To her 20 million followers, Erika Kullberg, 32, is a cheerful source of personal finance how-tos and hacks (don’t throw out those old Nikes — you could use them to get new ones for free!). But before she amassed her audience, she was a corporate lawyer with $225,000 in student debt. She paid it off in two years and then got obsessed with helping other people gain control of their money.
A big part of what sets Kullberg apart in the money-influencer field is, of course, her law degree. One of her taglines — “I read the fine print so you don’t have to” — is based on her ability to decipher legalese in contracts, warranties, and other documents that most people ignore. But she also attributes her success to plain old doggedness. She walked 30 minutes to her fancy law job every day for years just to save $2 in bus fare. Extreme? Sure, she’s the first to admit it. But she believes that it kept her in the zone of pursuing her goal of getting out of debt. “Having that mind-set and mentality and discipline helped me to stay committed and not make bigger splurges,” she says.
For all her hard work, Kullberg is also a big fan of passive income — money you make with minimal labor on your part by investing your time or cash up front. Here, she talks about how passive income can be more accessible than most people realize, what reading the fine print actually entails, and what she spends her money on now that she’s actually wealthy.
When did you realize that reading the fine print could really pay off?
I got into reading fine print in law school. I was learning all of these new legal skills, and I wanted to apply them to practical life. The first time it really affected me was when I was on a United flight for a job interview and my bag was delayed a number of hours. I knew from reading the fine print that if your bag is delayed, you’re entitled to compensation up to $3,800. It’s a Department of Transportation rule. Because I had an interview the next day and I didn’t have my suitcase, I went to Nordstrom and bought a nice outfit — a shirt, pants, shoes, and toiletries. I saved the receipts, submitted them to United, and they reimbursed me the full amount, which was over $500. As a broke law student, I had never spent $500 at the mall in my life, so that was very meaningful. I still have the shirt I bought, actually. And it was the first time I realized that reading the fine print could make a big difference.
What other fine-print tips do people tend to overlook?
A big one is warranties. For example, Nike shoes and apparel come with a two-year warranty. That means that if your Nike shoe has a tear, and it’s less than two years from the manufacturing date — which you’ll find right inside the shoe — they’ll give you a free replacement or a gift card for the same value. I’ve done it myself. You can either send the shoe in or you can go to the store where you purchased it. They’ll assess if the damage is wear and tear, which isn’t covered, or if it’s a manufacturing defect, which is covered.
Whenever things break down or aren’t working, check the warranty first. After that, check what kind of credit card protections are available, because a lot of credit cards will extend a warranty. For example, let’s say that your fridge has a two-year warranty, but if you bought the fridge with a certain credit card, they’ll extend the warranty by a year. So after two years, the fridge company won’t do anything for you, but your credit-card company will step in and cover the cost to replace it if it breaks.
Another example is AirPod Pros. A lot of people who had them were experiencing static-y noises, or the noise cancellation wasn’t working. They thought, They’re getting old; maybe it’s my fault. So they went to buy new ones. But actually, there was a recall program because of a defect. All you have to do is go to the Apple Store, have them test yours, and if they’re defective, they’ll give you a brand-new pair for free.
How do you find out about this stuff?
I’ll search the ten most popular brands in the U.S. and then I’ll go read the fine print from all of their websites and figure out if there’s anything that could be useful to my audience.
You also talk a lot about passive income. A lot of people think of passive income as requiring a lot of money up front, like to buy rental properties or invest in the market. What are some ways to earn passive income that don’t require a ton of money?
That’s the biggest misconception about passive income, that it requires a lot of money up front. If you don’t have money up front, then you need to put in time up front. That means you’re putting your own work into creating something that will eventually generate passive income. It takes longer and there’s less immediate gratification, but it can still work.
The very first passive income stream that I tried was YouTube. After you hit 1,000 subscribers and 4,000 hours of watch time, you get invited into the YouTube partner program, which is a revenue-share program. Advertisers pay to put their ads in YouTube videos, and if you’re in the partner program, YouTube splits that money with you. So I spent about six months creating one video per week before I saw my first dollar from YouTube, but once I did, that money was pretty consistent and has been for a couple of years now. The last time I looked, I hadn’t created a long YouTube video for about ten months, yet I was still making a couple thousand dollars every month from ads on YouTube based on people watching my old videos. So that’s an example of passive income. It didn’t come instantly. I put a lot of work into building these videos out and trying to gain subscribers, but that income is still being generated today.
Another way to use your time to generate passive income is by creating digital products or memberships or courses. The concept is that everyone has something that they are good at, and there are usually ways to monetize it because other people are willing to pay money to get that resource from you. For example, I’ve created a course on how to grow on YouTube. That’s something that I learned myself, and now people are willing to pay for that knowledge. I also created a course called 3D Money on how to be better with your money.
You can also create digital templates and sell them on Etsy. For example, people will pay for résumé templates or budgeting templates. It could take you 24 hours to create a really good template and start selling that on Etsy and then that could generate passive income for years. Also, anyone can create a travel guide. If you know your city or your neighborhood well, create a travel guide and sell it for a couple of dollars.
You paid off $225,000 in student loans from law school in a very short period of time. What made you decide to do that?
Having that much debt made me feel trapped and overwhelmed. It’s a heavy feeling. But in school, you’re not really thinking about it. It felt like monopoly money. At 20 years old, I was allowed to sign these papers to take out hundreds of thousands of dollars in loans. Then, at 29, when I created my first business, I couldn’t even get a credit card because I had no business history.
When I graduated from law school, I didn’t want to face my debt. For the first few months, I ignored it. I would get these letters in the mail. Then I started getting them more often, with these terms like, “Your grace period is ending,” “forbearance,” blah blah blah. That scared me, and that’s when I really got into personal finance. I felt like my debt was a huge burden, and I could not make the choices that I wanted to make while it was still hovering over me. I know that it’s not necessarily financially optimal to pay off your student loans so aggressively. There’s an argument to be made for investing your money in the market instead. But it was psychologically optimal for me to pay off my debt faster.
How did you do it, exactly?
My minimum payment was $3,000 per month, but I paid a lot more than that. The biggest factor for me was that I didn’t change my lifestyle from when I was a broke law student. The moment you increase your lifestyle, it is very, very difficult to decrease it again. So even though I was fortunate enough to have a big fancy corporate-law job, I didn’t live like that. I walked 30 minutes to work every day just to save $2 on bus fare. It’s not like that $2 made a huge difference, but having that mind-set and mentality and discipline also helped me to not make bigger splurges, like buying the $1,000 purse after getting a bonus or things like that. That’s how I paid them off in two years.
Was there ever pressure to increase your lifestyle? Or did you feel like you were missing out?
In some ways, yeah. For example, all of my colleagues would go out to lunch, but I had packed my lunch at home because it was cheaper, so I was eating lunch in my office. Don’t feel bad for me; it’s not like there was that much peer pressure. My long-term goal of paying off my student loans was more important than my short-term daily satisfaction of feeling a little extra comfort. It’s the concept of delayed gratification, which I think is so important when it comes to personal finances. You need to train that muscle to learn how to delay gratification, because otherwise, there are too many temptations to spend everywhere.
Do you think it’s something that people can learn? Or were you always good at being disciplined?
My dad was very, very frugal, and so that taught me from a young age that every penny is very important. Growing up, we could only run the air conditioning for certain periods of time because we didn’t want a big bill. That stuck with me. At some points, I admit it was too extreme. In law school, I would cut my tissues in half and blow my nose with half the tissue paper, so that my tissue boxes would last twice as long. That might have been going too far, but I think in general it has served me well.
When did you start to feel wealthy, and what does that look like for you?
When I could order appetizers at a restaurant without feeling guilty. That was probably right after I paid off my student loans. The day that I made my last payment, I celebrated by going to a fancy grocery store and buying scallops, which were very expensive. Then I made them for dinner and ate this fancy cheese that was $10 or $15.
What do you spend your money on now?
I spend money on things that buy back my time. I want to spend the rest of my life helping as many people get to financial independence as possible. I work harder on this than I did when I was a corporate lawyer. But I only have 24 hours a day. So I’ll hire someone to help me do chores around my house. That helps free up my time to work on my larger goal, so that’s worth it to me.
What do you wish that more people knew about money?
One is specific-goal setting. So for student loans specifically or for debt in general, sit down and take a day to figure out how and when you’re going to pay it off. If you don’t have a specific payoff day, it’s very hard to just chip away aimlessly without knowing exactly where you’re going. I had a debt-free day on my calendar and I spent two years working toward it.
Another one is investing. When you’re growing up, you always hear from parents, “You’ve got to save money. You’ve got to be smart about saving money. Money doesn’t grow on trees.” But most people, unless you were fortunate to have very financially literate parents, don’t hear the other side of the equation, which is that savings are worth less and less each year because of inflation. So to truly build wealth, you need to start investing your money so that it grows.
Another critical thing is that you don’t need to be an expert on investing to start doing it. It’s more important to get started than to feel like you’re 100 percent comfortable and competent in the topic. Just take $50 and put it into a low-cost index fund. You don’t need to spend hundreds of hours learning everything there is to know about investing, but it’s that fear and that psychological barrier that stops a lot of people. It stopped me too. For years, I felt like investing was a thing only rich people did. But actually, investing is what makes you rich.
The Cut’s financial advice columnist Charlotte Cowles answers readers’ personal questions about personal finance. Email your money conundrums to mytwocents@nymag.com.
