Total Income: $20,200.63
Total Expenses: $21,630.74
Personal Income $12,667.03
Personal Expenses $13,301.37
Business Income $7,533.60
Business Expenses $8,329.37
Total Personal Savings Rate: -5.01%
Total Business Savings Rate: -10.56%
Total Savings Rate: -7.08%
Updates to our income report
For the income report month in June, my primary B2B Sales job brought in $5,666.25, The secondary High ticket sales job brought in $4,299.9 my wife’s part time job brought in $2,261.25 and other income sources like business income from Our House hack, vending machine business, Amazon, Airbnb, Book Sales, and Our Rental Property, was $7,533.6.
Just to be clear, this is not a standard month for us by any means! We normally pull in $6-9K in total across everything. This month we were definitely fortunate that things worked out for us!
Updates to our expenses
You might have noticed the numerous expenses and thought, wow do they even have a grasp on their finances? Quite frankly, we do but there are a lot of initial expenses that we’re making to the home over the coming months that allow for increased safety, comfort, and value of our primary residence to grow. You definitely see a spike in expenses while these improvements are being made. We recently had to take out an above-ground pool from our yard. That plus the landscaping to make the space look clean and level was a decent chunk of change. That being said, almost all of our expenses are budgeted effectively so we have the necessary funds to reimburse ourselves for such a moment. Without the business expenses and factoring in the rental payments, we’re left with a true total personal expense of $5404.96. That falls right in line with what we spend on average. Maybe a bit more than usual but our range is usually $5,000-$6,000.
The biggest expense this month was the removal of our above-ground pool and landscaping which was $2,400. Granted we only spend money we have and can reimburse from our other accounts. We also enrolled our daughter into daycare so that adds $920 to our monthly expenses. However, with the time we’ll get back from her being in a daycare, it’s well worth it. Apart from the mortgage, removing the pool and landscaping, all of our expenses are under $1,000 and fall in line with what we would spend normally.
One thing we do that we feel good about it we budget our recurring expenses to reflect our standard purchases. Meaning if we spend on average $400 for groceries, $200 for home purchases/furniture, and $25 for gifts, we will put that money aside specifically for those expenses. It may not be optimal for most but it works great for us. Simply because it’s money we would spend anyway so we might as well put it to the side to guarantee we have it ready to go. Then when we make a purchase from the respective bucket, we reimburse from that bank account and know we have a net 0 cost because we’ve already budgeted for it.
With the remaining expenses, a lot of this month was spent moving vending machines around, ensuring all locations are up and running accordingly. However, one thing we’ve (thankfully) learned early is office buildings do not perform well at all. For reference, we have 3 different office building locations and all 3 combined do not make more than just one of our apartment buildings. We are also going to be attempting to place our lowest performing location to a new location like an assisted living center. I have a meeting with the facility at the beginning of June so we will see how that goes. Then there’s another location where I have recently heard back from. They are a smaller apartment building of 72 units. At this point, i’d happily take a facility like that over an office building at that point.
Through doing the vending machine business, the biggest bottleneck for us is finding someone to help move and repair machines. While I’m fully aware of the value of being able to repair the machines myself, I really value my time so I try to outsource a task that would take multiple hours if it can be done faster that way.
It’s also become clear that moving machines can be done by a repair guy. While likely more pricey than other options, it’s worth it to have a job done right the first time vs. doing it yourself for the whole day and stressing about getting it taken care of. The other bottleneck is scaling this business. Ideally, I would want to remove myself from the day to day operations because I would want to be able to travel around the country without any physical obligations to be somewhere. I could hire a part time employee but that doesn’t make sense until the route is making more than $3K a month. We’re currently right about $1,500-$2,000 depending on the month. It’s a work in progress to get the business optimized, and put in locations that are all making more than $500 a month. If it’s making less than that, it would need to be moved as soon as we find a better spot for it.
After the home, landscaping, and business expenses the rest of our costs are minimal. Truthfully, i’m not quite sure if it’s fair to include business expenses/income in here because they’re clearly going to be much more than personal expenses on average but hey, it’s my channel and there’s no rules here!
Now we love spending money on things that bring us joy. Going shopping doesn’t bring us much joy so why not use that money towards something like healthy eating or going on vacations? Ramit Sethi calls it a money dial in his book I Will Teach You To Be Rich. (would highly recommend you read this book as it shifts the way you view spending so you can do more of what you love)
Changes in mindsets
So much has happened this year and we’re extremely thankful that things are becoming more clear as what our path should be. At this current stage, it is heavily focused around continuing to improve at our jobs, build out our vending and real estate empire, and grow this blog (thank you for reading these brain dumps)
One of the best things that has happened in June is that we’re finally paying attention to doing more for ourselves and building something for our future. That has allowed us to be more intentional with the things we buy since we’d rather put the extra income into more investments that allows us to progress even faster.
Through that, we’ve committed to upgrading our mindset towards our goals. To do that, we’ve adjusted from simply, “paying our bills” to earning $20,000/month every month through all income sources added together.
This shift has been instrumental in our success because it forces us to think bigger. Therefore, we look at everything we’re doing and ask, “How can we earn $20,000/month?” The answer is NOT to commit everything to our corporate jobs. We need side hustles or something that can get us much closer to where we want to go. Therefore, I’ve started to sell high ticket coaching on the side of my full time job in order to supplement my income. Reason being is it can take 3 months from when I sold a campaign at my B2B sales job to get paid on it. So instead of waiting 3 months to get most of my commissions, I will work there but also be selling at these high ticket companies to earn more in the meantime. Add that to vending and our real estate, we’re getting about $5,500 in gross income per month from all of our sources. (our net is under 50%) so that definitely helps as well!
If you’re asking how did they shift their mindset so radically? It is 100% because of the book “Think and grow rich” by Napoleon Hill. Without a doubt the best book i’ve ever read that gives you practical advice on what or how you can upgrade your mindset to life a better life financially. This is now my 3rd time reading the book and i’ll very likely come back to read it again in no time. It’s not about reading as many books as you can, its about reading the critical few that bring the best impact to your life. The classics have already hit the point that need to be hit, the newer books are really just watered down versions of the old school books. My recommendation, find the classic books, read those 10 times vs. new, multiple watered down versions 50 times. You’ll get ahead much faster if you simply re-read the best books that have already been written.
What lies ahead?
Through our investments, We understand the importance of paying off debt. While our vending loan to get the initial surge of machines and HELOC to get the current real estate property that we house hack could be considered “Good Debt” I do not like the feeling of having to pay an interest rate above 7%. For all of the loans we have outside our 30 year mortgage, we have about 50K in debt that averages out to 13% interest. Our time would be better spent paying that off for right now than adding more debt for the time being. PERSONALLY, i’d rather know I can sleep well at night by not having any debt at all outside of our mortgages.
There’s a beautiful quote from Morgan Housel in his book The Psychology of Money: “Our goal isn’t to be coldly rational; just psychologically reasonable. The independent feeling I get from owning our house outright far exceeds the known financial gain I’d get from leveraging our assets with a cheap mortgage. Eliminating the monthly payment feels better than maximizing the long-term value of our assets. It makes me feel independent” This perfectly sums up how it makes me feel towards most debt. While I don’t feel too bad having a mortgage that is paid off using the rental income from a tenant, I would much rather prefer a debt-free lifestyle.
And even then, after 10-20 doors (when we get there) I would like to think I would rather pay off the mortgages entirely versus keep acquiring more homes. Especially if we can live comfortably already off the rental income by putting $6K in our pocket each month. Everything after that is a cherry on top. Ideally we’d be able to save 2X whatever we wanted to pay off each time so once the first debt is paid, we have a big enough buffer to get a head start towards the next debt payoff. What gets really fun is when you have 10+ doors and you use the debt snowball method from Dave Ramsey to pay off the lowest balance, then from there, you roll that income over to the next debt using the income you gained from your previous payoff and so on. Eventually, you have a few extra thousands of dollars that you can put towards the debts on top of your main income and the balance goes down exponentially. Specifically, after the total principle is reduced, that’s where you see the effects REALLY start kicking in. You begin to reduce the total balance that the interest can charge, so your dollars go much farther on how much you pay down the lower the total principle gets.
All in all, Our goal is to be earning $20,000/month consistently by April 24th, 2024. Through that, i’m going to continue selling products for my work, looking for new vending machine locations to replace our current low performers. Buy more real estate as it provides a very high dollar per hour opportunity since I can hire a property manager to oversee the whole portfolio and I would then spend maybe 1 hour a month seeing how the properties are doing. I’m not saying vending isn’t a huge focus but it’s more of a logistics business. For the time being until we can hire a route runner to fill the machines for us, it takes us around 4-8 hours a week to manage the business.
So for $1,100 in net profit and to spend on average 24 hours a month, our dollar per hour is $45 which is not bad but until we outsource our business more, it makes much more sense long term to build out a rental portfolio because you also gain equity over the long term. For example, if someone magically gave us $100,000, I wouldn’t even think about buying more vending machines. I would rather put all of it into buying more properties (assuming all debts were already paid off) That way we’d be able to increase our dollar per hour while also gaining equity that grows each month. Each time we pay the mortgage, that balance goes down significantly.
Therefore, it seems reasonable that we just start spending time on real estate moving forward. I’m definitely not against vending as I used to feel much more strongly about it but as time progresses, I’m fully aware that we will not only earn more with less time, We’d also be able to have peace of mind if we decided to travel somewhere for 3+ months without worrying about our property running into any issues. We’re open to any and all opportunities but these seem to be the best opportunities for us currently based on our personal interests, and what we want to focus on the long term.
Until next time
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