Author: teamjoe

Tips to Find the BEST WINE

https://youtu.be/Ndt8KOLU8mA

So you guys are the experts with this. Like, you know, I, I hear two big tips, right? From suppose the wine snobs, which everybody calls themself, a wine stumped. It’s like, hello everybody. I’m an audio file. What do you have apple air? Right. Not an audio file, whatever they call it. I don’t know why, so that people will say, Hey, find something that you like in your palette, doesn’t matter how expensive it is.

And you got guys who are more like, if there’s the numbers, right this 96, 97 points. Yeah. What is your opinion on like, all right. I don’t know what I’m looking at. How do I pick a good one? How do I go about doing. Yeah, it is really hard and it tastes is so subjective. So it is difficult to try to boil it down into a hundred point scale.

And obviously the a hundred point scale has been highly debated for decades. Now, I think ultimately it’s, it’s still very valuable for people because once you start getting into the high nineties, especially like that 98 point Dow. And especially if you start seeing that it’s got. Scores from three different publications.

So there you go. That’s the wine spectator to Canberra and Venus each giving a 98 point score. You can be completely confident at the very least, even if it’s not your taste. That is a well-made wine. There’s no flaws in it’s in balance. So there, there are a couple. Things that are objective rather than subjective when it comes to wine, like, is, is it oxidized?

Is it, does it have some sort of acetone issue? There’s all kinds of different flaws that can be in a wine that just make better characteristic of poor wine making. At the very least, when you start to see the high scores, it doesn’t have any of those problems. And that’s helpful at the very least there, there is something to be said about the particular, the particular.

Place that those scores are coming from. So some reviewers tend to give out a little bit more freely high scores than others. There’s not that many scoring publications that you have to care about. So you can pretty quickly learn what a 93 means from this place versus this other place. If you are more numbers, minded person, you can pretty quickly start to cut through the BS and see where those scores are actually in value.

But that being said, Yes. So use it on wine searcher and you can, this is where it’s great. You can see the price over time and then yeah, exactly. Wine searcher is invaluable resource for anybody. And what’s so cool about it is you can pop on there really quick. And see what people are paying for. It can usually see all the scores.

It depends on how popular and common the wine is. Thousands, probably the most famous port in the world. So there’s a ton of information on it on here, but then it’ll actually link to all of the individual sellers shipping offers you can see. And so we’re beating we’re sometimes there’ll be some stuff on here, like some random retailer in the middle of Kentucky.

And if you actually call them. I don’t even add the wine. It’s not, we’re not trying to beat those kinds of offers, but we’re definitely trying to beat all the real offers that are out there and we do a good job doing it. And I actually really appreciate that transparency. Yeah. If you guys are listening to this on the podcast or playing around with us on the unit, Version.

If you guys want to go to the YouTube channel or go to simple passive cashflow.com/wine, and we’ll keep this stuff for you guys to refer to, but we have we’re poking around wine spies.com and wines-searcher.com but school site. But one mistake I’ve made. I’ve bought some wine off eBay. I think it was like oxidize or fake.

I’m guessing I still drank it lately. I just been buying it from Costco.

September 2021 Monthly Market Update

Welcome everybody. This is the monthly market update for September, 2021. If you guys want to check out past episodes, you can go to simple passive cashflow.com/investor letter, and we are going to be going over some teaching points and some articles that I’ve stumbled across over the past. Some freebies for you guys, if you guys are interested in learning more about this thing, we’ve been talking about quite a bit, infinite banking from yourself.

What the heck is this? Why do the wealthy do this? Why does Lane say it’s not for people under a quarter million, half a million dollars net worth? Come and check it out on Saturday, September 4th from 9:00 AM to 11 Pacific time. If you can’t make it shoot me an email at lane@simplepassivecashflow.com. I will send you the recordings, but we’ll also be put a page for you guys together, which you guys can access@simplepassivecashflow.com slash banking.

And also my book is coming out. If you guys want to help me out with the review, should meet email and get you guys access to that. Just finished up the audio book. I know how you guys are, ” another book”. You can listen to it on two X speed and you can probably knock it out four to five hours.

What does infinite banking? Why do you do it? Well this is why we do it. Take an example somebody stuff’s a hundred grand in there. You create this phenomenal where you bake from yourself for infinite banking, where you now you’re able to take a pretty substantial loan against your policy.

Now you put that into other investments, such as syndications, private placements, rental properties should something happen in life you’re able to take the money out. That’s what that little cone comes in the middle of the road. You have your genuine income within the policy. The policy grows tax-free and that’s why we’re using the life insurance as a loophole here, guys. You also enjoy the benefits after asset protection with it being a life insurance.

And I, you stop worrying how to grow your wealth and worry about teaching the next generation, how to do all this stuff. If you guys haven’t met me before my name is Lane Kawaoka grew up in Hawaii, was in Seattle from 2003 to 2017. Got a couple of engineering degrees, but more importantly started investing in 2009.

2015, I had 11 rentals, but as of late, I’ve been more involved in private placements and syndication. Currently over 6,000 units now are working on our 37 38 project.

I also have a podcast, simple passive cashflow. And for those of you guys who like the shorter form quick tip podcasts can check that out. Quick tips. I think it’s quick financial tips from the rich uncle. If you wanna go on search that on iTunes, Google play.

But let’s have at it teaching points.

This is a chart of different cap rates in different markets. Now, of course, you could probably break down and take one market like Dallas in dozens of different sub markets and asset classes and different classes of assets, such as a, B and C D class . But this is just, comparing geographic locations San Francisco, New York, LA San Jose Portland, or have some of the lowest cap rates.

Which means is you don’t get the yields there, which also means that it’s a lot more stable. This is where a lot of the insurance companies will invest so they’re going more for capital preservation. But we as investors, we’re obviously not blind to the higher cap areas.

Some these are all major markets. If you’re in more of a tertiary market, that’s smaller, you’ll probably see caps on the five to 7% range. You’ll probably be talking to them for a pulled up ton at that point. These there’s different ranges of these markets the lower the cap, basically the means the more stable the market is.

But that doesn’t necessarily where the better returns are. Obviously, the places that we like to invest are in the middle of they’re good solid markets, but still good cap rates. So we can get yield.

For more information about this, check out, the guide at simple passivecashflow.com/vacation and we’ve got about 12 people checking in now, the live feed. This also gets put on the podcast form and the YouTube so you guys can enjoy all the pretty pictures and I have access to the comment feed.

If you guys want to ask live questions, as we go along, feel free to do so. Somebody told me this on one of our investor calls this past month Dunning Kruger effect. It’s a kind of starts off like this where you don’t know what you don’t know, and you realize that you don’t know, and then you start to hit a point and inflection point when you really start learning and eventually head office in a mastery.

Now, a lot of people, they still invest in their 401ks, Roth IRAs, and supposedly BofI ETS, that’s I say, you don’t know. This is like the 5 29. There’s just investment plans for the clueless, in my opinion. Get educated check out more of our content and here’s a text, the spade to be a joke.

You guys or gals are always trying to get your spouses to read that purple book. Rich dad, poor dad. Just tell them that, your ex stopped by your work today and then they’re going to get their attention. And then you hit them with she wanted you, or he wanted you to read rich dad, poor dad, happy face.

Anyway, moving on. The difference between sophisticated investors and accredited vestors really isn’t much. There’s a lot of accredited investors that don’t really know much. Typically sophisticated investors are more, but they have lower net worth . And that’s where we want to get everybody.

We want to get everybody to be speed semi-educated so that you can make the right investment decisions for them. Ultimately you guys own it. None of this in this presentation is supposed to be equal advice. If not, you’re an idiot, let’s face it. You’re going to take Eagle tax advice from some guy in the internet that happened to, use the tactics for his advantage.

You’re an idiot. This is just for entertainment. But sure you go pay a CPA lawyer, five, $600 per hour, most of those guys haven’t figured out how to leave their day jobs behind. One thing I wanted to point out this one when you have a lot of LLCs, you will get a lot of solicitations in the mail.

A lot of you guys will want rental properties are probably hit up with dozens and dozens of yellow letters, trying to get you to buy your house for pennies on the dollar, because they think you’re an idiot. I guess it works some of the time. Here are some correspondences I got from a LLC servicing company

and it’s confusing. I think when you first get your LLC set up, you get your registered agent and you’ve got the servicer, you’ve got the place your PO box goes to. It can be confusing and don’t forget the old people who solicit you to get those stupid posters that post the minimum wage that you don’t really need in my opinion. But who am I to say?

I think it’s important to check up on, where are these people saying any of these bills that do you need to pay these. One thing that tipped me off or what I got attention to was we see on this left side, typically spoof emails will not address you by your first and last name.

They’ll give you a generic name like you’re the same valued client. And then the first paragraph here is just scammy and they say, congratulations, it’s your company’s first. Our anniversary is time to pay your bill for your annual dues. I eventually found out that this invoice was legit, but I am going to use my other lawyer to just be my registered agent for me.

So instead of paying 350 bucks, I’m going to pay about $67 for LLC.

Another plug for learn how the wealthy bank from themselves go to simplepassivecashflow.com/banking to sign up for the free e-course and the live training this coming weekend. And you’re catching up this stuff late. Go ahead and sign up there so you can get you those videos.

Now, here is a flow chart that depicts when do you do a HELOC or cash out. Now, the reason why I put this in here is a lot of people realize that, yeah, I want to an alternative invest and get all that garbage in the 401k mutual funds. And maybe I’ve been doing some crypto, but that stuff is super risky at this point.

I want to invest in real estate and other alternative investing can take control over my financial picture. So you burn through your cash, right? Not many people have that much cash and I don’t, I’m smart. I have it in my infinite banking policy where I keep my dry powder, but for most people coming in, they don’t have that set up and they burn through their cash to invest.

Where do they go find their other, 30, 50, a hundred thousand dollars today? A lot of times it’s either going to be in their primary residence or the rentals or their retirement funds. Typically I would recommend people to go and rate the equity in their house. So their rentals first, before they go to the retirement fence, unless in some sense, some situations, the client will be like, I’m just freaked out about the stock market.

What you have good reason to be, because it’s all fake money in there. They’ve been pumping that into the system . We could probably debate this for quite a while. Now, this flow chart helps you choose whether it’s a HELOC from your home equity, which is cool because it’s reversible, right?

Should you not like to alternate invest? You can put it right back into the house. You don’t have to pay a lender that origination fee to get the cash out refinance, which is on the right side. The HELOC is sorta reversible the bad side of what the HELOC is that, if anything happens to the economy, the banks can pull those notes and pull the lines at any point where they cash out refinance you’ve pulled that equity.

They can’t come after it after that. Different circumstances. I tell people, Hey, do you want to live in that house for one and five to 10 years? If that’s the case, I would probably push it more towards this right side, getting the heat. Or sorry on this right side of getting the cash out refinance because it’s more of a long-term thing.

If they are going to be living in the house for just a little bit longer, I’d probably lean them towards getting the headlock and then just selling that house at some point. But if you don’t know, I would say maybe, default would be, he locked first just for a short. Until you get proof of concept, then you tap the equity more permanent via cash out refinance for more information about this HELOCs to go to simple passive cashflow.com/HELOC.

There’s full page on that type of content. I’m now getting into some of the headlines. Jobless claims reach the fresh pandemic era low of 348, 000 . Unemployment is definitely coming down weird. I’ve been seeing a lot of like commercials trying to get people or hire people, or looking for good people to work for us. I’ve never seen that in my lifetime where paid advertisement is going out to not for customers, but people that work at their freaking company. I don’t know. It’s weird. Perhaps that means companies want to burn up their PPP loans.

I don’t know, maybe that has to do with it, but I think people are looking for good people to hire at this point. Or I guess the other thread is, people will like to complain that, people are lazy sitting at all Belkin they’re on our plug checks, which we don’t want to get into that argument space.

Now this is the census here. This is discussing the demographics change in different ethnic groups and some of the biggest movers and shakers, Texas, Florida, California, Georgia Washington. And if I were to summarize this for the people listening in podcast land generally, all of these are five states.

The population is going up, California. Only going up by 6%. Texas, Florida, Georgia Washington are going up by low double digits. But the biggest differential I see is the Hispanic population. And those states are going up by 21 to 40%. White alone category here is staying pretty flat-line and actually decreasing by 8% in California.

You can see these other ethnic groups. I guess the message is minorities are taken over and that’s what’s happening?

Monthly report. This is from JP Morgan. The job tracker based on alternative data, this is the total employment. Overall the trend is strong.

It’s been four months since we had the disappointing 2 69 K report in the report in early September is close to a million. The fed could easily make the argument that goal of substantial, further progress has been achieved, which means, there isn’t much of a reason to keep putting in stimulus, but they still.

And the stuff that I’ve been hearing about quantitative easing pumping fake money into the system is probably going to be going on for at least another quarter or two. If I was a gambling, man, I’d probably say over a year, at least, but who knows? And I don’t invest in stocks.

I don’t really follow this stuff too much business or. Came up with the school map, with the best paint states for tech workers in 2021, a lot of you guys out there are computer programmers. Let’s see the top. I’m gonna read them out in terms of the top. Washington best I guess the average is 122 grand. Next is California at 116 brands.

Number three is DC. Number four is Virginia. Number five is Massachusetts. Six is Maryland seven, New Jersey, eight or nine Colorado. Those are your top 10. And for those you guys are just curious, Texas is at number 14, Georgia is number 19. Florida is kind in the middle of 27th . The ones that are bad or where are the non-tech areas?

Montana and North Dakota.

Mississippi. Wyoming is dead last.

Now this is a chart that we talk about quite often. It is modeling the cap rate in the deal. . Which has been slowly coming down over the last decade. This is where people come to complain about cap rate compression yields are lowering and this is what like drives me crazy.

Like people are like I’m not getting 130% return in five years. I’m only getting 110%. Dude because the yields are generally going to lower. This is marketwide. . The dark blue is the ten-year treasury rate, which moves around with the interest rates and for investors, they say this time and time again, it all is this teal minus the dark blue, which is the cap rate minus interest rate.

That is the Delta that investors make the spread. And of course they applied leverage onto that to leverage that yield. And that is what investing is. They move up and down together. If interest rates go down, cap rates go down and people always freak out that interest rates will go up.

Cap rates are going to go up and interest rates go up. The reason why they push it up or they let it go up is because the economy’s doing really well. And therefore, if you want rental real estate or any assets, you’ll probably be the beneficiary. Some of that flow into the market and good economy.

One thing I’d like to point out on this diagram, to me, cap rate compression is when you have a temporary squeeze where it comes off of the historical averages, where say in mid 2018, there was a bit of a squeeze right here in terms of how much delta there was, or in terms of investor returns. There were the times when you want to get involved or, around when there was a larger, healthier Delta, honestly you can’t really time.

That type of stuff, it is what it is. And by the time you’ve gone into a deal, the market has moved a little bit anyway, but I think one thing is for certain except the 2006 to 2008 era. Like you’re always going to have the cap rates higher than the interest rates.

I think that’s just a fact of life. That’s a basic fundamental

. Cap rates lowering . Now this is comparing the major markets that lower cap rate markets like your San Francisco Portland. Austin, Texas is like your, where you have your lower caps and your non-major markets where you typically have your higher caps, but overall they’re all coming down.

But I think one thing, like if you look at this as it’s coming down, I think you have good stable cap rates for the most. And then here was that other slide we showed earlier with the, the lower cap rates area were places like San Francisco, New York, Los Angeles, San Jose, Portland, Austin, Boston, Seattle, places like that.

Top five multi-family markets for red growth. This is from Yardi matrix. And in order it is Boise, Phoenix, Spokane, Tampa, Inland Empire. But then I started to look at this chart and I started to call it BS here because not all of these are major markets. And I put here in red, the population of these markets, everybody talks at it depends who you hang out with.

I would say unsophisticated investors always talk a lot about what because it’s jumping like crazy. But Boise is a really small market guys. It’s like a quarter of a million people. I think Hawaii is way bigger of a population thing. Whereas Phoenix is a major market.

61.6 million people live in Phoenix. Spokane Tampa are on this chart and Spokane is even smaller. And Boise yet 217,000 Tampa was a little bigger, but still under half a million population.

To me, a major market is going to be at least half a million or definitely getting over a million. I think this is a bogus chart here. Inland empire, shoot what’s inland empire. Do you like, do you call Rancho Cucamonga, inland empire? Do you call Ontario?

Ontario, California in an empire. I know certainly San Bernardino is in an empire, but they have about a quarter million population. why do you guys call it in an empire? It’s like a, this is a bad imagery, but it’s oh, you go to the barber.

And then like you tell the barbers like how far do you want me to cut down your neck? Like some people they got, yeah. They got the hair going all the way down to their neck or their butt. It’s the same thing. Where do you draw the line to get this data? But anyway, don’t want to offend anybody.

Of course, people get the offended these days. But here’s another chart, small and mid-sized that shows with the most economic growth in Read the small markets, mid-size markets and then the larger markets. The small markets, again, you gotta be careful investing in smaller markets because it’s not a stable.

Sure. You can get a lot of, yields there for the short-term, those would be Spartansburg South Carolina, quarter lane, Idaho, Sebastian bureau beach, Florida, Winchester, Wyoming. . Those are your small markets now, your mid-sized markets. Number one, Huntsville, Alabama. Number two, north port Sarasota, Florida, three port St.

Lucie, Florida, four Boise city, Idaho five over Utah. And then your major markets. Number one, Nashville Davidson Franklin, Tennessee. Number two Raleigh, North Carolina, number three, Austin Roundrock Georgetown, Texas for Jacksonville, Florida, five Orlando. Those are your top five for your large Mitchells.

I don’t know how they came up with this composite score. It has to do with percent change in total employment, unemployment rate average monthly building permits per a hundred thousand and average monthly home sales per 100,000 did we talk a lot about the south and Midwest? They’re landlord friendly states, good economic growth.

But what are some of the Western markets? I’m not a big fan of investing in Western markets because they’re typically more bluer states, a little tougher for landlords out there. But, Western states getting beat up in the pandemic. Maybe the current intuitive thing is from an stoic investor is to go in now, right?

Maybe it’s the time to go and do a development in New York city just saying. Those top Western markets for growth is Boise, Phoenix, Las Vegas, Tucson, Colorado Springs, Reno, Albuquerque, salt lake city.

All with huge rent growth, you could probably make the argument that all the tide raises all boats Arbor released their quarter to 2021 single family rental investment trends reports. This is not apartments this is more single family homes. Some of the key findings were occupancy rose to 95.3% highest level since 1994.

They can do occupied rent growth, accelerated 12.7%, a record high and cap rates dip to 5.8% of its rising asset valuations.

There’s a chart here showing single family loan to value ratios. Now, my takeaway on this is I think everybody’s like thinking what is the bubble going to happen? And, typically people who raised that question up on internet forums, BiggerPockets. People who’s only been around for one and a half years in a freaked out because the prices went up in the last 12 months.

One thing I look at is, like the loan to value are people like over their head of debt? They’re still in this band that they typically been in between 63 and 68% loan to value. Granted, you could probably make the argument that the home equity values went up.

So their loan to value was down. At least we’re not saying like that this thing’s spike. Cause the scary thing is like when the loan to value spikes, that’s when you know that people are using debt, like the unsophisticated people that don’t invest for cashflow are going after debt.

I think of the big shore where the taxi drivers and the strippers are buying rental properties or just banking on appreciation. Now, one thing that’s interesting here this chart investor percentage share of single family home purchases. This is showing how much mom and pop investors are buying the stock out there versus the institutions.

And this is going to be a story of moving forward, that the institutions are starting to get to the game of residential real estate. Why? Perhaps it’s something good to invest in whether it is, that’s what the smart money is doing. So in 2000, investor share was a little lower than a three to 4% range that has peaked in 2011.

Where I went all the way up to 9%, but since 2011, it’s been steadily declining, which is saying that it’s probably the institutions are buying more of the stock. That’s coming out,

Freddie Mac release. This is their interest rates. You can get Freddie Mac Fannie Mae loans, but I think this is just a good indicator of what’s out there or how historic rates are trending. These might not be the rates you’re personally looking at, especially if you’re working with a Daisy chain lender that marks it up, whatever the heck they want.

This is like the relatively how interest rates have been tracking, earlier in the year we hit a low and then things came back up, but we’ve been kinda summing back to those old time goals. Once again. Newer investors, they really freak out about interest rates going up by a 10th of a point.

But like I said, if you will look at that chart with the cap rates versus interest rates go up, stoic investors like cool, man, that means that the economy is doing well at my rents are going to be going up. And my cap rates are probably going to be going up to a, this is a chart showing the employment, rebounding across all industries.

the takeaway is the leisure here got absolutely killed and is about, I want to say 60 to 70% of where it was pre pandemic,

whereas, government workers on scale healthcare education. A lot of these. In information, financial professional services. Most of these definitely took a hit. But nothing like the leisure sector,

This is the stuff that you have to deal with when you’re a rental property owner. Most of the accredited investors are like, why the heck would you want to own a rental property? It’s a pain in the ass. I don’t like legal liability, just give me a syndication.

And these are the exact reasons why, this is what changed. That was a big occurrence for investors were rent, extension, having to do rent, forgiveness, nonsense. They had to decrease their rents, miss payments. The decreasing rents that’s all like it’s all the commercial professional property managers that are just killing these tenants in my opinions with five to 10% rent growth, the mom and pa investors

to me, they just don’t have the or the market data to raise the rents where it should be another reason why the mom and pa investor gets left behind. Deferred maintenance is a big thing. The only things that went down as a common currency were charging rent fees. They stopped doing that because they were desperate for renters and increasing rents, which is the

inverse of decreasing rents. Fun things here from shopping center business taco bell is releasing a new concept of drive thru lanes here. It’s a cool, it’s got this light pink or purple pink hue to it. New concept. It’s a two-story restaurant where you drive underneath it, and then it’s Jack in the Box

they’re going to build 64 new restaurants as part of the 16 franchise development agreements across Arizona, California, Idaho, Texas, and Utah. The goal Jack. Another thing that you guys might’ve seen is only fans. They’re not going to allow sexually explicit content anymore their the entire business model was gone. And this is the way I feel about short-term rentals, right? Everybody’s like I’m making a killing with this stuff, but short-term rentals are discretionary items. It’s what people spend their money on in good times. And when in bad times are pandemics where you can’t travel, it goes kaput

and just like how the government got rid of only fans sexually explicit material. The government can just remove and create some kind of law that takes them away. Do I think that is right? No, because they ultimately feel like it’s the big hotel industry and the big players lobbying against Airbnb and VRVO people at the end of the day, but it is what it is.

This is why I like to invest boring workforce style house. You guys want to get more into our inner circle check out our family office, Ohana mastermind to learn more about a simple passive cashflow.com/journey. It’s all about who you know, and building your peer network of other peer passive accredited investors.

And again, if you guys want to check out my book, go to simple passive cashflow.com/book, you guys can help me out. We’ll get you guys a copy when comes up, but I need some help. People who want to give me some views, go ahead and sign up there, shoot me an email.

And this is the point where you guys can put in some questions into the chat box, but there’s some personal stuff I’ve been going on.

So in terms of growth, yeah, I think everybody’s got goals they’re working on. I think things that like the way this year has been going it’s with the whole Delta pandemic and everything. It’s just been a little slow. I’ve been forced to stay at home lately, so it’s it’s been a bummer.

I want to see all you guys how I’ve been making contribution back in the world. One little thing at a time you guys asked for the infinite banking I-Corps. Here it is. We’ll get it for free, simple classic castle.com/banking. For those you guys who make under 50, 60 grand a year and network under a quarter million, this is not for you.

Do not waste your time with this stuff, right? This is more for the people with a little bit more dry powder and the higher net worth folks. But you can still get it for free. And I know you guys like free stuff. Three significance here. If you guys haven’t checked out. Our Facebook groups, which are mostly on invite.

I used to have calls with everybody. When I first started to do these things, slightly opened it up a bit. A lot of people are inviting their friends, but you guys can join our Facebook group, the Cooley passive real estate investor, Ohana for sophisticated and credit investors there.

And if you’re in Hawaii, we’ve got aria. They’ll have that. Oh for you guys to join up there. We’ve also got the subgroups. I think you guys can get these links and simple pass a capsule.com/networking. And if you haven’t lately go to simple passive cashflow.com and check out all the little links at the top and go handle on that stuff.

There’s all that stuff is for free, right? The whole point is that you guys don’t spend your money on some stupid guru charging 10, 20, 30, $50,000 of charge after upcharge. In terms of uncertainty? I’m a little worried that we may, I think we will, but we may not have the the January retreat in 2022 of you guys want to get the latest on that.

Go to simple passive cashflow.com/ 28 22 retreat. I just had a call today. Unfortunately we can’t have it at Bishop museum. That would’ve been cool. They’re already booked. But here in Hawaii, there’s a big Delta, we’re getting our kind of our first wave in terms of COVID with the, that the Delta variant.

But, my outlook is that the stoic philosophy of the obstacles were right when you have uncertainty, you, and you’re uncomfortable. That is typically when you’re going to be hitting gold pretty soon. So suck it up, but then good days are right. One thing I liked that has uncertainty in my life is the one thing I can count on is whether interest rates go up or down or even go up, which is some people think is bad.

The cap rates usually bounce along with it. And as investors, the cap rate is usually higher than interest rate is which you borrow. And then you apply leverage via good leverage. That is how we make money folks. It is simple as that. And that allows me to have some certainty in this crazy world. I’ve been hearing a lot of you guys.

Most of ha I guess, half of the people coming into our tribe these days are off of referrals. So I really appreciate you guys telling your friends about simple passive cash flow. I think a lot of you guys feel my pain where, people think you’re crazy and. I call them muggles. If you watched the, not the Lord of the rings, but Harry Potter muggles are like the non magic wizard people right there.

The people, the regular people, they’re the non-believers in a way. So don’t worry about the muggles. A lot of my friends are muggles. That’s cool. But if you guys realize that there’s a better way of doing this without the high fee. A lot of middleman, 401k, each fund, give your money to a financial planner who doesn’t really know anything like it just gets paid off permission.

Join our tribe and join our club@simplepassivecashflow.com slash club. Some things I’ve been buying for two dads about this, like both sleep buds. I tried out for our one night. I think I might return this thing. I don’t think it’s the greatest. I got desperate. I got a three month year old. I don’t get much sleep.

I got desperate. I bought it like when I was like, probably be returning it. But anyway, if you guys want to get the I released a free, basic financial, e-course probably better for the kids. If you guys got basic financial skills, this thing would probably be pretty basic for you guys.

But if you guys want to go text the word BASIC to 3 1 4 6 6 5 1 7 6 7. And for those of you guys want to get access to the free remote investor light course can text the word you guessed it. REMOTE to 3 1 4 6 6 5 1 7 6 7. Tell your friends. Again, none of this was made to be legal advice.

And we’ll see you guys.

250k Net Worth Chemical Engineer Coaching Call

https://youtu.be/pQvWa44YSdU

At what point would you say? I should start thinking about syndications, like investing in those. So for most people, I would say get up to half a million at least, but you’re already, still connected. That’s how you got into this stuff in the first place. Like you have the great ability to invest via proxy.

You got people around, you already investing in syndications testing the water. So by the time you’re ready, which you could probably do it now, you just jumped right on and it’s like, This is kind of what I call like investor proxy. If you have a couple of guys here, your buddies I’ve already invested in, they found that they’d found a good operator and just jumped in how bad can it be?

It’s the ones where a lot of investors are like really dumb these days and they just want to sound cool. So they say, oh yeah, some really good. And you come to find out that they need didn’t get, invest their money in it. They just, I don’t know what the heck they’re going off of or referrals. Great. But it’s not.

Good as like a real referral where someone is actually investing money with, I got hurt a couple of times where investing with that silver level referral to empty referral, what I call it. It’s just like when people are trying to find property managers. Oh, ABC property managers. Good. Do you have any houses with them?

Where did you just hear? Because they happened to be the sponsor of their local region. .

Smart Tip for Your Student Loan

https://youtu.be/wSMWaqSP4cA

📍 And student loans, like you don’t have too much of it, but tell us a little bit, like where you started off with your strategy. Get to this. Yeah, so a little bit, it goes back. So I did a co-op program. So I, it was a work study. I did five work sessions over five years. And so I graduated with about 18 months of experience and they actually paid extremely well.

I was. Probably close to what a full engineer was making my final year. And they were also paying for my housing in Chicago, which was tax-free. So that ended up putting me in a position when I graduated college with a, roughly 20,000 in cash and 30,000 in student loans. And so I started rapidly paying down the student loans and then for the first eight months of my working career, And then I kinda got the bug of, I wanted a new car.

And I had always told myself once I paid off my student loans that I’d get a new car, but I ended up deciding that I wanted the car sooner. And so that’s when I took out a more expensive car loan for me. And so I, at that point I reduced my student loans to the minimum payment and then had been paying down my.

Yeah, man. What’s life without a nice car getting the financial independence. I actually just refinanced it from the, so I extended the paydown a little bit, so we reduced it from 6 55 down to 4 52. And so I’m just going to make the minimum payment on all of these loans with my plan and then take the extra cash and invest it. .

4 Reasons You Don’t Need a 401k

https://youtu.be/DK1Sb59GfzM

When I first started getting into financial independence, the first things you find are index funds. And so I just haven’t really looked at it since, and in my opinion, it’s not a significant dollar amount in terms of if the market dropped 50%. Yeah. I’d lose 10 grand or 15 grand. It’s not like I’m sitting there with hundreds of thousands that I would lose a ton of money.

Yeah. Let’s keep it on red mentality. Just let it ride significance. Not make sense. And also with my logical and with my mindset too, could I ever run my bank zero, like really low to invest in a deal. And so I’m always going to keep some cash available and this is being a little bit more aggressive and the cash is a little bit more conservative and all this stuff for you.

Like I’m getting really nitpicky. You’re not working with too much, but this is the foundation for when you get over half a million, then you won’t really care about all this stuff. If you were to take this and maybe think about taking the Roth out, because you’ve already paid your contributions into it and just taking it out cash to invest it.

We talk about this a lot. Why do you not want retirement accounts? Number one? You’re going to be retired well before you’re 50 on the way to your sending to get it. Number two, your tax bracket is probably a lot lower today. So you want to pay your taxes on it today, then in the future, number three, where this country is going, taxes are going to be going way up.

But what a lot of people don’t realize is number four, when you invest in a retirement account, you don’t get the passive losses from your investments. So that is you need the passive losses, especially from the syndication. To get out the simple, passive cashflow gravy train, which is all about lowering your W2 activity, come and paying little to no taxes.

You don’t get that opportunity to do that. Yeah. You got to get real estate professional status at 750 hours. You don’t get to do that until you get those passive losses. So that’s the fourth reason why you don’t do retirement accounts, but something to think about, like Richard, like just maybe take out the Roth because you already paid a tax on it.

So it’s not really that big of a deal. And at least take out the contributions. You not the gains because you take out the contributions. You don’t need to pay the penalty. 10% penalty. So drain that out. But at the same time you want that magic number. I don’t know what that is in your head, like 20 to 30 grand of emergency savings.

But if you have to increase it, we’ll then put money into your 401k via the match. .

Don’t Let Your Money Burn

https://youtu.be/FMUdj4snpGc

Now some investors, they have a huge glut of lazy equity, maybe even half a million or $2 million of lazy equity that they haven’t done. Like I said, I’ve seen investors invest a million dollars in the first year with me, but I think that’s an outlier. Right. I suggest people try things out slowly, hang up for a year.

Make sure we’re competent. And I know we’re competent. We’ve done a lot of deals thus far. I’m just being empathetic to new people coming in because that’s the prudent thing. That’s the thing I would do. I don’t recommend anything that I don’t wouldn’t do at the same time. You got money burning a hole in your head.

And for every billion dollars of Lacy liquidity, you have, you could just stick that into something at 10%, pretty easy. It’s such as HP. I wouldn’t suggest putting all that money in one place or all that money in a private equity deal, but you want to deploy the funds, but you want to do it prudently a nice way of doing this is putting a chunk in private equity to just get it working because the idea is you’re going to get that much.

A lot of the, these deals, they make us put a lot of this money is reserves. So once we hit certain milestones, but we refinance the money out, return a lot of that initial nonprofit equity capital to investors right off the bat. And maybe originally went in with a hundred grand off of equity. Maybe you’re only sitting with 50 grand on a year’s time.

Every year, every deal is different. And I don’t want to set any precedents. But the pref equity is a shorter term lifespan. You’re sticking money in there. You got to think that you’re getting a heck of a lot faster than most people on the traditional equity side. So it can be a strategy thing. The way of thinking about it is you’re putting loading money in, but you’re leapfrogging it too.

Maybe one to three years into the future that, you know, you’re going to get it back, but then you go to redeploy into more of a traditional equity, eight to Sarah. I do this a lot of times. It’s kind of like a short term, one to three years, E in a way that you want to get your money in traditional equity, but you’re waiting for the deals that come around, which, and they’re even frequent.

And if you’re starting out, you may not have good deal flow. You’d likely though, right? So you want to be patient, but you still want to get your money working. And that’s what the private equity option.

Which is BETTER: Pref Equity OR Traditional Equity?

https://youtu.be/1JMzY_7b0XA

Another investor asked me one time. What do you think I should do? I’m torn between the two. They both sound right. Well, I asked them the question like, Hey man, how’s your job? Do you think you’re going to get fired any time soon? The company downsize? The reason I asked that as well. If there, if you’re a government worker or you have a pretty steady W2 job that arrived, if you’ve got your emergency savings account, few months of expenses, the kind of tie you over to find your next job, where you have opportunities to harvest some cash money from a Roth IRA.

Cash savings or he locked. You’re good. Put it in traditional equity, especially if you’re under a million or two network, you need to grow your money. Pref equity, 10, 11%, a great return. Personally, I think you can grow it better in a traditional equity. That’s what you should be doing. If you’re not to two to $3 million and above, you’ve got to grow your money.

You’ve got to use it now. You got to score more points. You’ve got to put up more points on the board. If not, you’re not going to win the game. And the flip side of that is say in an investor said, I worked for oil and gas industry. Things are weird or. I’m on a contract work this year. I don’t know what’s going to happen in six months.

Then I would say you should do the private equity at the stage of the game. Get your money working, get the cashflow. That might be a better way for that particular person to go. But again, it’s different for every situation. Every person has different. Ideally you’re segregating your portfolios. You see me?

See my portfolio. Sometimes I take more. Most of my portfolio is pretty conservative. Mostly stabilized cashflow. .

Fun Story – Operating/Investing ATM Machines

https://youtu.be/AvAdSmFNEE0

hey, Simple Passive Cashflow listeners. Today, we have a simple passive cashflow who we deal pipeline club member. Who’s invested in some deals and has an absolutely crazy story to share with you guys. Now, the people that sign up for our group and especially come out to our events are definitely not average.

I think a lot of you guys say that. Yeah, I can’t talk about like how much money do I take out of my retirement account? To make my AGI not go over a certain threshold. So I don’t pay those taxes. Not buying a house to live in. Like my friends, family, coworkers, think I’m absolutely crazy.

And I have nobody to talk with, but if that’s you guys need to get involved with our tribe go to our networking section and events section on the website to learn more how you can get more involved or if not, just join our investor clubs, we’ll pass the cashflow. Dot com slash club. But everybody, I think in our group the common thread I see is, we’re not trust fund kids.

A lot of us are first generational wealth. Which means our parents did not have a million dollars. My parents, even on real estate, they told me not to ever buy stuff and have people live in. Cause people screw it up. Boy, were they wrong? But everybody who comes in there they’re very frugal, actually a lot of people did a lot of crazy stuff in their twenties, such as travel hacking.

If you guys remember the mint coins where you. Buy $10,000 of coins and take it to your bank. So you can get the 2% on the credit cards. Had a one guy who rented a storage closet, so he could build the Ikea furniture. So you could sell the pre-made furniture on the internet. Daniel, Yeti, crazy stuff like that.

Okay. From your earlier days, when I was 18, I got bit with the network marketing bug, the multi-level thing. So I tried that for a long time going from different one, the different one, I was hanging out with the people that were making all the money. That’s definitely not making the money.

That was not so great, but it did open me up to the idea. That’s when I found out about That little purple book that most people read that got me into thinking about real estate, but I never did anything because I was so young and I didn’t have any money. And so I just never did anything with it, but nothing really crazy, like what you’re talking about, but I definitely did some different things that I guess most people don’t do.

I know in my. In my late teens, I did the Apple Rama’s so I could get a whole bunch of credit cards and business credit cards. So I could get back in those days, you could get like 6% interest rates in checking accounts and savings accounts. So I got, I racked up like 50, a hundred grand. This is during college and I just milked it for five, 6%.

And then in my early twenties, To my thirties. I did that. Those rewards checking accounts the ones we have to make full debit card transaction and get East statements. I had four of those accounts because a lot of the times you max out at 10 grand per account, some accounts I could set up with Venmo or PayPal transactions, I could do that from the comfort of my house, but there was always that one that I had to actually go to the freaking gas station and pump.

12 transactions, but you couldn’t do more than four because they would flag your account and And they’ve shut you down. And they had called my cell phone that was like the low point of my life doing this stuff. I was like, what am I doing? It was like 40 degrees outside driving around to all these crappy gas stations and pumping small micro-transactions.

So I could hit my 12th transaction so I can get my three, 4% at the time. I’m a recovering. Covering person today, but so Danielle is, I’m gonna be talking about a really cool story and it’s just mainly for fun. I think we don’t recommend people doing this strategy at all, but I think how we first met, you came in through the investor club, we connected and then you actually came to some events, but I don’t know, maybe I think you misinterpreted what I said.

I think he said You’re not allowed to invest. I told you, you can’t invest with me because you don’t have enough money. Is that she thought, I thought you had said you wouldn’t let me invest all of it. So I had made in what I thought was a substantial amount of money in the stock market fairly quickly.

And I was like, wow, I have some money now. I want to do real estate. And so of course. Got to you. And I think, I remember you saying, okay, you can’t put it all in right now, so you eat, you can do something. So I took some and started with you, but then I took the other half and I was like, okay, what can I do?

Did you look at like turnkey rentals, you go down that road. I did. That’s where I started was okay. I better get a single family home. Let’s start looking into that. I started looking into that and then I started finding the turnkey rental companies that were out there and I was following the breadcrumbs, so to speak.

And I just kept thinking to myself once I do one or two of these. There’s gotta be a bigger way of doing this. I was thinking, what about the people that do the apartments? Maybe I could check in to how they do that. They must pull their money together and started looking around. And that’s when I found you started listening to what you were saying.

And I was like, this is it. This is exactly what I’m wanting to do. And so I set the single family home part aside. And just went straight in and took my other half of my money. I was like, okay, what other kind of business can I do now to make money? And I had originally looked into doing vending machines, cause I thought about that a long time ago.

So I started looking into that again, cause I didn’t want employees, I didn’t want overhead. I didn’t want a building. And I saw this little ad. While I was looking around for ATM’s, which isn’t a vending machine, they just spending cash. So I started looking into that. So how that got started.

Yeah. It’s funny how, when you told me this, I was like, Oh, you went into these the ATM funds that everybody goes into, you hear about that. I’m not a big fan they’re decaying assets or how the fund is created they are a little misleading with how they also put in like the tax benefits there as returns, which is, I don’t think is what you should be doing in a performer.

Anyway, we’re not really here to discuss that stuff. That’s more for inner circle type discussions, but I was like, Oh yeah. Okay, cool. Daniel did a ATN and I tell him, I bought ATM machines to take us through. How you did this and how does it all work? I first started looking around online to see what this was all about.

There were a lot of YouTube folks out there that were promoting doing it yourself, which I guess most people. Don’t know that you can do it yourself. I started checking those out, listening to videos and podcasts and things about that. Just to learn, I liked the idea of how it was similar real estate in that these are things that you can own.

These are things that you can depreciate. These are things that cashflow we’ll call it. Half passive income because you do have to do things with it. And so I was looking at that and then I found out there was another way to do it besides doing it on your own. And , that a company offers you to able to join with them and have them do most of the work, the calling the contracts.

The leads, all of that. I wanted to go that route because I don’t like rejection. I don’t like meeting people and them telling me no all the time. And so I decided I’m going to go that route. Like a ATM turnkey ATM and to me, that’s the daunting part. I don’t know too much about the business, but like you have to make a deal with the corner deli or the shopping mall to put that thing in there.

The one part of this where you don’t have the technical expertise, so that industry knowledge and so they would set up the leads where I could then go and visit the hotel or the mall or the event center or whatever it was. And so I went that route and actually even went further than that

and decided I was gonna buy into an existing what you might call a route.

Where there were already ones placed already making money, and I’m just buying it from somebody else, stabilize asset or stabilized cash crop. Exactly. Or you can start from scratch. So I did both where I bought in, but then I also started myself trying to get my own. And so I did both of those and.

Obviously it costs more money to buy in than to start from scratch. And it’s definitely more lucrative to start from scratch, but it also takes a lot longer and there’s a far more rejection involved in doing it on your own. So to speak, trying to find your own leads and that kind of thing.

It varies depending on how you do it. And not that they. Always have it where you can buy in. They don’t, they just happen to be doing an acquisition at the time. And so they funnel those out to those people that want to do it that way as well.

Now there’s a lot of this stuff. You gotta be careful here.

Daniel can reveal all the numbers and everything. I think he likes beer. So if you guys see him in real life, I’m sure you can bribe him. And he’ll tell you all the dirty little secrets, but

just to give people some magnitude in their head, was it one of these ATM machines cost?

if you were to do it on your own and if, using these kinds property management type of companies that kind of gets you going. , I think an easy way to think about it again, not an expert, but from what I’ve learned, you can get an ATM for a couple thousand. If you want to go turnkey, let’s just call it just double that.

So 4,000, let’s just say then of course, you’re going to have to put money in and that is going to depend on what type of place you put it in. So if you’re in a mall, you’re going to need a lot more money than if you’re at the tattoo shop around the corner. The amount of investment on that side of it varies drastically.

And then of course, how busy the place is, will determine either how often you go or how much money you choose to put in at the time. that’s an easy way to think about the cost of the ATM as far as. The cashflow again, that’s going to depend greatly, but let’s just say an average of $300 a month.

Two to $300 a month is a nice, easy way to think about it. The annual lies, that’s a few grand. Yeah, 3030 500 somewhere around there. And you’re going to spend anywhere from two to 4,000 on the machine, the cash to put in it. So let’s just say $10,000. one, that’s how I think about it. Like when I was finding out about the turnkey rentals and everything for the real estate, okay. 20,000 to get you a hundred thousand dollar home. I think about these the same way, $10,000 to get me a home, but I’m going to make two or $300 a month, which may be somewhere, which is on par, right? Yeah. But as one of the podcasters would say, there’s no tenants, toilets or trash with this.

I thought that was a pretty funny way to think about there’s no leverage to involve. You’re buying these ATM’s cash, right? You can’t leverage. , you could possibly, once you get more. At this, you can probably get a business loan, I would think. But at this point starting off, it’s pretty lucrative actually has got my wheels turning.

It com it could be. you’re making about what a hundred. I got some random questions. The repairs, do these things break, what do you do on it? Because then what typically breaks on these things? Usually around 10 years or so before, you’re going to have to start replacing parts 10 to 15 years. And at that point you might replace a card reader. The piece that actually reads the card that goes in or maybe the speaker. Just little things. There’s not major that I have been made aware And obviously I haven’t been doing it 10 to 15 years, but there are people that I’ve met that have been doing it 15 to 20 years.

, I think that’s the most. Detrimental part about the businesses I’m buying this piece of metal and it’s just going downhill and it’s not something where I can just, Oh, Hey, I’m going to upgrade this and it’s going to be awesome. No, you’re going to have to buy a brand new one. And so it’s like just starting over.

It’s like a car, a depreciating asset. And. When these things break, right? I’m sure you had little mishaps, like you just call somebody and they go check it out themselves. If you, you don’t have to go out there and do diagnostics on yourself, cause you don’t know what you’re looking at.

I do. And I have access to technical support to help, but yes, I do everything , that could be a hurdle for a lot of people would, if people are very on. Technically inclined. They could just call a dude to go do that for them. I know that there are people that you can call that, do this kind of thing.

I haven’t done it it’s not that technical. more, unscrew this and turn that and okay. Put that back in and screw it back on. It’s not too techie. that makes sense. But you got to watch your six in case someone comes up hits you in the back of the head, right? Yeah. You want to go when nobody’s around?

Sure. Okay. So tell us, okay, now this is the fun part. You gotta feed this machine and Daniel’s not made of money, so he’s not stack overflowing this thing with the 110, the 50 grand in an ATM. You can’t even put that much. And if you wanted to, , you got,

Cheaper real estate. So the throughput on these things, isn’t super high, I’m assuming. So you’re how often are you refilling these things with five grand, 10 grand or something? Something like that every week or two just depends on the location and how it does. You got half a dozen of these things?

Yeah, I have eight technically. Okay. So how much take us through that day and what, when you go, so it’s just a route that you drive, right? You’re like a paper boy. Yeah. I go, I get my stuff ready. I go, I fill them up. I download the transactions on a little SD card and I go home. It’s really quite boring, but that’s what I love.

You’re missing out the good part. You go to the bank, you pick out. Oh yeah. I forgot about 40 grand of cash telling you. I’m telling you the first time I went, it was a little dicey. So I go to the bank and I’m like, all right. Give me 40,000 or whatever. I don’t remember what it was, but it was a lot of money and these were not hundreds.

So it was more than you would think. And so they’re just bringing their like, stacking, just. Stacks is like a movie. I felt I was like looking around. Is anybody else here? I was it was fun. I felt like I was robbing them, but yeah. How much shoe boxes of money is that 40,000? It’d be like. It’d be like that.

Okay. Just one or two for stacks of 10,000 or something. Yeah. You should make like a YouTube channel, just like you going to the bank and like getting all this money and putting it in your car or at home and just stalking people like that type of stuff. Oh yeah. It’s all over.

It’s already out there. I couldn’t do any better than whatever is out there already. You can watch people do their little videos. It’s funny. You’re taking this money around and you gotta be safe, right? Gotta be cool. Yeah. I am, I guess maybe lucky enough.

I don’t know. When I go there I go. When nobody’s there. So either before the place is open or whatever, obviously I know somebody that’s there, it’s very low key for me, which I’m very happy about. I would definitely not want some convenience store where I have to go. And there’s, 20, 30 people in there that’s not smart.

. Cause the institutional guys. Are sending in two dudes about two times your size with guns and a van truck. Got it. Oh yeah. And it’s even funnier to me. Sometimes I’ll go to a particular place that I have and the armor truck is outside. I’m just laughing because they have no idea what I’m doing.

And if they know they would probably laugh as well. Are you like trying to lift weights? At least look the part or I just try to look like your everyday Joe walking around. I think I do. Okay. I hope you you don’t have your like air buds in your ear. ABC have some situational awareness.

Yeah, I don’t, I’m good. I’m watching around. So one question I always ask for, like, when you vet any investment, is that aspect of insurance, right? What is the worst skin happen? And that’s okay. If you can mitigate that like some agriculture deals you can ensure the crop, in case it burns or there’s a flood.

What’s another one. Like some guys like to play around with like sports cards that just stresses me out. You’re not keeping that stuff in a safety deposit account. Most times you’re docking at it in your bedroom and you can smudge a corner. Your house could catch up fire, maybe it can fall on your homeowners insurance, but is there any insurance at this stuff? What if somebody does whack you in the back of your head and takes your money and, or steals the ATM machine? That’s very common. You see it in all the movies, they chain it to the back of the check and drag it around main street.

I guess the way I think about it is the type of locations that I chose to go with are more, the, I don’t want to call them higher end, but just less in areas where that kind of thing goes on. So convenience stores obviously are going to have way more opportunity for them

to hook that thing up and rip it right out. Whereas mine is in a location where it’s not even near the front door, so it’s just literally not possible for anybody to do that. Not to mention you can bolt them down. To the floor. That definitely helps a lot, most times in my reading and looking around as they’re stolen, because they’re not bolted down, they just throw the ATM in there and not too difficult to rip out.

Cause it’s not anything to rip out. You just take it. Yeah. I haven’t really had to think about that much. Thankfully I don’t think about it. But as far as insurance, I know you can insure the ATM and I’m required to through what, the way I do it. But I don’t believe you can insure the cash.

I’ve heard some people say you can, I’ve heard other people say you can’t. My research says can’t. So I wonder if they take it. Yeah. But once it’s in the machine is locked up. You’re covered at that point. Maybe you can cover it on your, like your homeowners. Of course.

You’re going to have to talk to your insurance guy off the record first to change because they may not like this idea. They won’t, I guarantee they won’t it’s just even getting a bank account is not easy. Yeah. This is like a money laundering stream. This one. Absolutely. Yeah. I, it’s funny just thinking about it.

Your broker brings you the location and you’re vetting it from there is your top of funnel filtering process. Then if I say, okay, go then they’ll try and get the deal. Okay. And the deal is how much do I make? much do they make that kind of thing?

So where is this all going? Are you just gonna fill it out? The goal, the end game is sell them hopefully in five to 10 years. It’s not like it can grow like. You can’t grow. It just does what it does. There’s nothing you can do to make it any better. And so that part, I really disliked.

So it makes sense. There’s no value add there’s no ability you can’t increase anything. There’s nothing you can do. Literally you can’t increase the fee structure. That’s them. That’s a no, I can’t change it. And the kinds of deals that they get when they sign the contracts are usually one to three year contracts.

After that, I haven’t been doing it long enough to know what happens after that. What if they say, no, we’re done. Get your ATM out of here. I guess I go find another place. I wonder if your broker’s business plan is that you’re captive to them. But maybe you can be your own like kind of commercial real estate broker and find other ATM folks.

So maybe that’s another part of this business you might want to build out where you start to build lists and cold call, cold email, different owners and make a deal with them. Hey, how would you like to have ATM machine? Here’s the splits and trying to cut, cutting that company out if you’re so inclined, right?

That’s how you want to use your time. Technically, I can’t do that, but if I didn’t go the route I went and you did it on your own, that’s exactly what you would be doing. You’d be going and meeting owners of businesses and trying to see if they’d let you put it in there. A lot of times you might not even pay them anything.

And that’s how you can technically make more money doing it on your own. But it comes with also other things that you have to deal with. The people that call when they say. That it didn’t give me money, but took my money, but it didn’t give me the money. I don’t not want to deal with somebody calling me and 2:00 AM, however, an issue, no way I don’t have to deal with that, but I’m sure there’s like a service or you can just outsource that part too.

Or if you want to stop doing the driving around with stacks of cash, you can outsource that. I assume. That gets into A little bit dicey thing where they’re walking around with my $20,000. And obviously I can know if they don’t put it in there, but it would take some time to figure that out and then they could be long gone.

I don’t know. I don’t, I have trust issues. I think we talked all about the bad stuff, but some of the good stuff it’s okay. Not only having $40,000 of cash in front of you taking selfies with can be a little therapeutic, but you mentioned to me last time we saw each other that you enjoy the taper out aspect.

Yeah. I liked driving around. I liked doing my own thing. I like being low key. I just do my thing and it works for me. I could be out doing whatever whenever for however long. And. I can check on it anytime I want online, see exactly what it’s doing, how much it’s done, how much is left.

And cool. It’s almost like checking my stocks. So I got addicted to checking my stocks when I was doing that. And so this kind of gives me that outlet as well. A little bit are you more from a tax perspective? Are you like what expenses you’re incurring? Like you writing off?

Mileage and definitely mileage administrative office reimbursements the accelerated depreciation. I did all of that. It’s really pretty cool. But I definitely had to get a CPA who knew what they were doing. So thank you for that, by the way. It’s nice to have somebody that knows exactly what to do and exactly how to do it.

Now you can justify buying a big lifted truck. That’s part of the branding. Yeah. No, thank you. It’s good. You could also justify a big pit bull or any kind of cool dog that makes you feel safer to go on your runs with you and a gun, that could be a business success.

I don’t know. Is there anything else that you could write off that would be necessary? Not really anything else, just normal expenses buying paper and different things like that. The bonus depreciation was definitely the biggest and most lucrative depreciate thing that I could write off.

So that was very helpful. Yeah. Maybe a gym membership. Maybe you could put down in there too. You could, or maybe a tattoo invented tattoos on your ear. That’d make you look a little bit more. The part I definitely don’t look the part I know. Cool. Yeah, any other insights from this?

A little fun when you making activity? I only if you’re going to do it all from scratch. If you’re going to buy in, it’s fine. It’s just when I compare it to what we’re doing in the Hawaii club, it doesn’t really compare unless you do it all on your own, and it’s going to take you a while to build it up.

So if you’re willing to do that or you like doing that might be something to do, but I liked the more passive route than the half passive route, especially if it makes the same or more. Yeah. I think what I like about this stuff, and a lot of people have that itch, right? Checking your stocks, seeing the money, hits your bank account, whether it’s like a short term rental, something like this, or some kind of side gig, or maybe note investing, something that a lot of people live in places where they can’t invest.

Something that is fun, like a hobby to them to justify some expenses. I think this is add that to that list. Yeah, I agree with you. Definitely. Thanks for jumping on Daniel and a lot of cool stuff you guys are doing. Like of course this is the simple passive cashflow group where we try and keep things simple and passive and very unsinkable and not passive at all.

But I think it’s a lifestyle and you always had the wheel spinning. Come in check us out, meet folks like Danielle here is a crazy stories when she, when they happen, hopefully they don’t happen. And yeah. Thanks. Thanks for joining us.

And we’ll see you guys on next week. Bye. Thanks.

Quick Announcements + Special Events + Intro to Infinite Banking

https://youtu.be/o7T36FPx5x0

This is a special announcement.  We are doing a special webinar on September 4th we’ll try and get it done in a couple of hours in a cram school type of format, where we go over the infinite banking policy. A lot of you guys had a lot of questions and we’re going to be unveiling the new free banking.

E-course have you guys come to that. You guys can get free access to. More details, go to simple passive cashflow.com/banking. And again, that’s on September 4th. We’re going to be starting around 9:00 AM and going to 11:00 AM. Pacific time. The next announcement September 18th, there’s going to be a tech seminar put on by Anderson, September 24th.

 

We’re going to be doing a little get together in Houston, Texas. We’re going to be trying to do another get together in quarter four in Northern Cal and Southern Cal. Full members, the family office, quantum mastermind members get first access to that. As we’re trying to keep it small, more intimate, you guys want to learn more about joining the exclusive inner circle.

 

Go to spool, pass a castle.com/journey. And if you guys want any more details on these full new events, coming up, go to simple passive cashflow.com/events and check out all the future events we have coming.  We’ll see you guys on Saturday for early in the morning, 

 

we’ll teach you guys all about infinite banking

 

now for some of these events, you’re going to need to. Access  past the member site. Go and sign up@simplepassivecashflow.com slash club and sign up for a free account there. There’s a lot of things I can’t really put up there on the internet, on the public site.  We try and restrict and get all the good stuff in that  member portal .

 

 What are you waiting for? Sign up.

 

Announcing my new book coming out next month. If you guys want to help me out with a review, I’d like to get you in advanced copy and the audio book should be an emaLane@simplepassivecashflow.com. 

 

And I appreciate you guys helping me find the book when it comes out. That’s probably the only way I’ll probably make my parents proud of me by having an Amazon bestseller. Cause after all they still wonder what I do these days. If I’m not an engineer,  they think I’m like a real estate agent.

 

 Help me make my friends proud and thanks for supporting 

 

 

 

we’re going to be going  over the infinite banking scheme that you guys have been hearing about profusely from  a lot of podcasts out there, they get like an insurance salesman and they talk about how the wealthy do this. I personally do this.

 

I started with a $50,000 a year policy back in 2017, 18. And now I have a bigger one and a lot of people in the family office group are using these policies.  We want to give, this is a primer really quick presentation. These are the slides we’re going to be going through today. This is going to be a little bit of a high level 20 something slides.

 

If you guys want to go through the company of men on the simple passive cashflow.com/bank, you guys can be to this year as we go through this presentation, but we’re going to be doing a special a couple of hours cram school, . We’re going to be going to this a lot more in detail on September 4th. If you guys are somehow watching this video, after that date, all these videos will be posted@simplepassivecashflow.com slash banking.

 

Or it will be put into the e-course a much more in-depth and curated course, which you guys can go through and learn about this stuff,  📍 but let’s get into it. If you guys haven’t met me before, my name is lane Colwell. I run simple passive cashflow.com. Here’s my bile.

 

The other person helping me present today’s tether for the Kala. Do you want to introduce yourself real quick, Tyler? Sure. Hi,  📍 I’m Tyler . I’m currently residing in Honolulu. Hawaii. I grew up in Hilo, went to university of Washington. Got my degree in  engineering. And then I was an active duty Navy officer about eight and a half years.

 

Transferred out to the civil service. Or I was a project engineer, construction manager, eventually first-line supervisor, and then the chief engineer in the end up in 2001. Retiring from there. And as far as from my real estate experience, I’ve been investing in real estate since 2002, where I bought my first single family home in Jacksonville, Florida.

 

I did house hacking then they didn’t know that term, but that’s basically what I was doing. Auto fuel more over the next few years got overwhelmed, stopped married with kids and put investing on hold until.  2018 or so when I met lane with online, with simple passive cashflow and ever since been so deep into syndications currently have about 24 active syndications going on.

 

And enjoy that. And that’s what allowed me to basically retire as far as for my insurance experience. I got my first policy about three years ago.  I looked at trying to get, understand how that works. So I got licensed  and then eventually started actually writing policies and I’m currently.

 

I’m licensed in many states across the United States. So Tyler he is an investor first and this whole discussion on this infinite banking concept that we’re going to call simple, passive cashflow banking here in the future. I been a lot of it is stemming from, how do we use this liquidity in these insurance policies to do what we do, which is.

 

Totally different than what most life insurance salesman of create and customize this stuff for.  Those guys just don’t get it. They don’t understand how the wealthy used this. These policies basically gets whole life insurance over-funded, but configured in the right way with lower fee structure.  Just making it better for the investor to use for their investing purposes.

 

But, yeah. So where this all came from, I asked Tyler A. Long time ago, Hey, if you’re interested in this stuff, go get a license. And then cut the fees down for me and my friends. And he went and spent what, a couple years  learning  that’s what you get. When you get an engineer to do this stuff, they actually read everything.

 

 Let’s start off here.  I think a lot of people, they go online, they look up whole life, infinite banking and everything that comes up is it’s a scam, right? Dave Ramsey will absolutely, talk really badly about it. But I think the difference here is  we’re not configuring this, like how most people do where they’re configuring it for high death payout and high interest rates.

 

We’re doing the complete opposite work at food bank for higher liquidity instead, so that we can take the money and invest it in, producing assets, such as real estate, or, if you guys still want to do your stocks and mutual funds, you can still do that.

 

So we’re taking the traditional finance method and turning it around. This is typically how.  Normal people do it, they put it in the bank, it deflates and value with inflation and inflation is running rapid. And that kind of makes it even more case to do this.

 

 Tyler wants you to talk to us about some life insurance works.  I think that the main point here is that if you search online, you may hear from some financial advisors that, whole life is a bad investment. Don’t do it. If it, it’s just that it’s not structured correctly.

 

The ultra Walty or wealthy, or even banks, they own tons and tons of life insurance. And the reason for that, it’s a safe, secure assets.  And it’s liquid. So this slide is just basically showing that banks on and hold a lot of assets of their assets in bank owned. Life insurance is basically life insurance that is owned by the bank.

 

So it’s called Bali.  But yeah, if you look at any large bank  on their asset sheets, they have tons of life insurance. 

 

The thing is, they like the pros. This is what they. And effectively what we’re doing here is getting rid of that, man. 

 

 

 

This is the loose framework and  we’re trying to bang from ourselves and that term, it sounds school, right? Like instead of using a bank that the bank is able to leverage our money and go invest. We’re doing this on our own, working directly with the insurance company, which by the way, to me is a lot more secure than any bank FDA.

 

Sure thing out there of insurance companies are some of the largest companies that have the longest track record. When you have a contract with an insurance company, it is very secure.

 

Like a lot of you guys jump into these apartment buildings  and you guys know we never buy a class assets, a class locations because the returns just aren’t there. A lot of times the insurance companies are the ones buying those large class, a assets in the class, eight areas because they are going after capital preservation.

 

lot of times is their cap rates are anything from two to 3%, but they don’t care. Because they want to just preserve and they don’t need to make that high rate of return. They’re in the game of just being secure with people’s money, but not every life insurance carrier is weighted the same.

 

Tyler, I want you to I think everybody has a little bit different definition of what infinite banking is. Depending on the way, people understand things, different things resonate with different folks, but why don’t you take a first crack and what this is, or something never heard of that.

 

I best define infinite banking is it’s really a process in creating, private vault for you to use as your bank and overall it’s a process. The vehicle that it uses is holding. Insurance and its dividend paying whole life insurance is the product of choice that I specifically like from multiple reasons that we’ll go over.

 

But that policy then is you overfund it. And in that way it has a cash value that you can ask. Your cash at any time via policy loans.  That’s the overall concept. And as you pull that out, the money still continues to work in their vault or in that, in your account. And you’re able to deploy that elsewhere and pretty much have your money work in two places at once.

 

 The way I personally use it, when I had a policy, when I first started to do $50,000 a year, after a couple of years, two, three years, I had at least a hundred thousand dollars of cash value built up in there. And, I always try and keep my liquidity low in my bank.

 

You never want to have too much cash making nothing,  that’s why the next money is in your infinite banking policy to cash value where it’s making it a nice little tax-free yield that’s the first component of why, we’d like infinite banking so much when the money is in.

 

 I would call this a government in full, but it’s just for some strange reason when it’s life insurance, your yields, there are tax-free.  That’s a place to store my liquidity. And then when I need to go into a dealer too, and  need to drain that liquidity, I have it, but at least it’s not sitting in my normal checking account savings account.

 

Not doing anything.

 

The guaranteed growth. The use of the whole lot. Insurance. It has a guaranteed aspect of it.  Current gross rate of that is 4% that is about to change, but the policies are ranging from three, three, 3%. It’s three and a half percent uncorrelated  not tied to the stock market directly.

 

On some policies you may have the choice and you can be in control of that, of how much funds are correlated. But one of the main benefits for investors that this is not correlated to the stock market  

 

protection.  It is a product. So there is a life, the death benefit portion of it. But in addition to that in states, It varies, but there is also some liability and bankruptcy protection with the cash value or the death benefit over your policy.

 

 Some of our doctor clients, what they like to do is they stuff a lot of cash in here mainly for this protection aspect, right? There’s all these different asset protection strategies out there. There’s not one that’s going to get you to trying to build your castle with multiple layers of protect.

 

And diversifying. So by putting some money into your life insurance policy, you’re shooting at one part of your portfolio, your network. Yeah. And  the liquidity, that’s one of the main appeals for investors where your funds are not tied up. You have access to them.

 

And it, you would have access to it in the forms of policy loans, and that’s what keeps it also tax-free where you have access to the growth and of your policy.  I think a lot of us, myself included  my wife, Tyler’s wife, we all got swindled at some point in our early twenties, maybe early thirties where,  a long lost college.

 

Classmate or high school classmates calls us up for lunch and China’s and stuff us into one of these badly customized, full life policies. Typically the way that they’re structuring it, it’s not built with good liquidity  customization, as you can see this is a lever here. There’s. If you were to imagine there’s different ways, you can customize these different components.

 

 A lot of these guys, they will ratchet up like the growth rate, but that’s not the point, right? The point is we can get much more, better returns outside of these policies. So this is why it’s counterintuitive to a lot of these life insurance agents who just aren’t real estate investors. And, we’re just glazing over the top.

 

A lot of this stuff, a lot of this is in that infoPage@simplepassivecashflow.com slash bank. You guys can get access to the e-course for free there. And then, we’ll be doing that cram school later on where we get to go into this in more depth and ask any particular questions.

 

 I can summarize, I  the purpose of this is basic to really emphasize. That it’s really the design of the policy. That is the most important factor. You could have the same product at the same insurance company and they would perform much differently and that’s all based on the design.

 

Yeah. And this is the classic. Hey, let me just shoot Layne an email ASCO, Hulu, the CPA lower he’s using, or are you guys going to. Mass mutual Penn, whatever, like top AAA rated life insurance company. And let me just go work with them. Whether you work with them or us, like everything is the same except the design.

 

And that’s the critical part of what we’re talking about here.

 

 I can cover this all. There’s two main factors of the policy design.  The two things you must maintain, so instruct to keep it an insurance product, which then reaps the tax benefits of it and the tax treatment. You need to meet some IRS limit. So there is some limits in there and you people may hear the modified endowment contract or the seven pay limit that keeps it an insurance product where it’ll be tax favored.

 

And along with the design maximizing the cash value. So you have the liquidity early to go use and do investments as you choose. And those are the two main levers  in the design that you’re playing around with  and, way back long before there was simple, passive cashflow, a lot of smart people figured out that, with being life insurance, you could have your yields in there grow tax-free.

 

And of course, there’s always people out there that get a little greedy. So that’s where the government started to put these limits in there that you have to have a search and above the actual life insurance,  you don’t get a dollar of life insurance, but stuff like the zillion dollars in there and still make it tax free.

 

People did it, which is smart actually, there’s limits to it today. And this is what we’ll go into more detail  in the e-course and then in the cramps.

 

Yeah. And just that IRS limit that’s based on the insured’s age, gender, and the amount of death benefit there is.  We’re designing it a specific way to minimize fees. The death benefit is needed there in order to be able to max fund it to your targeted amount that you want. And one common question that comes up here.

 

Some people who think that they’re older in their fifties, sixties,  they think that this is going to be more expensive.  And then, guys are typically a little bit more expensive than females for some strange reason.  Really at the end of the day, it really doesn’t matter.

 

Like we’ve compared policies from, 30 year olds  and 50 five-year-old.  It the cost of insurance really doesn’t matter. And why is that? Again, we’re not really doing this for the death. Hey, out again, we’re just, we’re doing this just to call it life insurance and the bare minimum so that we can have this policy book tax-free to be able to stuff cash into it.

 

And that’s, I think where a lot of people, they missed the boat on this. This is, yes, this is, there was a debt payout for it. It is life insurance. But that’s not the purpose. And that is why, the agent, the gender, and, people also say Hey, can we ensure my kids will talk all about that type of stuff?

 

And the e-course in the webinar,  this doesn’t really factor too much into the cost of this.

 

And the the second main limit other than the IRS limit, when designing that we have to be careful of is just the individual policy limits. Each individual company has  some limits. And specifically one of the main ones that they’re starting to limit is the amount of paid up additions, one can put in.

 

So each company has different limits.  For example, one company may have, you can put up  five times the base premium or 10 times the base premium. We just have to design it accordingly for that specific company. And that’s where the flexibility comes into play. That helps decide  which company is best suited.

 

 This is when I was learning this stuff. This stuff gets to be really complicated and it changes all the time. When I was just learning about this, I thought it was pretty simple, this is something that I learned and realize, we need to have somebody that’s under the umbrella of our group.

 

Kind of be on the look out for all , these changes. Coming down the pipeline to keep us out of trouble, but also optimize getting the best policy for our situation.

 

  Where does your payments go? So every year there’s a premium payment. There’s two main places that your money goes. One is to the base premium. So that’s basically to cover the cost of the insurance. That base premium is specifically what we want to drive down as low as possible, because that is a pure expense to you as a client that paid up additions, that’s really a cash.

 

Very little fees on that. , you almost see one for one  cash value increase on any paid up additions that you contributed.  There’s different premium splits. Some people may hear, 50, 50, 30, 70, 10, 90 traditional whole life.  Normally you may,  have seen in the past, that’s really a hundred percent.

 

 Base premium. That’s why it takes 15 to 16 years, maybe for you to break even  on your cash value for the amount of premiums you paid. And we’re able to  modify that so that, you’re breaking even sometimes years, between years three and four, five, usually at the end.  And that’s the use of this premium splits was also introduces a lot of flexibility that you may have throughout the year.

 

 Most of the credit investors over a million dollars net worth, they’ll probably do a policy where they dump a hundred grand in here. Add another couple of zeros onto them. And again, what, the way we’re trying to do it is we’re trying to minimize the amount of base premium. So the paid-up additions can build up our cash value so that we can take this out the next day as a policy loan and stick it into a multitude of different deals that make a much higher yield and sort of the industry secret of life insurances.

 

If you’re a sales. And you’re just worried about your commissions. You try and trick your clients into getting as much base premium, the more life insurance, but that’s the complete opposite that what we’re trying to do here with simple passive cashflow banking. Not that we’re,  we want to maximize the paid-up additions, typically going much better than a 50, 50 premium split.

 

That’s less insurance premiums and fees for us. But that’s better for the client at the end of the day, so they can keep most of that cash value, but that’s typically what’s wrong with most normal, full life insurance. And I think this is why, Dave Ramsey, all these online, Google’s kind of actually demonize this stuff.

 

And I went to if you’re doing like a 50, 50 premium split and a lot of this is going to your base premium, this is where most of the commission certainly calculated.

 

 This is an extreme example that 10 90 premium split, in some cases, some of the people in the family office group have found that the 70, 30 premium split is actually better. That’s an I actually use,  this is just more of the extreme about that example where you’re still complying with those mech limits.

 

So you’re getting the tax free treatment. But you’re stuffing as much money into the cash value and you’re minimizing your feet on this side.

 

One unique way that someone explained it to me, as far as understanding the premium PUA relationship was relating it to your house. The base premium is like your mortgage. So that’s an expense or a cost that you have to for your house. 

 

 By slowly paying down the principle. So base premiums does add a small amount of cash value. Just like how paint on your mortgage slowly pays down the principal. You can think of your paid up additions as if you were to do a renovation where you spend, $50,000 to renovate the kitchen, that $50,000 spent on the kitchen basically increase the value of your house.

 

Hopefully not almost exactly the same or even more so that’s the home relationship as far as the base premium, paid up additions to mortgage  and our renovation. Again, different ways to understand this and to me personally, and it really took me about a year and a half to really grasp this school.

 

And the differences between typical whole life insurance, configuring it in a way and using it in a way that the wealthy do have for some of you guys use that strategy where you’re taking a hilar out on your mortgage and paying down your mortgage with simple interests versus amateurs interests.

 

It operates in a very similar way. And in fact, when you’re using a whole life overfunded or infinite banking or whatever you want to call it, simple passive caching that. It is superior to using a hilar in my opinion.  And I actually think that’s, this is a lot better than using a 5 29 plan for your kids’ college savings too.

 

 How do you access the cash value within your policy? So that’s in the form of a policy loan  with the low interest rates, there are other ways also of accessing the cash value of basically collateralizing your cash values through a traditional.  That is also an option, but for here specifically how a policy loan.

 

 This is a loan you’re taking through the insurance company.  You’re basically utilizing your cash value that you have in there. You’re usually able to take about 95% of that cash value in the form of a policy loan. Your cash value actually stays there in the account. But your death benefit is collateralized.

 

From the insurance company, they’re basically able to give you the loan because they know at some point.  If you pass away and you don’t pay back the loan, they’ll basically just decrease it from the death benefit of your policy. So whenever you take out a loan there’s an interest charge to it.

 

However there is no payment or set payment plan. You are in control. You can choose to pay it back or not.  Very similarly to a Heela. They’re very similar. And tie it in with the other slide up here. This is the cash value, right? We’re stuffing money into the cash value.

 

And this is what we’re taking the volts out of to put into deals. If you want to buy jet skis, at some point, you can use the money for that. You don’t have to ask the bank or tell the bank what those annoying questions that the hilar  application always has. You’re in control.

 

And, some of the people in the family office group or, going to another bank and collateralizing this cash value policy getting anywhere from both 3% interest rates. And for some of you guys who are good business operators who drive your adjusted gross income very low at the same time, it screwing yourself by not being able to get a loan for a home.

 

This is a great way you buy the home cash. But you dip out of your cash value of your life insurance policy to essentially put debt and, get your leverage up, which is always a good thing. If you can pay your debt service.  That’s just one of the merit of different ways that we’ll go into more detail and we’ll ask individual questions on the webinar next week.

 

But, this is if you’re seeing how the wealthy are doing things, it gives them a lot of options and it’s something that they control that they bank from themselves.

 

And this slide was basically just go over an example. If you were to take on a loan to invest in real estate. You can create some sort of arbitrage use of the cashflow from your investment to also cover your debt service team for the policy loan. And as Leanne mentioned, one of the, one of the big benefits is that the policy loan interest is calculated as simple interest.

 

The cash value continues to grow in your policy, but it’s compounding interests or compounding dividends you’re receiving.

 

A quick policy example. So this is for a 50 year old male.  And when you’re looking at this, the target amount that this individual would want to put in is 50,000 per year. So you’ll see that. And then the breakdown of the, that amount is pretty much a 10 90 split. So the base premium is here.

 

 The 45 45 is what is required annually. And that’s 10 per that’ll cover the base premium. And the about the 44,000 or 45,000 of P Louise is truly unscheduled, or you’re able to stuff that in throughout the year  here shows it where you’re funding it for seven years and you are after that seven years, we’re basically doing what you call a reduced, paid up option.

 

So you’re eliminating any additional premiums needed from there on out. And then you’re just letting the cash value and the dividends girl throughout the year.  On this specific policy, even as of 50 year old, you’re breaking even at around year five. In cash value or between years four and five.

 

 And you from year one you’ll have liquidity or your cash value is about 88% or so of what you’ve contributed. So you still have you lose some of the quality up front and that’s the cost. That’s the main cost of starting these policies. But from then on, it truly feels like a deposit where that 50,000 you’re putting in every year, your policy cash value is growing by larger than 50,000 from year two on.

 

And this is I think this is where people get very confused, right? Because the difficult part of this industry is an insurance agent and ratchet up and take whatever fees they want like a home loan, but worse. So that the way.  Shop this stuff around is to figure out what Tyler is saying.

 

That break even point when dad is, that’s the quick and dirty way of comparing policies and colors always does that for our folks. We always beat them anyway, but  that’s the quick and dirty way of comparing the policies that you have now. Of course, there’s some, different nuances with certain kind of exclusion.

 

That different types of more flexibility of one year being able to pay your rider or the other you’re taking off those types of things that we’ll get to more detailed in the e-course and the webinar, but,  for the most part that’s, if you just ignore one thing from this little webinar

 

A question we also get often is what, the policy loan rates.  The normally most insurance companies for their variable interest rates, it’s based on the moody AAA corporate bond index.  Granted we’re in this super low interest environment. It’s two point something percent, but the company also has their floor, their limits, as far as how low their policy loans will go.

 

Most of them are all at the company policy floors, which is hovering around four and a half or 5% as far as their variable interest rates.  The company declares these rates annually, it becomes effective on your policy anniversary date. It’s that policy anniversary date may be different for everyone yet.

 

The company does declare it annually.  And the good news with it.  If your variable interest rate can increase by more than 0.5% every year. But it can go down. It has no limit on going down, but keep in mind that, the corporate bond index that, that, that doesn’t fluctuate, like what normal interest rates fluctuate.

 

 It is a slow moving number. But there, there is some safeguards in there where you’re not sure. Get blindsided by this large increase in policy loan rates. 

 

We have a lot of FAQ’s that we’ll talk about in the e-course, here’s some of ’em, the difference between the whole life and term life.

 

I’ll talk about, when you use one or the other  we also discussed IUL, no, people always have that question and that’s the way we do, everything is a lot of this is products. But when is the product right for you? I honestly don’t care which one you use.

 

It’s I care when it’s the right one and I’m the person let’s say when you do term, when you do whole life, and the such  we’re going to talk a little bit about.  There’s a lot of rogue insurance companies that have really like loose standards, , it doesn’t make sense when you actually are with a company you want to be with a secure company.

 

We’ll talk more about that small insurance companies for as large insurance companies. Talk a little bit about different ages, who to get the policies on a lot of business owners out there. This is definitely something to think about, getting it on key employees.  This is what all like the big boys, like Walmart.

 

Talk a little bit about taxes. And again, all this is in the e-course  which you guys can get access to@simplepassivecastle.com slash banking. And we’ll talk about this on the webinar. We’ll be going to the cram school format. We go into this stuff that much more to tell us.

 

 Here’s the big picture and the toddlers, you never seen this slide. I made this yesterday.  This is the roadmap here. Step one, put a hundred grand in and not say you got to do that, right?  We help you figure out what’s the comfortable level for you to start.

 

When I first started doing this a few years back, I did that $50,000 a year for six years.  Today I’m doing a much larger one and I always tell people to start off small and probably, makes more sense for the agent to have you do a bigger policy than you’re comfortable with so that you can teach him to collect his commissions.

 

That’s not where we’re about here. We want set people up, you stuff a hundred grand in there in this scenario or 10 grand or whatever you want. Step two, you start to establish a banking firm yourself system, and you are able to take a big loan from that cash portion.

 

 We’ll talk more about detailed on the next in the e-courses in the beginning is when it’s,  the cash value loan is going to be the least. You’re going to be able to take the lease out in the middle. But as time goes by year two, year three, you get typically 90% of what you put in and your 4, 5, 6, it’s essentially everything.

 

 Again,  these are front loaded into this stuff, but in the first year, just to using that as an example, as being the worst case scenario, and you’d take that 85 grand on your original hundred grand, we stick it in a deal and you make more money that way. Step three here, you’re leveraging money in two different places.

 

 Step four is once you’ve act, once you’ve invested the money into a deal or you’re producing income there, which is paying back the loan, right? Just if you would have taken the money out of your heat, lock out of your house and invest it in deals and use that money, the payback. Or what a lot of people just simply do is you just take it a little bit extra and put it on the side.

 

So they’d know they can make their debt payments for the next year or two. That’s just more of a mindset security thing. Like Tyler says, there’s a lot of flexibility on paying back these life insurance policies.  We’ll talk about  worst case scenario, which isn’t that bad, not paying back your principal and not paying back your.

 

It’s not the end of the world. It takes a lot for the policies to decay it. Cannibalize itself is the term that we use. And we’ll talk about exactly when that happens. When you’re customizing the amount of your policy, those are the things that you did have in the back of your head to be able to meet your commitments.

 

 And then the step five here, you have your income generating assets paid back the loans of the policy.  Or like they said, just keep that stockpile on the side and just pay it back when you want. That’s what I do. I’ll take a loan out. I’ll go into a deal. I’ll take a loan out and I may not pay it back for six months or a couple of years.

 

I just whenever I get a glut of money or when the deals exit, like we just had a deal exit a little while ago, Tyler was limited in that one. That’s what we did. We take that money. We put it back into those cash. That’s how we use these policies. Really no real motivation to really payback the policy because it’s ours.

 

 Life happens here, a little cone I put here,  so you have unexpected expense loss of job. College savings. Use this cash value as your emergency savings account while let’s making yield, give a nice four or 5%, but it’s making a tax.  In actuality, you could probably argue that to making five, six, 7% potentially, or even 8% for somebody you hide in cupboards is not there.

 

, step six is,  grows over time. And then you start to get a handle how to use this account, right? Like I’ve gotten a handle how to use it. I take it out. I put it into deals when it deals cash out. I put it in here, but then I go into two more deals. In the time being  it becomes a very fluid kind of state and it’s very similar to it.

 

You guys have gotten really accustomed to managing your passive activity losses on your taxes to offsetting your capital, gains it, depreciates recaptures on deal exits, and then a sub seven all this time. You’re enjoying the benefits of asset protection. And at the same time, if we always joke, if I died or toddler died or wives are gonna be,

 

 it’s sad, but they’re going to be set. I always ask what would you do if you had X amount of money? If I die, she just tells me to go play theater again, but yeah, you’re setting them up. And  it, we’re technically not doing this for death payout, but that’s some of the, also the benefits to them.  And Tyler, is there any kind of other he wants to get assisted living benefits.

 

There’s disability, there’s all these types of things that can be put in there too.  Definitely. I think the biggest thing is truly the flexibility  the flexibility of funding, the flexibility of what you can use it for, you are in control.  Personally, this has replaced the five to nine a long-term care plan.

 

All of those other things that I would normally contribute to where it locks in money, or even remember my retirement plan all of these will cover that you’ll be able to contribute. It grows. We’d like to call this the, an asset where you’re doing this in addition to what you were doing already.

 

 You don’t have to choose between a policy or a syndication deal. You do the policy and you do the syndication there layer. So you’re just enhancing what you were going to do. Already, but surely the flexibility if it’s properly designed allows you to choose what you’re going to do with this and allows you to set it up super benefit, your self while you’re living along with legacy planning for your beneficiary.

 

And in the course we’ll outline all the advanced strategy. What people typically will do. They’ll dump in a bunch of money the first year, sometimes based on where your birthday is, what part of the year it is, you can backdate and double this about and get her to the jumpstart on it.

 

And then, these guys are dumping money in there quick, so they can quickly put it into the next deal.  Usually it takes another like a week or two to get this stuff really wrapped.  Get all the banking relationships, direct deposits all set up, once it’s all set up, it’s as simple as calling up that life insurance company or just going into their online portals.

 

And in that direct deposit to your account, then you are off your funds that you signed your PPM and other certifications.  You’re set, you’re making money to places and, that’s where we get to at the end step eight, you stop worrying how to grow your wealth because you’re optimized.

 

What’s the passive cashflow is it’s not that hard. What we outlined here is exactly what the wealthy do, but it’s a little bit of a twist, right? We’re using the same technology, the same product that is full life insurance, where we’re configuring in a very special way that benefits what exactly what we do.

 

If you guys are real estate investors or you invest in other types of deals.  This is your jam guys. This is exactly what you guys need to be doing to augment and make money at both places and get the asset protection. But even if you’re not real estate investing, like Tyler said, for a lot of people, this replaces the 5 29 plan or any long-term type of insurance options, or just a place where you just get cashflow building up.

 

It’s a lot better than in your bank and it’s something that you can try.

 

 But anything else you think I missed out Tyler? No, we’ll go over a lot more in details and answer specific questions during the e-course. Make sure you guys sign up here. If you guys are listening to this video or after 20 20, 1 of just check out this website here, it gets signed up for the free I-Corps.

 

And if you guys have any questions contact information, this was up here earlier.  We always tell people, get educated  and then we can help you guys out, whether it’s taking a look at your current policies or  getting you set up with fresh new ones, get this infinite banking set up for you sooner set up.

 

Thanks for listening guys. And we’ll see you guys next time. 

Near Death Experiences with Kathy McDaniel

https://youtu.be/_Mhh74obBWs

Hey, simple passive cashflow listeners. Today, we have Mary McDonald here who is an author of a great book that you could find on Amazon called misfit and hell to heaven. Ex-pat so the reason why we are bringing. Mary onstage is because we like to do one of these touchy feely podcasts, know, maybe at least every couple of months, because a lot of the listeners who are listening are financially free.

You’re definitely on the right path to get there. Me certainly, I’m not to where I want to be, but I know. I’m on that flight path or that trajectory to get there. So I really try and make a conscious point to smell the roses along the journey. And you hear it all the time, even though you have hardly think it’s stupid.

Everybody says it’s all about the journey. Easier said than when you get there. Of course. But today, if you’re kind of rushing around trying to put on your own oxygen mask, trying to get your rentals or build your portfolio streams of income. Maybe take a break and, really embody what we’re going to talk about today,

but, um, It’s marihuana. give some quick background on yourself. You used to be a property, just like the rest of us were rental property owners. I started out just went to school and had, was an English major and then got married, had a couple of kids. Got divorced and then needed a job. So I was lucky I had done some bookkeeping for a bank.

So I went to work for a property management company. They had about a hundred units. And so I was thrown in the middle of that. There was two young men that had done. It started off as sheet metal workers and they started buying properties, rental properties, one at a time. And now after just a few years, they quit their sheet metal working and had all these properties all over town.

So a lot of them were run down. They bought them out. Discount, but they didn’t really bother fixing them. So it was a bit of a challenge for the type of tenants they drew. And it became my mission to get in there and organize everything, to bring the units up to a more habitable condition.

And then we better tenant that could afford to pay. Anyway, it was a, about a seven or eight. Project and I loved it. I loved working with people. And then at one point they said gee whiz, why don’t we start a property management company of our own. Kathy. My name is Mary Kathleen. I go by Kathy.

You go and get your real estate brokers license and we’ll do this well. We had a falling out over percentages, of course, when it came to it. So I started my own company. I left them and started my own company. It was the second one in town. So I had another lady ahead of me that I could see.

How she was doing it, but I loved it and it grew I, I hired my sister. I hired my daughter. We had a really good reputation. I was known as the land lady and I had oh gosh, I had probably. 35 units that I manage full-time and then I did hundreds of leasings. We lived in a university town, so there was lots of tenants that came in that were students, but I love this.

And I had a fiance that I was crazy about and life was good. And then things started coming apart. My fiance got transferred to the east coast. I didn’t want to leave my family and my business. And so we decided to split up. Soon after that he discovers, he’s got leukemia. He’s got to go get treatments in Seattle.

They’re going to try and save him at a research hospital. He was only 53 years old. We’ve been together for eight years and he needed a caregiver and I said, sure. So I dropped everything and it was only supposed to be a couple of months, get the treatments and then we’ll see how it goes.

Everybody was feeling good about it. We got up there and he would rollercoaster up the wood and hit the bottom. Then he’d beat up. And this other woman and I ran ourselves ragged for seven months taking turns, sleeping and driving and take him to the hospital. At the end of the seven months, he passed away and I was.

And physically, emotionally, mentally I didn’t know whether to go back to Santa Cruz to stay in Seattle, but I got the flu and in my run down condition it went to pneumonia and then to ARDS, which is very much like COVID, it’s a lung failure. My friend took me to the hospital.

Thank God I, my heart stopped and the ambulance that got me started again. And next thing I knew there were saying, Kathy you’re going to sleep. You’re going to sleep. You’re going to be fine. I was in an oxygen tent. Everybody was panicked and they intubated me and put me in a coma for about three weeks and really didn’t expect me to live.

Supposedly I’m laying there asleep, but I wasn’t, I slipped over to the other side. And the first thing I realized when I got back is that I never really knew I was dead. You don’t feel dead. You’re just still you don’t really have a mirror to reflect and say, whoops, I don’t have a body. You’re just you.

Opening my eyes in that situation was not good. I could tell something was wrong. There was this accurate smoke and a reddish glow. And then this horrible voice came at me with, do you know where you are? And I said, hell. And it just laughed this boisterous Bela Lugosi laugh.

I took off running because I used to do, I was terrified. It was a long process in that place. I went from being in this horrible bombed out city with these creatures creeping around to different sections of hell. At the time again, I did not have the luxury to be logical and sit down and say, wow, I wonder what’s going on at all times.

I was literally what I thought running from my mother. I, was given tasks by these demons that were really just cat and mouse games. They were playing with me. The tasks were impossible or they were disgusting or just terrible. Take my word for it. That I refuse to do that. Every time I refused to do something, I was thrown into a worse situation.

They kept saying that I should disappear. I should just give up. I was never getting out, but there was just something deep inside of me that thought, no, I’m a fighter man. I’m a survivor. And I will get out of here. At the very last section, I didn’t know it was going to be my last section and I never quite last my last sense of humor.

Okay. I did something and it’s all explained in the book, but it had to do with singing a Christmas Carol in hell and that’s not done. So with that Christmas, Carol coming to the words of Jesus. Boom. I found myself in this huge white light space and I was filled with joy and love. And it sounds so trite.

You hear people talk about this all the time, but when it’s you, it’s a totally different party. I knew again, I did not know I was dead. I just knew that I’d forgotten everything that had happened before. I had no recollection of hell no recollection. Of my family on earth, my job, nothing. I was just in this totally wonderful place that I didn’t ever want to leave.

And when I looked up and looked around, I saw my friend, the one who had died and I thought, oh my gosh, it was so thrilled to see him because he looked great. The last time I’d seen him, poor thing. He was bald. He was all purple with all the bruising and wasted away. And now we look fabulous and I, started to say something and I thought that’s when the recollection here, I thought, oh my God, he doesn’t know he’s dead.

And he started to laugh and I thought, wait a minute, if he’s dead, maybe I’m dead. And the thought of it sunk in, all right, bingo. You’re totally happy. You’re in this wonderful place. And you’re with your friends. I was astatic. I thought, oh my God, I made it to heaven and this is going to be great.

But then, and where all the angels like in the garden and stuff what’s going on. So he had been showing me something in this book. And when I came back, I couldn’t remember what it was, but I know now it was probably what I had to come back and do before I could return, because he said, now, Mary Kay, you’ve got too much left to do.

And it was like no hole. I was not going to go willingly. He just kinda smiled and shook his head and I woke up in the. I see you unit and there’s my family around me. I think they’re my family. I’m really not sure. My poor mind is full of drugs and I’m back. And I just remember being in heaven just a little while ago and how I had too much to do, but how could I do that?

Right now I was down to 86 pounds. I had no muscle mass. I couldn’t breathe on my own. I couldn’t move. I could blink and move one finger. And I was thinking, how cruel was that? You’ve got too much left to do, and you can’t even breathe on your own. I really feel for the COVID people and their families, because just because you survive three weeks in a coma, doesn’t mean your work is over.

They sent me to a rehab abilitation hospital for physical therapy. I had to learn how to do everything again, my muscle mass had evaporated, so I didn’t know how to crawl swallow. Tie his shoe walk, go up steps, nothing. I had to learn all of that all over again, just like a baby. And it took a month before I was able to walk to make my bed.

They wouldn’t let me go home unless I could do a few basic survival skills. But I did get home. And I had been dating this nice man that stood by my side unknowingly and during the whole coma, we got married and I tried to get back into my life. However, I was rather depressed about my. Financial situation.

I quit my job and sold my business to come help my friend and all that was gone. I had no home. I was 53 years old. I had just married somebody that I’d only known for about eight months and I was supposed to be doing all this work so I could go home to heaven. It was not good.

However, the real estate instinct in me kicked back in my husband and I said, let’s get a home. We need a home. We bought a Jeep home, lived in that for awhile. Then I had an inheritance. I bought another home. We rented out the first home and we started buying rentals up in Washington. The the real estate was practically free after living in California.

So you could buy rental, put the minimum amount down. And the rent that came in covered the expenses almost. So we started gradually building that back up. I read everything. I could get my hands on for the new things that were coming in. I found lending club. That was an organization I saw on 60 minutes where you lend money to other people through this company and they can skip the bank fees and all of that stuff.

And then they give you back a decent percentage of interest. So you’re helping people with your money. I liked the idea of that. I started doing that when they opened, I can’t remember how many years ago now, seven or something, but I’ve gotten a steady six and a half percent. And I pick my own people that I want to lend to that tells you who they are, what they do for a living, why they want the money gives you a credit report.

Anyway, it’s a hands-on kind of thing. And you feel like you’re helping people. I liked that. I liked also after coming back from this near death experience, this incredible. Feeling of needing to help people in worse situations than myself became almost overwhelming. I got great joy from giving money to homeless people.

People standing on the corner with a sign, give me, I just got such a sense of money, helping people, not only just helping myself. So that, that became very ingrained in me.

Like you had empathy the thing and the gave you empathy to see it from those people, the needy person’s eyes, or was it more, am I going to be I’m on earth for a little bit more? What it was this money, but what else could this money be going for? It was so interesting being dead because you didn’t have anything.

Physical you had you, there was that whole thing of you can’t take it with you became abundantly clear. I had no jewelry on, nothing that was there except my soul and what I did on earth that I brought with me, which was the good that I did. I brought with me. So when I saw it. People. I got, I had this thing after being in a wheelchair for quite a while.

I had this thing about being invisible. When I was in a wheelchair, it was an awful feeling. So when I got out and I would see somebody particularly homeless people in a wheelchair, I would go out of my way to look in their eyes and say hi, and just get shock on their face. Oh dude, I’m not invisible anymore.

Same thing. That sounds like it’s like you had that higher level of empathy, or you are aware a lot more aware of other people’s yeah. Sense that we’re all one, we’re all pieces of God. One person is not any more valuable than another. What you have is not as important as what you do.

And that’s what really brings you joy. It just seems to me that, money is a wonderful thing and it’s because you can use it to do things just to afford it or. Just only for myself, just brings a hunger for more. That’s what I found. I still love my real estate. I love what it can do for people.

I have a real empathy for homeless. My book I didn’t get into it to make money. I know I was sent back to write it. The book . Is more than just that one little three or four chapters about how it’s about my whole life and my family’s lives going way back, a couple of generations up till now and how we all struggle with things.

And we have to help one another. And I don’t know, I just feel like. The homeless are the people that need the most help. So I’m an advocate that direction, any money I make, half of it.

You’re in Tacoma and I’ve already given them a lot more than I’ll probably ever make, but it’s always worth it. Just go downtown sometimes and drive around and see the people sitting around the corner, particularly up here when it gets cold in the winter with nothing. If it doesn’t move you It probably something you should think about, but yes, we all have to provide for ourselves and our family, but there’s that need to also share.

And that’s what we usually teach our children when they’re small share, but we can’t lose that lesson. So what this is called the is NDE near death experience. It’s like an epiphany moment. Very, I don’t know what you would call, like a lot of you guys look like talk to has some kind of experience at work where you get fired, or you get passed up for a job or.

You go to someone’s retirement party and they have crappy Chinese noodles to wish somebody off for 50 years of hard work and dedication. And it’s similar. It’s a turning point in your life that you see another perspective and it takes you down another path, but it gets Kathy you’re in this realm of NDEs.

Do you see any, how other people react to it? Have you seen any other perspectives that you’ve seen from other people’s the, that you’ve spoken to as you shared your experience, it’s very lonely when you get back from a near-death experience, because most people don’t believe you. They don’t have any understanding.

The only ones would be sometimes emergency personnel who’ve seen this before. They’ll believe you, but your family doesn’t want to hear about it. They tell you it’s it was the drugs. Didn’t really happen. It was a dream, but this is a life altering experience. This is something that doesn’t go away and it changes you forever.

And it took me about 10 years to get up to them. N, which is the international association of near-death studies in Seattle. To where I found an organization of hundreds and thousands of people all over this world that have had NDEs and to go to their annual conferences and and the monthly meetings, and just be surrounded by people who have had this experience and who are also changed and are living in the world.

And they love living in the world, but they can’t wait to get home. That’s what changes you, you lose all fear. Nothing really can throw you off the rails much anymore, whether it’s politics or money or whatever, it’s all going to be okay. This life is really just a place. And I’ve learned from other people we choose to come down here and be who we are and learn the lessons we want to learn.

And God isn’t picking on us is something we’ve chosen. So I can give up victimhood. I can stop saying that person was mean to me. If they hadn’t done this, I picked every single thing that happened in my life. And so something weird happens that I don’t, like I say, wow, I wonder what the lesson was there.

But I look forward to going home and being, and having a that’s just indescribably. Great. But while I’m here, I’m going to enjoy the ride I’m going to do what I think I’ve been sent down to do. And just give people hope and give people a little hint that it matters.

What you do here? Most people up there get a life review. God’s not up there with a book saying, okay, you did this, you did that. God does not judge us. We get a life review and it’s not even a matter of judging ourselves. We just get to see what our actions did to every single person we ever came into contact with our whole lives and to feel how they felt when we interacted.

So when we’re interacting with people in a loving and kind way, we’ll be able to feel that if we’re being mean and stingy and hurtful, we’ll be able to feel that too. It can’t help, but change you, having that realization, having that happen to you? Yeah, I’ll say like in our community I now doing this podcast since 2016, hundreds of thousands of people I’ve come into contact.

I still do free initial onboarding calls to new folks who joined the club. It’s civil, passive cashflow.com/club. But I see so many different financial profiles. And more importantly, I see the similarities with the people who are going to reach financial independence and happiness, and those who don’t and those guys who don’t, they have this, what’s in it for me type of mentality.

They’ll come into the free, I have a free Facebook group, which is a kind of a a neat wait. So I can filter people into the community. These are the guys who is intermittently coming into the group and asking some random, okay, does anybody have a referral for this? Does anybody for this?

Everything’s me. They’re so stingy with their money, like you said, right there. And I get it. I was the same way, and that’s why I pick it up so quickly because I was that same way. It’s the people who. From what some of my mentors that spend money freely, especially on like expanding the business, or going on a trip to go visit a property. I see the stark contrast between somebody who doesn’t want to spend $50 on some kind of ebook to learn, or, and they continuously go to these free resources. CFEs is what I call it. Chief easy. And it’s funny because they don’t realize what they’re doing and everybody else who’s in the inner circle, who has that more abundance mindset.

They can point these people out super easily, and they distance themselves from those individuals. And unfortunately, these individuals never know, but I’m saying this because. Maybe take a self-awareness check of yourself. Are you somebody who, when money stops at you, do you afford money?

Like Scrooge McDuck? It’s okay to like, to see the numbers rack up in the bank account. I love doing that. That’s one of the fun things I like to do in the week is just check my bait count. I’m not going to lie, but are you somebody who. It’s hard to give away, especially to other people or to, do you spend money on education or meeting other people to expand your network, to expand your net worth?

Or do you hold it back for that next investment? But don’t want to get too preachy here, but I’m just saying, Hey, us in the inner circle we see these stark contrasts and these people never again to there. Because they have that type I agree with you. And not everybody has to go through and NDE near death experience to see that the other side, hopefully this worked for a lot of you guys.

Maybe next time we’ll do a wash, the cust ceremony, just kidding. But sometimes that’s what people need. Right. So people are so like, they’re still stuck. Serious. They get too serious. You got to lighten up. And that the last thing I’ll end with, and this kind of goes in with our retreat that we do every year.

And the communities that we try and foster is at the end of the day, y’all are going to be financially independent and likely five to 10 years. If you invest in the right side, You need to get on the simple passive cashflow gravy train, you get the passive losses, you pay less taxes. It’s math.

You’re going to be financially free five to 10 times faster than most people. The currency of the rich is relationships. I see it on Facebook all the time. Somebody posts something and nobody cares because that person is just one of those CFE guys. Cheap, easy. They offered no value to their people around them.

Who are the cool people in high school? The cool people, other than the cheerleaders and football players, blah, blah, blah, or the people who added value to other people. And that is ultimately when you’re older and you have the money you’re going to wish you had that. All right.

Any last thoughts before we wrap up? No just for fun, you can go to Amazon and buy misfit and hell they have an ex-pat. It is get a lot of humor in it. And I think a lot of people resonate with the type of families that I grew up with. And the bottom line is just to be loving and kind,

so we are not advocating going in engineering your own near death experience. There is no NDE in a bottle at this point. So the best we have is to learn from others. That’s right. That’s right. You’ll learn soon enough. Thank you. Yeah. Thanks for coming on Kathy. And everybody else maybe check out the networking section on.