Minki: Hey WINers. Welcome to Episode#4 of Money Bites, where we dive into money, mindfulness, and everything that comes in between in bite-sized discussions. We have an interesting personal story to share today of a serial entrepreneur who went from $30,000 in student debt to $30,000 in her savings account in less than eighteen months. Hear how she did it and the unconventional strategies that she used.

Hi, Jessie. I am so excited for you to be on our podcast. Welcome to Money Bites.

Jesse: Thank you. I'm excited to be here.

Minki: Awesome. We met on a women's networking Facebook group. You are the founder of an amazing business called Lumi.

Jesse: Thank you. Yeah. I started Lumi last year so it's been quite an adventure.

Minki: That's super exciting. But, it seems this isn't your first time around with being an entrepreneur. It seems you started very young?

Jesse: Yes. I started my first business when I was sixteen years old selling T-shirts. I was screen printing and selling T-shirts, making them in my parents' basement. Then, I ended up starting a company with someone I met at design school, my current co-founder, Stephan. We did our first business together that we started about six years ago. I've done a lot of different things. This [Lumi] is my second company.

Minki: Wow. That's actually amazing to have tried it again and again. Starting as an entrepreneur at such a young age, I would think there would have been some scary points. What gave you the courage to just start?

Jesse: Yeah, definitely. It was intimidating. I joke about this a little bit but I don't know another way. I never had a different sort of job or different income source. It's sort of the only path I know in a certain funny way. But I think what actually made me want to jump in and try starting my own business was the sensation that I had that to start something from scratch is the best way to learn about how the world works. If you want to learn things fast and you have this goal of having an impact on the world in some way, or seeing your ideas out in the world taking shape, then you might as well jump in and do it from scratch. It was that sort of thinking that led me to get over the hump and try to start a business.

Minki: One question that I have is your early entrepreneur years obviously shaped a lot of your relationship to money now, but I'm wondering, if we take that even earlier into your childhood, what is your first memory of money?

Jesse: That's a really good question. I remember getting five dollars a week in allowance. I remember that from when I was an elementary school kid and things like that. I think that something from my growing up that did impact my relationship with money is that I don't think my parents had a great relationship with money. I think they were always pretty stressed about money, which as I became an adult, I started to question why. They were both employed. My dad was a lawyer and my mom was a school teacher. They actually had two incomes for a while. Looking back, knowing what I know now, it's like why? Everyone has money trouble sometimes but I really think that the stress in my household around money was through, especially my dad I think, not being good with money. There was this consciousness I had where I was like, "I don't want to be stressed about money forever. Like, I wanna be better at using it than I think my dad was. Does that make sense?

Minki: Yeah, totally. Do you think, as you grew up, you acted on those insights?

Jesse: Yeah. I think that my first acting on that was I made a conscious decision to not let my lifestyle demands creep up. That's what I think my dad was always stressing about. He liked going on vacations and he liked different things and then we'd be stressed about money. Looking back it's kind of like, "what if we didn't go on that vacation," or like, who cares? I don't know. I mean, I'm sure, obviously the answer is he cares, right? But I think that my reaction to observing that sort of money stress was that stress would not have existed if you just didn't keep ratcheting up lifestyle demands or lifestyle expectations.

I went and lived in an arts colony in LA and paid myself very little money. I think, in a almost hippie-ish manner, my rebellion was like, "What if I don't care about money as much? Like, I don't care about impressing people with the things I have? Then maybe I'll have a different relationship with money." I'm still in the middle of all of it but I do think I have a very different relationship with money than my dad did.

Minki: I love how your form of rebellion, rather than drugs and partying, was "I'm gonna be super mindful about money." A girl's gotta do what a girl's gotta do. That's awesome. One of the reasons why I reached out to you after you posted your personal experience on the networking Facebook group was, you mentioned how entrepreneurship sometimes can be the antithesis of building personal wealth.

I want to follow your trajectory from when you were sixteen, when you were just starting out, and going gung-ho at all the obstacles to the point where you are at now. When you just started, were you paying yourself a salary?

Jesse: That's a good question. No. In the first several years of running my business I was never, from a work-status perspective, salaried. My first business was an LLC. Anyone a little bit familiar with text codes will know you can distribute money out to yourself and, it's not actually wages. It's income from the a business you own, which actually, creates a lot of complexities with your taxes. That's a whole other story. But, the quick answer is I was never salaried in the earlier years of my company. I never had consistent pay. What I would do is I would try to pay myself each week whenever the company could eke out so that I could survive. That was anywhere from a few hundred dollars to maybe a thousand dollars here and there. In the first several years of my business, my average yearly income was thirty five or forty grand or something, which is obviously like an entry-level or lower salary at most companies these days. It wasn't doing much, for sure. I think in those early years you're banking on something else and you're doing a different mental calculus. I wasn't even thinking about it. To me, as long as I have enough to just survive, I kind of considered myself lucky that I was still working on my own business.

Minki: It was your business and your own vision.

Jesse: Exactly.

Minki: But at the same time the thrill of entrepreneurship also comes with the risk of entrepreneurship. At a certain point, the first hurdle of many that comes for entrepreneurs is the mental burn-down. For you to be so laser-focused in the momentum and being able to continue that, that's amazing. What allowed you to be so steadfast?

Jesse: I think part of human nature is the grass-is-always-greener syndrome, right? I think that, I've developed a certain immunity to that over time. To hang out with friends who had jobs, let's say, and it would not be silly to assume that they are making twice or maybe even three times of what I was paying myself. You go out to dinner with people and just spend a full dinner complaining about their jobs. They're complaining about their bosses. I think that you have to recognize that every choice has a consequence, right? In what you just said, "It's amazing, the dedication to your company." I actually think that when I was doing it, I felt like it was a dedication to myself. Like, "I want to live this sort of life, so, sooner or later I'll figure out how to do it better. Even if it might be going well now. We all make choices and they're certainly hard choices but I think that's more of where my head was at.

Minki: I love the fact that you're emphasizing owning your choices because a lot of times I feel that people are in a certain situations and they feel like they're trapped. But a lot of times it is their choices that's gotten them there. There are, of course, situations where it's completely out of your hands...

Jesse: Sure, but a lot of things aren't. Especially in a country like we live. There's so much that usually we can change or that we have some agency over. Something that I have come to believe as well that I steered myself to or prepared myself for in those early days. It's like we have all built ourselves these very pretty little prisons in a certain way. This sounds very dramatic but what I mean is I've gotten used to living with very little in those early years. You're paying yourself thirty grand or whatever. I did normal things. I went out to eat. I did whatever I wanted to do. I'm not some monk person but I don't have the expectation that I need to have a brand new fridge in my apartment. I don't know but there's so much that I hear. They all have such high living expectations. What I'm getting at is that it's just really good to feel okay with living on a little bit less. It's just such a powerful thing, I think.

Minki: You sound so wise. At that point, what was your exact situation? You were making about thirty-five to forty thousand in variable income. You had student debt. Do you mind if I ask about how much?

Jesse: Yeah. Out of school I had thirty-five grand or so of student debt. After running my business for a few years, I was making minimum payments but I still had twenty-nine or thirty grand [in student loans]. I had paid a little bit of it down but it still, to me, felt like I had all of it because the bulk of it was still there, you know?

Minki: Yeah. When the repayment is slow it can be a bit daunting. 

Jesse: Yeah. It just felt like it was just sitting there and especially when I was paying myself so little. Thirty grand is, I was never just going to have thirty grand magically just paid off at a certain time.

Minki: Did you have any other type of debt?

Jesse: I mean, off and on. Something I did, that I've gotten way better about, is separating my business and personal finances. In the early years of the company, I would often put business-related things on my person credit cards. Even if it wasn't necessary. I was just so dedicated to the cause and not necessarily self-preservationist. I think that, a certain amount of it is good, but I think I took it even too far. There were times when the company was strapped. I would have several thousand dollars on credit cards. It's not like they were personal expenses even. They were expenses I was charging for the company and stuff like that. It was floating credit card debt, nothing super extreme. At various points I've had credit card debt  that I would maybe not be able to pay off for six or eight months, that was just building and things like that.

Minki: How long did the situations continue for where you were making minimum payments on your student debt and you were making a survival level of income?

Jesse: That's a few years. That's like, I got out of school and we start this business, so about three years. In the fourth year of the business, we actually turned a really nice profit. I do remember thinking to myself, okay, I need to actually pay myself. I don't remember the actual figure, but I do remember increasing my pay and started making more aggressive payments on my student loans and making sure that I had no company expenses on my cards, and things of that nature. It was like a full three years and then in the fourth year, because I was able to grow the business to a level, that I upped my [salary] from there.

Minki: Could I dig a bit deeper into that? On the fourth year, you were able to grow the business and you have, again, choices at that point. You could either invest more heavily back into the business, and running a business always have other expenses that comes up...

Jesse: Of course.

Minki: What was the mental shift that you went through to you set a firm foot down and say, "I come first?"

Jesse: I think I was seeing that the business was healthier and also feeling like there's a very big difference between sacrifice and martyrdom. Sacrifice is a choice. Martyrdom is also a choice but it's for the wrong reasons. I think I was intentionally sacrificing for several years because I wanted this lifestyle, because I wanted to test myself and try running the business. But in that fourth year when the business had grown to a point where the company made seven figures that year, that's where I think it would've veered into martyrdom. The company is making seven figures and I'm going to pay myself thirty-five grand of whatever. It's that balance of making sure that you take advantage of what you have built. These are personal choices. To me, it felt like the right time to make sure I was taking care of myself and my personal finances.

Minki: Yeah, absolutely. Now it's year four. You've generated enough revenue where you can pay yourself beyond the ramen noodle income. You had several financial priorities that you were juggling. How did you prioritize those?

Jesse: My biggest one was I wanted to get out of the student debt. This is where, part of what you saw on the Facebook post, well I can't even remember if I put this there... But I made a crazy decision to move into an airstream trailer with my boyfriend at the time, which was partially a fun life adventure and then another part was sort of financial experiment as well. We went from having an apartment that cost fifty two grand, so we're each paying a grand a month, to having no rent because we moved into an airstream trailer that we bought out right.  All of that to say that a certain switch flipped in me that year. I was like, "I'm paying myself more. I'm starting to see the light at the end of the tunnel. I can pay off this debt, I can save money, etc." But then there's another part of me that goes, "Okay, I see the light at the end of the tunnel. I could do this over the course of the next five years or I can just do it in the next year and be done with it if I just make some changes." That's what I did. I made some crazy choices and in twelve months I paid off thirty grand of student debt and put money away as well.

Minki: That's amazing!

Jesse: (laughs) I'm kind of like a rip-the-Band-Aid-off type of person. 

Minki: That's amazing! Thirty thousand in one year!

Jesse: Yeah. I paid it off and then I also reduced expenses just drastically, almost down to nothing. Then also, I admit that as an entrepreneur I have a little bit of freedom to my expenses that people probably don't have as much freedom with. For instance, I pay my iPhone bill through the company because I'm basically working nonstop. That's a business expense. Some other things that I was able to sort of rearrange (some reoccurring expenses) that are very business related and related to the company and things like that to even control expenses further. I know that not everyone has that option but in the scheme of things, I'd say, getting rid of my rent payment was a pretty extreme move. That probably had the biggest impact.

Minki: Wow. I don't even know what a airstream trailer is but that's quite amazing.

Jesse: You don't know what it is?

Minki: No. No.

Jesse: Oh. It's like this comic-looking trailer. It's like this silver color on the outside. If you look it up, you'd probably recognize it. It's really cute.

airstream trailer

Minki: That's amazing. Then you mentioned also that you got rid of student debt in a year and then as the next priority, you started saving aggressively.

Jesse: Yeah. Then I was able to save another thirty grand. I'd like to say for the record that I don't pay myself an insane CEO salary or anything. I really just don't spend money. In case someone's wondering, "is she paying herself a $150,000 or something?" No, I am not. Not at all. I just really reduced and made it a priority. I was able to do that. That quantum leap, basically, in a little over eighteen months, I went from being $30K in debt to having $30K saved.

Minki: That's amazing. Do you mind if I ask how big was the salary increase?

Jesse: Definitely. That's fine. Just to kind of explain the trajectory. So in that fourth year of the business, I probably started paying myself more like $60K, nothing extravagant. Then I started paying myself $80K, so that was the trajectory. It was that salary that helped and then I took my rent down to nothing. Your take home pay at that rate is like $1,300 a week or something - it's not that crazy. But I just stopped spending money and I didn't have a rent payment. Basically, I was paying almost a thousand dollars a week to my student loans and then saving it. The money I was spending was basic expenses or going out to eat or whatever. I was just really careful about not doing anything else that really adds up. I didn't do any significant travel obviously. Like personal travel or anything where you have multi thousand dollar bills that come in for that stuff. It was just a period of not spending very much.

Minki: There must have been so many temptations as, "I've earned this! It's my right to spend it." But to, again, be gung-ho and be steadfast in your financial progressive journey, that's amazing willpower.

Jesse: This is where I do think that the early part of my career prepared me for, with not having very much at all. I don't feel like I'm missing something. Another, what blows my mind when I hear other people talk about finances is there's self-pity involved, if I may be so bold as to say that. When people say, "all my friends are going to PF Chang's. I can't afford it!" Sort of the weird self-pitying comments that people make. I think, don't worry about it. You can go to PF Chang's another day or save money and do whatever you want. I'm just using PF Chang's like a hilarious example but the point is that if you remove self-pity from the equation and you just put money in the bank, you feel empowered. I mean, I have thirty grand where I can go to PF Chang's on Friday if I want. Who cares in the scheme of things? I do completely admit I have a different perspective on it because I think I've prepared myself for going without for so long, you know?

Minki: Yeah. It's become feeder for where you are now. In the process when you were making the switch, or even before, did you budget or track your expenses?

Jesse: Oh yeah, a 100%. I'm like the spreadsheet fiend! I was budgeting out how much exactly I thought I would need to spend in groceries and then I would reduce it by ten dollars and see what that would amount to at the end of the year. I am a spreadsheet-crazy person. I would play with scenarios in my own little personal spending spreadsheet and stuff. That doesn't mean, I'm actually saving every receipt and then tracking everything as I'm spending it. But I very much play with scenarios. If I do this, what would happen with the long term effect - playing with this, taking my rent out of the equation, etc. 

Minki: That's super interesting. You saw the scenarios, you saw the effect. Then how did you link back your spending so that you knew you were following the scenario that you have chosen?

Jesse: On a monthly basis I would see if I followed my intention, which is not every moment of every day. I was looking at it at the end of each month, and seeing how close to my intention I was. I'll just think that's important because then I'll check back in on it. It's obviously very hard to achieve that goal. Playing with the scenarios and the spreadsheets helped me see, for instance, if I did increase my income and didn't pay the rent, that I'd be done in a year. It was that type of scenario playing and spreadsheeting that helped me come up with a plan that actually excited me. I think that is another thing that is really important in this process. It's almost like a game for yourself. I knew how I'd feel when I was out of debt. I kind of gamified it for myself where I was like, "Well, if I do these crazy things, I'm going to get done two years sooner. Okay, cool. Let's do this." You know what I mean? I made it into almost like a game for myself instead of this grueling sacrifice.

Minki: Yeah. I feel we need to enjoy the process rather than being excruciatingly in pain with every step. I really like the gamification aspect. Awesome.

I'm going to ask two closing questions. One is, how would you define the role money has played in your life?

Jesse: I would say that I have tried to define money as a tool in my life instead of as a necessity or as a stressful taboo topic. Money is quite literally like a tool. You take it out of your pocket. You can buy things with it, whether it's digital or not. Then you get things in return and you can start businesses with it. You can build things with it. I would like to have more of a tool-type relationship with it. It's like a resource rather than a personal identification where it's like, "I am what I am because I have X amount of money."

Minki: That's exactly how, at WINii, we talked to our members in terms of our mission in viewing money not as a goal but rather a tool. 

Jesse: That's great. I think you can get there. Culture definitely pushes you in another direction - the fridge you own or whatever. You know the commercials you see. But I think you constantly have to remind yourself that it's not true. It's a tool, plain and simple.

Minki: Totally agree. The final question is, our name is WINii - where it's winning. You WIN, We WIN, We WIN too, WINii. So our closing question always is - winning in life. How would you define that for yourself?

Jesse: That's a great one. Yeah. That's a big one. For me, I think I was born like an old soul. I think life is short, shorter than we all think. Then, for me, winning in life is being bold the entire time, not viewing your boldness and your adventure as taking place in the future or the past. It should always be happening at every age. To me, if I can keep that mindset and keep being bold, and finding my next adventure and doing it, whether I'm 15, 35, 65, that is a great life. I don't like when people frame it as in the past or the future. You know, "I was adventurous when I was a young person" or "I'll be adventurous once I have enough money in the bank" or whatever. It should always be now. This is all there is. You better do it now. If I can keep that mindset, I think that would be a successful life.

That actually leads me to something that I want to touch on which is similar to people's unhealthy relationships with money, often times, I think, we have an unhealthy expectation with happiness. I'll always be happier - if I'm rich I'll be happier, if this I'll be happy. I think it's so normal in any path, whether you have a job or you're an entrepreneur, to be unhappy sometimes. That's a hundred percent fine. I have definitely gone through months of running my business where I'm like, "Ugh! It feels like a drag." And then you get through it and through it again. Instead of viewing that as some failure I just think that's just a part of it. Does that make sense?

Minki: Absolutely, accept the journey. For some of our members, sometimes it becomes emotionally very difficult if they don't see immediate changes in their spendings, in their financial journey, or if they have a bit of a hiccup. It's really hard to continue to stay motivated and remind yourself you're not gonna go from zero to sixty in three seconds. So yeah, definitely. Thanks for sharing that.

Jesse: Of course, yeah. I'm excited to. Hopefully, my crazy stories and whatnot are helpful to somebody.

Minki: No, absolutely. Absolutely. I wanna thank you so much for your time. This have been a blast to hear your experience and all the lessons that you've learned.

Jesse: Yes. Thank you so much for having me.

Minki: Hope you enjoyed Jesse's story. Money is still taboo in our culture so I really applaud her courage for opening up and sharing her experience with us. Jesse mentioned her first company being an LLC so for you entrepreneurs, freelancers, and side-hustlers out there, in the next episode we'll be speaking with an accountant on the financial benefits of creating an LLC, as well as an accountant's tale of her financial journey. Hope to see you soon!

You can find Jesse's company at Lumi.com. Our theme music was played and produced by Luna Lee.