"I just hope they hear that finance is so much easier than we think. I think we build it up in our heads as this complicated thing and I certainly used to as well. And so I just really want to empower people to be like 'Look, this is simple.' Let me show you how simple it can be. And you can really take control of your future ... I truly believe that anyone, at any age, on any income, can create passive income and achieve financial independence."
Rachel Richards is a professional speaker, finance guru, and bestselling author of Money Honey: A Simple 7-Step Guide for Getting Your Financial $hit Together. At the age of 27, she retired from corporate life and now spends her life in Colorado Springs empowering others to take control of their financial future and achieve their dreams.
In this episode, discover how personal finance was written in the stars for Rachel from the start, setting her on a path to coach countless people toward financial freedom and create a money-mindful community.
Listen to our conversation for a front row seat to how Rachel turns a dull and intimidating topic like finance into something sassy, fun, and simple. For more inspiring entrepreneurship stories, visit our full library of interviews.
Joe: Hi there. I’m Joe Dudeck, president and founder of Keyhole Marketing.
Shannon: And I’m Shannon Jirik. I work for Keyhole as the assistant brand manager.
Joe: And this is Metaphorically Speaking, a podcast that explores the mysterious side of marketing.
Shannon: Hello, and welcome to Metaphorically Speaking. We are transitioning back to our regularly scheduled programming after the last few episodes of our COS in COVID miniseries, which if you haven’t gotten a chance to listen to, we hope you do. Super inspiring stories of just resilient business owners figuring out how to run their businesses through COVID. We are excited, though, to transition back and welcome Rachel Richards to the podcast today. If you don’t know Rachel, she is a former financial advisor and a current author, written two books and working on her third, and really, what’s unique about her story is that she was able to retire at the age of 27, so we are super curious and wanted to know more about how in the world she was able to do that.
Joe: For sure. I know I feel quite ancient now hearing she’s retired at 27, has been retired, I think, for a full year now, and I’m still nowhere close to retirement, so I really need to get my act together.
Shannon: Yeah, and how old are you?
Joe: I’m 28. I need to…
Shannon: Okay, sure.
Joe: Yeah, it was an interesting story. Just, I mean, she was always under different trajectory than I was, always interested in money at a young age. Reading books, I think she said poolside, when other kids were playing, coaching her parents eventually through their retirement or their financial plans, and then leading her eventually to become an author, but you’re the target audience. I mean, you’re the female millennial that she’s writing for.
Shannon: That’s right.
Joe: Did this stand out to you?
Shannon: Yeah, I appreciated how she said her mission was to make finance simple, sassy, fun, and I can respect that. It can be a daunting topic, and so for somebody to simplify it is really appreciated.
Joe: I think it was interesting, too, she said about I guess she’s technically retired, but it isn’t the version I think we all think about here in America where you’re sitting on a beach somewhere sipping margaritas, maybe that’s just my view of retirement, I don’t know, but…
Shannon: That’s where you’re headed.
Joe: Yeah, but she’s been retired for a year and her definition of that is really when your passive income, she’s got a book about passive income, she’ll talk about that in the podcast, but when that exceeds your expenses, then you’re technically retired because you have more money coming in than you have expenses going out, so it was an interesting view on that and something to take away from that with reframing our mindset on that a little bit.
Shannon: Absolutely. Rachel is pretty new to the Colorado Springs area and she’s enjoying retired life working when she wants to in the mountains.
Joe: Clearly not sipping margaritas at a beach here in Colorado Springs.
Shannon: That’s right. She picked the wrong spot if that’s what she was after.
Joe: For sure.
Shannon: We’re just really grateful to have Rachel share her story with us and we’re excited for you guys to listen.
Joe: Thanks so much again, Rachel, for joining us. I’d love to just start at the beginning. Talk a little bit about, tell us about your childhood. Where’d you grow up? Any siblings? What’s your birth order? All those kinds.
Rachel: Yeah. Yeah, absolutely. I have two sisters, one older, one younger, so I’m the middle, fiercely independent child. Definitely have been that way my whole life. At a young age, actually, one of my earliest memories of learning about money and becoming interested in it was in sixth grade, and I went to this water park for this summer camp and I had found this book called The Motley Fool’s Guide for Teens: How to Have More Money Than Your Parents Ever Dreamed Of, and I was like, “Well, that sounds amazing,” so I was sitting at the edge of the pool reading this book while all my friends were going down the water slides and that’s where my nerdiness began, I think.
Joe: Nice. I hear you.
Rachel: So, that sparked some interest in me, but really, growing up in middle school and high school, I grew up in a wealthy county and my family was not super-wealthy like the people around us were. I mean, for example, some people in my high school were getting brand new BMWs when they turned 16. Yeah, my family was not even going on trips, let alone going even out to eat at restaurants, so I had this pretty intense feeling of not fitting in, and that’s not the way you want to feel in middle school and in high school.
I remember thinking to myself that I didn’t want to end up like everyone else struggling with money. I didn’t want to have to operate on a strict budget or borrow money from my family and friends to make it to my next paycheck. I wanted to be different and I realized what I did then would either set me up for wealth or for poverty, so that’s why I took it so seriously, even at a very young age, and it’s served me well, I’ve read a lot of books, I’ve learned a ton, and that’s the reason I’ve gotten to where I am today.
Joe: Yeah. Where did you grow up, again?
Rachel: I grew up in Louisville, Kentucky.
Joe: Louisville, Kentucky?
Joe: Okay, so we’re not too far from each other. I grew up in Indiana, just up the road.
Joe: Up at the Northern part of the state, but still the Midwestern experience, for sure.
Joe: Were you a saver when you were a child? Were you a spender when you got birthday money? Was it like you’ve already had it spent or no, that was going to sit aside for a while and you’re going to save it for something bigger?
Rachel: I’ve pretty much always been a saver and I think a lot of that is because I did read so many books when I was little. Elementary, middle school, high school, I was reading books about finance, so I just had a better education than I think most have. I mean, because the thing is, we’re in a financial education crisis. At no point in our lives are we taught how to manage our money, and then we’re left as young adults to figure it out all on our own. It’s unfortunate because I see so many of my friends and business owners really struggling with money and even having these feelings of guilt and shame and embarrassment, when in reality, it’s not their fault that we weren’t given the resources we need to succeed in the education system, so I was lucky to read books on my own and learn a lot on my own, and that’s why I know the things that I do know.
Joe: I guess when you think back on your childhood, you talk about from a financial standpoint. What kind of dreams or aspirations did you have as a child, not even financially speaking, but sort of like what did you imagine yourself to be and want to aspire to?
Rachel: Well, it’s so funny you asked that, Joe, because I used to write little short stories when I was little and I always loved to write, and at one point, I knew that I had this dream of becoming a novelist and writing books. Over time, though, I pushed that aside and I was thinking, “That’s not practical. How much do authors and writers and artists really make?” That was my thought, and so I ended up trying to figure out something more practical that I really felt like I could make money from, so I got a degree in financial economics, but obviously the irony is that I’ve now become a bestselling author for finance books, so it all worked out.
Joe: Yeah, for sure, for sure. Obviously, we’re going to talk about you retiring at 27 and you pretty much had a short career path in that respect. What was your first job actually? What was the first paid gig that you had?
Rachel: My first job was a financial advisor.
Rachel: I do have that certification, I have that qualification. In college, I sold Cutco cutlery. Have you heard of Cutco knives?
Joe: Yeah, I had some friends who sold that to us, for sure.
Rachel: Yeah, so I actually paid my way through school selling knives and my thought was, because I was so passionate about finance and I love to help people with money problems, and then I had this pretty good sales background, so my thought was becoming a financial advisor would be the perfect fit, and what I didn’t realize is that when you’re a financial advisor, you’re spending the first five or 10 years prospecting and really cold calling 99% of the time, so the 1% of the time that I was spending helping clients was great, but I just really couldn’t see myself doing that for the long run.
Joe: Yeah, yeah. Did you have some seeds planted in those jobs or you were just like, “There just has to be a better way,” or, “I don’t want to be doing this the rest of my life”? I mean, did you have those, again, that early retirement aspirations at that point?
Rachel: Yeah, there were definitely moments, and that wasn’t the only job I had. There were various moments throughout my somewhat short career where I started thinking, “How am I going to get out of here?” I mean, for example, I took a short stint in a real estate position and the woman who was my boss was extremely cruel to her employees. I mean, it was very much something where she put on a face for her clients and then she was a different person behind closed doors and she bullied us, she made people cry all the time. She made me cry a couple of times and I do remember one of those incidences, going to the bathroom to clean up and looking at myself in the mirror and really thinking, “I’m never going to let an employer treat me like this again. I’m never going to feel trapped in a job again.” I wanted that freedom to be able to leave and quit my job if I ever needed to, so that was one thing.
Then another thing, too, because I later became a finance analyst at a manufacturing corporation and I loved my job. I did have one manager who I’d get in at like 7:30 AM and leave at 4:30 PM because I figured if I was getting in a half-hour early, I could leave a half-hour early, my manager took me aside one day and she was like, “Rachel, I really don’t think you’re creating the right perceptions here by leaving early every day.” I listened to her, I started staying till 5:00, but my thought was, “Why am I getting measured based on the hours I put in rather than my output?” I mean, I was getting all my work done and then more, and then that’s the feedback that I got, so there were just little things that added up over time where I knew I eventually wanted to be my own boss.
Joe: For sure. That’s funny you say that because that was my last job before I started my own company was I stayed there for about a year and I remember that was some of the conflict that I had with my boss, him saying, “Yeah, we saw you left a little bit before 5:00,” and I said, “Well, you didn’t see me get here before 7:00.” He didn’t count the early part of the clock, he only took the ending clock, or same deal, there wasn’t any thought of how about the quality of the work that’s being produced, it was just more of a look at the clock constantly.
Rachel: Exactly, so frustrating.
Joe: Yeah, and especially for a creative space of marketing, you’re just draining my creative spirit, so I definitely had to get out of there quickly. One more just biographical question as we set the groundwork before getting into the financial things, so you live in Colorado Springs now. What brought you out here from the Midwest. How’d you get from there to here?
Rachel: Yes, we love it here. My husband and I have always wanted to move out West. We didn’t know where exactly, but once I quit my job and once he had the flexibility to work remote, we just finally made it happen, and we were drawn to Colorado because we love the mountains and we are avid hikers. We’ve only been here for a few months and my husband has already done like five or six fourteeners or something.
Joe: Oh, wow. Yes.
Rachel: Yeah, he’s crazy, but that’s the kind of stuff we like to do in our free time.
Joe: For sure. What about the Springs versus Denver or any other towns? What stood out to you about that?
Rachel: Because I’m from Louisville, Kentucky, which has a very small-town feel, some of the bigger cities just seem overwhelming to me and I wanted to be really close to the mountains, so that’s why we picked the Springs.
Joe: That’s awesome. I can relate to that experience, for sure. Let me ask you this question, it might be a little offensive, but you’re retired. You’re retired at 27. How old are you today? How long have you been living this retired life?
Rachel: Oh, you’re good. I’m 28, so it’s only been…
Joe: 28? Okay.
Rachel: Actually, I think it’s been a full year now since I quit.
Joe: Okay, okay.
Joe: You talk about in your materials just how your friends and you talked a little about it earlier, your friends in high school and college, they always came to you for financial advice. What was it about you that stood out to them? What were they seeing in you? What were you presenting to them that said, “Okay, I need to go to Rachel first for some input here”?
Rachel: I think they saw my passion and they trusted my advice because they knew I was intellectual, I read a lot of books, I knew what I was doing, I always made good grades, but a better example is I started getting really involved in Facebook groups, and not even ones that were about money in particular, but Facebook groups that had a lot of female millennials, so there would be finance questions asked randomly and I would hop on and I’d say, “Hey, former financial advisor here. Here’s what I think,” and after doing that enough, if a finance question would come up, people would start tagging me and being like, “Oh, you need to ask Rachel,” or, “Hey, oh, Rachel is your girl,” so I became known and gained some trust and credibility as this finance guru in some of these Facebook groups.
I think it came down to being able to educate people in a very simple way, without using complex jargon, without using technical terms, and people appreciated that, so when it came time to write my book, I went to some of these groups and I was like, “Here’s what I’m thinking, guys, what do you think?” and there were hundreds of women on that thread that were like, “Oh, my gosh, please write this book. You make finance so easy and simple to understand,” so I think that was the real key. I always say my superpower is making the topic sassy and fun and entertaining.
Joe: Yeah. Did you feel equipped when they would come to you for those types of things? Did you feel fully confident in your skillset? Was there some internal like, “Wow, why are they coming to me for this?” or were you just always internally self-confident?
Rachel: I would say after I became a financial advisor, I felt more equipped. Before that, I think there was definitely a little imposter syndrome, a little feeling like, “Well, who am I to give advice?” But having the certification of passing those exams and actually being licensed definitely gave me the confidence to be like, “Look, guys, I know what I’m talking about. I used to be a financial advisor. Here’s what I think.”
Joe: Mm-hmm (affirmative), yeah. You talked a little bit about just growing up in your high school with that affluent side, and then you had then where you stood in that range of financial. Were there specific financial hardships or struggles that you specifically recall, not just the diversity between the two groups, just like sometimes when maybe you couldn’t go out and spend some money and you wish you had, or some specific times where maybe that guilt and shame or embarrassment came into your life?
Rachel: Oh, absolutely. I mean, I think a lot of us growing up are really influenced by what our parents do and the example that they set, and my parents actually just had some pretty bad misfortune when it came to finance. There was a period of time, this all happened in the same year where my dad got laid off and then the two cars they used both broke down and my aunt had to come to live with us, so they were supporting her, and just various things happened that were financially devastating, one right after the other, so it’s not like that they weren’t prepared, and it’s not that they didn’t react in their white way. I mean, they did all the right things, downsizing, cutting back on the budget, but they just didn’t have enough in savings to get through that, so I saw how devastating that could be to the family, to the household. I remember worrying about them a lot when I was growing up and just being concerned that there wasn’t enough money, so that definitely shaped me a lot and is one of the reasons that I’m so motivated today, because I have that fear, fear of not having enough money to take care of myself and to take care of my loved ones.
Joe: Mm-hmm (affirmative). What kind of influence were you on them growing up? Obviously, you talked about your friends, your peers who were interested in your financial knowledge. How about your parents? Were they able to listen to you, transform some of the decisions they made financially? How did that relationship play out?
Rachel: It really transformed once I became a financial advisor because I wanted to help them, but you can imagine how awkward it would be for a 16 or 17-year-old to approach their parents and be like, “Look, guys, what are you doing?” Right?
Joe: Mm-hmm (affirmative), for sure.
Rachel: Once I became an advisor, though, I was like, “Okay, we’re doing this. I’m going to take you on and we’re going to get this all figured out,” and I literally looked at all of their finances, all of their debts and savings, put them on the Dave Ramsey plan, the envelope system, which worked really well, and that’s when they really started to improve their financial situation, so they’re doing much, much better today.
Joe: Yeah. That’s awesome. That’s what I was trying to pull off. I can just imagine. It’s interesting, I have some of those experience today where my parents reach out and ask for some input, but clearly back in high school when I was working at McDonald’s, they were not looking at me for financial suggestions, for sure.
Joe: I want you just to talk a little bit about the books you’ve written, just describe them in general, and then maybe talk a little bit about where they came from and why those were important pieces to write.
Rachel: Yeah, for sure. My first book is Money Honey. I wrote it in 2017, and like I said, by that time, all my family and friends were coming to me for financial advice. Well, I love to help them, and I began to wonder, “Why aren’t they learning on their own? Why aren’t they reading books?” That’s when I had that initial aha moment where I was like, “Oh, yeah. Personal finance is boring. It’s overwhelming. It’s intimidating. It’s complex. No wonder people don’t like to learn about it,” so that’s where the thought came from of, Okay, how can I make this topic sassy, fun, simple?” That’s when I started writing Money Honey. That was published in 2017. It did way better than I ever would have imagined. I had very low expectations for it because I just had no idea, but it really resonated with female millennials, so it was a huge success. I now have over 700 Amazon reviews.
Then my second book, Passive Income, Aggressive Retirement, I wrote last year, I wrote it in the months leading up to me quitting my job, so as I was talking about, “Hey, I’m going to be quitting my job this year and I’m going to be retired living off $10,000 a month in passive income,” of course there was a lot of interest in that, and by then, I had started building a platform, so people were like, “Oh, my gosh. How are you doing this? What is passive income? How can I create passive income?” so that book was inspired by just wanting to answer people’s questions and recognizing that there was a need for more information. In that book, I outline 28 different passive income models.
Joe: Can you describe that a little bit more? I certainly was looking into your materials, and generally understand that, but maybe just paint a picture of… I think just the whole concept of money coming in without striving and working so hard for it doesn’t always make sense to people, so maybe just describe that a little bit.
Rachel: Yes. Absolutely. The way I define passive income is that it’s money earned with a little to no ongoing work. Now, I know it sounds like a get-rich-quick scheme, but it definitely is not, it does take time or money to create passive income, and the epiphany I had is that once your passive income exceeds your living expenses, you’re retired, you’re financially independent. Now, is anything 100% passive? Maybe portfolio income, where you’re really just investing your money and then collecting interest or dividends. But for the rest of the passive income streams, you will have to work a bit. It could be a couple hours a week or a few hours a month to maintain that income stream, but the way I look at it is that’s much more passive than having to go in and work a 40-hour-a-week job.
Joe: Yeah. Well, yeah, passive doesn’t necessarily mean idle, right?
Rachel: Right, exactly.
Joe: It could just mean not working so hard. Well, I guess what I’m curious about, too, just in this day and age with the pandemic, I mean, does that affect this strategy of passive income? Are there some changes you’ve had to made since this has come around or that you would tell other people some changes, even since your book came out, that the pandemic has affected, or is there no impact whatsoever?
Rachel: Oh, there’s definitely an impact, but the impact has made me even more grateful to have passive income streams. I think there’s a lot of belief in this idea that having a full-time salary position, being an employee equates to job security and income security, but if you’re 100% dependent on a single source of income, there’s nothing secure about that. What happens when you lose your job, your hours get reduced, you get laid off? Of course, we’ve seen that now more than ever this year.
Joe: For sure.
Rachel: So, I like to talk about the idea of income diversification, and this just means having multiple sources of income. That way, when one income source is impacted or you lose it altogether, you still have other income sources keeping you afloat. Right now, my husband and I have four or five or six passive income streams, and here’s how they’ve been impacted from coronavirus, because they definitely have. Our rental income has taken a huge hit. In a normal month, we were making anywhere from eight to 10 grand a month in profit just from our rentals. In April of this year, we made $1,000 in profit, so that was a huge decrease.
Now, the way I was looking at it is, “Hey, there’s a lot of landlords that are doing better than me. There’s a lot that are worse off than me, but if I can just break even for a few months, I’ll be fine with that,” and the only reason I wasn’t in a complete panic is because I had other income streams keeping me afloat, so I truly do think that we can learn a lot from coronavirus and with what’s happening right now, and one of those lessons is that there’s two ways to safeguard your finances. There’s building up a nest egg and emergency funds so that if you lose your job, you can tide yourself over for a few months, and then there’s creating multiple sources of income so that if you lose one income stream, you’re still going to be fine.
Joe: Yeah, yeah. That’s interesting. Talk a little bit. You said the female millennials really took to your first book. Was that by design or did it just connect with that particular segment?
Rachel: Well, I think it’s a little bit of both. I am a female millennial, so naturally, people are drawn to me that are my age and other women, but I really did write Money Honey for them because those were the people coming to me for financial advice was my female millennial friends, and a lot of people, we get this reputation for being lazy and entitled and everything, and there’s probably some truth to that, but the female millennials that I saw that were coming to me with questions, they didn’t like not understanding finances. They were not happy with that, they weren’t content. They wanted desperately to learn, they just didn’t have a good resource, so I wrote the book for them.
Joe: Interesting. Yeah, what’s your message to them? What do you hope that they specifically, because obviously, everybody could benefit from your resources, what does that particular crowd, what do you hope that they hear more than anything?
Rachel: I hope that they hear that finance is so much easier than we think. I think we build it up in our heads as this complicated thing, and I certainly used to as well, and so I was really want to empower people to be like, look, this is simple. Let me show you how simple it can be and you can really take control of your future. At the same time, on the passive income side of things, I truly believe that anyone at any age on any income can create passive income and achieve financial independence.
Joe: Mm-hmm (affirmative), yeah. Just a couple more questions. You’re now a year into retirement. I guess, what does retirement look like for you? When you hear that word, “retirement,” it means a lot of different things to a lot of people. A, what did you initially aspire for it to look like, and what does it look like today? How do those things match up?
Rachel: Yeah, and I’m glad you’re asking me because you’re right, everyone defines retirement differently, and so I’ll get some people say, “Rachel, you’re not retired, you’re still working,” and that is very true, right? I mean, some people want to retire and do the beach thing for the rest of their life and do the golf thing, and that’s fine. Good for them. I just get bored very easily and I’m such an ambitious builder and creator. I always want to be working on the next project and growing my business and impacting more people, so retirement for me, I use the words “retirement” and “financially independent” interchangeably. Retirement for me means working when, where, and if I want, so I mean, even just having the freedom of working for myself on my own hours makes everything a lot more fun.
A typical day for me, I don’t set an alarm anymore, which actually has been the greatest thing that’s happened out of retirement. I still get up at like 6:45 AM. I wake up at 6:45 on the dot without an alarm, and so I’m still getting up early, but not having to get up for an alarm makes all the difference. I probably work, I don’t know, 20 hours a week. A lot of that is podcasts and calls and building my next course and writing my next book, so lots of different projects going on.
Joe: Yeah. How would you define your purpose, I guess, at this stage of life in this retirement zone?
Rachel: I’ll share with you something that David Osborne told me and he is a real estate mogul, he’s really great. He said, “Everyone’s bucket list, everyone’s dreams, they normally have a financial component to them. You normally need money to achieve them, whether it’s climbing Mount Everest or traveling or starting a nonprofit or whatever, volunteering, you need some sort of financial independence to achieve that,” so I view my purpose as really teaching others about finance so that they can achieve their dreams.
Joe: I like that. I like that.
Joe: Just one final question. We’ve talked a lot about money. It’s the word, just the concept of currency has so many conflicting pieces of it. It’s kind of this concoction of good and evil. It brings joy, it brings pain. We love it at times, we hate it at times. What’s the relationship maybe you have with money, but also you might wish other people had with money?
Rachel: Yeah, and this relationship has changed a lot, so this is a great question. I used to view money as… I just didn’t have a good relationship with it, so the thoughts that I used to think were like, “Oh, money sucks. Money’s never there for me when I need it. There’s never enough money to go around.” Sort of this fear and this scarcity mindset and I learned over time to transition my mindset into one of abundance and really changing my thoughts into there’s always more than enough money and money comes easily and effortlessly to me and I’m thankful for money and everything that it does for me. I think that’s an important transition. I personally would recommend using affirmations to do that, basically saying those statements out loud as if you believe them once or twice a day for 30, 60 days in a row. I felt silly when I first started doing it because I’m more of a practical, pragmatic person, so it felt silly to me, but it really does help you shift your mindset, so I definitely recommend that.
Then I also just like to talk about the fact that money isn’t evil. A lot of people will think that the more money you want, that makes you greedy, that makes you evil, that makes you selfish. There are people that accumulate wealth because they’re greedy and maybe they’re evil and maybe they’re selfish, but what I’ve seen from the wealthy people I know is that they are very generous. They have hearts, they’re kind, they want to support and love others, and the more money you have, the greater impact you can make. You can donate to charities, you can start a nonprofit, you can volunteer, so I really view accumulating money as a really good thing, something that you’re entitled to do and that you should do so that you can create an impact on the world.
Joe: Yeah, no, that’s awesome. Yeah, I do think there’s a lot of lies that we have to speak back to ourselves, whether about ourselves, about money, as we talked about. There’s a lot of things that we take on over the years that are not truthful, but then we perceive things from those lenses, for sure.
Joe: Thanks for helping us reset our lens a little bit and thanks for sharing your story today. It’s been great.
Rachel: Yes. Thank you so much for having me on.
Joe: Yeah, for sure. Hopefully we’ll see each other around town sometime.
Rachel: I would love that.
Joe: Awesome. Thanks so much, Rachel.
Shannon: You’ve been listening to the Metaphorically Speaking podcast. At Keyhole Marketing, we tell big stories for small businesses. If you’re in the Colorado Springs area and ready to tell your business story, we’d love to come alongside you and help you with your content, branding, SEO, social media, or photography needs. For an instant glimpse at your current marketing strengths, weaknesses, and opportunities, take our free marketing assessment at keyholemarketing.us/marketing-assessment, or send us an email at firstname.lastname@example.org and let us know how we can help tell your story.