Experts concur that getting a head start is essential for accomplishing important financial objectives like retirement savings. Yet even the most optimistic financial planners wouldn’t anticipate that many students would be making financial plans in between honours algebra and AP history. But, it’s possible that they haven’t yet met Rachel Richards.
Before starting college, she admits, she was “very freaked out” by the thought of having student loan debt. Because even at that point, I was a complete finance nerd In middle and high school, I read everything I could about financial literacy.
Richards received numerous scholarships to attend Centre College in Danville, Kentucky, one of which was for her piano playing, and she paid the remaining balance of her tuition, or around $10,000 per year, by selling Cutco blades. She graduated from high school debt-free in 2013 at the age of 20 because to that side job and the AP credits she obtained.
Richards attributes what happened next to this strong financial foundation: After less than eight years, she and her husband have achieved financial independence; she is retired and earns roughly $16,000 per month in passive income. What she did was as follows.
She started by saving “over half” of her paycheck.
Richards served as a financial advisor for two years after earning a Bachelor of Science in financial economics. She explains, “I reasoned that since I love money, I’m passionate about helping people, and I have this incredibly great sales experience. “Thus, I assumed that would be the ideal fit for me.”
According to Richards, the employment paid $36,000 her first year, and $42,000 her second. Despite having a meagre income, Richards claims she was still able to save the majority of it. According to her, her monthly expenses were around $1,500. Because I had no college loans and was extremely conservative even back then, I was able to save more than half of my income.
Richards rapidly understood that building a clientele for her financial advisory practise would take years of cold calling. Although I knew I wanted to leave this job, I still wanted to assist individuals with their finances since that is what I love to do, she claims. I had to think about how to get there for a while before I finally did.
Richards worked in real estate for a while before accepting a $75,000 position as a financial analyst at a manufacturing company in 2016. She remained for three years before leaving the 9–5 job at age 27 to concentrate on her income-generating projects.
Building a passive income-generating machine
Richards started concentrating on passive income strategies in 2017 for herself and her fiancé. We didn’t have any other sources of revenue before that, she claims. “We didn’t do side jobs.” We had no unearned revenue. We were both only going about our 9 to 5 occupations.
The pair invested in their first property that year, a $100,000 duplex in Louisville. We all contributed $10,000 from our personal funds, according to Richards, to reach the 20% down payment. The money we had been saving over the years is what was used to pay for that.
The fact that Richards’s husband, a military service member, had also graduated debt-free, she claimed, was also helpful. Buying six houses (totaling around 40 units) over the course of two years, the couple quickly increased the size of their real estate portfolio.
Rachel’s possession of an estate licence was essential to their quick growth. They had two significant benefits as a result, according to Richards. One was swiftness. In her words, “If you have a licence, you have a tiny time advantage because you can literally get notified of properties that are being listed in real time.
There have been occasions when I’ve set up a search such that if a property matches my criteria, for example, it will email me right away if it’s listed, I’ll know right away. Sometimes I may be the first person to place an offer on a house and arrive there within 30 minutes of it going on the market.
Also, she represented herself as a buyer’s agent, which allowed her to get a commission from a seller each time she purchased a home. “Every time we closed on one of our houses, we would literally completely exhaust our finances to buy a property, but then I would instantly get a commission check back for thousands of dollars,”
Richards explains. “On occasion, it may cost around $10,000. The savings for the following down payment would therefore get a jumpstart.
Richards claims that, with the exception of the first duplex, the majority of the houses the couple purchased were rented out and ready to move into. From there, Richards began looking for homes where she believed she could earn $200–300 in monthly profits per unit.
2018 marked the end of the couple’s new home purchases. At the moment, they manage the homes for 5 to 10 hours a week. According to Richards, the monthly earnings total about $8,000.
Turning a passion project into passive income
Richards was working at night on her passion project, a novel, at the same time she and her fiancé at the time were thinking about purchasing their first home.
I began considering creating a book in early 2017 since all of my relatives and friends were turning to me for financial guidance, the author claims. I started to question why kids weren’t studying on their own or from books as well.
I finally realised that, yes, most individuals find personal finance dull after that realisation. It is dry, complicated, and intimidating. I asked myself, “How can I make this topic enjoyable, sarcastic, and easy?” The inspiration for “Money Honey” originated from there.
According to Richards, she first had a romanticised view of landing a conventional book deal. She did discover, however, that many publishers demand that authors handle the majority of their own marketing and promotion in exchange for a 10% to 15% fee. Yet, “if you self-publish on Amazon, you can earn 35% to 70%,” she claims. I reasoned, “Why am I going to pay them, effectively, if they’re not going to truly help me sell my books?”
Richards claims she made back her investment in the first month after self-publishing her book on Amazon. Since then, the book—along with its sequel, “Passive Income, Aggressive Retirement,”—has been flying off the virtual shelves, bringing in approximately $4,000 a month in royalties for Richards.
An additional passive source of income for the pair is an eight-week online course that Richards delivers. Known as “Get Your Money $hit Together,” the $497 course earns Richards around $4,000 every month.
“It’s about working when, where, and if I want to.”
Richards refers to her and her husband’s financial condition as “Fat FIRE”—a financially independent way of life that does not include the kind of minimal living that is associated with the FIRE movement.
It was our goal to generate $10,000 a month in passive income. It now costs $16,000 each month. The average monthly cost of our expenses, she claims, is about $8,000. Travel is something that we enjoy doing. We go on several trips. We simply wanted to be at ease and be able to visit REI and spend money there without worrying about it since we live in a rather large house.
Still employed, her spouse. In addition to his salary, he also receives benefits including the couple’s health insurance plan. Focusing on millennial women, Richards wants to grow her line of personal finance guidance.
“Now it’s about working when, where, and if I want, and working on this business that I’ve established by producing books and instructing women on financial literacy just so happens to be my love,” she said.
So that is how I spend the most of my time, adds Richards. While I adore my job, my husband is a rare human in that he chose to continue working for the time being. He adores what he does for a living. It makes him feel quite content. As a result, for him as well, working should be a choice rather than a necessity.