Financial blogger and professional wrestler Martin Dasko from Studenomics.com came down to the basement to talk to Joe about how to achieve financial freedom by the time you’re 30. For today’s written interview, we’ll share his insights on how he bought a property and rented it.
Joe: Welcome to the basement, man!
Martin: Hey! I love it here.
Joe: Let’s start with your book (Next Round’s On Me: How to Achieve Financial Freedom in your 20’s) You start your book waking up at 5 pm in Argentina feeling guilty. Tell me about that.
Martin: A lot of personal finance blogs try to make you feel guilty about spending and your general philosophy. Instead, I don’t hide anything. I try to be as real as possible. I went to Argentina and the first night I went out and had a great time partying. It was November so it was freezing cold in Canada, we were going to get up early and enjoy some sun…but we’d stayed out so late that we didn’t even go to bed until 8 o’ clock in the morning, and didn’t wake up until 5 pm. So, I felt guilty because I slept in, wasted a whole day and missed my original goal. But then I realized there’s no sense in feeling guilty.
I compare this to personal finance this way: if you save money and hit your target to your goals you shouldn’t feel guilty rewarding yourself once in a while. What is the point of saving money if you don’t get to live. Don’t feel guilty about what you miss. Enjoy what you do.
Joe: It seem as if that whole first chapter is about being epic with your life.
Martin: Yeah, that’s the theme. I’ve read personal finance books and enjoyed them, but you have to know your audience. After seven or eight years blogging now I know my audience. If I told them to stay in, wear used clothing, and cut their own hair…my readers, they have a social life and a love life. They don’t have time to cut their own hair. They want to have a nice hair style and that’s okay. It’s okay to have a nice shirt, dress well and feel good. You shouldn’t feel guilty or stay in everyday. That is what personal finance is about it.
Joe: Later in the book it is the opposite. You say that you make more money if you look the part.
Martin: Dress for the job you want, not the job that you have. You can still be extremely fugal. People want to move up in their job, they want to make more money.
Joe: I wanted to ask you about that because a quote from your book is “I’m awful at frugality, but pretty decent at saving money”. Aren’t they two sides of the same coin?
Martin: I am awful with the daily frugality. If I see you and run into you I will buy coffee for both of us. If I want to go for dinner I will go for dinner. In that sense I am awful.
On the other side of that coin, I hit my financial targets. I set goals. When I wanted to buy a rental property I figured out how much I needed and saved for it. I believe in paying myself first. When I get paid, I pay myself first, cover all my expenses and enjoy the rest. Nobody should feel guilty about having that cup of coffee. If you did what kind of life would that be?
Joe: You start off with pay yourself first in the book, which is specifically aimed at 20 year olds. A lot of 20 year olds have the first goal of geting into as much debt as possible.
Martin: That is why I had to write this book. We finish college and we’re delusional. A study polled a bunch of college students and asked what they thought was going to happen after college. As you can imagine everyone thought that they would be making great money and living the high life. Realistically you finish college and you struggle to get a job, never mind the easy job.
I wrote this book because debt will only ruin your life. If you’re in debt you’re going to be stuck in debt and you’re going to have to make debt payments. That means you are going to accept any job you can get. You will be stuck at that job. You won’t be able to take any risks. You won’t be able to travel or start your own business. All you are going to do is pay your debt. I had to write this book to show you how to avoid debt, or if you are already in debt, to pay it off.
Debt strangles you. You can’t do anything if you are in debt.
Joe: You start off with a plan for twenty–somethings to be financially free by the time their 30. Some business authors talk about business setting “big hairy audacious” goals. Well, that’s a “big hairy audacious” goal. You can’t do it without being out of debt.
Martin: It is impossible. Financial freedom is different to everyone. If you are debt free and you have money saved up you are free. You can do whatever you want. You can take a risk. You can take a job out of town, start your own business, or go on a trip. You are in control. My goal is to have you in control of your money.
Some people brush off this idea of early financial freedom. They say you can’t do it. I ask, “Have you have tried anything?”
One guy said this is a get rich quick book.
Joe: Your book?!
Martin:Yeah. …because I talk about financial freedom. How much money are you making? I know for certain he isn’t making much money. I said, “This book will give you tips on how to increase your income.” He said, “I’m not into that.” ((Joe laughs)) I said, “Well, then this book will never help you.”
I give tips on how to expand your net worth, how to make more money. If you’re financially fit and save your money you can become financially free. That is how you save up $50K by the time you’re 28.
That is why I had to write a chapter on quitting your job. I will never tell you to quit your job with out a plan…if you are not happy figure out what you can do. You can take courses to make more money at your job, pay off your debt so you can quit your job. Or can you be a better networker to help you find a different job.
Joe: Tell me about your first rental property.
Martin: My goal was to buy a condo so I had to cut back on everything else. I cooked my own meals. I worked odd jobs. I saved my money. I finally bought a condo when I was 19 going on 20. Not outright. I bought it from a developer. When you buy it from a developer you don’t have to pay the down payment all at once. You pay 5% at signing, 5% at 6 months, 5% at a year, and 5% at closing…That obligation forced me to work. I worked like an animal and saved, saved, saved. To make that down payment at once would have been impossible, but I broke it down into chunks it was possible. Each payment was $10k. It was a lot of money, but I lived at home and made sacrifices. I had 3 years to make the payments. I moved in there when it was ready and lived there for awhile before I turned it into a rental property. I was going to hire a rental management company. Instead a friend advised me that I should do it myself. He told me that I had time and energy because I was so young that I should figure it out.
Joe: Is that so when you had more rental properties in the future, when you didn’t have time, that you’d know when a contractor was screwing you?
Martin: 100%. The beauty of the internet is that you can find anything there. I typed in “how to find a tenant” and there were answers. I found the document and copied it. I just changed the pictures. I posted it and in the morning I had twelve responses.
I forgot to mention that you should buy a rental property in an area that people want to live in. Before you buy you should go to Craigslist to figure that out. If no one is offering rentals and no one is looking for rentals chances are nobody wants to live there.
When it came to actually renting the place I googled “rental agreements” and changed some wording. (Editor comment – please don’t consider this to be advice….get professional help when it comes to rental agreements and contracts!) Everything was on the job training. The viewings…the screening. I did not even know what to ask. I called for references. I had no clue what to ask. I was calling just to call. I ended up getting a tenant. I rented it out for a few years and then sold it. I made a lot of money on that.
Joe: Even if you hadn’t made a lot of money, that on the job training has been invaluable.
Martin: Yes. Now I know the whole process of buying a property, finding tenants, and renting it out.
Joe: Half way through the book you switch gears and introduce systems…putting systems in place to manage your money. That is how you are going to win.
Martin: You need passion, energy, and motivation to get started, but what keeps you going is discipline. If you want to find the money for partying or to go somewhere, you have the power to save up. What is going to keep you consistent is they system. If you have a goal, you need a system to keep yourself consistent.
As you see you need passion and a reason to save, but don’t forget to make a system to make it easier. You can get Martin’s book (Next Round’s on me: How to Achieve Financial Freedom in your 20’s) in the Stacking Benjamins Stack Factory store. You can listen to the full interview here on the Stacking Benjamins Podcast.