If someone wanted to fast-track Fi, how would you think about choosing between a nine-to-five or an entrepreneurship? Are there, like, certain characteristics or personality traits that you think might suit someone better?

I think it's a math problem and a psychology problem.

So a lot of people hear me speak, they know I'm an entrepreneur, and they think that I'm just, like, a side hustle guy.

Like, "Screw the nine to five.

You're an idiot if you stay in corporate." Not at all.

I see a lot of people where if your corporate job is the fastest path to increase your income and maximize the gap between your income and your expenses, and you don't mind doing that corporate job, my God, do that.

Like, one of my buddies, Justin David Carl, he kind of had the same Fi journey as me, but in his mid-30s.

What are some of the biggest levers that you think they should be pulling in the next couple of years to help them increase their income the fastest?

There's something else that you're gonna be doing with your money.

So I think I'm gonna introduce a framework to answer this question, but then I'll get down to my portfolio split.

So one of the first things I did in my book, 'cause I think this is what's different from kind of what I talk about, what I preach versus traditional FIRE, which is the save up your 4% or save up 25x your annual expenses, and boom, that's your FI number.

Then you can withdraw, and you have, you know, this percentage chance it's gonna last you for the rest of your life.

So I like to bucket financial independence into two main strategies.

There's the nest egg approach, which is the one I just talked about, 4% rule, and then the cash flow FI approach.

And since you guys have probably a pretty big crossover th- with real estate investors, this is one that a lot of real estate investors pursue.

If you're in, you know, y- you're someone who's in their 20 to 25-year-old range right now, or maybe even older or a different life stage, do you think it's more or less or, or different r- from a repeatability standpoint now than it was when you started?

Mm-hmm.

The second type is scalable side hustles.

So this is you're putting your time, your energy, your money into something once, and then that thing is going to pay you hopefully in perpetuity or at least for years or decades to come.

So this could be you're buying a rental property.

Like, this would be a scalable side hustle.

You buy it once.

That thing pays you in perpetuity, assuming it's a rental.

Hmm.

Yeah, let's do it

...

so type one side hustles is you're trading your time for money.

So this could be trading your time for money on the computer.

Like, for me, I was freelance writing.

I did freelance podcast editing.

I did website building.

Yeah.

Can you talk about how you define passive income and how you would explain that to somebody else? And, like, and just the reality of, hey, something can be kind of passive, and how you conceptualize that entire thing.

This is a great question and a great framework.

Most people hear passive income or active income, and it's a binary.

It's like zero or one.

But passive income is a spectrum.

Like, someone who owns a portfolio of real estate, it might take, and this is coming from experience, a couple hours per month to manage that portfolio.

Like, that's how much time I was spending, Brad, when we had those 13 units bringing in $3,700 a month.

So, you know, my question to you is, if you lost everything tomorrow, and you were starting over at 50, at, with a late starter, what would you do first?

[laughs]

Whether it's starting a successful Etsy shop, whether it's retiring early, whether it's getting in good shape.

A lot of people think that you just, like, go hard for one week.

Like, if you're trying to get in good shape, you just diet like crazy for one week.

You go to the gym, and you're like, "Why don't I have a six-pack? I've been doing this for a whole week." Or, you know, you start an Etsy shop, you get a bunch of products listed, and you're like, "What the heck? Why am I not making $10,000?" Or you're like, "All right.

I'm gonna get my finances together." Maybe you do, like, a no-spend challenge for two weeks, or you start a new side hustle and you're like, "Why aren't I rich yet?" It's because these things take time.

They take years.

We just did it organically.

But yeah, what are some good highlights that you checked out?

Yeah.

I'll ...

If it's helpful, I'll split up the kind of framework that I use for side hustles, 'cause I think that'll just help us better talk about the side hustles that I've had.

So real quick, I, I break side hustles into four different buckets.

Type one is trade your time for money.

So this could be on the computer.

As we're wrapping it up, any other sort of broad tips for people, uh, to start side hustles, especially if they've, like, dipped their toes and never actually had, like, success come their way, and they're like, "I know there's these business models." Where would you direct them?

So for you, how did you define financial independence, and what does that look like?

Okay.

So yeah, let's get into the numbers here.

So for me, there's two basically main ways to hit financial independence.

There's the kind of traditional method.

People have probably heard of the 4% rule if you've been listening to podcasts like this for a long time, where you save up 25x your expenses, and then at that point, so let's say you're spending $60,000 a year, 25x that is 1.5 million.

Once you have that invested, you can, in theory, live on that portfolio.

How did you keep the lifestyle creep from creeping up?

All right, what else you got?

The other one, so I'm an online guy.

I'm always looking for, like, cutting edge stuff.

There's, like, the HeyGens of the world where, like, you know, I can kinda create AI videos of myself, and it works okay.

But I wish there was, like, some kind of a, a service where they could, like, suggest making AI videos, like, for different marketing campaigns.

Like, I'm always creating, like, stuff for Facebook ads and things like that.

"Hey, Cody, here's a video of you, like, running through a brick wall.

What were the big two or three levers for you?

You list some of the things that people buy that they think makes them look successful, but it's really destroying their flexibility.

So the big three are the ones that are really gonna kill you.

And contrary to what a lot of personal finance influencers say, it's really not about the coffees, it's really not about Netflix.

Like, those don't make a huge impact if you cut those out.

You're maybe saving a couple hundred dollars, assuming you're getting a daily Starbucks latte and you're, you got the premium Netflix.

What really moves the needle is housing, transportation, and food.

That makes up two-thirds of the average American spending.

Can you tell us Justin's story? 'Cause I think this is kinda the it-doesn't-take-a-side-hustle-to-win story.

So tell me kind of the story and then we'll kind of dive in from there.

Yeah.

So for those who didn't listen, I was last on, I just checked in May of 2024.

So over two years ago, things have definitely changed a lot since then.

And kind of in the last time I was on, we focused on stock hustles, how it hit financial independence.

I know today we're going to focus a little bit on what hitting financial freedom actually looks like in life after FI, if you will.

But my quick SparkNotes version of my story, I went into corporate commercial real estate lending for seven months.

What are the best

Like, how, how do you see that?

Yeah.

I think the most important thing to focus on on your FI journey is that gap between your income and your expenses.

And your expenses can only go to zero.

Like, it, they can really only go to the floor, right? Like, once you're living under a bridge and you have no healthcare and you're dumpster diving to eat, like, there's n- you cannot get below zero on your expenses.

But your income, it can go as high as you want it to go.

So, I'm such a maximizer of what I call the gap, that, that gap between your income and your expenses.

When somebody sat down with you, it's like, "Cody, how can I get to financial independence? How should I plan that out?" How, how do you approach that? Or maybe how did you talk about it in the book?

Wow

... early years when I first started with entrepreneurship, I was making 96K and living on less than around 20K, less than 24K, 2K a month-ish.

I was house hacking, so similar to you.

I was living in one unit.

I had another unit next door, four bed, two bath apartment with 600 square feet of office space.

Me and my then girlfriend, now wife, Lauren, lived in this unit.

I'm actually recording from the same unit.

Like, so give some advice about kind of like side hustles or starting your own thing on top of your corporate job.

[laughs]

But basically started back when I was 19 years old.

I read The 4-Hour Workweek by Tim Ferriss.

That book completely shifted my just worldview, my mindset about money.

Because up to that point, I always thought you had to trade your time for money on a linear basis.

So like growing up, you know, lawyers made a lot of money.

Doctors made a lot of money.

Yep

So you want, you wanna talk a little bit more, Cody, on some of the, the creativity that you did early on with, um, your house hacking and some of your real estate?

Yeah.

So this was everything.

So maximizing the gap.

Like if you can take one thing away from this interview, this conversation, my book, it's the gap.

It's the difference between your income and your expenses.

That is going to what's di- that, that's what's going to dictate how quickly you reach financial freedom, financial independence.

Can you talk a little more about like just, uh, why you need to kinda get started with, with something so that you have that base skill set?

If nothing appeals to you, would you jump into real estate?

Yeah.

It's kind of hard to argue against this one.

Like, I would say if you can...

If you're a really great entrepreneur just right out of the can, and you can get, like, a, a business going crazy in a year or two, then maybe that could be the path.

Like, that's, that's the path to super riches.

But if you're just a regular person who wants to replace their income, it's probably something like real estate.

Like, what's the rush? Why, why bother 25 or 30? Like, what am I gonna do with my life anyway?