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135 | How To Leverage A Modest Income With Joel From How To Money

Brad and Jonathan talk to Joel from How to Money about his path to Financial Independence. Joel has pursued FI on a relatively low income and has used pure hustle to fill in the gaps.

Joel’s Story

In the beginning, the first thing that made Joel think about money was his parents’ bankruptcy. After years of spending at the upper limit of what they could afford, disaster struck and pushed the family into bankruptcy. At the time, Joel was 12 years old and the whole encounter really changed the way he approached money.

He realized that if you do not know how to handle money well, then it can lead to a stressful and difficult life. The hard times affected his outlook on life. At a young age, Joel decided that he wanted a different future for his family.

That’s not what I want for my family someday. It’s really really important for me to figure out the nuts and bolts of how I get my money act together so that money doesn’t become an issue someday when I get married and have kids.

Although his parents were not wild spenders, they did spend largely on housing and cars. One memory that has really stuck with Joel is the brand new Dodge Durango in the driveway. His parents had bought it even though they couldn’t afford it. Once his dad lost his job they knew that it was just a matter of time before the Durango was repossessed.

You can’t predict when you’re going to have a job loss, but you can prepare for it.

Choosing A Different Path

Instead of emulating his parents, Joel did the exact opposite at the time of his first major purchase. He mowed lawns and worked at a fast food place for years to save up the money to buy his first car. He wasn’t even aware that you could buy a car with money you didn’t have.

It was a quick first lesson. Already, he was on-board with buying cars in cash. Plus, it is well known in the FI community that there are awesome cars with a few years on them.

Related: Longest Lasting Cars On The Road Today

Although he didn’t quite know what to do with his money yet, he knew that he wanted to be frugal. His frugality bordered on the miserly but it was a starting point for growth. He knew that he could make his life much more difficult by spending more money than he should so he paid attention to where the pennies were going.

Finding A Financial Education

After witnessing his dad lose a job, he knew two things. He couldn’t spend more than he was bringing in and he wanted to have a job that he loved.

I had to figure out something in regards to money. I had to find some sort of help…it made me decide that I wanted to keep more of the money I made, as opposed to buying stuff… if I make a decision like [buying the brand new Dodge Durango], I can completely sink a lot of the other things around me. I can really make life a lot harder than it has to be.

At 22 years old, he landed his second job out of school as a producer on the Clark Howard show. Working on this show became the crash course in finances he had been looking for. And although the job paid around just $24,000 a year, Joel loved the job.

Joy Of Going To Work

He warns anyone that wants to go into the radio industry that the low salary is fairly typical for the business. For Joel, it is worth the relatively small paycheck because he loves the job.

Frugality was essential because I really just wasn’t making very much money…the salaries aren’t amazing, but you know what, the joy of getting to go to work every day and enjoying what I do, that to me was worth it.

Plus, he was given a financial education on the job while producing the Clark Howard show. Joel says that his mindset and skill set have grown due to the show and that is worth it to him.

Even on this relatively low salary, Joel has been able to put himself and his growing family on the path to FI through real estate.

Moving Towards FI

From an early age, Joel had the frugality aspect down. If he was going to reach FI on a smaller income, then frugality would have to be a key component.

Your approach to FI changes when you’re making less money. And so, for me, the best thing I had at my disposal was, first, continuing to be frugal. But then, on the other side, funneling my money into investments I could understand.

Joel knew that it was not enough to just save the money, he also needed to invest it in places he understood. The first place to start was his 401(k). He contributed enough to receive his employer’s match. The next place investment vehicle that he understood was real estate, so he decided to funnel his savings there.

Joel’s First House

In order to save up 20% down for his first house on a yearly salary of $24,000, Joel had to hustle. He picked up a side gig of pressure washing houses in the mornings before work. The side hustle helped him accelerate his savings towards a down payment.

The timing of Joel’s first house purchase coincided with the market collapse. Although it was a scary downturn, Joel knew that this was his opportunity of a lifetime. So, he purchased a home for $89,000 with 20% after saving for just 2.5 years on a salary of $24,000.

I realized quickly ‘what if I can replicate this?’ And that’s when I came up with this two year rule. If I could buy a house every two years, if I could just accelerate and bank that savings, bank the extra, and save that towards another down payment. Well, this is something highly replicable in my life.

That first house has been a building block towards FI. After he bought the house, he brought in a roommate that paid most of the mortgage. Without a lot of living expenses hanging over his head, Joel was able to save another down payment of 20% for his next home purchase. The next purchase was also a single family home that he was able to move into and completely rent out the first.

The Next House

Joel chose to owner occupy his home purchases because it gave him many benefits. First, the financing opportunities are better for an owner occupant. Secondly, living in the house allowed him to understand his investment better. For example, he knew what things he would likely have to replace soon and anything that might go wrong with the house.

With the goal of buying a new home every two years, Joel was able to amass five doors that he self-manages in the area near his house. Now that he has a wife and three kids, they will not be continuing the owner occupant strategy. However, they do still rent out the back part of their home to a roommate to cover some of the mortgage. This has allowed his wife to stay home with their young kids.

Joel’s Real Estate Portfolio

Today, Joel owns three single-family homes and one duplex. He self-manages all of these properties and does what he can to keep expenses down. The idea behind self-managing is–why pay someone to do something that you can do yourself. Plus, no one will care more about your investment than you do.

The ultimate goal of the real estate portfolio is for real estate to pay all of their expenses. Currently, it brings in around $20,000 a year.

Although he bought a property in 2017 and 2018, Joel is not currently looking for a new buy. For now, he is looking into investments with less hands-on management required. However, in the future, that may change. Joel says it is possible for the portfolio to produce enough income to put 25% down on a property every single year.

If Joel resumes buying properties, then he plans to focus on multi-family properties instead of single-family homes.

How To Get Started Building Your Real Estate Portfolio

As a general place to start, Joel likes the 1% rule. The 1% rule means that if you buy a house for $150,000 then the monthly rent of the unit should be $1,500. He also looks for houses that will likely appreciate over time or houses that he can buy at a deal.

Depending on your market, some of these guidelines may be more helpful than others. For example, if you live in Denver then the 1% rule may seem laughable. However, if you live in a stagnant market, then the idea of looking for a property that will appreciate is equally laughable.

I look for that 1% rule, I want to see appreciation over time, and I also want to see cash flow. But again, this is market specific.

Do the research in your own area to determine what you should be looking for in a property. Make sure the numbers make sense before jumping on what seems to be a deal.

In terms of property management, Joel likes the do-it-yourself approach. However, it is not for everyone. Know what you are getting into before you sign up to manage a new investment property. Regardless if it is by yourself, or through a property management company.

If you are starting today, Joel recommends buying a multi-family unit. You can live in one of the units and have the other units cover the mortgage. With that, you have the opportunity to build up your savings quickly and potentially buy more properties rapidly.

Working On The Clark Howard Show

Joel loves going to work every day. As a producer of the Clark Howard show, Joel’s approach to money has been understandably altered. Listening to one of the largest personal finance shows in the world every day has helped shape his mindset about money.

For me, it was this overall mindset shift… Money has a lot of value. I don’t have to just cling to everything. I can actually use it well. And I can use it well to invest and to care for others.

In addition to the takeaways in the real estate space, there have been many others during his 12 years on the show. From cutting down monthly bills to being more generous with his money, the show has changed many things.

It’s about helping people think about money in a completely new way. And they think about their money bills in a way that they hadn’t thought about before.

“How To Money”

After years of learning from the show, Joel decided to put more information out into the world from a personal perspective. With his co-host, Matt, they discuss money topics in a light way. The goal is to help people recognize that they do not have to give everything up to be financially successful.

Joel’s Approach To Life

Joel has leveraged a small salary and hustle into a growing real estate empire. Although he does not have a FI date in mind, it could be in the next several years.

Joel’s goal is to continue to do something that he loves every single day. And if it takes getting to FI a little longer because of that, that’s ok.

Whether he chooses to invest more into his side hustle or decides to take a mini-retirement, Joel is content in his choice to lead a fulfilled life on his journey to FI.

Listen to Brad and Jonathan’s review of this episode here.

How To Connect

You can find Joel’s podcast “How To Money” wherever you download your podcasts. Also, check out for more ways to connect with Joel’s content.

The Hot Seat

Favorite Blog: Instead of a blog, Joel shared his favorite podcast, The Joe Rogan Experience. Specifically, a favorite episode was an interview with Colin O’Brady, the man who pulled a sled across Antarctica.

Favorite Article: #48: Everything Costs More Than You Think

Biggest Life Hack: Ride your bike more. In particular, a cargo bike.

Biggest Financial Mistake: Thinking that buying cheap stuff was a good idea. Just because something is on sale does not make it a good purchase.

The advice you would give your younger self: Be more generous. A miserly approach to money is not a good way to live with money.

Bonus! What is the purchase you have made over the last 12 months that has brought the most value to your life? AfterShokz bone conduction headphones

Related Episodes And Articles

New to FI? Be sure to check out Episode 100: Welcome To The FI Community!

How To Leverage A Modest Income With Joel From How To Money

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