Ep. 1 - Leaving Corporate Life & Creating Financial Freedom w/ Sleep Coach Kaley Medina
We are kicking off the relaunch of Pitchcast with guest and entrepreneur Kaley Medina! When her first child was born, Kaley launched a pediatric and adult sleep coaching agency, Live Love Sleep, that has grown to include 10 consultants across the U.S. She left her career in the oil and gas industry in 2020, and has budgeted her way to financial independence since then. She's paid off her mortgage and in three more years, expects to have enough to live on comfortably, allowing her husband to transition to work with their company full time. Kaley walks us through the journey, how her and her husband merged money philosophies, what she'd do differently when starting a business, how much to have on hand when departing the corporate world, and how she's mentally adjusted to the freedom of entrepreneurship. Thank you, Kaley!
Episode Transcript
Christina Honkonen (00:17):
Okay. Well, thank you again for coming on. I guess it makes the most sense to perhaps start with, tell us a little bit about where you are today. Are you in Texas?
Kaley Medina (00:27):
I am, yes. We're in Dallas, Texas. We've been here for about four years now. We moved from Houston, um, before that, and we're just loving this area.
Christina Honkonen (00:37):
So you told me a little bit about your background, and you mentioned that you were originally in oil and gas, so you come from a corporate background. Tell us a little bit about that. I think that transition, like I've gone through it too, and it's can be really wonderful and also really challenging. But tell us your story. How did you get to where you are today?
Kaley Medina (00:58):
Yeah, so I graduated college with a five-year degree to get my c p A as a certified public accountant, and got my master's in marketing. So I started working for one of the big four accounting companies, and after two years was not getting any sleep and couldn't stand what I was doing <laugh>. So decided to look for more of a industry job, um, you know, in the finance and accounting world. And being in Houston at the time, uh, really the two big industries there are healthcare and oil and gas, uh, oil and gas has wonderful benefits, uh, over healthcare. So I decided to go that route and I was at an oil and gas company in Houston for about seven years. Moved around to a lot of different positions within the company, from accounting to finance, internal audit. And then when we moved to Dallas, um, I got another job in the oil and gas industry for a couple years before deciding to go full-time with my business. So I do own a small, uh, sleep coaching agency, and I started that business back in 2015 after my daughter was born. Uh, working a corporate job and having a new baby is so challenging. <laugh>. Mm-hmm. <affirmative>. It's not something that I really understood before having children. Yeah. I, I remember thinking like, oh, she's going out on maternity leave, like, she has three months of vacation. Wouldn't that be nice? Right,
(02:29)
Right.
Christina Honkonen (02:29):
I went through, I remember those days
Kaley Medina (02:30):
Too, E leaves myself. Oh yeah. It is no vacation at all. Yeah, it is tough, tough, tough. And my daughter didn't sleep, and we were up just all night and maybe I'd get like 20 minutes of broken sleep here and there throughout the night. And we went on like that for six months. By the time she turned six months, I mean, I had just reached my breaking point and was willing to try almost anything. Um, but I didn't wanna let her cry it out. So when I learned that there was more gentle methods out there that I, I didn't need to let her do that. Um, I was like, well, let's give it a shot at this point. What do we have to lose? And she was sleeping through the night by night three, and our lives were just a miracle changed forever. Oh, it felt like it.
(03:12)
And I had so much more energy. Her personality just flourished and aw, it was wonderful. So I decided, why not, why not start this? I I did a program online mm-hmm. <affirmative>, and I thought, wouldn't it have been nice to have some one-on-one support as I was going through this rather than just a program that was pretty general, but I mean, it, it worked for me. But there's a lot of people that just need a little bit more one-on-one support and want a plan that's really gonna be customized for them. So I decided to start a sleep coaching business and started it in Houston again back in about 2015, and have since grown it to a team of 10. That's
Christina Honkonen (03:54):
Phenomenal. Congratulations. Yeah,
Kaley Medina (03:56):
Thank you. It's, it's really great. And I was able to say goodbye to my corporate job too. Um, back in the crazy days of March of 2020, if you might recall what was going on at that time.
Christina Honkonen (04:09):
That is a wild time to have done what you did.
Kaley Medina (04:12):
Yeah. Yeah. It, everything worked out the way that it was meant to. I've, I've always wanted to do this full time, but it's kind of, it's really scary taking that leap from corporate to mm-hmm. <affirmative> really going all out and doing entrepreneur stuff, not having the benefits anymore. Yeah. Um, but yeah, in March of 2020, oil and gas, just along with a lot of other industries, it just taint and my company, um, you know, had to let a lot of people go. And I was part of that downsizing. And so after getting laid off, I was like, all right, well, this is my time. Like, do I go back and get another corporate job or do I go all in, all in and yeah, my kids are at home. They can't go to daycare right now. They were, yeah, two and three at the time. Um, I had I think a week or two during COVID that we kind of overlapped with the corporate job and having the kids at home, and it was just so hard. Yeah. Um, so I, yeah, it was, we
Christina Honkonen (05:08):
Did the same thing. We know. Well, yeah.
Kaley Medina (05:10):
Yes. It's tough. It's, so, it was like, I, I couldn't really balance that corporate very well with having a family, you know, at home with small kids and decided, all right, let's give this a year. Um, at that time, I, I had a team of, um, I think it was just three of us. 'cause I had two girls in Houston, um, that I kind of needed to take over my market there once we had moved to Dallas. And yeah, within a year, <laugh> like business had basically doubled and, uh, ended up hiring, you know, a lot more team members and just can't believe where we're at right now. And really looking forward to growing even more as time goes on.
Christina Honkonen (05:48):
Yeah. That's phenomenal growth really quick. So for people who are thinking about going out on their own, just looking back and being really very close to that transition time, what would you, is there anything that you would've done differently? Although it sounds like it's been such a success, but looking back at it, and by the way, like hiring, like that is not easy, especially when it sounds like you went out on your own and hired right away, which is super smart, but not a lot of people do that. They'll wait however long they need to, to build up and then hire on. And I know, and you work with consultants, we actually do too. So it is a little different. We know how that goes. But just tell us a little bit about like how did, how your decision making around both transitioning and even through the lens of what you might might do differently?
Kaley Medina (06:36):
Yeah. So I think what I probably would've done differently is started hiring even sooner, not just the wow. The two team members that I hired in Houston, but started to expand more regionally and nationally sooner as well. But, oh, I had heard the advice you want to hire before you're ready, and was just so scared of that because I just kept thinking like, well, what if I don't have enough business to give these people that I'm hiring? Like, I would just feel like a terrible <laugh>, you know, manager. Yeah. But, but it's, it's something that I've learned that if you have the skills to be able to teach them how to be successful, how to, how to teach the people on your team to be successful, generate some business on their own while still being able to, um, you know, give them some that it's, it's, it is something that you should look into, uh, doing before you, before you get overwhelmed and have too much work.
(07:34)
Because having that little team of three or so during Covid, um, once things started expanding, I was working a lot and it was, I would wake up early to try to do some work before the kids got up. I would stay up late and do a lot of work once they were in bed. Um, and it was just hard to balance kind of that work-life balance, whatever life there was back in Covid <laugh>. Yeah. Right. But it, it was still, um, it was a challenge and, and spending enough time with my husband, um, because pretty much as soon as the kids were in bed, I was like, all right, see ya. I've got hours of work to do here. Yeah. Um, so yeah, I think that hiring before you're ready is really something that I wish I would've taken that advice before. Um, I got a little overwhelmed.
Matt Honkonen (08:22):
Something I really struggle with as it relates to managing those people that you hire is the balance, like you said, of feeling like you need to put the, put the boots on and do the hard work, and they're there to support you. But then there's that feeling of like, well, I'm giving them the work. What am I supposed to do? There's that, there's that part of my brain. And then the other part of my brain is battles between the work itself and then the management of the team and how much time that really takes. Do you have any advice for people now that you're at 10 employees, do you have any advice for people who are in your position, the balance between the work itself and the admin and the management of that team?
Kaley Medina (09:04):
Yeah. So I found with the work itself, what I needed to do was this, this might be a little bit different than, you know, other people's business models, but with mine, I realized I needed to somehow differentiate myself from the rest of my team because there was just such a demand. You know, my name was out there and people wanted to work directly with me, and my prices were exactly the same as the rest of my team members. So would you wanna work with the founder who has six years of experience, or someone who's just started? So I found the way to differentiate myself from the rest of the team was to increase my prices. And that took a little bit of burden off of the actual one-on-one consulting that I was doing, and it was able to give more to my team members too.
(09:52)
And then every client that I got, I was making a lot more than I would've, you know, otherwise mm-hmm. <affirmative>. Right. So I think that finding a way to somehow decrease one of those workloads, and for me it was the one-on-one client workload. Yeah. Um, was a, a good way for me to be able to actually focus on growing the business even more, be able to focus on doing more marketing that not only helped me, but all my team members as well. Um, and then be able to do some more. Just, just sit down and think about other things that I can do and how I can improve my hiring process going forward so that you can just streamline it, um, as much as possible. And that's kind of what I'm working on right now, is figuring out with my next group of hires, how I can make that training process, um, a lot more automated so that I'm not having to spend a few days doing one-on-ones and then just answering questions, what can feel like left and right. Everything like that. <laugh>.
Christina Honkonen (10:53):
Yeah. Yeah. Yeah. Well, so I have a quick question. When you are working with your consultants and your team members, when do you know that it's not a good fit? Has that happened yet for you? And how, what has that been like?
Kaley Medina (11:07):
Yeah, so what I, I've tried to make my hiring process, uh, to where, you know, I get to know them as much as possible because I feel like people can learn things, right? You can learn the technical side of almost anything if you're dedicated, if you have a passion for it. Um, but is it ultimately the right fit? And that's where I feel like having, uh, some zoom interviews where you're just chatting and feel like, you know, is this vibe right? Are you gonna be the right fit for my team? I've, I've kind of started doing that with my last round of, um, hires and I really liked having more of just that open chat mm-hmm. <affirmative> and then having like a second interview where it's more targeted questions that asking. Um, but yeah, I did have one team member, uh, who, you know, we just kind of mutually decided that it wasn't a good fit a few years in, um, just things kind of changed in her life where she didn't have the same amount of time that she had before and had more kids and it just wasn't really something that she was able to put in as much effort, um, as she was before.
(12:18)
So it was something we just scheduled a call to talk about what she, what her ultimate goals are, and, and the final decision was that, you know, it just made sense for everybody that we parted ways.
Christina Honkonen (12:29):
Yeah. Yeah. Those hard, those are hard discussions, but they're so important. And it's always interesting to hear how different people navigate them and how willing they are to even have them, because we do find that a lot, I mean, I'm sure we all have throughout our career that there are certain managers who just don't wanna have those hard conversations and other managers who maybe wanna have 'em too often and you just <laugh>,
Kaley Medina (12:52):
It's
Christina Honkonen (12:52):
Like, where is that happy
Matt Honkonen (12:53):
Media? Let's talk about your failures.
Christina Honkonen (12:55):
Yeah, exactly.
Kaley Medina (12:56):
No, <laugh>. Exactly. Like, it's gonna be one of those great <laugh>.
Christina Honkonen (13:00):
Yeah. Right.
Matt Honkonen (13:02):
Oh, I've got a million questions. I can wait
Christina Honkonen (13:03):
Though. Well, I just wanna make sure we go back to the money side of this story and get to hear a little bit about your personal finance focus and how that played into all of this. And you can go back as far as you like, like some people start these stories at their childhood because it played, I think money plays a role for all of us and our childhoods obviously, um, or maybe in your marriage, but where did that sort of start and how did it, um, enter in at the beginning of this entrepreneurship journey?
Kaley Medina (13:34):
Yeah, it's funny, my relationship with money has always been that I, I wanna make sure that we're going to be stable. My parents were both, uh, raised on farms up in Canada way back in the day. And they, they grew up in these really small rural towns and there wasn't very many opportunities for them. Um, my, my dad was number seven of 11 and my mom was number nine of nine <laugh>. There was lots of kids in the family. Wow. And a lot of people just get stuck when, and, and there's just not opportunities to be able to go out and find a great career. Um, but my mom was determined to make something of herself and she was one of the first ones in her family to go out and go to college. Um, met my dad there and she just always instilled in me that you don't wanna have to rely on somebody else to take care of you.
(14:32)
Um, 'cause she just saw a lot of situations where, you know, people would get married, it would not work out, and if the husband was working, the wife wasn't left with very much. And so she, I, I was, um, one of three girls and so just raising us, she was always just talking about how it was for us to be able to make our own money and be able to support ourselves as we got older. Yeah. Um, so that was something that just kind of always stuck with me. And as I was in college, I was thinking about, well, what can I do to actually start this journey? I'm about to come out and, um, you know, I'll be making real money for the first time in my life. What am I gonna do with this money once it comes in? Yeah. I know a lot of my friends are excited about buying their first car and <laugh> going on that great trip.
(15:21)
They've always wanted to go on, but I wanna start saving now because I, I just don't know what the future is going to bring. And I started my career in the fall of 2008, which I'm sure you can remember was mm-hmm. <affirmative> not a good time. Uh, I think a month after I started that layoffs had already started going. So, um, again, it was just kind of in my mind. I just, the, the future is so uncertain. I want to be able to have a good nest egg and feel comfortable not only today, but in the future because I don't know if social security is gonna be around by the time I retire, Uhhuh <affirmative>. So I just got really excited about looking into personal finance and figuring out what I could do as soon as I started my job to start saving for the future.
(16:08)
Um, and I learned about, uh, IRAs, Roth IRAs, and of course with, uh, 4 0 1 kss. Now, at that time that I graduated, my husband and I had just got married. He was in the Army and I was working, uh, big four public accounting. So between the two of us, we were not bringing in very much money. I think maybe between the two of us, it was like 65, 70,000. But I was determined that we were going to max out every single account that we possibly could. So we put in the, at that time it was like $5,000 into our Roth IRAs and maxed out my 4 0 1 k. Um, and we, we didn't do anything with the military because just the way that our investments worked, it, it just made more sense to put that money into my 4 0 1 K at the time. Um, and that's what we were doing ever since, uh, that first month that I started my job, we've been maxing out our IRAs and putting everything that we can into those 4 0 1 Ks.
(17:10)
And once we finally had him leave the army, um, and start, start working, he's a pharmacist now, so we had four years of school for him too. Um, but at that point we finally had money left over that it wasn't just, everything's going to retirement, now we can max out these accounts and have a little bit of money left over. What are we gonna do with this? Mm-hmm. <affirmative>. And, um, oh gosh, that was back, I think before, definitely before my daughter was born back in about 2013, and we bought our first house in Houston at that time. And my husband had read Dave Ramsey's book mm-hmm. <affirmative>. And he was very adamant about using that money that we had left over after all of our retirement accounts to put towards the house so that we would be completely debt free. And me being, you know, an accountant and thinking about the taxes, I was like, no, but you get the tax benefit of <laugh>, you know, having, having a house like, I dunno about this, like the message is a good thing.
(18:08)
Um, but he had me read the book and we finally agreed upon, um, going ahead and, and putting all of that extra money after retirement savings into the house. So, um, we ended up moving to Dallas before we could pay off that house, but we had a nice chunk to be able to put about 40% down on the house when we bought it here in Dallas mm-hmm. <affirmative>. And, um, just continued that philosophy. Uh, once we moved here and with my severance that I got from my corporate job in 2020, we were able to completely pay off our house here and be 100% debt free, which feels amazing because that is financial independence, you know? Yeah. We've got no more debt, we've got money saved up for retirement. We've been saving up for, oh, I don't know, 15 years now or so. Um, and I feel very happy with where we're at and at this point it's just, we just need to, to make it more, you know, month to month until retirement and what we've got in there at this point, we, we don't really need to be putting too much more in, so.
(19:20)
Right. That feels really good.
Christina Honkonen (19:21):
Yeah, I bet it does. That's exciting. So are you looking at a, the classic retirement age of like 60 to 65? Or are you all aiming for something sooner?
Kaley Medina (19:32):
That's a good question. So when I think of retirement, to me that kind of means not having that corporate responsibility. And while I've been able to say goodbye to the corporate life myself, my husband still does work as a pharmacist, and it's, it is just very reassuring still knowing that we have those, um, the health insurance, right. That's the big one in the us Yeah. Um, and then, you know, the benefits that go with it, like having an H S A and, um, the 4 0 1 K and everything. Um, but I think our ultimate goal is to be able to have him be able to step back from that and be able to focus more so on the business and doing that together. Because he is one of the, the 10 people on our team, um, me and the nine others, we do, uh, pediatric sleep consulting, but he is our adult sleep consultant.
(20:26)
So it kind of goes hand in hand with pharmacy getting rid of, you know, the pills that people might take to get For sure. So it's a fit's, yeah. Mm-hmm. <affirmative>. And so our goal is just to get to the point where we're able to have him be able to take that step back from his corporate job and come on full-time with me so that we can, you know, work day to day together. And, um, you know, I haven't really thought about succession planning at this point as to when I'll be able to just, you know, fully give up the company. But once he retires, um, from that corporate job, I'd like to get the business to the point where it is so automated that I've got people doing, you know, all of the jobs that I'm currently doing now, I talked about having one of my senior consultants, you know, work on the training. I'll have somebody else do more of the marketing that I'm focusing on a lot more right now. Um, and just be able to delegate more of those roles so that I'm working more of that four hour work week and to me, like a four hour work week, I'm happy to work that until I'm 55 6.
Christina Honkonen (21:34):
Right. Absolutely.
Matt Honkonen (21:37):
Yeah. I think a lot of us grew, a lot of us grew up with our parents' generation and the classic tale of like, somebody works a corporate job their entire life, they retire for two years and then they get a job. <laugh>.
Kaley Medina (21:50):
Yep. <laugh>
Matt Honkonen (21:51):
A a quick background about me. So I'm a musician, I'm a composer, and when I retire, quote unquote, I'm never actually gonna stop it. It to me it is freedom, like you're saying, it is like, I get to choose, is it two hours a week or four hours a week? Whenever I want is retirement to me. So I wonder for you, is it, is it a similar thing where the, the word retire just means the freedom of choosing your day, choosing your week, and that automating of your business being the real key to that retiring?
Kaley Medina (22:23):
Yeah, and I think retirement is just really about thinking about the things that you truly enjoy doing. And it's something that I believe people should think about now rather than when that time comes and you're actually retired because I, I do hear of a lot of people who retire and then decide to go back to work a year or two later because they're so bored <laugh>, they just don't know what to do with their days. But after I left my corporate job and my kids have gone back to school now I've just, I've been able to rediscover some of those things that I was able to enjoy as when I was in my youth, like tennis and pickleball, going swimming, um, going out with friends, just going for walks. The, those kinds of things really, really make me happy. And being able to spend real quality time with my children just, it's so priceless to me. And as we get older and they have grandkids, I wanna be able to be there to be able to spend that time with them as well. Yeah. So I think that's just something that people should think about is what ultimately makes you happy and what, what you would wake up being enthused and be able to find joy with every day.
Christina Honkonen (23:39):
Yeah. I love that. That's a good way to look at it. So let's talk a little bit about your asset allocation, which I think it's so wonderful that we get to talk to a A C P A and an entrepreneur and somebody like you that's really unique. Tell us a little bit about to whatever your ex your comfortable discussing it, what your asset allocation is, and then even perhaps more importantly, what maybe you looking back would've either done differently or said like, yes, that was a big home run for us. You've obviously been very successful. What has, what has um, benefited that portfolio so greatly in your opinion?
Kaley Medina (24:18):
Yeah, so other
Christina Honkonen (24:19):
Than the bull run <laugh>, we've just,
Kaley Medina (24:20):
Right <laugh>. So yeah. Right now I would say like our house is about a third of our equity and then, uh, the majority of everything else is in stocks and bonds right now. Um, unfortunately I would say like the last few weeks have not been so good. That's true. Um, yeah, exactly. But I would say, um, yeah, so I kind of had like a, I'd say about a 80% stock and about a 20% bond allocation right now. And I've worked with, I guess three corporations over my career and my husband has as well. And when we left those jobs, what we did not do was roll over our 4 0 1 kss into our IRAs immediately. I actually didn't do that until last year. And that was, I think, the thing that I would have done differently because imagine trying to manage, I, I try to do rebalancing and everything on a quarterly basis.
(25:27)
Um, and you've got those six different accounts plus our IRAs and it's a lot of moving pieces mm-hmm. <affirmative> to try to figure out what the right allocation is going to be. Um, and we've got like our, our personal brokerage, uh, set up through, uh, Vanguard, which I am the biggest advocate of their index funds because you have such low expenses. Uh, so that's what we eventually moved all those, uh, 4 0 1 KSS over to was to those IRAs so that we could take advantage of the much lower expenses than we were incurring in the 4 0 1 Ks.
Matt Honkonen (26:03):
I have a similar regret about my rollover happening about a year ago. <laugh>. Yeah.
Kaley Medina (26:08):
<laugh>. So we were on the same timeline. <laugh>, yeah.
Christina Honkonen (26:11):
They make it for us, the experience with rollovers has been really different from company to company. Like one was really easy and then the other one I feel like dragged out and dragged out and they made it really, really challenging and it became this time suck and yeah, really frustrating. Yeah,
Matt Honkonen (26:28):
I mean, honestly, you, you just hit the nail on the head of, of something I want to make sure we leave to our kids, and that is don't be passive about it. Like, the time you need to be active is as early as you can. And I think that's the thing I would've told an earlier me, um, as it relates to rollover and things like that.
Christina Honkonen (26:46):
So let's talk about rebalancing really quickly. So I don't, I think that this is something that, well, for the most part, I think people who are in personal finance and managing their own portfolio, like us, we don't have your background. So I think people rebalance. I don't know. I, I I doubt it. I highly doubt that happens very often when someone's solely managing their accounts. I can tell you I don't rebalance, which I probably should, but, so tell us a little bit about what that should look like and would you say like, don't ever do this on your own, go to a personal, you know, advisors, a finance advisor, or would you say like, this is how I'd go about doing it?
Kaley Medina (27:25):
Yeah, so rebalancing is actually really easy. What rebalancing means is I was talking about how my stocks, I wanna keep at, at this point in my life, about a 80% stocks and about 20% bonds. And then I have, you know, my domestic versus international with those as well. So every time a stock or a bond makes money, one of your, uh, that allocation is gonna get a little bit outta whack. Like, let's say my stocks do really well over the last few months, well, they haven't been, let's say, my stocks do really bad <laugh> and my bonds do really well. And in that case, every quarter I just kind of go in and look at, well now my stocks are at about 75% of my total allocation and my bonds are at 15%. I need to get that back to that 80 20. So in order to do that, I need to take some out of my bonds and put that towards my stocks, and again, do that right allocation between the international and domestic as well.
(28:23)
So they do make it really easy these days because, um, I know with both Vanguard and Fidelity, they have the ability to just set that up to do it automatically. So you can tell them like, I wanna get to this, you know, 80 20 between stocks and bonds, and I want this much in my international and this much in my domestic and every quarter it'll automatically do that for you. Um, so it's, it's really easy through that automation or I just have a very easy spreadsheet that I set up that just basically runs those calculations and allows me to be able to just, um, change those allocations as need be. I just put a reminder on my calendar, like basically it's whenever my quarterly taxes are due, like, all right, let's sit down for a day and today's gonna be tax day and it's gonna be my personal finance day. I'm gonna look at paying all the taxes and figure out, you know, what I owe there and then also sit down and, and look at what I need to rebalance within all of those accounts to get that total number back to what I want it to be.
Matt Honkonen (29:23):
That's awesome. Um, I know when you're climbing a ladder, it's really easy to focus on the next rung. And when you're saving money, it's really easy to do the same thing. Have you struggled with, have you and your husband struggled with, okay, we're putting all of our attention, retirement and our current lifestyle and our current cars and our current house, none of that matters. Let's just focus on the end goal. Have you had to deal with the struggle of life balance versus retirement in your life? How have you overcome those feelings? What's your advice to people who are on a financial mission but also are living in the meantime?
Kaley Medina (30:02):
Yeah, so what we did with our budget was we always put in a discretionary line item every month so that we didn't feel like we couldn't do things that we wanted to do. And at the end of every month, everything left over. Um, and we might've had some money left over from that discretionary fund that went into our house and our retirement. So we never had like a set we're going to put in like $5,000 every single month. Um, it was always whatever was left over, like that's what we'll do. And um, it it just allowed us to be able to, you know, live a lot more happier to where we didn't feel like we're, we're on a budget even though we are.
Christina Honkonen (30:47):
Yeah, I like hearing that because so many people in this space are suffering there and, and that can actually be a really noble pursuit and a noble reason to suffer in the meantime. But it's nice to hear somebody, we live a little bit more like that, where we're like, whatever's left at the end is what we, and we get ambitious about that. We have big goals for our savings, but we do pretty much live how we wanna live. And then, um, we live frugally, but we live first and then what's left is what goes towards savings.
Kaley Medina (31:21):
That's great. And I think it changes as you get older as well. 'cause when we first started our careers, you know, it was, we, we, we did live a lot more frugally and there really wasn't very much leftover at the end. So as, as we got older and we were, we started making, you know, more money with our jobs and our careers, then that allowed us that opportunity to be able to have a lot more extra wiggle room in that budget. But I think, you know, especially with people coming out of college and they're young and in their twenties, if you're able to just, just sustain the lifestyle that you've been on and, and not take that next step up, just waiting like a year or two extra can really help to build up that next nest egg and save for retirement so that just a few years later you can start stepping it up and, and living life a little bit. You know, more, more how you want to.
Christina Honkonen (32:17):
Yeah. By the way, are you, for your, um, estimation around when you'll retire, are you leaning on the 4% rule or is there anything else that you'd recommend when people are trying to calculate what they'll need to retire on and if they'll meet that goal?
Kaley Medina (32:35):
Yeah, I'll be honest, that 4% rule is just what I follow. I just wanna keep it as simple as possible. And um, I've, I've been looking into kind of stuff in the fire community the last few years and that's just what I found to be the thing that a lot of people are using and what we're using for our calculations as well.
Christina Honkonen (32:55):
Yeah. So one of the questions that we hear a lot about is, especially from the younger generation who are either partnering up or marrying, um, they ask about how we handle our finances. And I can say, which I think is so funny because for us we were so we didn't have any money, so we were like, we put it all together 'cause you just wanted to grow faster. So we were more interested in like, let's just get the money going than, um, really divvying it up like fairly, um, like you, there wasn't much left after at the end of the day, those that decades ago. So anyways, um, but yeah, how have you viewed it and how do you both, like what do you guys do as a family and then also what do you recommend for people and young, young kids who ask about this?
Kaley Medina (33:40):
Yeah, so we just do it. My husband and I have joint accounts and we just do it as a family unit. Um, I mean, if there's like ever anything extra that he wants to buy that month, then okay, that's fine. But next month I'm going to get that purse that I want <laugh> or whatever. It's
Matt Honkonen (33:59):
Next month I get to <laugh>.
Christina Honkonen (34:01):
<laugh>.
Kaley Medina (34:03):
Yeah. And, and it's something that, um, I think everybody has their different level of materialism and what they wanna go out and buy. My husband, you know, in his family, he was very much raised to where when money comes in it goes out and you buy whatever you wanna buy. So it was interesting trying to teach him <laugh>, you know what? I bet. Yeah, yeah. But he was a fast learner. Um, but even these days he still has things that he wants to buy that I'm like, really? But you know what, like that kind of stuff like that makes you happy. It to me, I don't need it, but if it really does make you happy, like we'll have a little bit of a budget in there for you to be able to get that stuff.
Matt Honkonen (34:46):
That's wonderful. I think that that's the key to all of it. I love it. I love how you phrased that last bit because I think people have a tremendous amount of guilt either being like a miser or a spender. It's like everybody, everybody is a little bit of both. Yeah. And there are things that you dig and things you don't dig. And for me it was a, it was a huge revelation looking at our monthly expenses and going, holy crap, I don't even care that much about coffee. Why am I spending so much on it? Like, I could put all of that into something I'm really into or cars, like, I, I don't care about a car personally, but a lot of people are into that as a hobby. Great. Go spend your money there. That's the thing I love about the fire community and the thing that, that finally she convinced me to be a part of this kind of thinking is if you are working so hard for your dollars, make sure you're spending them on the things that enrich you, not the the corporate mechanism of, um, of life in America nowadays where it's just subscriptions left and right.
(35:47)
Make sure you're putting that money that you've hard earned. Put it where it needs to go.
Kaley Medina (35:52):
Exactly. That's really well said.
Christina Honkonen (35:55):
So I wanna come back really quickly to your asset allocation and just get your input on what you, what do you recommend, or you can do it share through your own lens and how you, um, distribute your portfolio. But are you relying really heavily on bonds and index funds, like the ss that track the s and p 500, like V T S A X or are you buying individual stocks and I think you mentioned international funds too, so how do you all set that up or you're welcome to just share through what you'd recommend?
Kaley Medina (36:27):
Yeah, so I mean I just had a one-on-one phone call with, um, advisors from Vanguard and just got their very simple opinions as to what we should do with our allocations. And so we just use the, uh, basically it's, it's two different, um, like index funds. That one is their domestic index fund and one's the international one and then they have the same things for the bonds. And so I just kind of followed their advice with where they recommended putting that and we just have them in four accounts within Vanguard, so it makes it really easy for those allocations and rebalancing too. Mm-hmm. <affirmative>.
Christina Honkonen (37:07):
Yeah, that's really smart. I don't think I've ever talked to anybody who's like, I just called up Vanguard and was like, tell me what to do, <laugh>. It's really smart, smart.
Kaley Medina (37:14):
I mean it's a free service, like you're giving them your money, so that's
Christina Honkonen (37:19):
For sure I'm gonna do it, I'm gonna call them up. That's get their opinion. I think that's really smart.
Kaley Medina (37:24):
Yeah.
Christina Honkonen (37:25):
So for those, another question that gets brought up a lot for people who are transitioning from the corporate world into their entrepreneurial journey is how much money they should have on hand in cash as they make that transition. So did you, is that something, I guess you had a second income coming in, but is that something you thought about a lot or, uh, did you want a, um, stockpile of cash on hand to kind of get you through for a little while? And if so, how much? Um, and then of course what do you recommend?
Kaley Medina (37:56):
Yeah, so that, that's the reason why I started my company while I still have my corporate job. I just didn't know like what, what is the chance that this business will be able to actually replace my income one day or when I started it, I didn't think it would, I thought it was just a little side hustle that I'd be doing. Um, but as I continued to stick with it, I was like, wow, I really like doing this and I can make this work as a full-time thing. Um, but just being I guess a little bit more risk adverse. That's what I really liked doing was starting that company while still working full-time so that if it didn't work out, then I still had that corporate job to be able to go back to. Um, also, I mean, I'm not gonna lie, being married to somebody who still has a corporate job, that is also very reassuring once you go through that transition, knowing that if if I was not able to make this work full-time, we're still going to be able to have enough and work.
(38:57)
We worked our budget around, let's say we only have your income, like let's say it's just a terrible month and I don't make anything this month. Like, can we actually live off of your income? And so we rebudgeted, um, and sat down and, and for a long time, like we, we are on a lot lower budget the first few months that I went full in with the job. So I, I do like to have money set aside. I know, I think like with Dave Ramsey, I think he says about like three months of expenses you wanna have. I I just wanted to at least double that <laugh>, but we had about like nine months of expenses by the time we decided to go like all in with my business and still had the option of having like my husband's income as well.
Matt Honkonen (39:45):
That's awesome.
Christina Honkonen (39:46):
Yeah,
Matt Honkonen (39:47):
I did a similar thing when I started. I, I worked myself out of the day job. Like that's that risk averse, that risk averse piece of it. I have a question about your husband. How important has it been to your financial journey that you all have done it together? Would things look drastically different if you had done this by yourself versus how you, how you are where you are now? Like you said about that push and pull of, hey, I'm gonna take time now, I'm gonna do this, you're gonna float us for a second while I get this off the ground. How important has that been to where you're at now financially?
Kaley Medina (40:22):
I don't think we would be here now if we weren't on the same page because I, I mean, I just don't know how it could work if one person's wanting to go out there and spend, spend, spend and the other person is trying to save as much as possible. Um, it would just lead to too much of a conflict, like in your personal relationship and you're not ultimately reaching the goals that you wanna be reaching to us. I've just found that communication has been the most crucial thing. Like we sit down every month and go through what that budget's going to look like and we've kind of gotten to the point where, you know, now it's, it's pretty much the same and we don't really have to sit down, we just kind of know what those numbers are. But we did do that a lot when we were younger, especially when I was working on changing his mindset about what to do once the income came in <laugh>.
Christina Honkonen (41:15):
So tell us about that because I think most of the time, I mean all of the time you're gonna, if you're gonna either be super on different ends of the spectrum or you're going to be like slightly off, like that's the nature of being a human being. We are not all the same. So tell us a little bit about what it was like, you know, how did you view it? Was it a lot of discussions? Was it frustrating? How did it ultimately get to the point where you are today, where you are, um, more synchronous? Is that
Matt Honkonen (41:45):
Right? Synchronous,
Christina Honkonen (41:47):
You're, you're in
Kaley Medina (41:50):
<laugh>.
Matt Honkonen (41:51):
I like synchronous way more than
Kaley Medina (41:54):
I can just imagine a band with that name. <laugh>.
Christina Honkonen (41:57):
You heard it here first.
Kaley Medina (41:59):
Yeah. I feel like it was relatively easy because we, I just sat down and really mapped out the numbers for him so that he could see what we were actually bringing in after taxes and showing him those credits, card statements and just walking him through it step by step and showing him, you know, hey, if we're going out and spending this much, we only have X, Y, Z left over to be able to put into those retirement accounts and remember what I was telling you about how we can max those out and if we do this is what we'll be making, um, at retirement and be able to potentially retire that much sooner. And so just walking through it through him, he was able to, you know, get it I think pretty quickly. But it's a give and take too because he taught me, you know, about the Dave Ramsey and paying off, um, our house sooner. That was something that I was not on board with at all when he first was introducing that idea to me. Um, but I think, I think it took him about six months of convincing me and getting me to read it before I changed my mindset around that as well. So if there's just something that you feel very passionately about and um, you know, getting your partner on board, it's just something that you need to continue communicating, um, until you come to the right agreement.
Christina Honkonen (43:16):
Yeah. So are, were you using a, um, compound into calculator and go and putting the numbers in and showing 'em that way? Is that what you used?
Kaley Medina (43:24):
Yeah, back in the day we <laugh>. That's great. We got on Google and
Christina Honkonen (43:28):
Just, we still use, it's like the best tool. Yeah. Do you use what um, percentage increase? Do you use like a 7% every year to to look further out and project where you'll be at? I hear all the time, like some people use 10, which sounds really ambitious and optimistic. Um, yeah. So what number do you like to use?
Kaley Medina (43:50):
Yeah, I have heard that 7% is kind of that average number, but I'm a little bit more on the conservative conservative side when it comes to thinking about what that number's actually gonna be. So we use 6% just to make sure that we do have that extra wiggle room and should there be extra when we retire then Awesome. Let's go on all those extra trips I wanted to go on or Yeah. You know, leave a great gift for our children.
Christina Honkonen (44:16):
Yeah, that's great. That's awesome.
Matt Honkonen (44:18):
My final question is where do guys get shirts like the one you're wearing? Cat
Christina Honkonen (44:23):
<laugh>?
Matt Honkonen (44:24):
Is that something I can order? Was that, was that a gift? Is that something from your company
Christina Honkonen (44:29):
That
Kaley Medina (44:29):
You need to start? I need to because, because there's so many ideas I have for t-shirts. <laugh>.
Christina Honkonen (44:33):
I bet, I bet that's a very good idea. Okay, before we get off, tell us, um, we didn't even get to talk about sleep. We'll have to talk to you later about part two.
Kaley Medina (44:42):
Part two <laugh>.
Christina Honkonen (44:44):
Yes. And well, and everybody should call you and, and get help if they need. They need help. Um, no freebies on this show apparently today. <laugh> <laugh>. So tell us a little bit about like where can people find you and um yeah, how can they get in touch?
Kaley Medina (45:00):
Yeah, so you can visit my website@livelovesleep.com or follow us on Instagram. I'm at baby sleep help and I have a free sleep q and a every Wednesday. Um, so if there's just, you know, any questions that you have, certainly pop those into the chat box on Wednesday and I can help to get those answered. But me or my team, we would love to work with you to get your child sleeping well.
Christina Honkonen (45:29):
That's fantastic. Okay, we'll be following along. Thank you so much for sharing your story. It's hugely inspiring and we just are so excited to share this with everybody.
Kaley Medina (45:38):
Yay. Well I really appreciate you guys having me on today.
Matt Honkonen (45:45):
That is it. That's the episode. Thank you so much for listening. Head over to Instagram and follow us if you do the social thing at Pitch Wire. And for fresh episodes of the Pitch cast, head to pitch wire studio.com.
