How To Pay Off Your Loans Without Having A Full Time Job | Cashflow Hacking Ep #19 Katie Welsh
Katie Welsh, Co-founder of The Chain of Wealth, joins us on the podcast to discuss how she paid off over nearly $200,000 in debt without having to work a fulltime job. Having gone to college to become a teacher in her home state of Florida, Katie was quickly saddled with student loans and brand new car payment that so many American’s find themselves struggling under today. Tune in, and listen to Katie share her story about escaping from a mountain of debt on her own terms, without having to work a typical nine to five.
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This is the Cashflow Hacking Podcast with Casey Stubbs where you will learn the tips, tricks, and strategies to increase your cash flow. And now to your host, Casey Stubbs.
Casey Stubbs: 00:20
Hello, this is Casey Stubbs from the Financing and Markets Cash Flow Hacking Podcast and today we’re with Katie Welsh, who is the founder of Chain of Wealth and she helps people get out of debt and to grow their wealth. Hi Katie! thanks for being on the show today.
Katie Welsh: 00:35
Hey, thanks for having me.
Casey Stubbs: 00:38
So you like to help people get out of debt and you give them tips and tricks and you host your own podcast as well on the Chain of Wealth. How did you get involved in starting the Chain of Wealth?
Katie Welsh: 00:51
It’s actually kind of a bit of a funny story and a bit of like a realization of my own nightmare. So when I moved from Florida up to Virginia to live with my boyfriend and we kind of had that conversation of, so what do your finances look like? And his were fine. He had no doubt he had all this money and savings and everything. And then I was like, like a hurricane, like I just had stuff everywhere. I had like tons of that that I’d never really thought of as that. And he was like, we need to get this under control. And so slowly but surely with learning different things and paying off my debt and talking to my friends and my family, it seemed like everybody was the same kind of situation that I was in and being a teacher previously I wanted to make my experience count and really try to help other people.
Casey Stubbs: 01:54
OK, well that’s pretty good. So based on the learning that you went through, you now want to teach others. When you first had that conversation about your getting your finances in order and under control with your boyfriend, did you agree with him that that was a really important thing that you needed to do? Or was there any resistance that you didn’t think there was any problem with having all that debt?
Katie Welsh: 02:19
No. Like I wanted to get out of that. Like I’m not a big spender. I didn’t have credit card debt. Like, it’s not like he was saying, you know, you can’t go get your nails done, you can’t do this, can’t do that. And I was fighting with him over it. It was like, why haven’t you been paying back your student loan? Like and I told him like I, it was so much money. I didn’t, as a teacher having a mortgage and a car payment, honestly I didn’t have the leftover money to be paying my student loan just kept deferring it and honestly kind of hoping that it would just go away. Which it didn’t but we were both in agree. I want it to be out of that. I just didn’t think that there. I didn’t think it was really possible because I had, you know, a mortgage and this horrific car loan where I had all this negative equity and the car payment was like I was driving a Honda and it should’ve been like a Maserati basically. And I just didn’t know enough to be able to get out of it. So he kinda like built this plan for me and he said if you do this and this and this, you will be debt free within the next couple of years and that’s what I’ve done.
Casey Stubbs: 03:36
Okay, so, you at that time, you had a $200,000 worth of debt. And have you paid any of that off right now?
Katie Welsh: 03:42
I have. I’ve actually paid off quite a bit. So I, when I moved to Virginia, I owned a town home in Florida and so the immediate decision was, well I don’t live there anymore and I don’t really want to deal with the hassle of renting it. So I sold the house and thankfully I made enough money off of the house that I was able to buy my way out of the negative equity was my car and the car was the big thing. I was $50,000 in debt with my car because the car was $30,000. And then the negative equity, that long story short, I co-signed for somebody and it turned into a big nightmare was $20,000. So the money from my house was able to buy my way out of the car, so right away like those two things were gone and then I was able to apply for the Teacher Loan Forgiveness Program for my loan. And since then I have paid off about $12,000. Thinks about December-ish. So I’ve got about $26,000 left to pay.
Casey Stubbs: 05:00
Wow. That’s pretty fast. That’s pretty amazing. So after the 26,000, you’re going to be completely 100 percent debt free?
Katie Welsh: 05:07
Yes. And I’m super excited. It’s definitely been like a whirlwind, like when I sit down and think about it, it’s like, yeah, no wonder I’m tired all the time. Like it’s been so busy all the time between the podcast and the blog and paying off all this that and learning all this different stuff. But it’s definitely been fun and I’m super looking forward to being debt free because then I can actually start growing my network and saving for things and being a little bit more responsible with my money.
Casey Stubbs: 05:41
Okay. So I want to just go back knowing now what you know, what you’ve learned about paying off debt. Would you start over doing the same thing and go to college and get yourself into $200,000 in debt?
Katie Welsh: 05:55
College is a really fun time, but I don’t I would. I think I would have applied for scholarships for going into college because when I was 17, like money was the last thing on my mind and when I was in college, like applying for loans and everything. Like obviously I’m like not naturally a super financial genius. It never occurred to me that it was really going to have to pay the money back. So I don’t think I would’ve taken out as much as I did and then definitely after graduating I would have started paying my loan back quicker because I’ve been graduated for a long time now. Like I, if I would have started then, like how I am doing now, it would’ve been gone years ago.
Casey Stubbs: 06:41
Yeah. I’m always a person that likes to think about college as if you really absolutely have to put all that money into it or is there another way you could do it? Can you work and pay it off as you go? Can you go a little slower? Is it really necessary to take all that debt. Is it really necessary to get $200,000 in debt and then end up working at Walmart, which I see a lot of people doing.
Katie Welsh: 06:41
Casey Stubbs: 07:09
So I think that young people, and I like your mission is, is for young people, is to help them really think about these things before they do it. Just because everybody else is doing it. They don’t really know what to do. Their parents don’t know what to do. Their parents are saying, you know, we want you to go to college. There could be pressure there to go to college pressure to take the loans on. Even even the high schools pressuring them, the colleges are pressuring them. So it can be probably.. it’s a good mission to be able to educate people on that.
Katie Welsh: 07:40
Yeah. Well, I came from like a similar type of situation. I came from a single parent family and you know, my mom always really wanted an education so she kind of like went through life, like always telling us like you’re going to college, you’re going to college, but being a single parent, like there was not a lot of extra money to put towards saving for the college and you know, my brother went straight into college and then went to Grad school and he was doing great. So kind of like the expectation, okay, well I’m going to do that now too, but I even my high school didn’t really share like different alternative.
Casey Stubbs: 08:21
Right. It’s almost like it’s the only choice that you have and I actually didn’t go to college and I’m really thankful that I didn’t take it back. I went for about a month and then I said this is not my deal. And so I joined the army because they had recruiters on campus. I don’t know if they had that on your, at your college, but I just started talking to those guys. I’m like, I’m out of here and I’m glad that I, that I bailed. So as of what you’re doing right now, you, I noticed there was a blog post you where you said you made $7,000 in six months and you didn’t even have a job. How do you accomplish that? Like, I think people listening to this, they’re trying to make some extra money. They don’t have anything going on. They’re stuck in their job. Like how did you do that on the side?
Katie Welsh: 09:09
I want to say that we really creative, but we weren’t, we signed up to the Airbnb host so I didn’t have a job moving up to Virginia and I felt very uncomfortable not having any money coming in, even though I had savings and Dennis said that he would, you know, pay for the rent and everything, but I wanted to have something going on with my own. So I made an Airbnb listing. We had an extra bedroom where we lived and it was absolutely beautiful. We lived near the metro, its like prime location. So we made a profile and people just started flooding in like constantly. We always had people staying with us and it was actually, I was, I won’t lie, I was really hesitant at first like I’m not really sure about these people, like I don’t know who they are and they’re in our apartment but it was actually a lot of fun. It was much safer. Katie walsh twitter like I thought that there would be times where like I wouldn’t want to be home alone with the guest, especially if you use like a grown man or something and I never felt that way. We had our guests were all background checked and we had their IDs on file and we only allowed people with great reviews coming in and it was a really, really enjoyable experience. We got to talk to people from all over the world. A couple of people we went out to dinner with, we grabbed a drink with them or sometimes we would just have like a glass of wine in the living room and just getting to hear their story was a lot of fun and then because we did enjoy it so much, we became like super host right away. It felt like, and we were talking to friends too because we’re doing so well with it.
Katie Welsh: 10:56
They started trying it and they were not having the same kind of luck. So my boyfriend is super entrepreneurial and he was like, you know, maybe you should create a course, how to become an Airbnb host and how to take the pictures and like different things that kind of set you apart that you’re just doing. Apparently not everybody knows that. So I created a course called Hosting Your Pad and that is how we’re still with Airbnb, but right now we’re living, we’re not Airbnb-ing physically because we have moved to a one bedroom apartment. But that is how it was just so quick.
Casey Stubbs: 11:39
Okay. So the revenue came from the, the Airbnb or from the course or both?
Katie Welsh: 11:49
From the Airbnb. So the post, it was like 6, $7,000 in six months was where we got the idea for the course. So that was straight like people coming and staying with us.
Casey Stubbs: 11:56
Well that’s pretty cool. And I actually have done something like that myself. I don’t use Airbnb, I use VRBO, Vacation Rental By Owner but I bought a house that had like a mother-in-law cottage on it and it was really big, a big mother-in-law cottage.
Katie Welsh: 11:56
A lucky mother-in-law.
Casey Stubbs: 12:23
Yeah and so my wife and I just furnished it. We put furniture, we put a nice big screen TV we decorated with. So we’ve put a lot of money into the, the, the cottage, and then we put it on VRBO Vacation Rental By Owner, and we marketed it as a vacation rental. So it’s like, OK, you’re, you’re traveling. You, do you want to stay at a hotel or do you want to stay at our home? You know, you can have up to 10 guests, you can eat dinners, you can watch TV, you can hang out. There’s a nice beautiful view because we’re out in the country. So it’s a much more attractive offering than a hotel room. And the price is a little more than a hotel room, but not much more. So you’re getting all that additional value. And we, when we did that, it was a new property that we’ve paid for, but since we’ve moved in in 2013, it is totally covered our mortgage payment. So we’re not, we’re not, we haven’t paid the house off. We’re not out of debt, but we’re not paying rent. So we’re living for free with a little bit of net profit, actually.
Katie Welsh: 13:28
Yeah, and that is the great thing with our Airbnb, there are a couple of months where it paid out. It always paid at least half of the rent. But there are some months where it did pay like all of the rent. And that was such like a big help. Because it’s expensive to live places.
Casey Stubbs: 13:47
It sure is. And I like to think entrepreneurially as well. Like if I’m moving into a property, I’m like, okay, how can I make money from this? You know, I want to be funded. Like even if you’re like in my area, there’s a lot of duplexes in Pittsburgh area. It’s real comments. Like just if you’re going to get a house, get your first house, get a duplex, rent the other side out and let them pay your rent. Why pay mortgage when you can have someone pay it for you? right?
Katie Welsh: 14:20
Because our Airbnb is doing so well, we were talking about it to Dennis’ parents who live in South Africa and they were like, I wonder if it would be okay to try it down here and since they had been trying it to every time we talked to them, they have people staying for like two, three weeks who are traveling and want to see the country and you know, they kind of stay with them and then they’ll go away for a couple of days and then they kind of use their houses like a landing day. So when they’re traveling and it’s just such a good idea that I’m so glad. Finally, somebody thought of it
Casey Stubbs: 14:49
So for people that are in debt right now and struggling with debt. What are some things that you would recommend to them to try to help them overcome that obstacle of, cuz, you know, like you said you were in 200,000, like that’s a huge amount and that’s kind of scary. You could maybe just throw up your hands in the air and say this is too much for me. What do I do? Like, so what, what could you recommend to people in that situation?
Katie Welsh: 15:15
Yeah, I definitely can relate. Like when I found out was in so much that like the first thing that went through my mind was like, how did this even happen? Like how did I get myself into this kind of situation? Like, I know it sounds like kind of ridiculous, but it was kind of by like accident. So to help other people, first you have to list out what are your decks actually like everything that you’re having to make a payment on, what are they? And then look at your budget. And if you don’t have a budget, you need to make one and then track your spending. Give yourself like, like an allowance for fun things like you don’t want to cut yourself off completely and say like, okay, well I’m only paying my debt back and I’m not spending money anywhere else that won’t work. If you like going out with your friends are doing something special, you can still do that, but you have to cut it back, allow yourself a certain amount per month and then everything else needs to go towards your debt. So my best advice is to track your spending and see where you can make some changes. And then also getting a side hustle like Airbnb or driving for Uber or walking your neighbor’s dog with wag or something like that is such a big help.
Casey Stubbs: 16:39
Yeah, I think those two tips are really good ones. Like tracking is really important. Most people don’t realize what they spend until they start tracking right? Because you think that you’re doing fine or you think you have no money, but with the actual reality of the situation is usually much different than the perception and you don’t begin to actually see the real picture until you’re tracking it. And then again, also, the side hustles really big. I read a book called the Richest Man in Babylon, which is a fantastic book. It talks about saving 10% first living below your means. So if you’re making whatever you make, live, only spend 90% and then take that 10% to earn extra revenue, like you said, the side hustle or something, you know, whether it’s real estate, Bitcoin, just anything, stocks, whatever. Just find something, start a new business, find something to generate extra revenue, and then you take that, the profits from that and then you roll it back in again and then you’re always in. That grows into another stream and then you have multiple streams of additional revenue coming in and that really will accelerate you long-term into being, having a healthy financial situation.
Katie Welsh: 17:59
Yeah, definitely. And I think I read somewhere that like the average millionaire has like seven streams of income at one time and you know, I don’t have seven streams but I have like a couple and I’ve all looking back even with all the debt, I’ve always kind of had like a second job or something that I was doing on the side. And now after reading that book, me and a couple of my friends, like we compare our side hustlers like homemade are do you have going on right now? And you know, when I tell my friends that I’ve picked up something, oh, I was like, oh, so how many is left for you now? Like you’re always doing something. And I’ve also read that the average American will spend about four to five hours a day watching TV. Like that’s a lot of time. And if you even cut that down by half and you only watch TV for two hours a day, you could find something to really do with your time that makes it worthwhile. You could start a business, you could, you know, drive for Uber. You could do anything that can make money. It’s so easy to make extra money these days with all the different apps going on that it’s shocking when I talk to people and they have nothing like they’re not driving for Uber, they’re not doing Airbnb, they’re not walking somebody else’s dog. They’re not grocery shopping for somebody. Like, what are you doing with all your free time?
Casey Stubbs: 19:25
Right. Well, you just answered that question. You said 4 to 5 hours of TV or more.
Katie Welsh: 19:25
Casey Stubbs: 19:31
And part of the problem is TVs addictive and also rots your brain away. So that’s part of the problem. But yeah. So I think another thing that you mentioned that’s really powerful is you said that you’re talking with your friends about how you’re advancing your financial situation. So if you’re in a position where your finances are bad, look around at your personal community, your, your close circle of friends, and if they’re all bad in that area, then you’re more than likely gonna be bad in that area. And I’m not saying just to treat your friends like a jerk and say you guys are losers. I’m out of here, but you do want to try to develop relationships with people that have similar interests and people that have had some victory in that area because usually the people that you hang out with, you’re gonna have a similar situation.
Katie Welsh: 20:21
Definitely. You are definitely the company that you keep and usually talking about like your student loans or your debt or anything like that doesn’t typically come up, are like happy hour. Like nobody likes to talk about that but we’ve made it to a point at least I feel like it’s not awkward anymore, talking about money. Before, I used to always shy away from that. I didn’t want to talk about it, but now I feel like. Well first of all I basically, I feel like my entire financial life is on my website, but I don’t feel like it’s an awkward thing to talk about anymore. Like you have this problem. It’s not a negative thing on you. It’s just something that you have right now. Like let’s talk about it. Like I’ll tell you what I think. You can tell me what you think, what are you thinking? And it’s a way, if you can’t talk about it with your friends and your family, who are you gonna talk to it about? Like if you have money problems, you probably don’t want to go pay to talk to a financial planner or something. Let’s talk about it here first and then you can kind of get an idea and then you can go talk to an expert about it.
Casey Stubbs: 21:22
Well, I would say that you don’t really wanna. I mean wouldn’t wanna talk for free about my finances to someone who is in a really bad financial situation. So because they’re probably not gonna give you a whole lot of good advice. I’m all about getting free counsel. Just get it from the right people. Make sure that these people are walking the walk.
Katie Welsh: 21:47
Yeah. You don’t want to be getting your financial advice from somebody who is in even a worse situation than you.
Casey Stubbs: 21:52
Right? And so on your website, you’re sharing all of your financial information and that could be a little challenging or but have you found that that’s helped you learn how to manage your finances better and helped you with your discipline and helps give you maybe a little more vision for your own finances?
Katie Welsh: 22:11
Yeah, it was definitely. I was very apprehensive to share it at first to put out there like I am in this much that and this is what I’ve done. I did not want to do it at all. But then looking at other people’s blogs, other people had done it and nothing negative had come from it. In fact, sharing my, debt and everything, I actually just got a text message from a friend who she’s like, you’re down to $26,000. I heard you talking about on your podcast. That’s so great. You’re gonna be out of debt in no time. And I originally thought it was going to be looked upon as negatively, but now it seems like it’s only positive. People are only cheering you on. They’re sharing their stories with you. And it’s a great way to hold yourself accountable.
Casey Stubbs: 22:59
Yeah. And you can help other people along the way. So that’s a, that’s a pretty cool thing that you started out and did that. So we’re getting close to the end of the show, but I want to give the listeners a chance to get in touch with you or to find out where your stuff is located at where they can hear your podcast. So how should people who are listening try to find you.
Katie Welsh: 23:24
Yeah. So you can look us up on iTunes or Stitcher or wherever you listen to your podcasts at Chain of Wealth. You can find this at our website, chainofwealth and on twitter at @chainofwealth, basically Chain of Wealth for everything.
Casey Stubbs: 23:41
On your site, Chain of Wealth. What, what types of stuff besides the podcast you have on there for people? Do you have resources for people to help them get out of debt or help them manage their finances?
Katie Welsh: 23:51
Yeah, we have different ideas on how you can quickly save some money, whether it’s at the grocery store, just around the house. There are different blog post about how to start like a crypto currency if you want to get into that. There is my personal story of, you know, just getting to Virginia and then getting all the like kind of grappling and coming to terms with all the, all the debt that I had and I am working right now on a post of where I’ve reached out to a lot of personal finance experts and I asked them what is something that somebody who’s paid off a major debt, what are two things that they need to know? And I came up with that question because I paid off my car and got rid of the car. Backed by like Thanksgiving and last week I got a phone call from the creditor and they were like, you owe all this money. And I was like, no, I don’t. I paid the car off and it kind of just popped into my head like if I pay the debt off, but I didn’t realize there were things to do after the debt was gone that I should have done. And so I reached out to a bunch of people. I got a ton of great advice and I’m super excited to be posting that, seems to.
Casey Stubbs: 25:08
Well that sounds pretty interesting, but now you’ve got me really confused because if you pay something off, what else was there? Like I don’t know what’s going on here. What happened?
Katie Welsh: 25:18
So the bank opened as savings account in my name that I didn’t know about and because they are sending me a statement, they were charging me $5 every month, but I didn’t know about this account that they had until I looked at this statement. I moved, so it got like shuffled in the, in the crosshairs I guess, and I was like negative on this account and I called them and I was like, how do I have a negative balance? I paid the car off month ago, like I don’t even have the car anymore, like this was supposed to be done and I didn’t know that there were things to do afterwards. So that was like a shock to me.
Casey Stubbs: 26:00
Okay. Yeah. Well that’s good that you’re learning that. It sounds like a good content piece for people to check out. So if you guys are listening and you want to check it out, go to a chainofwealth.com and listen to Katie and she’ll tell you all about how, what to do after your pay some debt off. Well, thanks again for showing up on the show and congratulations on your website and on your podcast. Very exciting stuff. Keep up the good work and I think you’ve got great things ahead for you.
Katie Welsh: 26:00
Thank you for listening to the Cashflow Hacking Podcast. If you want to get the show notes, just visit our podcast page at financeandmarkets.com