right now.

Scott: Are you leveraging with these properties or you buying them in cash?

Stuart: We are. Yes so we’ve got conventional loans on four properties so 20% down on each of them and you know 30-year financing at about 5 1/2% interest.

Scott: I want to point out once again that you have a break with the Dave Ramsey approach here right where you got like you started so what kind of facilitated that mental change?

Stuart: Yes, so continuing to learn and learning about the arbitrage and how leverage can boost up your increase in ROI. I still love Dave Ramsey and his philosophy and you know getting to become debt-free, but then at some point you got to break free of that and learn how to invest correctly. Paying cash for houses and not using the advantage of leverage is just going to decrease your ROI. I kind of made that mind-shift change over the last like three or four years. You know it definitely allows you to increase your return on investment when you’re using leverage.

Mindy: Are you comfortable with the amount of leverage that you have on these properties? I think some people get a little ahead of themselves and just get sucked into it and they’re super leveraged and then all of a sudden they freak out, “Oh my goodness. I can’t sleep. I’m so in debt.”

Stuart: Yes, absolutely and that’s kind of a rule that my wife and I have kind of had been sticking to is we don’t want to over leverage ourselves to where we’re millions of dollars in debt. We know for a fact that you know we still have a decent sized portfolio of the mortgage notes. You know God forbid something happened to where we had to pay off one of the loans. We could sell a mortgage you know pretty quickly and be able to pay it off.

Our mortgage note portfolio easily covers the leverage that we have and we don’t want to ever really get way higher than that.

Mindy: Okay. No, that’s a valid point. I love Dave Ramsey, but I don’t agree with the whole pay cash for everything because I can’t save up $300,000 to buy a house. I could just get a mortgage instead.

Stuart: Right. Yes, 100% agree.

Scott: One thing that’s interesting about your story here is that most in my experience or the people I’ve come across on through BiggerPockets a lot of folks will build their wealth through rental properties. Then transition that you know in through a large usually self-directed IRA, usually they’ll contribute to a 401K or something like that while they’re building their rental part for the portfolio. Then they’ll begin investing in notes.

Stuart: Yes.

Scott: The advantage of that of course is that the like you just said it a note income all of that interest is taxable so it’s just an increase in the highest tax rate kind of income that you can generate outside of W2 basically. If you put it through a 401k or other self-tax advantaged, tax deferred retirement account you can avoid those income tax as well it’s growing, but you did it the complete opposite way and put the note portfolio and are now transitioning from a position of a rather strong financial position into real estate invested.

Stuart: Yes, I did solely backwards but I mean it’s worked out so far so I can’t complain too much.

Scott: Well the reason I point that out is do you recommend that as an approach to other people or do you think that you went about it backwards and would recommend the opposite approach to folks just starting out?

Stuart: Yes, I probably went around it the opposite way. If I would do it all over again I would probably buy rental properties first and build up that and then transition you know, turn my Roth IRA into a self-directed IRA and invest in paper mortgage assets, do private lending all in my Roth IRA or self-directed Roth IRA. If I was going to do it over again ten years ago, I would buy rental properties first.

Scott: Okay well it seems like it worked out either way for you. It seems like the moral story is self-education and you know…

Stuart: Yes.

Scott: Massively pursuing this at networking and taking advantage of opportunities in front of you can work in any field even if it’s not the most tax advantaged path forward.

Stuart: Right. Yes and that’s what it’s all about. It’s just learning, taking action, learning from your mistakes if you have to change your strategy and continue to just pursue.

Mindy: Okay so we talked about you being in the Navy at the beginning of this story. Are you still in the Navy or have you transitioned out of that?

Stuart: Yes, I’m still in the Navy active duty. I’m in 16 years in the Navy so my plan is to go to 20 years to where I can get a full retirement and a pension for the rest of my life and retire at 20 years.

Mindy: Okay so you did all of this while being active duty military?

Stuart: Yes, yes. I stay busy.

Mindy: Okay.

Stuart: I stay busy.

Mindy: Well yes, but I want to point out that you did all of this while being active duty military that’s really impressive and that’s really something that I want all those active duty military people to hear is that you don’t have to just sit there and be in the military, you can do other things.

Stuart: Absolutely, yes.

Mindy: You can bring in more money. I mean how much money are you bringing in? Did you say that your wife is now no longer working?

Stuart: Correct. Yes, she quit her job and we now have two kids and so she is a full-time stay-at-home mom. Our investment income has completely replaced her income that she was making as a graphic designer, so yes it’s awesome. You can definitely do this stuff on the side.

Scott: They still have all their army buddies or navy buddies living in the house with that right. You still have all those roommates.

Stuart: Well, we sold our house in San Diego you know and bring up the house hacking idea to my wife now and you know she’s probably not so keen on mom sharing the house with some roommates with two little kiddos running around the house, but it was a good experience when we did it.

Scott: No. I mean, it sounds like what you did is you took advantage of all these opportunities. Kept her expenses really low, saved up at a huge rate, didn’t take on any bad debt and are now reaping the rewards of those decisions which you know maybe would have been slightly less than optimal for those first three or four years now with the ability to kind of have your way stay home and take care of the kids and not have to work and you’re going to retire in just a few years. I mean, that’s great.

Mindy: He’s going to retire. Did you hear that he’s going to retire in a few years with a full pension?

Scott: Full pension, yes.

Stuart: Yes.

Mindy: How active is your investing right now? Like how much of your day does it take to manage your four properties and in Birmingham and I’m sorry. Is it four properties or four doors?

Stuart: Four single-family homes.

Mindy: Okay.

Stuart: That’s four properties.

Mindy: It’s both.

Stuart: Correct.

Mindy: How much time out of your day are you spending doing that management and managing your mortgage documents and your stock in portfolio and all of that?

Stuart: Yes, very little. I mean the properties in Birmingham, Alabama have property management in place and every now and then I’ll get an email from them that says you know, “Hey, we had a leaky faucet and we sent a plumber in and please send $30 to pay the plumber,” but besides that like that’s really it the mortgage notes like zero time. It literally is just I see it checks coming into our bank account every month.

Mindy: Well, that must be so hard.

Stuart: It’s yes.

Mindy: Okay, so what I’m hearing you say is in the beginning of your journey you discovered this Financial Peace University, you made small tweaks to your life and now you’ve got all this money coming in that you’re basically doing nothing for.

Stuart: Yes.

Mindy: I mean like right now, you’re not actively managing it. You get an email that says, “Hey, we had a plumber. Okay thanks!” I’m not like trying to belittle you, I’m trying to point out to people who are listening small tweaks makes such a big difference. It doesn’t have to be this radical shift in everything that you do to get you down the path to financial independence and you started this in 2009, it’s 2018. You’re not even a decade into it and you’ve already replaced your wife’s income, well and your income. I don’t know how military pensions work.

Stuart: Yes so in the military, if you make it to 20 years you will basically get 50% of the last three years of your paycheck. Your base income, you’ll get 50% of that for the rest of your life. You know, I will get around it’s going to be around $35,000 of annual income for just being the military for 20 years.

Scott: That’s awesome.

Mindy: That’s fantastic! You have the notes, the note portfolio, you have this stock portfolio and the mutual fund portfolio and you have the rental property portfolio, what’s next? What other aspect of investing are you going to conquer?

Stuart: Long-term, I would love to get into multifamily investing. Would love to you know maybe do like some type of multifamily syndication, but right now I actually just created a new business with my college roommate. He had been investing buying some properties in Milwaukee, Wisconsin. His wife is from there. He and I were talking, so he bought his properties through a turnkey company.

I had bought my Alabama properties through a turnkey company and both of us although still happy with the investment kind of had been talking and figured out, “Hey. We could probably do this just as good and or better than these companies.” We’ve kind of put a business in place and we’ve put a team in place, we read David Greens book about you know investing out of state and putting a team together so that’s what we did. We put what we feel as an amazing team there in Milwaukee, Wisconsin.

About three months ago we started buying fixer-upper properties doing the BRRRR strategy, getting some private lending from our friends you know our network of military guys. We have started doing some BRRRRs and putting buying rehabbing putting renter’s in it in Milwaukee, Wisconsin. Kind of doing our own turnkey investing if you will so we’re on property number six right now and we have four sold to other investors that are buying them for long term buy an old rentals.

Mindy: Okay, you said the BRRRR strategy. Can you go over that really quickly for people who may not listen to the BiggerPockets podcast which is the Real Estate podcast and Brandon Turner who invented this acronym.

Stuart: Yes, so BRRRR – Buy, Rehab, Rent, Refinance and some like to say Repeat.

Mindy: Repeat, yes.

Stuart: Yes, yes so we’re using private money so we’re receiving private money now instead of me giving private money and buying the houses rehabbing them and then getting renters in place and then selling them to other investors who want to just have the rental properties.

Mindy: Okay so there was a really awesome article on the BiggerPockets blog just a couple of weeks ago and we will link to this in the show notes which can be found at BiggerPockets.com/moneyshows33. Alexandre Felice wrote an article about how to wrap your rehab costs into your loan at the time of purchase, which gives you more of an opportunity to refinance because they refinance based on the purchase price not the new ARV or After Repair Value. I’ll link to that it’s a really great article and he explains it way better than I could.

Stuart: Yes that makes sense. It’s kind of what we’re doing. We’re getting private loans and we’re including the purchase price and the rehab money and all the closing costs and fees into the loan and so we’re making the contract for that top price and then all of the rehab money is just going into an escrow account is then used for the rehab so instead of buying a house at $30,000 we’re buying a house at $60,000 and that extra 30 is going into just a rehab escrow.

Scott: This strategy, the BRRRR strategy is something that you, the listeners, should go in it and explore and read long distance real estate investing, but they’ve agreed because you know that’s how a lot of you can pull it off is you may not be able to do this in Denver Colorado without a huge amount of initial capital, but you can go to a place like Milwaukee buy a place for 40 or $50,000, put $30,000 in rehab into it and if this is your cash savings potentially for over the last couple of years. You know your risk at this point is you have a paid off in cash rehabbed property.

It may be a little more or less expensive than you estimate, but you’re not even leveraged yet if you’re doing this for the first time you know. Then once you fix the property you might have a $120,000 you can refinance pull 90 some work most or all of your investment back out and now you’re leveraged on a fairly stable property potentially in a reasonable area.

While there’s a ton more work involved in this strategy, one could argue that there’s actually a well-researched, well-read person could actually enter this with fairly little risk and pull it off from a financial leverage standpoint and then repeat it infinitely.

Stuart: Yes, absolutely. I mean, even if you don’t refinance out you know you’re getting just like you said Scott you’re getting a $70,000 house all cash and it’s renting for a $1,000 a month so you’re way over that one percent rule you know you’re at 1.3, 1.4% and it’s just I mean it’s a great investment in that area.

Mindy: Yes, that’s amazing and there is a really long form article from Brandon Turner. He wrote out all of these steps on how to do it right and we will also link to that in the show notes. If this is something, it sounds too good to be true because we all know what we’re talking about and it’s kind of glossing over like we understand the concepts so we’re kind of glossing over it, but we could devote a two-hour podcast episode to just this concept so Brandon did that for us in the form of words and you can read it and we’ll link to that.

Stuart: In the form of words.

Mindy: In the form of… written words. I guess these are words too these spoken words, in the form of written words. I digest it at your pace.

Scott: Well awesome, so I think it’s a great approach. It makes a ton of sense given your goals I think you seem like the kind of person that’s going to be very successful at the strategy over the next couple of years. We’ll definitely look back to having you on in a few years and hearing about your massive empire that you’ve built.

Stuart: Yes, it’s fun you know doing this is obviously quite a bit more work. It’s not as passive as all the other strategy that we’ve done so far, but you know the goal hopefully is to as we transition from getting out of the Navy and then really ramping this up and doing this on a more of a full-time basis.

Scott: Awesome.

Mindy: Okay, so I want to go back now to the very beginning of your story. You talked about Financial Peace University from Dave Ramsey and he’s created this course that really teaches people how to handle their finances. We’ve never really discussed this in detail on this show and I am hoping that we are bringing this to some people who’ve never heard of it before, but you said that you now teach people. You teach Financial Peace University at every place you stop. Can you tell us like give us a few minutes of overview on what this actually does?

Stuart: Yes, absolutely. Dave Ramsey has a course called Financial Peace University. It’s a 13 week course and it goes over, it start small so basically he has what’s called the baby steps, steps 1 through 7 and it really is just about teaching kind of just financial habits that gets you to a point where you’re debt-free and then you’re you know investing for long term and building wealth and then giving back.

You know step one is like I think it’s a $1,000 in emergency fund. Just to have a $1,000 set aside in case some type of emergency happens because emergencies will happen. Step two is trying to pay off that debt you know that he calls it the debt snowball where you’re sitting them all up all the debts and just one by one knocking them out trying to get all the debts paid off as quickly as possible.

Mindy: The debt snowball is a… There’s the debt snowball from Dave Ramsey and then the debt avalanche and the debt snowball, he says write down all of your debts. Every single dollar that you owe to somebody write it down in smallest amount to largest amount. Then you pay off that smallest amount and you get this big win.

Stuart: Right.

Mindy: Paid off. Now, I’ve got a whole debt that’s not there anymore and then you pay the minimum on everything and you throw every extra dime that you have to that one debt, crush it. Then you pay off the next one and the next one and as you’re paying off these debts, then you have more to throw at that next debt. The only problem I have with this is it doesn’t take into account the interest rates.

Let’s say you have a 10 dollar debt that’s you know at 1% interest rate and you pay that off first great, but then you’ve got you know $1,000 at 10% you’re still paying the minimum on that. You’re barely covering that. I like the debt avalanche where you arrange it in percent order or I’m sorry, interest rate order where you’re paying off the highest interest rate first. Sometimes, that’s the most expensive debt that you have so you don’t see that big win.

There’s a difference with that. I like a hybrid solution where you line them up in both ways and then you pay off the small one, you get the win, and then you pay off the high one, you get that win, and then you kind of go back and forth if you need that win. Some people really need that boost that you know, “Hey. I actually paid off a debt.” This does work.

Stuart: I think he does it like it’s a mind shift thing, it’s a mindset. It makes you feel really good once you’ve paid off a debt and if you pay off the lowest ones first, it kind of just boosts you up and you know keeps you fired up to continue to pay those off.

Mindy: Yes and everybody works differently. It’s difficult with the interest rates to…

Stuart: No. Yes, that totally makes sense.

Mindy: Totally support that one. Okay, I’m sorry. Step three.

Stuart: Step three is three to six months into an emergency savings account just a boost up that savings just in case something happens. Then step four is where you start investing and he says, “Invest 15% of your income into a tax-free or tax deferred account.” That’d be like a Roth IRA or just a typical IRA.

Scott: Does that include home mortgage debt?

Stuart: It does not. Good point, it is everything except for your home mortgage paying off becoming debt free, except for your home mortgage. I believe it’s step five, I wrote some down some notes here. No, step five is starting to pay funds to save for your college education for your kids. That’s like a 529 plan or something like that. Start saving up money down the road, pay for college for your kids.

Then step six is where you start paying off the mortgage to your house and that’s kind of what we talked about earlier, Scott. For me, it didn’t make sense because I knew I’d be like moving in two to three years. You know for him, I think it’s more of like, “Hey. I’m going to live in this one house for the rest of my life. I’m going to pay it off as fast as I can.” That’s step six.

Then step seven for him is you know continue to build wealth and then give back. It’s a great education on budgeting and you know just increasing your education on financial savviness and like we talked about earlier, I agree with everything until we get to like the leverage and you know paying with houses and cash and stuff like that. For most of the sailors in the Navy and in the military, there’s not really any type of formal education on this kind of stuff, and so just the learning phase of budgeting and paying off debt and saving, all that stuff.. A lot of the guys that work for me like have no clue, and so I’ve really found it… You know, it’s fun for me to be able to teach this stuff to a group of guys and then see the benefits that come out of it.

Mindy: Well, it’s not just the guys that work for you.

Stuart: Well, true. Yes, true.

Mindy: Yes, most people don’t have a clue. I like to say that Dave Ramsey is a great way to get you from a negative net worth to zero net worth. Following his steps will absolutely get you there. You have to put the work into it but it’s a great program, and then Dave and I go off in divergent paths because I do believe in leverage like you.

Stuart: Yes, it kills me when I see like you know this young 21-year old that just got into the Navy, you know got his first paycheck and he goes out and buys like a brand new like Escalade. It just kills me, so getting that type of education early on so that you know the guys that work for me and work with me, like it’s a lot of fun.

Scott: I think what Dave Ramsey gets that maybe, I’m a really quantitative person. I always look at like what’s the best mathematical approach. Like I would have wanted to pay off my debt from highest interest rate to lowest balance first. What Dave Ramsey gets that I didn’t for a long time was how much mindset matters.

Like this approach, you could argue that there’s ways to increase efficiency in every step basically but it works. It’s simple and  it’s very easy, approachable, understandable, and it’s a way to make it work that I think that is really accessible to anybody. You don’t have to do a lot of research to make this plan work and figure it out. You can just follow it and you will be pretty well off within five, ten years better off than most of the country.

I want to shout out that I am increasingly a large fan of Dave Ramsey and his approach in Financial Peace University as a result of how effective it is at getting anybody to follow it.

Mindy: Well and I think that you don’t realize the mindset because you’re not in this place where you need to be taught all this, you already know this. It’s easy to… What is it? Information bias or something where you already know something so you don’t like you sometimes forget about it, but I like his steps because they are solid steps and they’re one thing. Save a thousand dollars. All you have to do is not spend a thousand dollars and put it in your pocket and they are your savings account or whatever and there you are. Pay off your debt. Here’s how you do it. Now go and do it. Just pay it off, that’s all you have to concentrate on. It’s not this like multi-step thing, it’s like one step at a time. I really like him a lot.

What would you say is your biggest takeaway from Financial Peace University or from the Dave Ramsey concept in general?

Stuart: I think just knowing where your money is going. Knowing what your money is doing, you know having a plan, having an idea and taking charge of your money instead of the money taken charge of you. I think you know, that itself is just such a huge, huge thing to accomplish. You tasking your money what to do instead of you know you just randomly having money whatever you know just kind of willy-nilly whatever you’re doing with your money.

Mindy: Give every dollar a job.

Stuart: Right.

Scott: Awesome. Well, anything else you want to cover before we transition to the famous four?

Stuart: No. I think that’s it.

Scott: One thing that I want to point out that I’ve kind of observed here is that you are in a position now with your finances where you seem to appear to begin transitioning from playing to invest. You’re starting to play to win as in the wind kind of like big way. I’m going to build a business that’s going to invest big time in Milwaukee. I’m going to start really expanding aggressively and I think that that as a result of you kind of moving through those baby steps paying off that debt, having a high savings rate. Now, you can transition from playing not to lose with your finances in to playing to win and make big returns.

Stuart: That’s good. Absolutely. It’s consistency, right? I mean it’s just doing the same thing over and over again, not getting distracted. Like what you told us, it’s taken ten years to get to this point and you know it’s so small baby steps like Dave Ramsey talks about.

Scott: Awesome.

Mindy: Okay, so now it’s time for our famous four questions. These are the same four questions that we ask of every person. They’re actually five because we don’t know how to count. The first question is what is your favorite finance book?

Stuart: My favorite finance book is from Darren Hardy and it’s called, The Compound Effect. I like it a lot because it really lays out a plan of setting goals and you know it’s not necessarily all about just finances, but it’s all about setting goals and breaking that goal down into annual, monthly, even weekly plans of how to get to where you want to go.

He has this thing called the Weekly Rhythm Register and take an example of you set a goal, you want to lose ten pounds, and how do you break that down to weekly and daily actions that will get you to lose those ten pounds. I equate that a lot to finances. Just like we said, it takes a long time and it’s that compound effect of doing the same thing over and over again to get to where you want to get, so I think it’s a great book.

Scot: It is one of my favorite books as well. I’ve read it probably four or five times in the last five, six years. One of the things that kind of really sticks out to me is just how the little things compound over time. It’s that’s the title of the book, Compound Effect, but he gives this example of these three guys. One guy goes on and eats an extra couple buffalo wings every day and the other guy goes and walks 30 minutes every day. Over the course of six months, nothing happens. 12 months, you can’t tell any difference. That one guy is a little heavier but not anything that could be outside of a rounding error. 18 months go by, same thing. 27 months go by and the differences are astronomical.

I think there’s a lot of like that concept just applied to life I think is fantastic because you’re not going to notice any… You can do all these things for such a long time and see no noticeable result until all of a sudden you do and it just compounds exponentially. It’s the difference between saving nothing over that time period and saving a thousand dollars a month, and then all of a sudden having a hundred grand to invest. That’s a big difference over the guy who didn’t save.

Stuart: Right, yes it’s a great book. Same thing, I think I’ve read it like five years in a row and it helps me kind of set those goals for the next year.

Mindy: Okay. Brandon Turner has recommended this book a bunch and I’ve never. He just says, “Read it,” and you guys, this is…

Scott: Well, I think he brought a copy there, right?

Stuart: There’s two, yes. You can have mine, Mindy. I’ll let you borrow it.

Mindy: I haven’t even read this book, but now I want to go get it. No, I’ll get one at the library.

Stuart: Yes, it’s old enough. Probably it’s at the library. You can probably get it for free there.

Mindy: Yes.

Scott: Awesome, so what was your biggest money mistake?

Stuart: Yes, so my biggest money mistake when I graduated college I went to the Naval Academy and they give you a, they call it a career starter loan. Basically, it’s $30,000 at 0% interest. Young and dumb at the time, didn’t know anything about this investing stuff. I went and bought a brand new vehicle. I bought a really sweet two-door Chevy Tahoe for basically $30,000 and I regret it to this day. I wish I would have you know taken that 0% interest loan and even if I just put it into the stock market, I’d be way better off now than I was. That’s my biggest planning mistake.

Mindy: Wow. I didn’t know they gave you a $30,000 loan at 0% interest.

Stuart: Yes, it’s pretty amazing.

Mindy: Does everybody at the Naval Academy get that?

Stuart: They do, yes. There’s two banks that really market to two military guys. USAA is one of them and Navy Federal is the other one. It’s not just the Naval Academy, they do it to ROTC students and all the service academies, you can pretty much get a career starter loan. Yes, it’s pretty awesome.

Scott: Well, that’s a great money mistake.

Stuart: Yes, just blew that one away.

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

Stuart: I think the best advice is just really break down and learn about where your money’s going. You know, learning how to budget, learning how to define your expenses, and that will allow you to learn how to reduce your expenses and increase your income and boost that savings rate. Learning how to budget is my best advice.

Scott: Awesome. What is your favorite joke to tell at parties?

Stuart: I’m not a really big joker guy, so I had to kind of like do some research on this but I’ve heard this joke before. It’s a military joke, so you would think that all military people regardless of the service talk the same language but not so much.

For example the phrase “securing the building.” If you tell a Navy guy to secure the building, they’re basically just going to go turn off the lights and close the doors and lock the doors. If you if you tell an army guy to go secure the building, they’re going to post a guard out front and start checking ID cards and making sure you can’t come in unless you have an ID card. If you tell a marine to go secure the building, they’re going to call in an airstrike and start killing everybody inside and set up headquarters. If you tell an Air Force guy to secure the building, they’re going to get a four year lease with an option to buy in year five, so that’s my joke.

Scott: That’s great. I remember reading like so many jokes in the Reader’s Digest for the humor in uniform. I was growing up in my parents bedroom. I always thought that Reader’s Digest was actually Reader’s Digest. I didn’t like make that connection until maybe like a year ago when I visited and I was like, “Oh. It’s Reader’s Digest.” I remember the humor in uniform was always great.

Stuart: Yes, good stuff.

Mindy: Okay. Stuart, where can people find out more about you?

Stuart: Yes, so I started a website about two years ago to help people learn more about investing specifically real estate investing. It’s called militaryinvestornetwork.com and they can go on the website there. We have a Facebook page. We have Instagram. We have a YouTube channel where I’ll do videos of showing different types of investing and they can email me at Stuart, S-T-U-A-R-T at militaryinvestornetwork.com.

Mindy: Okay, and we will put links to all of this in our show notes at BiggerPockets.com/moneyshow33.

Stuart: Thanks guys. This was a lot of fun.

Mindy: Awesome, thank you so much for coming in.

Scott: Yes, thank you for coming on.

Mindy: This was our first in-person interview and this is a lot of fun. It was nice to meet you in person.

Stuart: Yes, absolutely. This is good.

Mindy: All right. That was our interview with Stu Grazier from the Military Investor Network. Wow, just so much information in that show, Scott. I really enjoyed this episode today.

Scott: Yes, I thought it was a great example of someone who you know maybe went through the first part of their career not really thinking about money, making some choices that you know maybe were some setbacks, and then discovering the concept of financial independence, taking immediate action, and then being consistent about it in the decade following that discovery.

I mean, what an incredible leaps and bounds and net worth from that initial struggle of paying off debt to saving up that first 25 grand outside of his retirement accounts so that he could invest that in a private note, and then building and exploring that niche and going on… Niche or niche?

Mindy: It’s both. I say niche, but you can say niche.

Scott: Well, exploring that niche-niche and becoming wealthy as a note investor, and then now kind of exploring other alternatives. I mean, he’s going to be incredibly setup in a few years when he has all this huge portfolio and his pension all going for him.

Mindy: Right and it all started with a small tweak to his housing instead of living just with his wife, he got roommates. It’s not that difficult and he was pretty young when that happened too, so it’s not that difficult to live with roommates when you’re kind of already used to living with roommates. You’ve got your family, then you go to college or into the military. Once he’s sleeping alone in the military, did he get his own private room? I don’t think they do that in the military.

Scott: No and by doing that with his living situation, it allowed him to invest to win instead of invest not to lose his money. That I think has made all the difference over the last couple of years and enabling him to build that huge portfolio.

Mindy: Yes, that was amazing. Okay Scott, shall we get out of here today?

Scott: Let’s do it.

Mindy: Okay. From episode 33 of the BiggerPockets Money Podcast where we interviewed Stuart Grazier from the Military Investor Network. This is Mindy Jensen over and out.