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We paid off $250,000 in debt and grew our net worth to $800,000: Here's our best advice

"We didn't want to just tell our kids how to manage money. We wanted to show them how."

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Jonathan and Jacqueline Sanchez are real estate investors and the founders of Parent Portfolio.
Courtesy Jonathan Sanchez

My wife and I grew up in a culture where people believed that a person's occupation or salary defined their success, and that having a career in fields like health care or engineering was the way to achieve it. I could never blame them for their way of thinking. My elders grew up in a generation where having job security was the highest priority.

We followed the plan that had been laid out for us. After we graduated from college, my wife became a pharmacist and I became a software engineer. But though we were earning a decent living, that didn't mean we were good with our money. 

There would be times, for example, when we wouldn't budget properly for big purchases like trips, so we would charge everything on our credit card and depend on our next paycheck to pay it back fully. We needed to find a sustainable system that would work for us. Serious discussions about money and our kid's futures motivated us to change our mindset and habits. 

It took us about 15 years to get to this point. And for the last decade, we've focused on paying off $250,000 in student loans and consumer debt. Careful budgeting and living within our means, and as well as qualifying for the public service student loan forgiveness program, have helped us become debt-free. 

Today, thanks to a combination of investments in mutual funds and contributions to our employer 401(k)s and side hustles like our real estate business and our site Parent Portfolio, our net worth is now over $800,000. 

Here are the biggest lessons that we have learned. 

Time is the most valuable asset you have 

In 2019, as we drew closer to paying off our debt, my wife and I had a conversation about how we didn't want our kids, our then 3-year-old daughter and 6-year-old son, to have to take on the kind of debt we'd had. 

More than that, we wanted to teach them to be financially wise. I remember my wife talking about a quote she'd come across that blew my mind: "Instead of saying 'I can't afford it,' ask, 'How can I afford it?'"

I used to be scared to think about our finances. I worried constantly about losing money, so I would save without any purpose and not allow myself to enjoy the fruits of my labor. On the odd occasion that I did indulge myself, I would feel guilty. But stepping back and looking at our money in terms of how we could make it work for us, rather than the things we couldn't do, was a turning point for me. 

Looking at our money in terms of how we could make it work for us, rather than the things we couldn't do, was a turning point for me. 

We really began to change our money mindset when we realized that time is more valuable than any single monetary amount, and that we didn't have to only earn money through our 9-to-5 careers. I started to see passive income as wealth that can buy you more time to do the things that are important to you. 

We already invested in the stock market, and the tangibility of real estate was appealing to us, too. Part of the reason why we wanted to start a small real estate business is because we didn't want to just tell our kids how to manage money. We wanted to show them how to do it.

In June 2019, we bought our first investment property. After it was rented, we acquired two more properties over the next 13 months. Now we earn passive income on those properties that we are able to put toward other long-term goals. And we finished paying off our debt in April of 2020.

Challenges can help you create new goals 

Like so many of us, last year presented a set of economic challenges we didn't see coming. In May of last year, my primary employer temporarily furloughed me. We needed to keep our daughter home to save on daycare expenses, which created some additional pressure on us, on top of my wife's day-to-day stress as a pharmacist working through the pandemic. 

These circumstances made us even more determined to achieve our financial goals. And they showed us the importance of both creating additional income sources and working towards financial independence. 

We learned that you have to be mindful of the conditions around you and make the appropriate adjustments. So we analyzed our finances again and became even more intentional with our money. 

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We refinanced our primary mortgage, which reduced the years on our loan and monthly payment. We adopted a zero-based budget strategy to assign every earned dollar a role in our family finances. This budgeting strategy allowed us to hit multiple savings goals, which in turn allowed us to comfortably purchase another rental property in November of 2020.

We also decided to invest in real estate with 15-year mortgages as a way to increase our cash flow.

This past summer, I started a site called Parent Portfolio. After our experience, I wanted to create a platform to help other parents understand their money and generate passive income. After I returned to work, we continued to write content for the site. With the help of a group of like-minded bloggers called Money Mix, we've continued to grow and generate revenue from this side hustle through opportunities like getting paid to syndicate Parent Portfolio content on other sites.

Success comes when preparation meets opportunity 

A big part of the shift in our money mindset has come from surrounding ourselves with a community of people who are working toward similar goals. Getting to know other real-estate professionals, investors, and lenders has helped us find great deals and build our portfolio. 

My best advice is to do all the preparation you can so when an opportunity presents itself, you're able to take advantage of the moment and leave nothing on the table. 

But most importantly, I could have never gotten to this point without my wife. It was her dream many years ago to invest in real estate. I wasn't mentally ready then, and we knew that we had to be on the same page for all of this to work. 

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Communication is a huge part of how we have been able to get our money to work for us. After the kids go to bed at night or during a meal, we often have a 30-minute conversation about our finances and touch base about our properties, regular household expenses, future projects, and website. 

These conversations lay the groundwork so that when potential new business ventures come up, we're prepared.

The financial habits you develop can yield benefits for generations

Our net worth will cross the million-dollar mark within a few years, based on our projections. That goal represents the hard work and solid financial habits we've built over time.

A lot has happened over the last few years, but all the ups and downs have shown us we want for our family. Our biggest goal is to continue to teach our children to be financially fluent now and in the future. 

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We often analyze potential deals with our kids, explaining what makes it a good deal, what improvements contractors need to do, and how much it's going to cost. I've even sketched out the BRRRR method (Buy, Renovate, Rent, Refinance, and Repeat) on a whiteboard for them, and they regularly come with us to on-site renovation projects to check on the progress of the contractors. 

Of all the strides we've made with our finances over the years, I think I was the most proud when my son asked us what kind of business he should start. It turns out that there is always an opportunity to teach your kids something, even when you think they're not listening. And that lesson is something that will always be valuable. 

Jonathan and Jacqueline Sanchez are parents to two lively kids, and are also real estate investors and founders of Parent Portfolio. They own a small real-estate business that operates a couple of investment properties in their local market. Through proper money management and diversifying their investments, they are able to build wealth for their family and develop skills to pass on to their children.

Grow is published by Acorns + CNBC. Acorns helps you invest spare change automatically into diversified portfolios. Download the app today or learn more at Acorns.com.

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