Today on the podcast, we are talking about becoming wealthy women. To be honest, I don’t believe this is talked about enough. So often, the focus is simply on making more money but what happens after that? After you pay yourself, what do you do with that money? I interviewed Erinn Bridgman, who has built an empire in real estate investing, and is a money mindset coach for female entrepreneurs. She's not only shared her story, but has actionable tips and tangible examples how how you can become a wealthy woman too.
In this episode, we talked about:
- How she used funds from her photography business to fund her real estate business in the beginning
- Her journey in real estate investing so far (from her first home flip to now managing 20 doors)
- How our money mindset affects us as women especially
- The difference between being profitable and being wealthy
- How (and when) we can raise our salary as business owners
- Advice for going into real estate investing with family and friends
And so much more. Seriously, I LOVED this interview and I know you will too. Whether you are interested in real estate or not, I loved having her share her perspective on building long-term wealth on the podcast today!
LISTEN TO THIS EPISODE NOW:
About Erinn Bridgman
I’m a money business coach for creative female entrepreneurs. I help the entrepreneur who knows how to make money - so generally they're making at least $100,000 in business revenue - but they know they have some skeletons in their closet around how they think about money and how they manage the numbers inside of their business and in their life. I want to help them become wealthy women. That’s the kind of work I do within my coaching business.
Erinn’s investment in real estate
Back in 2014, we made an investment into our first property. We did that through the excess we had through our photography business. Since then, we've scaled. Now we have 20 doors and we have about 3.4 million dollars right now in flipping. For us, real estate is how we are working to build long-term wealth and also cash flow into our lives. Our goal is to be able to retire in five years. I love this term someone used, they call it “Desirement”, not Retirement. I’m an enneagram 3, so I’m not going to stop working, but I will no longer have to work for money.
For readers not in real estate, what do you mean when you say you have 20 doors?
Yes, a single family home would have one door, a duplex would have two doors, a triplex would have three doors. For us, it’s a mixture of single family homes and duplexes that make up the 20 doors.
At the time you invested in your first property, you and your husband both had student loan debt but you chose to invest in real estate instead of pay off debt. How did that feel?
I grew up with Dave Ramsey. Brett and I did financial peace university before we got married. I do think some of his advice is very valid and very helpful. I like to stir the pot though and remind people that his main audience is somebody who works nine to five, who has a very particular salary, and who has a very particular take home. He’s not speaking to the entrepreneur. At the time, we did a very anti-day Ramsey thing and it ended up being something that I teach and now live by.
That being said, we didn’t make the decision flippantly either. We knew there was risk and reward, but ultimately we felt comfortable investing for a few reasons like:
- My husband’s dad had knowledge around investing in real estate
- It wasn’t as expensive to get into real estate in my city compared to others
- I grew up in a college town and had connections that would help me fill rentals.
My first investment into real estate was around $20,000 - which was my annual salary at the time. It felt like a LOT of money. But we had big devotion to our goals which were mainly to be debt-free and live a more expanded lifestyle. But it was also the most money I had made at one time and part of me did just want to roll around in it and enjoy it.
One of my own stories that I’m constantly trying to reframe is, “I have to work really hard to make good money”. I’ve had to really embrace this idea that your money can work hard for you.
How has your journey in real estate looked from the first property to seven million dollars in investments overall?
It sounds more glamorous than it is! Every door and/or milestone comes with joy and comes with pain. Brett and I like to say “education is expensive” and we are constantly trying to take that perspective with it.
High level: we started with one property which built our confidence. My dad has to cosign with us. We got a typical Fannie Freddie loan. Then, we started to house hack.
For people who are interested in getting into real estate, I like to ask: How can you be super savvy with your primary residence? Or, if you’ve already bought your first home, maybe you can get a HELOC and use that money to invest in something else.
When I say we house hacked, I mean our first home was a really crappy home, worth like $150,000 and then we funded the flip through sweat equity and cash from my photography business. Then, through a reappraisal the home was worth $300,000 so we were able to borrow more money because of that. We eventually sold that home for $500,000. Obviously we put money into it, but I think we made a couple hundred thousand dollars on just this one property, which we then rolled into other investments.
When I say each flip comes with pain, I mean we were spending weekends painting and extra money was spent on countertops instead of going out with our friends.
Around the time we sold this first home, we started to tap into hard money lending. I think a common myth is that you need a lot of money to get into hard money lending and it’s just not true. When it comes to real estate, $40,000 is a great amount of money to start being able to invest in real estate. And it doesn’t have to be all cash! You can use money from your HELOC or something like that too.
What is the day-to-day look like managing 20 doors?
You are finding me in the messy middle! We are still trying to figure out our long-term vision and deciding how we want it to look like. But we do work very collaboratively with the team we built and we feel supported by that. We have three full-time employees that are absolute rockstars at what they do. Right now, we are doing the EOS style referenced in Traction. My advice is to empower your employees and hold the vision. Eventually, I want real estate to take up about 8-10 hours of my week so I can focus more on my coaching business.
What does “money mindset” mean to you as a money mindset coach?
Simply put, it’s your thinking around money. It can be very woo-woo but personally, my background is very science-oriented. While I try to lean into the woo, I am logic-focused first.
In the coaching side of my business as a money mindset coach, I blend money mindset and money management. Besides “just” thinking about how our thinking creates our actions, it’s also important to look at how we actually manage our numbers to become wealthy women.
Many creative entrepreneurs are amazing at what they do. They're incredible photographers, designers, illustrators, etc, but they sort of inherited the business. To me, if it’s a business, not a hobby, that means that you're profitable, that you know your numbers, and that you're paying yourself a consistent salary. Yet many times money was a skeleton in the closet and it felt like I talked to people who were closing their eyes or hoarding their money instead of investing in their team or equipment and just hoping for the best.
Money Mindset is MORE Than Money Stories
Our brain is designed to keep us safe. I heard this stat once that was like “you have between 6-60,000 thoughts a day and 80% of your thoughts are negative”. But the good news is - we CAN change the actual composition of our brains.
We have all inherited individual money stories, but there are patterns with women and money specifically like:
- Women invest 40% less than men
- Most women have no emergency funds
- 71% of women hold their assets in cash instead of investing
Women couldn’t open their own bank account without a man until the 1960’s and couldn’t have their own credit card until the 1970’s. This is a deeply systemic issue that women face, beyond just our personal stories. So grace is needed!
Women listening to this episode right now, are on the frontlines of this change. We have the ability as women to make the most money that we've ever made in history. As entrepreneurs, we have the ability to go to the market and raise our prices and make more money.
If you feel like you have a “bad” money mindset, let me just say: you are gutsy enough to go out into the world and say my product or service deserves an energetic exchange of money. That’s ballsy. Give yourself credit!
What is a Money Loop?
The money loop, put simply, is this: Our thoughts create a feeling, that feeling creates action, and that action creates a result.
Whatever we are thinking about right now is neutral.
For example, you have X dollars in your account. That’s neutral. But your thought could be, “I have this many clients now; what if I don’t have them in the future” and that might make you feel like clinging to your money and feeling fearful. That might lead to an “action” of cutting down your marketing spend or lowering your prices. Then, the result might be then having fewer clients or money.
Another perspective could be you have the same amount of money in your account, but your thought could be, “I have enough right now and I know I’m a creative and resourceful person who can bring more in at any time”. If you think like that, you’ll feel more abundant and flowy. Then the action could be showing up on social media more and because your vibe is high, the result will be that your business will see more success.
Often, it’s hard to catch yourself in a negative thought so sometimes it’s easier to reverse engineer the feeling. If you want to feel abundant, what does your thought need to be? If you find yourself in a result you don’t like, what actions and feelings got you there? What could you think instead?
What’s the difference between profitable and wealthy?
Profit and wealth fuel each other. To me, wealthy is when money transfers over from your business into your personal world. A business can’t have a wealthy identity. A profitable business can make us a salary that can make us wealthy women. Wealth can’t just be quantified in money either, it can be time freedom as well.
Steps to Raise Your Salary as a Business Owner
Every business is different, but here are 4 simple steps to figuring our how you can raise your salary as a business owner.
- Put your current salary on auto-pay
- Monitor your business’ profitability and cash flow.
- Learn how to calculate your projections beyond a Profit and Loss Statement which only shows you present and past.
- Once you get confident in knowing what you truly have coming in as profit, readjust to a higher salary.
Why did you choose to invest in real estate? Do we need to invest in real estate to become wealthy women?
Brent had watched his father do it, so it was an attractive way to build wealth to him, and he was also very handy, so it was accessible for us to do a lot of work ourselves. We also have a low barrier to entry in Indianapolis because our average real estate purchase is around $175,000.
Something we say is this: do you want to be the unicorn who makes a lot of money in a random way or do you want to be the 9/10 who builds significant wealth through real estate?
Everyone needs a home and it’s one of the biggest investments most people will make. On top of that, because it’s a popular way to build wealth, many people making decisions around the law and tax breaks have their money in real estate as well.
Is real estate passive income?
I wouldn’t say it’s passive income but it is very scalable income.
Advice if you feel like the barrier to entry in real estate is too high
If you feel like the barrier to entry is too high, the first step of investment is always in knowledge. Think of ways you can get resourceful: maybe that’s getting a HELOC or living on one side of a duplex and renting the other. Maybe it’s renting through Airbnb. Maybe you can improve your own residence and add value, or maybe you even borrow money through one of your connections. Those are great ways to dabble into making money through real estate.
Advice for investing in real estate with a partner or a family
When considering something like that, consider if you need unsecured debt (not tied to an asset) or if you are seeking hard money lending (tied to an asset). When we invested with a family member early on, it was hard money lending and he made 12% interest annually on the money he lent us.
With a partner, I feel like you have to assess these things before deciding whether or not it’s a good fit:
- What is the value I'm bringing?
- What is the value they're bringing?
- What is the vision?
And it’s really important to be on the same page for all three and make sure you are both bringing equal value to the table. You also need to understand that the partnership will be long-term.
I have some of my closest relationships working with me in my business (my sister works for us full-time, I run the business with my spouse, we have our dads investing) and there is so much joy and pride in that.
And also… it can be very messy. Not always, but sometimes situations with money can be icky. I think Brene Brown says “clear is kind” and that resonates with me. Overcommunicate when it comes to money or working with family/friends.
Rapid Fire Questions with Erinn Bridgman
What’s a purchase of $100 or less that has positively impacted your life in the last six months?
Lululemon underwear. If you are looking for small upgrades that can make you feel like a wealthy woman now, start with linens, towels, or lululemon underwear.
What is your favorite failure?
Our most recent flip. It was the biggest real estate piece we ever put on the market and we kept getting negative feedback about it. We just took it off the market, which was super humbling, but it just went pending off-the-market yesterday. It taught us a huge lesson about doing things excellently.
What’s your goal retirement age, and what are you most looking forward to?
Our goal is to retire in 5 years. We currently have 20 doors, and we would need about 50-60 doors to retire based on our lifestyle and how much we are currently cashing in per door. My lifestyle won’t change that much but I won’t have to make money.
Want more from Erinn Bridgman?
Make sure to follow her on Instagram and listen to her show The Wealthy Woman Podcast! She also has a wealthy woman checklist you can download FOR FREE here.
Ready to Build Wealth? My Profit Sheet is Here to Support You!
If you are ready to finally know your numbers, I’ve created a Profit Sheet for service-based businesses to track their finances and answer questions like:
- What is my profit margin?
- How much have I paid myself this year?
- What am I saving for quarterly taxes?
All in a convenient Google Sheet form (that you can download and use in excel - if that’s your preference. Did I mention it’s only $37? Get instant access here.
Are you part of our FREE Facebook community yet? If not, we would love to welcome you in! If you are looking to surround yourself with fellow business owners who totally "get it," this is where you'll want to be! I also share behind-the-scenes access to my business strategies, including deep dives into each podcast episode.
And of course, you can ask me any questions you have, and I'll be there to give you the answers you need. Click here to join now!
This Episode Is Sponsored by Riverside
Riverside is my favorite software for recording podcast interviews and creating short-form videos and YouTube content from those episodes! Whether you are on episode one of your podcast or have over 200 episodes like me, let me say - the right software makes ALL the difference. Get 20% off your subscription and try Riverside today!
Grab Your Profit Sheet
Watch this episode on Youtube
Join my FREE Breakthrough Brand All Access Facebook Group
Check out Booked Out Designer
Connect with Elizabeth on her Instagram
Connect with Erinn on her Instagram
Grab the Wealthy Woman Checklist
Check out Erinn’s website
May 16, 2023