Downturn into an Upswing: Financial Advice from Derek Sall

The Zebra
Feb. 5, 2019

sidehustle_photo

 

What inspired you to start a blog on financial management? How do you think Life and My Finances is different from other blogs?

I graduated from college in 2008 (the beginning of the economic downturn) with a degree in finance . . . needless to say, I didn’t find a job right away. But I still had a burning desire to talk about finance and more specifically, to help people with their personal finances! And so, the blog was born.

Life And My Finances is different in many ways:

  • I speak and teach based on my institutional knowledge, but also based on my experiences (I got out of consumer debt in 2011 and completely out of debt – house and everything – in 2014).
  • We share free tools Excel calculation tools. The most popular is the debt snowball tool that allows you to enter all your debts and the additional payments you can make, and it will tell you exactly how long it will take you to pay them all off.
  • Complete transparency. I tell my readers all the details – about myself, about my blog, about things I’d recommend to them, and things that I’m selling that can help. They respect my opinion and I respect each and every one of them. I am sure to take the time to respond to each and every question I receive.

 

You write so honestly about your life — the good and the bad. Has it ever been difficult to maintain that level of transparency?

Yep — I went through a divorce in 2012. I still remember writing that article about the struggles I was going through and the impact it had not only on my finances, but on my spirit and my soul as well.

The toughest part is that many people from work read my stuff and I didn’t even know it, which can often lead to somewhat awkward conversations. Think about it — they know about my divorce, my new marriage, my blog earnings, my net worth, etc. etc. It’s happened on a few occasions where I meet a new coworker and they start finishing my stories because they’re fans of the blog.

The only thing I’ve ever kept hidden is my salary. I feel that exposing that could do more harm than good. As for everything else though, it’s fair game! Let’s talk about it!

 

What are some immediate solutions for someone still living with significant debt?

First and foremost, you’ve got to know what you’re spending your money on. You might think you know where your money is going, but unless you actually pull out the credit card statements or the bank statements (or easier yet, put it all into an application like Mint so you can see it all in one place), you really have no idea where all your money is actually going. Even for me, a penny-pinching saver, the experience was eye-opening.

Next, now that you know what you’re spending your money on, it’s time to reduce your spending!

  • Stop buying that dumb $4 latte every day.
  • Your cell phone bill of $100/month is outrageous – renegotiate it or switch providers.
  • You’re paying hundreds of dollars in insurance every month. Consider comparing rates of other insurance companies.
  • Cable is $150 a month? Might be time for YouTube TV…
  • Restaurants are stealing hundreds of dollars from you each and every month. You could survive on $600 or less if you just bought some groceries yourself.

The list goes on and on. Look at your expenses, find the big numbers, and simply make them smaller. That’s it.

Now, it’s time to sell stuff. If you’ve been living in your place for longer than a year, you have stuff to sell — believe me. Have a garage sale or put a few things on Facebook Marketplace. You’ll be surprised at all the things people are interested in. And, you’ll also be pleasantly surprised how quickly $20 here and there can add up to hundreds.

Finally, it’s time to tackle the debt. I’m a big fan of the debt snowball – paying the smallest debts first and the largest debts last (need a debt snowball spreadsheet? This one is the best out there!). It will get you pumped up early and you’ll be more likely to pay off all your debts in the long run.

It may take a while to get rid of all your debt if you’ve got a lot, but just know that it usually takes less time than you think. Hang in there and keep tackling the debt.

 

You talk a lot about passive income. What’s the most enjoyable side-hustle you’ve come across?

The terms “passive income” and “side hustle” don’t often go together. Typically, passive income is something you can create after you’re out of debt and have extra money to invest, which in turn, will earn you even more money — all without doing much of anything.

My favorite form of passive income is rental properties. If you buy the property right, not only will you experience 11%-12% returns on your money in rent, you’ll also earn much more with the appreciation of the property.

My favorite side hustle is blogging (by far). I like to help people, I love personal finance, and it’s fun to earn money in the process (typically $1,500-$2,000 a month)!

 

What do you see coming for yourself and the blog in the upcoming years?

I’m really getting excited about the blog recently. I’m working to give it a new facelift as we speak, I’ve recently updated it to a more secure https:// site, which should make it more favorable in Google searches, and I’m continually coming up with new and improved articles as I get farther along in my wealth-building journey.

It may surprise you (it surprised me), but my site has over 2,200 helpful articles that are just waiting to help people that are looking for the information! In the upcoming years, I’m taking it upon myself to do a better job marketing each one of these articles. This will help more people, this will make the site more reputable, and it will ultimately make more money for the site. It’s a win-win-win!

 

How has your life changed since starting Life and My Finances? Do you live your life differently because of it?

Oh man, my life has changed a ton since I started the site back in 2010. Back then, I was newly married to someone I barely knew. We ultimately divorced. Since then, I plowed through my debt like a maniac (blogging all about it along the way of course), got married, had two kids, and now I wonder when I’ll find the time to write my next article (P.S. “extra time” can be found at 5am . . . Did I mention I love blogging?).

I definitely live my life differently because of Life and My Finances. First off, having a site where I’m supposed to teach people something about money makes me want to learn more myself (you know, so I actually have something new to talk about once in a while). This, in turn, makes me smarter about money over time. Secondly, I never want to be called a hypocrite. If I tell people something about money, I sure better believe in it and act on it myself as well.

Between these two things, my financial success has really soared since I started my blog; from a negative net worth to over $600k in less than 9 years, I’d say that’s commendable.

 

What is the most interesting thing you’ve learned about personal finance since starting Life and My Finances?

Financial success is less about the knowledge and numbers as it is about maturity and emotional control.

People know that buying a new car is dumb. It’s expensive, it comes with interest payments, the car goes down in value like a rock. But people still buy new cars all the time.

Why?

Because they can only think about how great that car will make them feel today, and they completely put blinders on how it will impact them 10 years from now.

If you want to be a financial success, just continually ask yourself one question each and every day: “How will my actions today impact me 10-20 years from now?” If the result is negative, you probably shouldn’t do it. If it’s positive, pull the trigger!    

 

Got a quote about financial management? I’d love to hear it!

“If your house was a company and you were the financial manager, would you fire you?”

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