Ben Le Fort
Nov 4, 2018 · 5 min read
Picture of a person relaxing on an outdoor hammock with their feet crossed.
Picture of a person relaxing on an outdoor hammock with their feet crossed.
“person lying on pink and purple hammock surrounded with trees” by Nicole Harrington on Unsplash

“Financial Independence is not about being wealthy, it’s about feeling secure”

Joel Larsgaard has as good a handle on his money as anyone you are likely to meet. Through hard (and smart) work he and his wife have built themselves a stream of passive income that has allowed Joel to pursue his dream job working in radio, even though it doesn’t pay all that much.

I recently heard Joel recount his journey with money on the Bigger Pockets Podcast and I wanted to share my main takeaways because I think many of us can relate to his story and ALL of us can learn about building passive income from Joel.

Difficult Financial Upbringing

Joel’s parents were similar to many of our parents and family members. They worked hard but struggled with money. As Joel describes it his parents worked way too hard to pay for “Things” that cost way too much, that they really didn’t need.

As a kid, Joel heard his parents arguing about money. Which should not be a surprise, Long work hours coupled with financial strain while trying to raise a family is a recipe for stress. Joel’s mom wanted to stay at home with the kids but was forced to work to pay the bills, which were piling up.

This is a perfect example of how money restricts many of us from living the life we want. Joel's mom wanted as much time with her children as she could get but their financial situation made that impossible. I can imagine that the hours spent at work were all the more painful knowing she was not there by choice but by necessity. This is something that millions of people can relate to. “Financial Independence” means something different to everyone. But at its core, it’s about living the life you want, not the life you can afford.

The families finances really took a turn for the worse when Joel’s dad lost his management job. It sounded like they had little to no emergency savings and Joel’s dad was forced to take whatever job came along. A job for which he was overqualified and underpaid.

When Joel was 12 his parents filed for bankruptcy. He describes seeing his parents lose everything including their car being repossessed. From that point on Joel associated money with security. I can relate to Joel’s experience having seen my parents declare bankruptcy in my early 20’s. Long before I learned about F.I.R.E and Financial Independence, I associated money with security.

When you associate security with money the natural next step is to try and acquire (and hold onto) as much money as possible, as quickly as possible. Joel said he started working as a kid. Mowing lawns in the neighborhood, working at Chick-Fil-A and any other job he could find. Between his savings and scholarships, he earned he was able to graduate college with only $13,000 in student loan debt, which he paid off within a few years.

Start By Working Hard Then Work Smart

The motivation for many people (including myself) to take control of their money, is fear. Fear that what happened to Joel’s parents will happen to you. Somewhere along the way, mastering your money becomes less about fear and more about the opportunity. For Joel, one of the opportunities was working his dream job in radio, despite the fact that his first few years he was only making $24,000 per year.

When Joel started out, he had no passive income, so he was forced to work hard. He took on a side hustle pressure washing houses before going to work at the radio station. This additional income allowed him to save up his 20% down payment on his house within 3 and a half years. At the time, the real estate market in Atlanta was depressed so he was able to buy a house for only $89,000. Sorry if you hear the envy through the keyboard, but in my local market houses are going for an average of $600,000.

Given the rock-bottom price, he was able to acquire his home, his mortgage was less than $600 per month. He implemented his first house-hack by renting one the room’s in his house for $400 per month. This offset the majority of his housing costs, allowing him to increase his savings rate even further.

Every two years he would buy a new house, rent out the old house, and rent out a room in the new house that he lived in. Rinse and repeat this process a few times and today his rental portfolio provides him over $2,500 per month in cash flow. Now he is working smart.

Joel diversifies his investments by contributing at least enough to his 401(k) to get the full employer match (free money). He also invests in a Roth IRA. However, his primary focus for building passive income is investing in local real estate. The focus on real estate because of the excellent cash flow it provides. Local, because he knows the Atlanta real estate market well, he can manage the properties himself and choose the tenants he wants.

He mentioned during the interview that he wants all of his properties to meet the “1% rule”. A term real estate investors use when the monthly rent from a property is at least 1% of the purchase price. So if you bought a house for $100,000 and generated $1,000 per month in rent, you’ve hit the 1% rule. It’s a rule of thumb analysis to help an investor understand if the property is likely to cash flow. It’s important if you are thinking of investing in real estate to learn how to value a potential investment.

This is just one example of an investment that can generate passive income. There are four ways I can think of to generate passive income.

Investing in Physical real estate is the path that Joel has taken. You can also invest in real estate through Real Estate Investment Trusts (REITs) which is stock in a company that invests in real estate. Index funds is a passive way of investing in the stock market. You can also start an online business that brings in additional passive (or active) income on the side.

Find a strategy that works for you. Do your homework. Know the risks and know the benefits. Personally, I view Financial Independence as having enough passive income to build a life that is not dictated by money. If you are truly financially independent, your life would hardly change if you won the lottery.

You can check out Joel’s blog here.

Bonus video: How to evaluate a real estate investment

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any major financial decisions

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

Ben Le Fort

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Sharing my journey to financial independence. For freelance inquiries reach me at

Making of a Millionaire

Stories about money, personal finance and the path to financial indepndence.

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