On the last day of a semester in college, Adam Zaleski’s geology professor dropped a bomb on his class: the professor was worth a staggering $10,000,000! The reason for telling the students about his net worth wasn’t to impress but to make the case that exponential growth is more likely than most people think. This taught Adam that he needed to choose a profession he enjoyed so he could continue to work, invest, and grow his wealth exponentially, just like his professor.
Adam did just that, and now, he’s a millionaire professor, working a casual thirty hours per week, doing what he loves! Adam knew from the beginning it was more important to make long-lasting, intelligent financial decisions, instead of chasing after a bigger salary. He did this right out of college, taking a serious pay cut to live in a state with far cheaper housing, allowing him to house hack, build wealth, and reach financial freedom.
Now, Adam is looking to expand his real estate empire a little further, without having to sacrifice a large amount of time to do so. If you’re interested in partnering up with Adam or looking to chat about long-distance real estate investing, market analysis, or the best surf spots in Kauai, shoot Adam a message on BiggerPockets!
Mindy:
Welcome to the BiggerPockets Money Podcast, show number 253, where we interview Adam Zeleski and talk about designing the life you want to live.
Adam:
And so for me, there were a few people in my smaller circle that saw the value in that, saw it was a good thing, but I would say nine out of 10 people would say don’t do that. That’s a bad idea. You need to take the more money, go to DC, don’t go to Florida for 40 because it’s horrible in Florida right now, that the houses are selling for nothing. And you’re like, “Yeah, that’s the point.”
Mindy:
Hello, hello, hello. My name is Mindy Jensen. And from time to time, Scott’s schedule is just too jam-packed to record with me. Rather than missed a week, I’m bringing in some of my friends to help me out. Today’s guest host is J Scott. You know him from all over BiggerPockets. From our fantastic episode 70, where I predicted the stock market crash of 2020 almost almost to the day. And our epic episode 219, where he educated us for 2 solid hours, 2 of the fastest hours I’ve ever spent, on real estate syndications, pretty much absolutely everything you need to know is in that show. So, J, thank you so much for taking up Scott’s slack.
J Scott:
Can we go back to the point where you called me your friend?
Mindy:
J is my friend.
J Scott:
I like that. You’re bringing your friends on.
Mindy:
I’m bringing my friends on. They were all busy so I call J.
J Scott:
Ah, that’s so sweet. Oh, okay there. Now, we’re back to where I expected to be. How you doing, Mindy?
Mindy:
I’m good, J. How are you?
J Scott:
I am doing great. I’m excited to be here. I think it’s the first time I’ve co-hosted this show. This is awesome.
Mindy:
This was a lot of fun. Well, I’m sorry. This will be a lot of fun. We will always record the intro after we record the show. So we know what we’re talking about. J 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.
J Scott:
Yep, and whether you want to retire early, whether you want to travel the world, whether you want to go on to make big time investments in assets like real estate or start your own business, we’re going to help you reach your financial goals and get money out of the way. So, you can launch yourself towards your dreams.
Mindy:
J, I am super excited for this episode. We are talking to Adam, who is a, I call him a teacher, he is actually a professor. But when you said professor it makes us sound like he’s making oodles, and oodles, and oodles of money. And he is basically doing all of the stuff that you are about to hear on a teacher salary. He is not making 6-figures, when he is doing all of this fantastic investing that he is, he’s really created life that he wants to live. And I love his thought process and the way he thinks about money, in terms of what it can get you as supposed to how much do you have.
J Scott:
Yeah, I mean he’s a teacher, a professor by trade, but I like to think of him after this discussion, he’s a financial and lifestyle engineer.
He’s figured out how to make really good decisions, both from his personal life and his financial life and bring them together to give him basically the last I guess 10 years since he’s been out of school and 30 years since he’s been an adult to figure out how to live this life that everything he wants for him, for his wife, for his family, at the same time building a nest egg, inching closer… not inching, but taking big giant leaps closer to financial freedom. He’s not sacrificing his lifestyle for money, and he’s not sacrificing money for his lifestyle. He’s really figured out how to have it all and in this episode, he talks to us and gives us great actionable tips for how we can do the same thing.
Mindy:
Yeah. He is really amazing and his story. And I love the way that he shifts the way that he is looking at things a little bit. And a whole new world opens up. He has made some really really smart decision. And I cannot wait to bring on him to tell you all about him. Adam Zeleski, welcome to the BiggerPockets Money Podcast. I am so excited to talk to you today.
Adam:
Thank you for having me. Thank you for giving me the opportunity to share my story.
Mindy:
I wanna jump right into it because we have a lot to cover. Where does your journey with money begin?
Adam:
So, I grew up in the Midwest, middle class, suburbs of Chicago, pretty normal. The only thing that might have been a little bit different was my parents got divorced when I was seven, and I noticed that money got a little bit tight during that time, because pretty normal stuff. You had one household, and then there was a split, and now there’s two households. So, my parents were learning how to adjust on same amount of income, but higher expenses. There was a lot of money fights, nothing horrific, but it just wasn’t fun. There was a lot of complaining. Eventually, they figured it out and they both got remarried when I was probably 12.
And at that point, then all the money conversations went away again, but there was five years, there was a lot of bickering about money. And as a kid, I just didn’t think it was fun. I made an internal pledge to myself when I was a kid. I was like, “I don’t want to be in that position when I’m constantly complaining about money, because it’s just simply not fun.”
J Scott:
Yeah. I know when I went through my parents divorcing when I was very young as well, and it was always that weird thing to watch different money habits, different money discussions. One side the family was no money discussions. The other side of the family was more complaining about money, but I grew up very conflicted about how I should be viewing money, because I never got a consistent message from my parents, because they were separated and remarried. How did that impact ultimately your take on money moving forward? I mean I know that my childhood, how I saw my parents dealing with money had a huge impact on me moving forward. How did that impact you once you got to the age where you were independent and on your own with money?
Adam:
That’s a great question. That did have an impact on me, because what happened is my mom, it’s just cultural when she remarried. She remarried into somebody who was into the corporate lifestyle, climbing the corporate ladder. He was an engineer. He was a part owner, had equity in a small engineering firm. And then my dad’s side was a pipefitter construction worker. My whole dad side of the family were construction workers, and it was the white collar versus blue collar. And one’s not right or wrong, but it’s just very different, and both sides have their own set of unique challenges. And what the conclusion that I came to is everyone’s got problems. And I really didn’t identify with either group and that actually had a big impact on me in searching for something different.
The white collar side face value, it looked pretty fancy, but there was long commutes. My people, my hometown, they lived about an hour outside of Chicago, so very long commutes into the city, very long commute side of the city. And then from my dad’s side when you worked overtime, that was a good thing. They were union construction workers, and they would brag about working 50, 60 hour weeks because that was good money. But as a kid, I’m like, “I don’t want to brag about working 60-hour weeks. I want to brag about working 30-hour weeks,” but the idea that you would brag about 60-hour weeks just didn’t resonate with me. So, I saw these two paths and I actually didn’t either one of them. I decided I got to find out my own path, and I have no idea what that is.
J Scott:
I love that, I love that. When you I guess got out of school, when you were ready to go off on your own, what was your plan? YOu said you want to find your own path, but what was that path when you were young, when you first got out of school, and how did that evolve as you matured and got older?
Adam:
So, I guess just skip ahead to then maybe high school, mostly Bs. Didn’t love high school, didn’t hate it, wasn’t super motivated for college, but I was decent at baseball. I got a small baseball scholarship to play division two baseball. Wasn’t great, but I was good and really baseball is what got me into college. Otherwise, I don’t know if I would have been motivated enough to do it. But when I got to college, I absolutely loved it because it wasn’t like high school, at least my experience. And there wasn’t a lot of micromanaging. They empowered you. If you do the work, you do great. If you don’t, you get enough. I love that. I love the challenge and I love being challenged.
I ended up taking college a lot more seriously than I took high school and I gravitated towards education, but baseball was still there. I played a couple years of college baseball. Once I wasn’t getting better and I realized I wasn’t going to be major leaguer, then baseball faded out, and then I got even more serious about my academics. And I do consider myself to be a first generation college student, because nobody in my family had gone to college. However, my stepdad did, but he didn’t really enter our lives until much later on. So, my stepdad did technically graduate from college, but nobody else in my entire extended family had. So, I was pretty much the first one and everything was new. I liked it. I was a psych major.
People would ask me, “What do you want to do with it?” I’m like, “I have no idea, but I really the critical thinking aspect of psychology.” There’s a lot of problem solving in that major, and I know that it doesn’t really guarantee you a job when you graduate, but you become a really good critical thinker. And I think that will stay with you your whole life as your jobs change.
J Scott:
Yeah, I love the fact that you seem to really figure out all of these things early on. You figured out one, you didn’t want to work the 60-hour weeks. You figured out early that you wanted to be financially free. You figured out early that how important it was to have those critical thinking skills regardless of what your ultimate job would be. I mean I know these are a lot of lessons that I’m old right now, and I am barely learning at this age, let alone when I was a teenager. So, that’s really great. Mindy, you’re about to ask something. I’m sorry, I cut you off.
Mindy:
Oh no. Your opinion is just as valid as mine, J. I was gonna asked him what his financial position was leaving college. You had a small scholarship but it sounds like you also had some?
Adam:
Right. So yeah, I’ll go over college costs. I think I did pretty well with that. So, my very first year, I got a baseball scholarship and an academic scholarship. So, tuition was basically free, but I did have to pay to be in the dorms. I did not pay that, my parents did. So, I did get some help in college, then I actually went to community college. So, I did one year in the Midwest and then I moved out to California. And I did two years of community college. The first year, it was $120 a unit because it was out of state. So, it was about 1800 bucks a semester, but then my next year when I got in-state tuition, it went down to $12 a unit. It was like a 150 bucks a semester, which was a lot cheaper.
And then I transferred to San Diego State, and this was around year 2000. And it was $900 a semester, and the way that they do it there is technically the tuition is free, but it’s $900 a semester in fees. I’m sure that fee is higher now. I don’t know what it is today, but it was essentially $900 fee a semester. And then I did that for two and a half years. When I graduated, I had about $7000 worth of student loan debt which is some, but not terribly horrible, I don’t think. Logistically, California originally when it was founded, tuition was free. When I was going there, when you get your bill, it says tuition zero and it says fee 900. And this could be a very much larger conversation about higher education, but it’s very difficult to get a tuition increase passed, but it’s very easy to get a fee increase passed.
So, it gets really complicated now for parents when they look at the tuition, and then they realize that there might be $4000 in fees added on to that. That part’s a little bit tricky.
J Scott:
Interesting.
Adam:
Yeah.
J Scott:
We skipped over one thing that I like to ask when I’m talking to people about their money journeys, because I think this ultimately has a big role in how they think about money later in life. What was your first job?
Adam:
Oh, yeah. So I was a caddie at 13 years old. I worked a lot as a kid. So, 13, 14, 15, I carried bags for rich people on the golf course, and that was a good experience. I loved being outside. Then I worked at a California pizza kitchen. I worked at Blockbuster. And then I also did in the summers, a lot of my dad’s side of the family was in construction. So, it helped a lot with I did plumbing, roofing, excavating. Whenever they were busy, needed help, I would fill in and do a lot of that stuff. And again, working those summers was fine doing construction on a small time, but once it was 40 hours a week, I didn’t like it.
J Scott:
Okay. So, it’s interesting, you aspired to be lazy and only work 30 hours a week, but at the same time, you weren’t scared to really work hard. I mean in a caddie working in a restaurant, working construction. Okay, let’s fast forward. You get out of college, you’ve got a little bit of debt. You’ve got about 7000… well little a lot and I guess it’s all relative. I had a lot more when I got out of college. Take us back to right out of college, what did you do next and what were you thinking.
Adam:
I guess two things right before I graduated college, my mom did give me a copy of Rich Dad Poor Dad, and that was a life changer for me. It was a mindset thing, and it’s so weird how many people say that on this show. And I thought I was like I know it’s a bestseller, but I’m like, “Man, people really reference that.” So, I felt immediately connected to this group in this podcast, because I went through the same experience 20 years ago. And then I also had a professor that went through the whole exponential growth thing, and he did a graph. And humans think in more linear terms, and it’s very difficult to think exponentially. He was a geology professor. He was in his late 60s.
And basically in the last day of class, he told the whole class like, “Hey, I’m not here to brag, but I’m worth about $10 million. And I don’t have to work, but I work here because I like it.” And he said, “My biggest piece of advice to you is essentially find something that you enjoy, find something that you love. If you want more money, just figure out a way to invest and make more money that way. Don’t make more money at your job, make more money through investments. So, pick your job on what you want to do. And then if you want more money, do it in other ways, but don’t try to do it through your job because then you might end up having something that you like, and then you ruin it for yourself because you put too many hours into it.
Mindy:
I love that. I love that because what is it like the amount of money that you’ll make over the course of your salaried-life is nothing compare to the amount of money you can make if you can just invest consistently small amounts, medium amounts, large amounts in the stock market, in income generating assets like real estate.
Adam:
Mm-hmm (affirmative). Yep. So, then to answer your question before I forget it, so then come out of college, I was like, “Okay, I want to be a professor. I know I’m not going to make a lot of money, but I read Rich Dad Poor Dad, I could do rental houses. And basically I want a job as a professor. I want four rental houses, and they’re going to be worth 250,000 a piece, and I’m going to have a million dollars in real estate, which won’t make me rich, but it’ll give me enough money to do the travel that I want to do.” With the teachers, they have the time to do the travel, but they don’t have the money, right? And then the corporate people have the money to do the travel, but then they don’t have the time.
So, how do you get both? My recipe was get a job as a professor, and then have a few rental houses to pay for the travel that I wouldn’t otherwise be able to do.
Mindy:
Okay. So coming out of college, you have $7,00 in debt. You have a job? You didn’t talk about your job. You graduate college, what’s next?
Adam:
So basically, it took a year and a half off. I studied for the GREs. I had to score well enough to get into graduate school. I did a year in Breckenridge. I was a snowboard bum. I got 123 days of snowboarding in as a snowboard instructor. That was a lot of fun. So, now I’m 24 and I get accepted to a master’s program in general experimental psychology in California. And I did that for two years. And then after that, I did a PhD at Colorado State, Fort Collins and I did that for another five years.
So, then basically, I did seven years of graduate school after undergrad, which is not a short amount of time. So, I basically lived on 15 grand… well, actually no, I lived more on 20. My salary was 15. I did the difference with loans. So, on average, I was taking out $5000 to $7000 a year in loans. So, then when I graduated from my PhD, I added on about 50. So, then I was totally done with college, I had about 57,000 student loan debt.
J Scott:
And at that point you’re about, 30 years old?
Adam:
Thirty-two.
J Scott:
So, you’re 32 so most people get out of college with debt and… well, they go one of two directions. They either get a job and get further into debt, because they don’t handle money well, or they use that time at a school to shore up their finances and make things better. You’re about seven or eight years out of undergrad. You’re in your early 30s, and you’re basically just getting started in your financial journey from about a negative $50,000 starting point.
Adam:
So kind of. So, what I did was is looking forward, so I saw that as my future. And I said, “I got to do something before I graduate.” Because I was actually in California at the time when I was in my master’s program, and I really did want to stay in California, but it just didn’t make sense for me as a graduate student, because the cost of housing was so high. Luckily, I had a choice of a few different programs, but I chose Cal State or Colorado State University Fort Collins because the housing was cheaper. I actually bought a 4-bedroom house near campus, and then I had three roommates to pay for the mortgage. So basically, I house hacked through my PhD. So, I was technically at zero when I did leave, but I had a house going.
I called my wife and double checked. But basically when I left, I think I was about plus 20,000 and then she was about negative 20,000. We were basically at zero when I left graduate school, and then we moved to Florida for my first job.
Mindy:
See? I heard that in a different way, J. I heard him say that he got through a doctorate program with $50,000 or $60,000 in debt cause we hadn’t talk about the house yet. And I’m like that people are leaving 4 years of college with $50,000 or $60,000 in debt. He did like 80 years of college for 50 or 60,000 so its math, I’m not gonna do the right math. So, you’re like, in my book you’re ahead. Yeah, you haven’t started really saving much money but you are so far ahead because you are already at the end of your, I mean the doctorate program, I don’t know if you know this, Adam but that’s a big deal.
Adam:
Sure, and yeah, in my doctorate program, I got a PhD in applied social psychology, and I studied social influence. We also called social norms, and that probably has the most relevant piece of information for me going forward, and we’re social animals, we’re social creatures. We do what everybody else does.
And then a lot of times, it makes a lot of sense, but my area of expertise was using social norms to try to guide behavior for health behaviors and for environmental behaviors, try to get people to drink a little bit less, try to get people to not smoke so much, try to get people to turn off their lights when they leave, try to do all these environmental and help things, but I found interest in economics because it applies very much to supply and demand. Basically as humans, we’re wired to buy high and sell low. Because when everyone else is buying something, so the price goes up because everybody wants it. We as humans feel comfortable when we buy something that’s really, really expensive, which is the complete opposite of what you actually want to do.
So then when I left Colorado, I moved to Florida and this was 2011. Well, then in around that time, there was a housing crisis going on and Florida took it on the chin. Really, the prices were extremely suppressed and out of all the jobs that I could apply to, this salary was probably one of the lowest salaries that there was. So, it was $40,000. I didn’t quite have my PhD yet, because I was leaving ABD which is pretty normal, but basically, I had a PhD training and I was expected to get it soon, but that the reason I moved to Florida was because of the housing opportunity. I was willing to take less salary to buy a house at a discount and get into a house right away, versus go somewhere else that’s a lot more expensive with a higher salary.
J Scott:
I love the fact that you’re now in your early 30s, and you’re just finishing up school. But as we talked about, you learned all these great lessons, money lessons as a teen and then in your 20s, even without working a full-time job, starting your career, you learn probably the most important lesson of all, which is the value of investing and the value of building investments for the future, as opposed to what I’d like to refer to as just transactional money, trading your time for money. You realize that yeah, you’re going to go through your life trading, your time for money, but then you need to also be investing your money to make more money, your passive income.
It’s a great lesson to learn in your 20s, especially given the fact that you weren’t yet working a full-time job and you hadn’t even left college. So, I’m really excited to find out what you learned in your 30s and later.
Adam:
So then real quick, so then it was in November 2010, I interviewed for a job in Washington DC at a non-profit and the goal was to get a job as an academic, but it was to be a researcher at a non-profit. And the economy wasn’t doing that great in 2010, 2011. So, I was trying to expand my options. The goal was to be a job as a professor, but just in case it doesn’t work out, I should probably apply to other things. I went to DC. They loved me, and they offered me the job. And the job offer was 67,000, four weeks’ vacation immediately, and then a 4% match or whatever, but I went to DC. And I was talking to the guy and I said, “Look at the housing prices,” and there’s a housing recession going on in America. I don’t see it in DC.”
He said, “Yeah, DC’s fairly recession proof because our largest employer, the federal government continues to hire even three recessions.” I was talking about it. I’m like, “There’s no housing discount here?” He’s like, “Nope, you pretty much got to pay full price, even though you can get a huge discount everybody else.” So, basically it was a little bit of a turn off, even though it was a decent salary. I was trying to project my life out five days in the future. I didn’t really see myself buying a house there. It was out of my price range, and I saw myself renting. And I saw myself essentially five years not really having a lot of investments, and not having a lot to show for it.
So ultimately, I turned it down and most of my friends and family thought I was totally nuts, because there weren’t a lot of jobs, and you just turned something down very reasonable. But at the end of the day, it wasn’t what I wanted.
Mindy:
So, I’m sorry. Let’s go back for a second. You moved to Florida instead of DC? or you are in Florida and looking for the other options?
Adam:
So, I just wanted to mention right before I moved to Florida before I actually got the job offer in Florida, I was offered a job in DC for 67,000 and I turned it down. And then ultimately, I took a job in Florida for 40,000. And at the end of the day, that was a much better decision for me.
Mindy:
So, what were housing prices in DC-ish, and what did you buy in Florida?
Adam:
You know what, in DC, I really didn’t pay much attention because the numbers were just so high. I just was like, “You know, I just can’t do this.” And when I moved to Florida, I remember what those numbers are because I was really excited about it.
Basically, I bought a 3-bedroom, 2-bath home, 2-car garage 1750 square feet and I bought it for 95,000. And it didn’t need some rehab, but it was mostly cosmetic. And there were tons of them that were available, and I could actually pick and choose on the one that I wanted.
J Scott:
I assumed that was going to be your personal residence?
Adam:
Correct, correct.
J Scott:
You had mentioned earlier that your plan was eventually to have a million dollars’ worth of investment property. Were you thinking that you were going to buy investment property in Florida as well? Had you already started thinking about it at that point?
Adam:
I think the plan was, yeah, to buy that as my primary residence and then I think live there for a couple years. And then move out of it and then try to buy another one as a primary residence. I think that was the plan moving there. So, then for my job, it was 40,000, but as far as the fringe benefits go, it was an 8% match on the salary. Florida doesn’t have any state income tax. My health insurance was only 50 bucks a month, and then my commute was 10 minutes. With all those things, I know that the number 67 is higher than 40. But based on my situation, 40 was way better than 67. And I think in psychology, we talk about money being secondary. It’s not primary, so it’s not the actual dollar value of the money. It’s what it’s associated with that gives its value. So, 40 in Florida was way more than 67 in DC for me.
J Scott:
Interesting. That’s a really interesting mind shift, and I think again something that I’ve started to realize later in life, but you don’t necessarily think about when you’re in your early 30s and right out of school, you started to recognize that not only were their lifestyle decisions that factored in or lifestyle factors that factored in, but also that your job provides other benefits besides your salary. And when you think about those benefits a lot of times, they can either overshadow the salary, or at least compensate enough for the salary that makes it a better decision than some other job in some other location. So, talk to us about… you said you moved to Florida, and you didn’t have a plan yet.
Well at some point, you must be putting together a plan because it sounds like you’re thinking about these. So, at what point did you say, “Okay, here’s my plan to get down to that teenage goal of 30 hours a week in financial freedom.”
Adam:
Yeah. I think I was headed in the right direction. It wasn’t a rental house yet, but the goal was to buy it as a primary residence, and then later turn it into a rental house. I only had to put 5% down. So, 5% on 95,000 is not that much, and then the renovations were about 16,000, I lived there for four years and basically, the plan was to move on to the next job eventually, and then rent that out. And I guess maybe one thing I did forget to mention when I was moving down to Florida, because the housing market was suppressed and I was telling people my plan, I’m going to take a job for 40,000, I’m going to buy a house in Florida. They’re just like, “You’re crazy, that’s not a good idea,” but again I think that’s how the humans big think.
And because the housing market is so bad, they’re seeing all these things on TV, “Oh, it’s crashing, it’s horrible.” Well yeah, but if you’re a buyer, that’s a good thing, right? And it’s very difficult for people to take that mental hurdle that it’s actually a good thing and not a bad thing. For me, there were a few people in my smaller circle that saw the value in. So, that was a good thing, but I would say nine out of 10 people would say, “Don’t do that, that’s a bad idea. You need to take the more money, go to DC. Don’t go to Florida for 40 because it’s horrible in Florida right now. The houses are selling for nothing.” And you’re like, “Yeah, that’s the point.”
Mindy:
Well, and I can see somebody is saying, “Oh, but the house is in DC.” Let’s call ’em a 200,000. Let’s just say they’re twice as much as the four in houses. They’re gonna be worth twice as much. Well, no. You’re $200,000 DC house is not necessarily going to appreciate at the same rate as your $95,000 Florida house. And, like J said, to have this mindset when you’re in your early 30s and just having gotten out of college is incredible because I bet that house is worth more that 95,000 right now.
Adam:
Yeah. So today, it’s probably worth about 310.
J Scott:
Yeah, and there’s this idea of recency bias in financial economics where you look at something that’s happened recently and you give it more weight than you otherwise might have. And people look at Florida after 2008, and Florida got decimated during the 2008 downturn. DC fared pretty well. So, I imagine there are a whole lot of people who are thinking, “DC is a much safer place to buy a house than Florida.” But if you really think about it for just a couple minutes, it becomes obvious that because Florida was hit so hard, prices were probably depressed and assuming you thought that the market was going to recover, Florida was a obvious choice.
Again, you used your psychology background to really be able to make good financial decisions, whereas other people just went with their gut. And we all know like you said yourself, your gut doesn’t always make the best decisions.
Adam:
Right. I would say the Florida house, I am proud of. You got to celebrate your wins, but even in going to Florida, I just added a little bit more extra piece to it was in Florida near the university, there’s lots of gated communities. And a lot of the gated communities have an HOA. So, during the economic downturn, when the houses became vacant, they went in for closure, they still had the HOA to mow the lawn. Well, where I bought, it was in a non-HOA community, and those are not as common. And in 2011, when I was looking at houses, it looked like a war zone. I mean the grass was three, four feet tall in all these areas, and the houses were not kept and it just looked horrible.
I went and looked at the data though, the neighborhood’s in a good location. Traditionally, that neighborhood is about at or maybe 5% above the median house price for the city, or for the county. And what happened is during the downturn, it ended up being about 22% below the median. And I think the reason was because there was no HVA to mow the lawns. It just looked awful. My prediction was okay, if I buy now when things do recover, I’m predicting that this neighborhood will recover faster than the other ones, because it’ll eventually go back up to the median, and that’s what happened. So, it took about eight years. So not only did that recover, but it recovered back up to the median where it should be. I ran some numbers.
As far as appreciation if you add 16 on a 95, so 111, 111 to 310, it’s a bit increase of about 180%. Well, what other people were buying where there’s HOAs, the increase was about 100%. They still made money and prices still went up, but that neighborhood basically did the best out of all of them because of that thing. And again when I was buying that neighborhood, people are like, “What are you doing? This is not a good idea.”
J Scott:
Okay, so let’s talk about you’re in Florida for what was it six years, seven years?
Adam:
Four years, four.
J Scott:
Oh, only four years, okay. So, you buy this house. When you bought the house, it sounds like you were still several tens of thousands in debt. You were building equity in the house, but you had a job that had a relatively low salary. You did have some other benefits that were great. You were putting away for your retirement, you had a big match, but you weren’t generating a lot of I presume disposable income. So, fast forward to four years later, when you’re getting ready to take the next step in your life, where are you financially? Are you still largely in debt? If not, how did you get out of debt, or what did things look like at that point?
Adam:
We started at zero. We moved in Florida. The housing market was pretty flat, I feel like ’07 to 2014 and I was making steady. Now remember, I still have the house in Colorado, so that’s getting rented out. And then I’m in Florida and then I’m teaching the University in Florida, but I ultimately want to teach community college. So, I interview and I accept a job in Hawaii. So, I got a job at a community college on the island of Kauai. You can figure out which one it is, and I won’t say the name. And what had happened was is basically during that four years, I took a decent chunk out of my student loans, but I didn’t pay it off by any means. And then my wife paid off all of her debt. She had student loans, and then we were able to save up some cash.
We had about 30 grand on our checking account. So, then when the opportunity came for us to move, we could do it. And a lot of people said, “Oh, you can’t move to Hawaii. It’s too expensive,” and it’s like, “Well, we were saving our pennies to give us more flexibility.” So, then we did move. Basically, we went from having the rental in Colorado, and then having the house in Florida. And when things really started to change, it was 2015. And I think that’s when the housing market really started to take off. You saw some positive movement ’13 and ’14, but ’15 is from my experience is when it took off. And in moving to Hawaii, it wasn’t as bad as Florida, but the housing in Hawaii, it took a lot longer to recover.
So in 2015, Florida I don’t want to say is fully recovered, but it had a very strong comeback in 2015. 2015 in Hawaii, it’s still lagging. There’s still opportunity. Basically, I wanted to teach community college and be a good resume booster. I went to Kauai once, and it was one of those places where you’re like, “Hey, if you ever have an opportunity to live somewhere or be on vacation, take the opportunity.” So, I asked my wife, “Hey, you want to quit your job and move to Kauai?” She said, “Yes.”
Mindy:
So do I. Ok so, you live in Kauai. Did you buy a house in Kauai? Did you sell your house in Florida? or did you keep it?
Adam:
No, we kept it. We kept the house in Florida. We were a little bit unsure. We listed it for rent for 1400. There was pandemonium to try to get it.
So, the house ended up running for 1600, and I was trying to figure out what happened because I was looking at the rents and then it was just way more in demand than I thought it was. And then six months later, I was looking at some of the report. And apparently, I think Fort Myers, Cape Coral was number one in rental increases in the nation, and it had gone up 23% in a year, and so 2014, 2015, around there. So, basically we got… and then also for Colorado, I increased the rent by 500. I increased the rent from 1450 to 1950. So basically, now we’re getting almost a thousand dollars a month in cash flow. Obviously, there’s expenses, but we got about a thousand dollar spread on the mortgage to the rent on two rentals now when we moved to Kauai.
So, we have enough of a financial buffer where we feel like we’re going to do it, and it was more money and moving requires more money too.
J Scott:
Yeah, it sounds like you learned a very important lesson relatively young. It’s funny, I to teach my kids if there’s only two things you ever have to know about money, rule number one, buy good assets and rule number two, don’t sell them. And I found that if I talked to a hundred people who are wealthy today, 95 of them followed that formula. They bought good assets, cash flowing assets, or non-depreciating assets. And they held them for a long period of time, and I talked to a lot of people who say, “I learned way too late,” and I’m one of those people. I was in my 40s before I learned that lesson. You learned that lesson early, and so it was great.
It’s a perfect example how buying assets and just holding them can really set you up for financial freedom later in life.
Adam:
Yeah, thank you very much. I think I was born patient. I think it’s my personality. I didn’t know for sure that that’s the way it was going to go. I was optimistic, and I was willing to wait to see what to see what happens. So basically, we moved to Kauai. We got a studio apartment for 1100 bucks a month. It was 332 square feet. The landlord told us it was 450, but I measured it and I was like, “Yeah, it’s taller than that,” but we were within a mile of the beach. So, we could walk to the beach every day. So, it was a great life. We were there for three years, and I bought a house. And we bought a house that had a basement rental unit, like a mother-in-law suite. Basically, we bought the house for 603,000.
And what I did is I refinanced rental number one. I did a cash out refi, and so that gave me enough money to do the 20% down. And then it also needed about 50 grand worth of renovations. There was some water that was getting into the basement unit, and it was a foreclosure. And people didn’t know why. So, it was a little bit of a leap of faith when I bought the house, but I lifted enough houses where I was like, “Nothing’s risk-free. It’s severely discounted, so I’m willing to take the risk.” And basically, what we had found out was one of the gutters was filled with leaves and dirt, and the water wasn’t draining from the gutter. So, it was falling right next to the foundation, and it was just slowly seeping into the basement.
Basically, the bank probably discounted the house a hundred grand because of water in the basement, and it was a about a $300 to $400 fix. Mm-hmm (affirmative). Mm-hmm (affirmative). Right. Yep, very happy with it. And then so the mortgage was like… So, Kauai is expensive, Kauai is expensive, but they have the lowest property taxes in the country. On that house, the property taxes are only about 1500 bucks a year. You do get a little bit of a discount for being a owner occupied. So yes, it is expensive, but the property taxes are so low. And when you combine that with low interest rates, your payment might be high, but a lot of it is going towards principal.
And where I grew up in the Midwest, I grew up in lake county Illinois and the property taxes are three, four, maybe sometimes 5%. And I’m paying 1500 on a house that’s worth six. It’s a quarter of a percent, so it’s way less. Our mortgage was 26.50, and then the rent that we got downstairs was 1600 a month. And then so we’re left paying about 10.50 a month for our house. Right, kind of yeah. Right. So, I got a 20,000… well, I’m sorry. It went from 40 to 54. So, my base dollar is 54,000, but they paid overloads pretty well. And there was opportunities for overloads.
J Scott:
What are overloads?
Adam:
Those above your regular load. My regular load was nine classes a semester-
J Scott:
Got it.
Adam:
… and then if I teach a tenth, I get an extra five grand. And then if I teach an eleventh, I get another five grand. I was making 64,000 with teaching two extra classes.
J Scott:
That’s a fancy word for teacher overtime.
Adam:
Yeah, yeah.
J Scott:
Professor overtime.
Adam:
Yeah. Mm-hmm (affirmative), mm-hmm (affirmative). Mm-hmm (affirmative), mm-hmm (affirmative). So, we were in Hawaii for four years. And when we moved there, we didn’t have any children. And right around about the time that we bought the house, that’s when we were expecting our… no, my son was born in May 2017. We bought the house in June 2018. So, when my wife was pregnant, that we started looking at houses. It took us 18 months to find the house that worked for us. So yes, it did take a while, but be picky and then we ended up with the house that we wanted.
But when we did buy the house, we weren’t super strong that we’re going to be here forever, which I know is an odd thing to say, but we’re just like, “Let’s buy a house. We can get an unoccupied rate. Even though this probably won’t be our forever, let’s buy a house, rent it out, and then this will be a retirement house, kind of a thing.” Even though I bought the house, I was actively looking for other jobs. Because once we had had our child, we were far away from home. And my wife was wanting to move back to the mainland to be closer to her family. So, we bought the house about the same time that we knew that we weren’t going to be there forever, which is an odd thing, but that’s what we did.
J Scott:
So, your 32-year-old self set a goal, or maybe a little bit before 32 set a goal of having four houses worth a million dollars.
Adam:
Mm-hmm (affirmative).
J Scott:
Here you are about, what is it eight years later?
Adam:
Yeah, sure.
J Scott:
About eight years later, and you have three houses now worth how much?
Adam:
So, at that time, so once we fix up the Kauai house, we put 50 into it. It was probably worth 750 to eight. And then the Florida house was probably worth probably 225, and then the four Fort Collins house is probably worth 360.
J Scott:
So, you’re close to 1.6 at that point in eight years, as opposed to 10.
Adam:
Right.
J Scott:
It goes back to one of my favorite quotes, which is we often overestimate how much we can accomplish in a year, but we highly underestimate how much we can accomplish in five or 10. And I think it’s a good example of how if you had to go back and reset your goals, you probably would have set them a whole lot higher. And it’s a good reminder I think for our listeners, that when you’re setting goals for the future, don’t underestimate what you can accomplish in five or 10 years. You can probably do a whole lot more than you expect. And if you set those goals, high worst case you fall a little short, but it’s better than setting them low and just hitting them.
Adam:
Yeah, absolutely. I agree with that 100%.
J Scott:
Okay. So, you’re ready to leave Hawaii now for some reason that I don’t think either Mindy or I will be able to comprehend. Kauai is my favorite island. You decide it’s time to leave Hawaii. How did you come to that decision, and where did you go?
Adam:
We ended up moving back to Colorado, where my wife is originally from and I went to graduate school in Colorado. I don’t have any family there, but I still have a lot of friends. And she wanted to be closer to family, and we had California as a number two. We had Arizona as a number three, and then we had Michigan as a number four. I’m originally from Illinois. We were looking at Western Michigan because it’s within a couple hours of Chicago, where my family’s from. And we got lucky and we got our number one choice. We moved to Southern Colorado. I got a job there, and we are an hour and a half away from her parents. And she’s actually having lunch with them right now on campus at our… We have a culinary program and it’s international cuisine week.
It’s fabulous food, and it’s heavily discounted. They’re having a poached salmon and French onion soup and crème brulee. So, she’s happy, she’s hanging out with her parents. She’s with our son who’s four. Colorado is tricky because the cost of living if you’re near Denver is expensive. The way that I get paid through the state is really doesn’t matter where you live. Everybody gets paid the same. So, Denver might be a little bit more desirable, but my salary goes a lot farther if you can be outside of Denver. So, we’re about an hour and a half to two hours outside of Denver, and the cost of living is about 30% to 35% lower. That way, my salary goes a lot farther. Sorry, go ahead.
It’s a little bit better if I want to… we don’t get as much snow, and it’s about three to five degrees warmer. So, the only time it might be worse is August, it will be three to five degrees warmer. So, if it’s 96 in Denver, it’ll be 100 in where I’m at. Right. Right, yeah. Now, yeah. Yeah, yeah, there is. Yeah. Yeah. So for where I live, honestly we’re right at the base of some of the local mountains. They get up to about 12,000 feet. I mean looking off in the sunset it looks like a lot boulder with the flatirons and all that, just probably a tenth of the price. And the school district is amazing where I live, and this happened by accident, but it’s pretty common for college. I don’t teach on Fridays, that’s normal. But the K through 12 system where I live, my son doesn’t go to school on Fridays.
It’s a Monday through Thursday kind of curriculum to give the kids longer weekends. So basically, I’m super happy because as a family, we have 3-day weekends every single weekend. Unless school’s not in session, then we just don’t have to do anything. Mm-hmm (affirmative). Right.
J Scott:
Where are you people sending your kids that they’re just off of school on Friday? I love this place. I can put my kids to work three days a week, that’d be awesome. So, how long have you been in Colorado now?
Adam:
So, this is two and a half years.
J Scott:
Okay.
Adam:
So, we moved here in August 2019. We bought another house in November 2019. So, we bought a primary, and we were going to rent for a year. We were renting, but the rental unit had I think some smoke cigarette smoke in the floors, and we didn’t really notice that at first because they really piled on the cleaner. And after a while, we smelled cigarette smoke coming from forest. So, we asked our landlord if they could fix it and they tried, they couldn’t. So, we said, “Hey, can you let us out of the lease because the house smells like smoke?” And they’re like, “Yeah.” So, that was out of the lease. I said, “All right, let’s look for another rental,” and she’s, “How about this one?”
And I said, “Well, that has a for sale sign on it, not a for rent.” She goes, “I know, but I want to buy it,” and I’m like, “Okay. Well, how are we going to pay for it?” She’s like, “Well, let’s refinance the Florida house.” Because at the time, it was worth 250 and we only owed 70 on it. And I was like, “Okay, if this is what you want to do.” The guy flipped it. He did a great job. It looks like a Joanna Gaines farm style house. We refinanced the Florida house. We bought the house there. I feel like Colorado is very cyclical in the sense that prices spike up during the summer, because that’s when everybody wants to move. So, part of the reason why I was able to get sold on it, I’m usually in the habit of I got to get a deal somehow.
And I’m like, “Well, this house is fixed up and it’s fancy. Where’s the deal?” Well, what had had happened was is the guy who was flipping, it took him 11 months to finish everything. He put it on the market in late September, early October. Well, the summer demand was gone. Normally, I think he listed during the summer, probably listed for 300.” But because he was late to the party, he listed it for 280. We got it for 280. We had to compete with a couple other people, but we just paid asking price. And I feel like if he would have got it done in the summer, he probably would have gotten more. So, I feel like I saved about 20 grand because we bought it in the fall.
J Scott:
So, you now have four rental properties in three different states. Is that correct? Four rental properties.
Adam:
Three properties, four doors because one of them has two units.
J Scott:
Got it.
Adam:
The Hawaii one’s two units.
J Scott:
Okay. I’m going to pry a little bit. So, you’ve obviously have a good bit of money in your real estate investments. Do you have other investments outside of real estate that you consider to be long-term investments for your financial future?
Adam:
So, I think about two years ago, I came the realization that we were a little bit real estate heavy. I decided to start diversifying. We have about 200,000 in retirement accounts. For my current job which is mid-50s for that. For Colorado, the pay is probably anywhere from 45 to 55. Because I have so much experience and a PhD, I was on the higher end for 55, but 13 and a half percent comes from my employer. And then 13 and a half percent comes from me, so 27% of my paycheck goes into a 401(a), which is essentially the same thing as like a 401(k). And then the last two years, we’ve been fully funding our off. We’ve been continuing to do that. So, we have about 200 in retirement accounts, plus the real estate equity.
J Scott:
Which is pretty impressive given that relatively speaking, you haven’t had the highest salary jobs. You’ve been living in relatively high cost of living areas, but you’ve made good decisions along the way. I love the fact that there are a lot of people out there who put their lifestyle first and don’t think about money and then find themselves in bad money places. Then there are other people that put money first and don’t think about their lifestyle and end up not happy, because everything they do revolves around saving every penny. You’ve done a good job of finding a compromise in between. You make lifestyle choices, but you allow money to inform those choices, and you make lifestyle choices that will also allow you to maximize your lifestyle and your financial future.
I think the lessons here are just so important to anybody out there that’s either starting out, or into their money journey that has that struggle between do I live the lifestyle I want, or do I save money, so I can be financially free? You’re proof that people don’t need to make that choice. There’s a compromise where you can really optimize for both.
Adam:
Yeah, I really like that. I think that nails my philosophy pretty close. I think there’s a compromise in there. And the only thing that I would add is with real estate, I wouldn’t consider it to be totally passive. I would consider to be more of a side hustle, and there’s so many different ways you can make money in real estate. So, I think when you do dive into real estate, you just have to think of the lifestyle. What type of real estate do I want to buy that would fit into my life that I would like to live? So, then this would be a good transition then to talk about now I live in Colorado, and now I got all these rentals all over the place. So, how does that work, right? In Florida, I do have family that lives there.
I go to Florida twice a year no matter what. So, I have a rental house that’s 30 minutes away. So, that’s pretty easy. My stepsister is a real estate agent in the area. If I ever wanted to have her manage it, or give it to one of her friends, it wouldn’t be a big deal, but I self-manage just fine. And then for the Hawaii house, this is where it gets tricky. So, for the Hawaii house, it is not passive. The house itself isn’t really that difficult, but the yard is. It’s extremely beautiful, there’s tons of foliage, and it needs to be trimmed often. So, I basically fly there three times a year to do the major landscaping, cut things back. The tenants mow the lawn, but I have to cut trees back, bushes back.
Otherwise, it’ll just turn into a complete jungle. So, it is true, I do get on a plane and I fly to Kauai. And it is work, but usually it’s a four or five day kind of trip. I do half the day at the house and then half the day, I go surfing with my friends. And to me, it’s still pretty fun. So, you can categorize it however you want. You can say, “No, that’s work, it’s not passive.” It’s like, “Yeah, but I like it.”
J Scott:
I’m not a tax professional, but I believe you can probably write off those expenses as well since you’re spending more than half your time over several days.
Adam:
Right.
J Scott:
Now, you basically have not a free vacation, but certainly a cheaper vacation, because it’s now tax deductible in Hawaii.
Adam:
Absolutely. So, it’s not free, but it’s heavily subsidized. Yeah.
J Scott:
A great reason for buying rental property in places not only where you go, but where you might want to go.
Adam:
Correct.
J Scott:
So, that’s a little trick that my wife and I learned a number of years ago, that if you buy rental property places you want to go, yep, it’s a little bit cheaper to visit.
Adam:
And then this past summer then, it was our big trip. The timing was pretty good. We had tenants that moved out in May, and I don’t work in the summer time. And the last piece that I wanted to do with the house is I wanted to paint it. So, it hadn’t been painted probably about 20 years. We occupied the home for six weeks over the summer. I painted the house blue. It took me about three, three and a half weeks to paint it. And it was work, but I took my time and did it when I wanted to do it. Campfires on the beach, surfing with my friends, and doing a little bit of work on the house. Yes, it is work, but again, it fits in with what we want to do. And we have a minivan parked in the backyard. So, when we fly there, I don’t have to rent a car.
Mm-hmm (affirmative). Mm-hmm (affirmative).
J Scott:
Yeah, if you’re doing it to save money, that’s probably not the right reason to be flying to another state to trim the grass, but you’re not doing it for the money. Yeah, it’s a good thing. So okay, let’s fast forward and we’re already at today. So, when I say fast forward, let’s talk about the future. It sounds like you’re doing really well, you’re very happy, you’ve engineered a life that you love with financial decisions that have put you in a really good place. What are your goals for the next five, 10, 15, 20 years from here?
Adam:
Yeah, that’s a really good question. I’ve really struggled with this because I hit everything that I wanted to hit way earlier than I thought. So, I’m having a hard time coming up with something to work towards. I’ve designed the life that I wanted. The only thing that I could maybe wanted… I don’t know, this sounds excessive, but I do like to snowboard. And when I was young, I didn’t really mind the drive. It’s about two and a half hours, depending on where I go. I’m 42. So, as I’ve gotten older, the drive is getting a little bit not as fun. I have been toying around with the idea of doing a short-term rental, south of Breckenridge. Breckenridge is a little bit too outside of my price range, but I’ve been looking at Alma and Fairplay.
It’s about 30 minutes south of Breckenridge, and I’ve been kicking around the idea of maybe trying to buy a short-term rental that we could use and rent out. And I don’t know, I’m not ready to commit yet, but it’s something that I’ve been thinking about, but I’m really been struggling to come up with the next step. So, I don’t know, I’m trying to figure it out. Mm-hmm (affirmative). Mm-hmm (affirmative). Yeah, I had 10 acres under contract in Alma, and the deal fell through because the listing agent wasn’t completely honest with the condition of the property. They said it was snowplowed by the HOA, but there was a 300- or 400-yard stretch right before it got to the driveway where it wasn’t plowed. I had 10 acres under contract for 125 and the def.
And I walked away from the deal, and I don’t regret that. Because if it was plowed, it would have been fine, but now when I try to go look, that was September of 2020, so just over a year later, now those lots are 250. So, the lots have doubled in about 12 months. I was, “Ah, I don’t know.” That one got away, but whatever, something else will come up. Mm-hmm (affirmative). Yep. Mm-hmm (affirmative), mm-hmm (affirmative), mm-hmm (affirmative).
J Scott:
He’s a professor, professor.
Adam:
Yeah.
J Scott:
Remember, professor overtime, that’s his new nickname.
Adam:
Ah. Yeah, so I would say going forward, I would say the only thing is I realized I think I hit my limit as far as managing rentals myself. I could take on more, but that really would be more work for me. I like my 30-hour weeks. I don’t want to add more stress. If I’m going to grow, I have to partner. I think I’ve come to the realization that I have to start reaching out and shaking hands and meeting other people to partner up, because I am interested in growing, but I’m not super interested in adding a bunch of extra hours. I know there’ll be some, but I’m not really looking to add on a lot of extra work. Mm-hmm (affirmative). I think that probably is this the next step is probably buy more rentals closer to where I’m at.
And for the Florida house, it is probably my least favorite, but every time I try to get rid of it, the price goes up. Right now, it’s rented for 1950 and I feel like I would try to be $100 under market value. So, I rented it in June, the people occupied the house in August. So, the market rent looked at about 2050, so I asked 1950. It wasn’t enough money. Now, Zillow, the market is saying it should be more 2400. I’m locked in for the year, so I can raise the rent after, but every time I try to get rid of it, something like that happens. And I’m like, “Well, I guess I got it for another year.”
J Scott:
Well, let me ask you a question. Let’s say you were to sell it, what are you going to do with the money?
Adam:
See, that’s the million dollar question, or at least the $310,000 question.
J Scott:
Yeah.
Adam:
And what was happening is up until that point, my local market was so hot, I didn’t want to compete with those people. I told my wife it doesn’t make any sense to sell the Florida house, because I don’t feel comfortable navigating these waters with it being so crazy. So, once things calm down and I feel more comfortable, then I would feel more comfortable selling the Florida house.
J Scott:
Yeah, I often get the question should I sell or should I hold, and my answer is typically, tell me what you’re going to do with the money when you sell and if you don’t have a really good answer for that question, don’t sell.
Adam:
Mm-hmm (affirmative).
J Scott:
More homework.
Adam:
Mm-hmm (affirmative). Mm-hmm (affirmative). Mm-hmm (affirmative). Yeah, no, I agree 100%. I think ultimately, what’s going to happen is I’ll probably South Florida at some point, and then I will probably buy my local area or Fort Collins. That’s probably what will happen. The only thing about the Fort Collins house, I’m a little bit less likely to sell it. And I don’t maybe you guys can chime in, but it’s a double lot, but the house is in the middle. So, I can build another house on the lot, but I would have to demolish the house that’s on it. So, labor’s really expensive right now, but at some point, so it doesn’t financially make sense, but thinking long term it, it’s about half a mile away from the university.
I think at some point, I might actually knock the house down and build two, but that’s more a distant kind of goal. Okay. Yeah. Oh. Yes, I’m ready. So, I think I have to represent psychology. So, this is a good one. If you force me to pick one, so Thinking in Bets.
J Scott:
He’s holding up for those that aren’t watching this on video. It’s Thinking in Bets by Annie Duke, and I’m actually friends with Andy Duke, or used to be friends with Annie Duke. And I love that book.
Adam:
So from a psychology perspective, for me personally, it was just a tiny bit disappointing because she does such a good job of breaking it down into simple concepts. So, at the risk of sounding arrogant with somebody with a PhD, I was hoping there was a little bit more meat on the bone. But for somebody that is not a psych major for people that started from zero, this is absolutely the best book in communicating with that type of audience. And I actually had a similar experience as her, in the sense that I never really played poker, but when I was in my PhD program, I got invited to go to a bachelor party. It was in Laughlin, Nevada and we played poker, and I got third in the tournament.
So, I won $300 or $400 and all I was doing was using the principles on judgment decision making that I learned in graduate school, and I actually asked a few people. I was like, “Hey, is there anything to this? Do you think I could pursue this path?” They’re like, “No, it’s just all dumb luck. You don’t have any skill.” And then this book came out and I was like, “There is something to it. I knew there was something there.”
J Scott:
She’s a very smart person and a very good poker player.
Adam:
But then I would like to talk about just a small progression, so Influence by Robert Cialdini if you liked the Annie Duke book. So, I worked on some projects with Robert Cialdini in graduate school. We had some of the same grant funded projects. My advisor was at Cal State San Marcos, and we had some joint grants from Arizona State. So, we were doing some of the same studies that he was doing in Arizona, we were doing in California. So, his stuff is really good. And then the third one is Daniel Kahneman, Thinking Fast and Slow. And I would do this in this order. This is an amazing book. It’s really hard to read. There’s a lot of technical psychology, but if you feel like you understood the first two and you want to make the leap, read the third one.
This is written more a academic. There’s big words in here that a lot of people don’t understand. It’s still written for the non-academic, but it’s probably the most technical. If you can make it through it, though it’s worth it, but it’s not going to be easy, it’s going to be work.
J Scott:
Oh, so I love Annie Duke’s book, but the two you just held up are two of my favorite books of all time. Anybody that reads Influence or even if you don’t have time to read all of Influence, there’s a chapter in Influence called reciprocity. And it is a chapter that is probably the most important chapter I’ve ever read in any book in my entire life. So, if all you do is pick up the book Influence and just read that one chapter, I think you’ll find the book worth it. And then Thinking Fast and Slow is my all-time favorite book. Recommend it to everybody, and I don’t think you’re right in that it’s that academic. I think it’s written for some of us mere mortals to understand as well.
Yeah, it’s a dense book, but I think a lot of people can get a lot of out of that book. Changed my whole view on psychology and marketing. Okay, question number two. What was your biggest money mistake?
Adam:
I got busy in Florida, and I wasn’t paying enough attention to the rents in Fort Collins. So, I let a group of students re-rent with no rent increase, and that was a huge mistake. By the time I finally got to raising the rent, I raised it from 1450 to 1950, and it really wasn’t enough. The next year, I raised it to 2200. So, what Mindy was saying there was Fort Collins took off, and I wasn’t paying attention. Eventually, I saw it, but I saw it a little bit too late. When I was in Florida, I had my new job and I was finishing up my dissertation at the same time. And that was probably the busiest part of my life, was the first two years in Florida. And then after that, I slowed up, but yeah, I wasn’t paying attention to the rents. And I should have increased the rent a lot sooner than that.
So, I think it cost me about 10 grand probably in lost rents. So, not horrible, but… Right. Basically, everyone has different goals. I’m currently teaching personality psychology right now. Personality is mostly genetic. We’re bored with our personality, and everyone’s a little bit different on what motivates us and what makes us tick. So, I would just say come up with your own goals, don’t come up with goals that other people tell you you should have. And basically, if I was to add on to that, once you figure out your goal, then just reverse engineer it, how do I get there. And then if each step seems too big, then you just break it down into smaller steps. And then when you accomplish each step, you got to celebrate your wins. And I feel like that’s what I’ve done over the last 10 years.
J Scott:
Love that. Okay. Final question. I feel like Mindy you should be asking this question, but I’m going to ask you because it’s my turn. So, what is your favorite joke to tell at parties? Mindy’s the funny one. She’s the one that should be asking the joke question.
Adam:
So, I don’t know, I’m hoping this is funny. It’s a joke that I love telling at parties, but you have to know me and know my wife to get the joke. I’m an optimist. I’m glass headphone kind of guy. We’re in Florida, and it’s the summer time. And my wife has to go to work in the morning, and I don’t. I’m just going to sit at home and work on a few things. And I drank a little bit too much wine the night before, and she’s getting ready to go to work. And she’s just seen me laying on the couch, and she’s a little aggravated because she’s got to go to her corporate job that she doesn’t really like that much. And she opens up the fridge and she’s like, “How much wine did you drink last night?”
And I was like, “Yeah, not that much which is a total lie.” And she’s like, “Not that much, the bottle is half empty.” And I look at it and I go, “Actually, it looks more it’s half full to me.”
J Scott:
That would have been better if you wouldn’t have given the punchline away in the setup.
Adam:
Yeah, yeah. Okay, sorry about that.
J Scott:
It’s okay. I like it, I like it.
Adam:
Yeah. I don’t know. I do have an account on BiggerPockets, Adam Christopher Zaleski. So, if you want to message me there, I’m not really selling anything, but I feel like I probably do have to partner with people if I want to grow. So, I have to go outside my comfort zone a little bit. I am looking for a loan officer that is licensed in three different states; Florida, Hawaii, and Colorado. I’ve been doing this a little bit too long to be going with different people. So, I’m looking for one person that can do everything for me. And then the other thing is if anyone’s interested in partnering on a short-term rental in Park County, just south of Breckenridge, let me know.
One of my ideas, I don’t know how crazy this is, but if I was to do a successful short-term rental, I think I would still end up with about 100 days of vacancy. And what I want to do is still take advantage of those vacancy days by using them myself. There’s no way I could do 100 days of vacancy. I can’t use that. So, I was thinking as a partnership, my idea was to split the vacancy days. And then that way, it gets used and there’s less waste.
J Scott:
Love it.
Adam:
Yeah, so reach out to me if you’re interested in real estate. I’m really interested in how psychology applies to real estate. So, I can talk about that all day long. I have not. Okay.
J Scott:
Thanks, I appreciate that. Sheesh. Absolutely. Adam, it was great talking to you. Thank you so much.
Adam:
Yeah, thank you very much. Thanks for having me. All right, bye-bye.
J Scott:
I thought that was great. I mean honestly, there are so many things that he started with these insights as a teenager that a lot of us don’t have until our 30s and 40s. And every decade in his 20s, he realized that he should be buying rental property. In his 30s, he realized that it’s not necessarily taking the highest paying job. In his 40s, he realized that every time you buy a new house, don’t sell the one you had, hold it as a rental. I mean he’s making these decisions each decade of his life that a lot of us are making 20, 30, 40 years later because we don’t have the knowledge and wisdom to make these great choices. So, I love the fact that he was so far ahead of so many of us.
And I hope anybody that’s listening to this that’s in their teens or in their 20s or in their 30s is really taking heat of the things he said. Because if you follow his advice, by the time you’re in your 30s or 40s or 50s, you’re really going to find that you’ve achieved everything you’ve needed and wanted to achieve. And you’re so much closer to your financial goals than you would have been otherwise.
I wouldn’t make those same choices now. He was smarter at 30 than I am at… well, however old I happen to be right now, more than 30.
Nobody cares what I’m up to. I’m here hosting this awesome episode with somebody that almost calls me a friend. There is nothing more that I could ask for in life. I’m living life in a beautiful place not too far actually from where Adam bought his first house in Florida and yeah, engineering my life, hopefully following the lessons that Adam laid out for us on the show.
Oh, I’d like come back. Let’s do it. Everybody, thank you so much for joining us on this episode of the Money Show.
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