September 15th, 2020
“You don’t have to do what society tells you to do. You don’t have to do what other people expect you to do. Follow your own path. Figure out what’s fulfilling to you and do that. Do whatever makes YOU happy.” — Rachel
How can you retire at any age? How do you build passive income? What does it require? The “Money Honey” Rachel Richards is my guest on today’s episode of Making Finance Fun. Rachel is a former financial advisor, the best-selling author of two books, a real estate investor—and she retired at 27. She lives on $10,000+ a month of purely passive income. In this episode, she shares what motivated her to build a passive income large enough for her to retire early. She also talks about HOW she made it happen. Do not miss this one!
Outline of This Episode
- [0:24] The Money Honey Rachel Richards joins the show!
- [3:53] The backstory of Rachel’s books
- [8:48] Rachel‘s journey in real estate
- [14:07] Rachel’s experience managing properties
- [16:27] What Rachel’s day-to-day life looks like
- [17:38] How did she decide to retire at 27?
- [22:47] Where the desire to be different comes from
- [29:07] Time or money: which is your most valuable resource?
- [32:47] How to start where you are now
- [38:08] Rachel’s four main streams of income
- [40:53] Build a consistent income stream first
- [43:14] How Rachel chose to follow her own path
- [46:55] How to connect with Rachel Richards
Why did Rachel write her books?
Rachel wrote Money Honey because ALL of her family and friends came to her for financial advice. But she wondered: why aren’t they reading or learning this on their own? She realized that most people found personal finance overwhelming and complicated. So she decided to make the topic of money management sassy, fun, and simple. It now has over 600 positive reviews on Amazon—and she released a 2nd edition.
Her second book is called Passive Income, Aggressive Retirement. She wrote this book as she was gearing up to leave her job. She became obsessed with learning how to build passive income. It takes time and money to create passive income but once it gets going it’s more hands-off. The book outlines 28 different passive income models.
How did Rachel decide to retire at 27?
An experience early on in her career solidified her desire to be her own boss: she worked for someone awful. This woman was professional with her clients and cruel to her employees. She made Rachel cry on multiple occasions. Rachel decided she would never let an employer treat her like that ever again. It gave her the motivation to get started with passive income. She left that job and started a career in finance that she LOVED. She worked there until she built up enough passive income to quit—for good. What does the day-to-day life of a “retired 27-year-old look like? Keep listening to hear how Rachel spends her time.
Time or money: what is your most valuable resource?
I asked Rachel to elaborate on this question. She didn’t want to have to trade her time for money: “Time is your most valuable resource because it’s scarce. Money isn’t scarce. It may feel scarce, but in reality, there’s abundant amounts of money.” Your time on this earth is limited, which is why it’s more precious.
When she graduated college, she had a lot of time and ZERO money. So at that point money was the most valuable resource. When you get to a point where you’re making more and your life changes, time becomes more valuable.
You have the same amount of time in your day as Warren Buffett. It just depends on how you spend it. Think of your time as an investment. You have to be careful and strict with your time and invest it in the right places. Where are you going to invest it? Learning and education? Time with family and friends? Or are you going to invest it in wasting time on social media and tv?
How to start where you are NOW
People assume that Rachel’s a trust-fund baby—which couldn’t be further from the truth. She made $30,000 in her first job out of college. She’s never had a job where she’s made 6 figures. She was simply frugal and saved money, typically 50% of the income she made. It does take sacrifice. But you have to sacrifice now so you can reap the rewards later. She emphasizes that “I truly think anyone at any age on any income can create passive income and retire early.” She did it in only three years.
Resources & People Mentioned
- Jim Carey motivational Video
- BOOK: Money Honey
- BOOK: Passive Income, Aggressive Retirement
- BOOK: Rich Dad, Poor Dad
Connect with Rachel Richards
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